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Copyrights | Fourth Estate Public Benefit Corp. v. Wall-Street.com, LLC | https://supreme.justia.com/cases/federal/us/586/17-571/ | NOTICE: This opinion is subject to
formal revision before publication in the preliminary print of the
United States Reports. Readers are requested to notify the Reporter
of Decisions, Supreme Court of the United States, Washington,
D. C. 20543, of any typographical or other formal errors, in
order that corrections may be made before the preliminary print
goes to press.
SUPREME COURT OF THE UNITED STATES
_________________
No. 17–571
_________________
FOURTH ESTATE PUBLIC BENEFIT CORPORATION,
PETITIONER v. WALL-STREET.COM, LLC, et al.
on writ of certiorari to the united states
court of appeals for the eleventh circuit
[March 4, 2019]
Justice Ginsburg delivered the opinion of the
Court.
Impelling prompt registration of copyright
claims, 17 U. S. C. §411(a) states that “no civil action
for infringement of the copyright in any United States work shall
be instituted until . . . registration of the copyright
claim has been made in accordance with this title.” The question
this case presents: Has “registration . . . been made in
accordance with [Title 17]” as soon as the claimant delivers the
required application, copies of the work, and fee to the Copyright
Office; or has “registration . . . been made” only after
the Copyright Office reviews and registers the copyright? We hold,
in accord with the United States Court of Appeals for the Eleventh
Circuit, that registration occurs, and a copyright claimant may
commence an infringement suit, when the Copyright Office registers
a copyright. Upon registration of the copyright, however, a
copyright owner can recover for infringement that occurred both
before and after registration.
Petitioner Fourth Estate Public Benefit
Corporation (Fourth Estate) is a news organization producing online
journalism. Fourth Estate licensed journalism works to respondent
Wall-Street.com, LLC (Wall-Street), a news website. The license
agreement required Wall-Street to remove from its website all
content produced by Fourth Estate before canceling the agreement.
Wall-Street canceled, but continued to display articles produced by
Fourth Estate. Fourth Estate sued Wall-Street and its owner,
Jerrold Burden, for copyright infringement. The complaint alleged
that Fourth Estate had filed “applications to register [the]
articles [licensed to Wall-Street] with the Register of
Copyrights.” App. to Pet. for Cert. 18a.[ 1 ] Because the Register had not yet acted on Fourth
Estate’s applications,[ 2 ] the
District Court, on Wall-Street and Burden’s motion, dismissed the
complaint, and the Eleventh Circuit affirmed. 856 F.3d 1338 (2017).
Thereafter, the Register of Copyrights refused registration of the
articles Wall-Street had allegedly infringed.[ 3 ]
We granted Fourth Estate’s petition for
certiorari to resolve a division among U. S. Courts of Appeals
on when registration occurs in accordance with §411(a). 585
U. S. ___ (2018). Compare, e.g., 856 F. 3d, at
1341 (case below) (registration has been made under §411(a) when
the Register of Copyrights registers a copyright), with, e.g., Cosmetic Ideas, Inc. v. IAC/Interactivecorp , 606 F.3d 612, 621 (CA9 2010)
(registration has been made under §411(a) when the copyright
claimant’s “complete application” for registration is received by
the Copyright Office).
I
Under the Copyright Act of 1976, as amended,
copyright protection attaches to “original works of
authorship”—prominent among them, literary, musical, and dramatic
works—“fixed in any tangible medium of expression.” 17
U. S. C. §102(a). An author gains “exclusive rights” in
her work immediately upon the work’s creation, including rights of
reproduction, distribution, and display. See §106; Eldred v. Ashcroft , 537 U.S.
186 , 195 (2003) (“[F]ederal copyright protection
. . . run[s] from the work’s creation.”). The Copyright
Act entitles a copyright owner to institute a civil action for
infringement of those exclusive rights. §501(b).
Before pursuing an infringement claim in court,
how- ever, a copyright claimant generally must comply with
§411(a)’s requirement that “registration of the copyright claim has
been made.” §411(a). Therefore, although an owner’s rights exist
apart from registration, see §408(a), registration is akin to an
administrative exhaustion requirement that the owner must satisfy
before suing to enforce ownership rights, see Tr. of Oral Arg.
35.
In limited circumstances, copyright owners may
file an infringement suit before undertaking registration. If a
copyright owner is preparing to distribute a work of a type
vulnerable to predistribution infringement—notably, a movie or
musical composition—the owner may apply for preregistration.
§408(f)(2); 37 CFR §202.16(b)(1) (2018). The Copyright Office will
“conduct a limited review” of the application and notify the
claimant “[u]pon completion of the preregistration.” §202.16(c)(7),
(c)(10). Once “preregistration . . . has been made,” the
copyright claimant may institute a suit for infringement. 17
U. S. C. §411(a). Preregistration, however, serves only
as “a preliminary step prior to a full registration.”
Preregistration of Certain Unpublished Copyright Claims, 70 Fed.
Reg. 42286 (2005). An infringement suit brought in reliance on
preregistration risks dismissal unless the copyright owner applies
for registration promptly after the preregistered work’s
publication or infringement. §408(f)(3)–(4). A copyright owner may
also sue for infringement of a live broadcast before “registration
. . . has been made,” but faces dismissal of her suit if
she fails to “make registration for the work” within three months
of its first transmission. §411(c). Even in these exceptional
scenarios, then, the copyright owner must eventually pursue
registration in order to maintain a suit for infringement.
II
All parties agree that, outside of statutory
exceptions not applicable here, §411(a) bars a copyright owner from
suing for infringement until “registration . . . has been
made.” Fourth Estate and Wall-Street dispute, however, whether
“registration . . . has been made” under §411(a) when a
copyright owner submits the application, materials, and fee
required for registration, or only when the Copyright Office grants
registration. Fourth Estate advances the former view—the
“application approach”—while Wall-Street urges the latter
reading—the “registration approach.” The registration approach, we
conclude, reflects the only satisfactory reading of §411(a)’s text.
We therefore reject Fourth Estate’s application approach.
A
Under §411(a), “registration . . .
has been made,” and a copyright owner may sue for infringement,
when the Copyright Office registers a copyright.[ 4 ] Section 411(a)’s first sentence provides
that no civil infringement action “shall be instituted until
preregistration or registration of the copyright claim has been
made.” The section’s next sentence sets out an exception to this
rule: When the required “deposit, application, and fee
. . . have been delivered to the Copyright Office in
proper form and registration has been refused,” the claimant “[may]
institute a civil action, if notice thereof . . . is
served on the Register.” Read together, §411(a)’s opening sentences
focus not on the claimant’s act of applying for registration, but
on action by the Copyright Office—namely, its registration or
refusal to register a copyright claim.
If application alone sufficed to “ma[ke]”
registration, §411(a)’s second sentence—allowing suit upon refusal
of registration—would be superfluous. What utility would that
allowance have if a copyright claimant could sue for infringement
immediately after applying for registration without awaiting the
Register’s decision on her application? Proponents of the
application approach urge that §411(a)’s second sentence serves
merely to require a copyright claimant to serve “notice [of an
infringement suit] . . . on the Register.” See Brief for
Petitioner 29–32. This reading, however, requires the implausible
assumption that Congress gave “registration” different meanings in
consecutive, related sentences within a single statutory provision.
In §411(a)’s first sentence, “registration” would mean the
claimant’s act of filing an application, while in the section’s
second sentence, “registration” would entail the Register’s review
of an application. We resist this improbable construction. See, e.g., Mid-Con Freight Systems, Inc. v. Michigan
Pub. Serv. Comm’n , 545 U.S.
440 , 448 (2005) (declining to read “the same words” in con-
secutive sentences as “refer[ring] to something totally
different”).
The third and final sentence of §411(a) further
persuades us that the provision requires action by the Register
before a copyright claimant may sue for infringement. The sentence
allows the Register to “become a party to the action with respect
to the issue of registrability of the copyright claim.” This
allowance would be negated, and the court conducting an
infringement suit would lack the benefit of the Register’s
assessment, if an infringement suit could be filed and resolved
before the Register acted on an application.
Other provisions of the Copyright Act support
our reading of “registration,” as used in §411(a), to mean action
by the Register. Section 410 states that, “after examination,” if
the Register determines that “the material deposited constitutes
copyrightable subject matter” and “other legal and formal
requirements . . . [are] met, the Register shall register
the claim and issue to the applicant a certificate of
registration.” §410(a). But if the Register determines that the
deposited material “does not constitute copyrightable subject
matter or that the claim is invalid for any other reason, the
Register shall refuse registration.” §410(b). Section 410 thus
confirms that application is discrete from, and precedes,
registration. Section 410(d), furthermore, provides that if the
Copyright Office registers a claim, or if a court later determines
that a refused claim was registrable, the “effective date of [the
work’s] copyright registration is the day on which” the copyright
owner made a proper submission to the Copyright Office. There would
be no need thus to specify the “effective date of a copyright
registration” if submission of the required materials qualified as
“registration.”
Section 408(f)’s preregistration option, too,
would have little utility if a completed application constituted
registration. Preregistration, as noted supra, at 3–4,
allows the author of a work vulnerable to predistribution
infringement to enforce her exclusive rights in court before
obtaining registration or refusal thereof. A copyright owner who
fears prepublication infringement would have no reason to apply for
preregistration, however, if she could instead simply complete an
application for registration and immediately commence an
infringement suit. Cf. TRW Inc. v. Andrews , 534 U.S.
19 , 29 (2001) (rejecting an interpretation that “would in
practical effect render [a provision] superfluous in all but the
most unusual circumstances”).
B
Challenging the Eleventh Circuit’s judgment,
Fourth Estate primarily contends that the Copyright Act uses “the
phrase ‘make registration’ and its passive-voice counterpart
‘registration has been made’ ” to describe submissions by the
copyright owner, rather than Copyright Office responses to those
submissions. Brief for Petitioner 21. Section 411(a)’s requirement
that “registration . . . has been made in accordance with
this title,” Fourth Estate insists, most likely refers to a
copyright owner’s compliance with the statutory specifications for
registration applications. In support, Fourth Estate points to
Copyright Act provisions that appear to use the phrase “make
registration” or one of its variants to describe what a copyright
claimant does. See id ., at 22–26 (citing 17
U. S. C. §§110, 205(c), 408(c)(3), 411(c), 412(2)).
Furthermore, Fourth Estate urges that its reading reflects the
reality that, eventually, the vast majority of applications are
granted. See Brief for Petitioner 41.
Fourth Estate acknowledges, however, that the
Copyright Act sometimes uses “registration” to refer to activity by
the Copyright Office, not activity undertaken by a copyright
claimant. See id. , at 27–28 (citing 17 U. S. C.
§708(a)). Fourth Estate thus agrees that, to determine how the
statute uses the word “registration” in a particular prescription,
one must “look to the specific context” in which the term is used.
Brief for Petitioner 29. As explained supra, at 4–7, the
“specific context” of §411(a) permits only one sensible reading:
The phrase “registration . . . has been made” refers to
the Copyright Office’s act granting registration, not to the
copyright claimant’s request for registration.
Fourth Estate’s contrary reading of §411(a)
stems in part from its misapprehension of the significance of
certain 1976 revisions to the Copyright Act. Before that year,
§411(a)’s precursor provided that “[n]o action or proceeding shall
be maintained for infringement of copyright in any work until the
provisions of this title with respect to the deposit of copies and
registration of such work shall have been complied with.” 17
U. S. C. §13 (1970 ed.). Fourth Estate urges that this
provision posed the very question we resolve today—namely, whether
a claimant’s application alone effects registration. The Second
Circuit addressed that question, Fourth Estate observes, in Vacheron & Constantin-Le Coultre Watches, Inc. v. Benrus Watch Co. , 260 F.2d 637 (1958). Brief for Petitioner
32–34. In that case, in an opinion by Judge Learned Hand, the court
held that a copyright owner who completed an application could not
sue for infringement immediately upon the Copyright Office’s
refusal to register. Vacheron , 260 F. 3d, at 640–641.
Instead, the owner first had to obtain a registration certificate
by bringing a mandamus action against the Register. The Second
Circuit dissenter would have treated the owner’s application as
sufficient to permit commencement of an action for infringement. Id., at 645.
Fourth Estate sees Congress’ 1976 revision of
the registration requirement as an endorsement of the Vacheron dissenter’s position. Brief for Petitioner 34–36.
We dis- agree. The changes made in 1976 instead indicate Congress’
agreement with Judge Hand that it is the Register’s action that
triggers a copyright owner’s entitlement to sue. In enacting 17
U. S. C. §411(a), Congress both reaffirmed the general
rule that registration must precede an infringement suit, and added
an exception in that provision’s second sentence to cover instances
in which registration is refused. See H. R. Rep. No. 94‒1476,
p. 157 (1976). That exception would have no work to do if, as
Fourth Estate urges, Congress intended the 1976 revisions to
clarify that a copyright claimant may sue immediately upon applying
for registration. A copyright claimant would need no statutory
authorization to sue after refusal of her application if she could
institute suit as soon as she has filed the application.
Noteworthy, too, in years following the 1976
revisions, Congress resisted efforts to eliminate §411(a) and the
registration requirement embedded in it. In 1988, Congress removed
foreign works from §411(a)’s dominion in order to comply with the
Berne Convention for the Protection of Literary and Artistic Works’
bar on copyright formalities for such works. See §9(b)(1), 102Stat.
2859. Despite proposals to repeal §411(a)’s registration
requirement entirely, however, see S. Rep. No. 100‒352, p. 36
(1988), Congress maintained the requirement for domestic works, see
§411(a). Subsequently, in 1993, Congress considered, but declined
to adopt, a proposal to allow suit immediately upon submission of a
registration application. See H. R. Rep. No. 103–338,
p. 4 (1993). And in 2005, Congress made a preregistration
option available for works vulnerable to predistribution
infringement. See Artists’ Rights and Theft Prevention Act of 2005,
§104, 119Stat. 221. See also supra, at 3–4. Congress chose
that course in face of calls to eliminate registration in cases of
predistribution infringement. 70 Fed. Reg. 42286. Time and again,
then, Congress has maintained registration as prerequisite to suit,
and rejected proposals that would have eliminated registration or
tied it to the copyright claimant’s application instead of the
Register’s action.[ 5 ]
Fourth Estate additionally argues that, as
“registration is not a condition of copyright protection,” 17
U. S. C. §408(a), §411(a) should not be read to bar a
copyright claimant from enforcing that protection in court once she
has submitted a proper application for registration. Brief for
Petitioner 37. But as explained supra, at 3, the Copyright
Act safeguards copyright owners, irrespective of registration, by
vesting them with exclusive rights upon creation of their works and
prohibiting infringement from that point forward. If infringement
occurs before a copyright owner applies for registration, that
owner may eventually recover damages for the past infringement, as
well as the infringer’s profits. §504. She must simply apply for
registration and receive the Copyright Office’s decision on her
application before instituting suit. Once the Register grants or
refuses registration, the copyright owner may also seek an
injunction barring the infringer from continued violation of her
exclusive rights and an order requiring the infringer to destroy
infringing materials. §§502, 503(b).
Fourth Estate maintains, however, that if
infringement occurs while the Copyright Office is reviewing a
registration application, the registration approach will deprive
the owner of her rights during the waiting period. Brief for
Petitioner 41. See also 1 P. Goldstein, Copyright §3.15,
p. 3:154.2 (3d ed. 2018 Supp.) (finding application approach
“the better rule”); 2 M. Nimmer & D. Nimmer, Copyright
§7.16[B][3][a], [b][ii] (2018) (infringement suit is conditioned on
application, while prima facie presumption of validity depends on
certificate of registration). The Copyright Act’s explicit
carveouts from §411(a)’s general registration rule, however, show
that Congress adverted to this concern. In the preregistration
option, §408(f ), Congress provided that owners of works
especially susceptible to prepublication infringement should be
allowed to institute suit before the Register has granted or
refused registration. See §411(a). Congress made the same
determination as to live broadcasts. §411(c); see supra, at
4.[ 6 ] As to all other works,
however, §411(a)’s general rule requires owners to await action by
the Register before filing suit for infringement.
Fourth Estate raises the specter that a
copyright owner may lose the ability to enforce her rights if the
Copyright Act’s three-year statute of limitations runs out before
the Copyright Office acts on her application for registration.
Brief for Petitioner 41. Fourth Estate’s fear is overstated, as the
average processing time for registration applications is currently
seven months, leaving ample time to sue after the Register’s
decision, even for infringement that began before submission of an
application. See U. S. Copyright Office, Registration
Processing Times (Oct. 2, 2018) (Registration Processing Times),
https://www.copyright.gov/
registration/docs/processing-times-faqs.pdf (as last visited Mar.
1, 2019).
True, the statutory scheme has not worked as
Congress likely envisioned. Registration processing times have
increased from one or two weeks in 1956 to many months today. See
GAO, Improving Productivity in Copyright Registration 3
(GAO–AFMD–83–13 1982); Registration Processing Times. Delays in
Copyright Office processing of applications, it appears, are
attributable, in large measure, to staffing and budgetary shortages
that Congress can alleviate, but courts cannot cure. See 5 W.
Patry, Copyright §17:83 (2019). Unfortunate as the current
administrative lag may be, that factor does not allow us to revise
§411(a)’s congressionally composed text.
* * *
For the reasons stated, we conclude that
“registration . . . has been made” within the meaning of
17 U. S. C. §411(a) not when an application for
registration is filed, but when the Register has registered a
copyright after examining a properly filed application. The
judgment of the Court of Appeals for the Eleventh Circuit is
accordingly
Affirmed. Notes 1 The Register of
Copyrights is the “director of the Copyright Office of the Library
of Congress” and is appointed by the Librarian of Congress. 17
U. S. C. §701(a). The Copyright Act delegates to the
Register “[a]ll administrative functions and duties under [Title
17].” Ibid. 2 Consideration of Fourth
Estate’s filings was initially delayed because the check Fourth
Estate sent in payment of the filing fee was rejected by Fourth
Estate’s bank as uncollectible. App. to Brief for United States as Amicus Curiae 1a. 3 The merits of the
Copyright Office’s decision refusing registration are not at issue
in this Court. 4 Section 411(a) provides,
in principal part: “[N]o civil action for infringement of the
copyright in any United States work shall be insti-tuted until
preregistration or registration of the copyright claim has been
made in accordance with this title. In any case, however, where the
deposit, application, and fee required for registration have been
delivered to the Copyright Office in proper form and registration
has been refused, the applicant is entitled to institute a civil
action for infringement if notice thereof, with a copy of the
complaint, is served on the Register of Copyrights. The Register
may, at his or her option, become a party to the action with
respect to the issue of registrability of the copyright claim
. . . .” 5 Fourth Estate asserts
that, if a copyright owner encounters a lengthy delay in the
Copyright Office, she may be forced to file a mandamus action to
compel the Register to rule on her application, the very problem
exposed in Vacheron & Constantin-Le Coultre
Watches , Inc . v. Benrus Watch Co ., 260 F.2d 637
(CA2 1958), see supra, at 8. But Congress’ answer to Vacheron , codified in §411(a)’s second sentence, was to
permit an infringement suit upon refusal of registration, not to
eliminate Copyright Office action as the trigger for an
infringement suit. 6 Further, in addition to
the Act’s provisions for preregistration suit, the Copyright Office
allows copyright claimants to seek expedited processing of a claim
for an additional $800 fee. See U. S. Copyright Office,
Special Handling: Circular No. 10, pp. 1–2 (2017). The Copyright
Office grants requests for special handling in situations
involving, inter alia , “[p]ending or prospective
litigation,” and “make[s] every attempt to examine the application
. . . within five working days.” Compendium of U. S.
Copyright Practices §623.2, 623.4 (3d ed. 2017). | The Supreme Court held that a copyright owner must wait to receive copyright registration from the Copyright Office before filing a lawsuit for copyright infringement. The Court affirmed the Eleventh Circuit Court of Appeals' dismissal of Fourth Estate's copyright infringement lawsuit against Wall-Street.com, as the copyright registration for the articles in question had not yet been approved when the lawsuit was filed. |
Copyrights | Star Athletica, LLC v. Varsity Brands, Inc. | https://supreme.justia.com/cases/federal/us/580/15-866/ | NOTICE: This opinion is subject to
formal revision before publication in the preliminary print of the
United States Reports. Readers are requested to notify the Reporter
of Decisions, Supreme Court of the United States, Washington,
D. C. 20543, of any typographical or other formal errors, in
order that corrections may be made before the preliminary print
goes to press.
SUPREME COURT OF THE UNITED STATES
_________________
No. 15–866
_________________
STAR ATHLETICA, L. L. C., PETITIONER v. VARSITY BRANDS, INC., et al.
on writ of certiorari to the united states
court of appeals for the sixth circuit
[March 22, 2017]
Justice Thomas delivered the opinion of the
Court.
Congress has provided copyright protection for
original works of art, but not for industrial designs. The line
between art and industrial design, however, is often difficult to
draw. This is particularly true when an industrial design
incorporates artistic elements. Congress has afforded limited
protection for these artistic elements by providing that
“pictorial, graphic, or sculptural features” of the “design of a
useful article” are eligible for copyright protection as artistic
works if those features “can be identified separately from, and are
capable of existing independently of, the utilitarian aspects of
the article.” 17 U. S. C. §101.
We granted certiorari to resolve widespread
disagreement over the proper test for implementing §101’s
separate-identification and independent-existence requirements. 578
U. S. ___ (2016). We hold that a feature incor-porated into
the design of a useful article is eligible for copyright protection
only if the feature (1) can be perceived as a two- or
three-dimensional work of art separate from the useful article and
(2) would qualify as a protectable pictorial, graphic, or
sculptural work—either on its own or fixed in some other tangible
medium of expression—if it were imagined separately from the useful
article into which it is incorporated. Because that test is
satisfied in this case, we affirm.
I
Respondents Varsity Brands, Inc., Varsity
Spirit Corporation, and Varsity Spirit Fashions & Supplies,
Inc., design, make, and sell cheerleading uniforms. Respondents
have obtained or acquired more than 200 U. S. copyright
registrations for two-dimensional designs appearing on the surface
of their uniforms and other garments. These designs are primarily
“combinations, positionings, and arrangements of elements” that
include “chevrons . . . , lines, curves, stripes, angles,
diagonals, inverted [chevrons], coloring, and shapes.” App. 237. At
issue in this case are Designs 299A, 299B, 074, 078, and 0815. See
Appendix, infra .
Petitioner Star Athletica, L. L. C., also
markets and sells cheerleading uniforms. Respondents sued
petitioner for infringing their copyrights in the five designs. The
District Court entered summary judgment for petitioner on
respondents’ copyright claims on the ground that the designs did
not qualify as protectable pictorial, graphic, or sculptural works.
It reasoned that the designs served the useful, or “utilitarian,”
function of identifying the garments as “cheerleading uniforms” and
therefore could not be “physically or conceptually” separated under
§101 “from the utilitarian function” of the uniform. 2014 WL
819422, *8–*9 (WD Tenn., Mar. 1, 2014).
The Court of Appeals for the Sixth Circuit
reversed. 799 F. 3d 468, 471 (2015). In its view, the “graphic
designs” were “separately identifiable” because the designs “and a
blank cheerleading uniform can appear ‘side by side’—one as a
graphic design, and one as a cheerleading uniform.” Id., at
491 (quoting Compendium of U. S. Copyright Office Practices
§924.2(B) (3d ed. 2014) (Compendium)). And it determined that the
designs were “ ‘capable of existing independently’ ”
because they could be incorporated onto the surface of different
types of garments, or hung on the wall and framed as art. 799
F. 3d, at 491, 492.
Judge McKeague dissented. He would have held
that, because “identifying the wearer as a cheerleader” is a
utilitarian function of a cheerleading uniform and the surface
designs were “integral to” achieving that function, the designs
were inseparable from the uniforms. Id., at 495–496.
II
The first element of a copyright-infringement
claim is “ownership of a valid copyright.” Feist Publications,
Inc. v. Rural Telephone Service Co. , 499 U. S. 340,
361 (1991) . A valid copyright extends only to copyrightable
subject matter. See 4 M. Nimmer & D. Nimmer, Copyright
§13.01[A] (2010) (Nimmer). The Copyright Act of 1976 defines
copyrightable subject matter as “original works of authorship fixed
in any tangible medium of expression.” 17 U. S. C.
§102(a).
“Works of authorship” include “pictorial,
graphic, and sculptural works,” §102(a)(5), which the statute
defines to include “two-dimensional and three-dimensional works of
fine, graphic, and applied art, photographs, prints and art
reproductions, maps, globes, charts, diagrams, models, and
technical drawings, including architectural plans,” §101. And a
work of authorship is “ ‘fixed’ in a tangible medium of
expression when it[ is] embodi[ed] in a” “material objec[t]
. . . from which the work can be perceived, reproduced,
or otherwise communicated.” Ibid. (definitions of “fixed”
and “copies”).
The Copyright Act also establishes a special
rule for copyrighting a pictorial, graphic, or sculptural work
incorporated into a “useful article,” which is defined as “an
article having an intrinsic utilitarian function that is not merely
to portray the appearance of the article or to convey information.” Ibid. The statute does not protect useful articles as such.
Rather, “the design of a useful article” is “considered a
pictorial, graphical, or sculptural work only if, and only to the
extent that, such design incorporates pictorial, graphic, or
sculptural features that can be identified separately from, and are
capable of existing independently of, the utilitarian aspects of
the article.” Ibid .
Courts, the Copyright Office, and commentators
have described the analysis undertaken to determine whether a
feature can be separately identified from, and exist independently
of, a useful article as “separability.” In this case, our task is
to determine whether the arrangements of lines, chevrons, and
colorful shapes appearing on the surface of respondents’
cheerleading uniforms are eligible for copyright protection as
separable features of the design of those cheerleading
uniforms.
A
As an initial matter, we must address whether
separability analysis is necessary in this case.
1
Respondents argue that “[s]eparability is only
implicated when a [pictorial, graphic, or sculptural] work is the
‘design of a useful article.’ ” Brief for Respondents 25. They
contend that the surface decorations in this case are
“two-dimensional graphic designs that appear on useful
articles,” but are not themselves designs of useful
articles. Id., at 52. Consequently, the surface decorations
are protected two-dimensional works of graphic art without regard
to any separability analysis under §101. Ibid. ; see 2 W.
Patry, Copyright §3:151, p. 3–485 (2016) (Patry) (“Courts looking
at two-dimensional design claims should not apply the separability
analysis regardless of the three-dimensional form that design is
embodied in”). Under this theory, two-dimensional artistic features
on the surface of useful articles are “inherently separable.” Brief
for Respondents 26.
This argument is inconsistent with the text of
§101. The statute requires separability analysis for any
“pictorial, graphic, or sculptural features” incorporated into the
“design of a useful article.” “Design” refers here to “the
combination” of “details” or “features” that “go to make up” the
useful article. 3 Oxford English Dictionary 244 (def. 7, first
listing) (1933) (OED). Furthermore, the words “pictorial” and
“graphic” include, in this context, two-dimensional features such
as pictures, paintings, or drawings. See 4 id. , at 359
(defining “[g]raphic” to mean “[o]f or pertaining to drawing or
painting”); 7 id., at 830 (defining “[p]ictorial” to mean
“of or pertaining to painting or drawing”). And the statute
expressly defines “[p]ictorial, graphical, and sculptural works” to
include “two-dimensional . . . works of . . .
art.” §101. The statute thus provides that the “design of a useful
article” can include two-dimensional “pictorial” and “graphic”
features, and separability analysis applies to those features just
as it does to three-dimensional “sculptural” features.
2
The United States makes a related but distinct
argument against applying separability analysis in this case, which
respondents do not and have not advanced. As part of their
copyright registrations for the designs in this case, respondents
deposited with the Copyright Office drawings and photographs
depicting the designs incorporated onto cheerleading uniforms. App.
213–219; Appendix, infra . The Government argues that,
assuming the other statutory requirements were met, respondents
obtained a copyright in the deposited drawings and photographs and
have simply reproduced those copyrighted works on the surface of a
useful article, as they would have the exclusive right to do under
the Copyright Act. See Brief for United States as Amicus
Curiae 14–15, 17–22. Accordingly, the Government urges,
separability analysis is unnecessary on the record in this case. We
generally do not entertain arguments that were not raised below and
that are not advanced in this Court by any party, Burwell v. Hobby Lobby Stores, Inc. , 573 U. S. ___, ___
(2014), because “[i]t is not the Court’s usual practice to
adjudicate either legal or predicate factual questions in the first
instance,” CRST Van Expedited, Inc. v. EEOC , 578
U. S. ___, ___ (2016) (slip op., at 16). We decline to depart
from our usual practice here.
B
We must now decide when a feature incorporated
into a useful article “can be identified separately from” and is
“capable of existing independently of” “the utilitarian aspects” of
the article. This is not a free-ranging search for the best
copyright policy, but rather “depends solely on statutory
interpretation.” Mazer v. Stein , 347 U. S. 201,
214 (1954) . “The controlling principle in this case is the basic
and unexceptional rule that courts must give effect to the clear
meaning of statutes as written.” Estate of Cowart v. Nicklos Drilling Co. , 505 U. S. 469, 476 (1992) . We
thus begin and end our inquiry with the text, giving each word its
“ordinary, contemporary, common meaning.” Walters v. Metropolitan Ed. Enterprises, Inc. , 519 U. S. 202, 207
(1997) (internal quotation marks omitted). We do not, however,
limit this inquiry to the text of §101 in isolation.
“[I]nterpretation of a phrase of uncertain reach is not confined to
a single sentence when the text of the whole statute gives
instruction as to its meaning.” Maracich v. Spears ,
570 U. S. ___, ___ (2013) (slip op., at 15). We thus “look to
the provisions of the whole law” to determine §101’s meaning. United States v. Heirs of Boisdoré , 8 How. 113, 122
(1849).
1
The statute provides that a “pictorial,
graphic, or sculptural featur[e]” incorporated into the “design of
a useful article” is eligible for copyright protection if it (1)
“can be identified separately from,” and (2) is “capable of
existing independently of, the utilitarian aspects of the article.”
§101. The first requirement—separate identification—is not onerous.
The decisionmaker need only be able to look at the useful article
and spot some two- or three-dimensional element that appears to
have pictorial, graphic, or sculptural qualities. See 2 Patry
§3:146, at 3–474 to3–475.
The independent-existence requirement is
ordinarily more difficult to satisfy. The decisionmaker must
determine that the separately identified feature has the capacity
to exist apart from the utilitarian aspects of the article. See 2
OED 88 (def. 5) (defining “[c]apable” of as “[h]aving the needful
capacity, power, or fitness for”). In other words, the feature must
be able to exist as its own pictorial, graphic, or sculptural work
as defined in §101 once it is imagined apart from the useful
article. If the feature is not capable of existing as a pictorial,
graphic, or sculptural work once separated from the useful article,
then it was not a pictorial, graphic, or sculptural feature of that
article, but rather one of its utilitarian aspects.
Of course, to qualify as a pictorial, graphic,
or sculptural work on its own, the feature cannot itself be a
useful article or “[a]n article that is normally a part of a useful
article” (which is itself considered a useful article). §101. Nor
could someone claim a copyright in a useful article merely by
creating a replica of that article in some other medium—for
example, a cardboard model of a car. Al-though the replica could
itself be copyrightable, it would not give rise to any rights in
the useful article that inspired it.
2
The statute as a whole confirms our
interpretation. The Copyright Act provides “the owner of [a]
copyright” with the “exclusive righ[t] . . . to reproduce
the copyrighted work in copies.” §106(1). The statute clarifies
that this right “includes the right to reproduce the [copyrighted]
work in or on any kind of article, whether useful or otherwise.”
§113(a). Section 101 is, in essence, the mirror image of §113(a).
Whereas §113(a) protects a work of authorship first fixed in some
tangible medium other than a useful article and subsequently
applied to a useful article, §101 protects art first fixed in the
medium of a useful article. The two provisions make clear that
copyright protection extends to pictorial, graphic, and sculptural
works regardless of whether they were created as freestanding art
or as features of useful articles. The ultimate separability
question, then, is whether the feature for which copyright
protection is claimed would have been eligible for copyright
protection as a pictorial, graphic, or sculptural work had it
originally been fixed in some tangible medium other than a useful
article before being applied to a useful article.
3
This interpretation is also consistent with
the history of the Copyright Act. In Mazer , a case decided
under the 1909 Copyright Act, the respondents copyrighted a
statuette depicting a dancer. The statuette was intended for use as
a lamp base, “with electric wiring, sockets and lamp shades
attached.” 347 U. S., at 202. Copies of the statuette were
sold both as lamp bases and separately as statuettes. Id., at 203. The petitioners copied the statuette and sold lamps with
the statuette as the base. They defended against the respondents’
infringement suit by arguing that the respondents did not have a
copyright in a statuette intended for use as a lamp base. Id., at 204–205.
Two of Mazer ’s holdings are relevant
here. First, the Court held that the respondents owned a copyright
in the statuette even though it was intended for use as a lamp
base. See id., at 214. In doing so, the Court approved the
Copyright Office’s regulation extending copyright protection to
works of art that might also serve a useful purpose. See ibid. (approving 37 CFR §202.8(a) (1949) (protect-ing “works
of artistic craftsmanship, in so far as theirform but not their
mechanical or utilitarian aspects are concerned”)).
Second, the Court held that it was irrelevant to
the copyright inquiry whether the statuette was initially created
as a freestanding sculpture or as a lamp base. 347 U. S., at
218–219 (“Nor do we think the subsequent registration of a work of
art published as an element in a manufactured article, is a misuse
of copyright. This is not different from the registration of a
statuette and its later embodiment in an industrial article”). Mazer thus interpreted the 1909 Act consistently with the
rule discussed above: If a design would have been copyrightable as
a standalone pictorial, graphic, or sculptural work, it is
copyrightable if created first as part of a useful article.
Shortly thereafter, the Copyright Office enacted
a regulation implementing the holdings of Mazer . See 1
Nimmer §2A.08[B][1][b] (2016). As amended, the regulation
introduced the modern separability test to copyright law:
“If the sole intrinsic function of an
article is its utility, the fact that the article is unique and
attractively shaped will not qualify it as a work of art. However,
if the shape of a utilitarian article incorporates features, such
as artistic sculpture, carving, or pictorial representation, which
can be identified separately and are capable of existing
independently as a work of art, such features will be eligible for
registration.” 37 CFR §202.10(c) (1960) (punctuation altered).
Congress essentially lifted the language
governing protection for the design of a useful article directly
from the post- Mazer regulations and placed it into §101 of
the 1976 Act. Consistent with Mazer , the approach we outline
today interprets §§101 and 113 in a way that would afford copyright
protection to the statuette in Mazer regardless of whether
it was first created as a standalone sculptural work or as the base
of the lamp. See 347 U. S., at 218–219.
C
In sum, a feature of the design of a useful
article is eligible for copyright if, when identified and imagined
apart from the useful article, it would qualify as a pictorial,
graphic, or sculptural work either on its own or when fixed in some
other tangible medium.
Applying this test to the surface decorations on
the cheerleading uniforms is straightforward. First, one can
identify the decorations as features having pictorial, graphic, or
sculptural qualities. Second, if the arrangement of colors, shapes,
stripes, and chevrons on the surface of the cheerleading uniforms
were separated from the uniform and applied in another medium—for
example, on a painter’s canvas—they would qualify as
“two-dimensional . . . works of . . . art,”
§101. And imaginatively removing the surface decorations from the
uniforms and applying them in another medium would not replicate
the uniform itself. Indeed, respondents have applied the designs in
this case to other media of expression—different types of
clothing—without replicating the uniform. See App. 273–279. The
decorations are therefore separable from the uniforms and eligible
for copyright protection.[ 1 ]
The dissent argues that the designs are not
separable because imaginatively removing them from the uniforms and
placing them in some other medium of expression—a canvas, for
example—would create “pictures of cheerleader uniforms.” Post, at 10 (opinion of Breyer, J.). Petitioner similarly
argues that the decorations cannot be copyrighted because, even
when extracted from the useful article,they retain the outline of a
cheerleading uniform. Brief for Petitioner 48–49.
This is not a bar to copyright. Just as
two-dimensional fine art corresponds to the shape of the canvas on
which it is painted, two-dimensional applied art correlates to the
contours of the article on which it is applied. A fresco painted on
a wall, ceiling panel, or dome would not lose copyright protection,
for example, simply because it was designed to track the dimensions
of the surface on which it was painted. Or consider, for example, a
design etched or painted on the surface of a guitar. If that entire
design is imaginatively removed from the guitar’s surface and
placed on an album cover, it would still resemble the shape of a
guitar. But the image on the cover does not “replicate” the guitar
as a useful article. Rather, the design is a two-dimensional work
of art that corresponds to the shape of the useful article to which
it was applied. The statute protects that work of art whether it is
first drawn on the album cover and then applied to the guitar’s
surface, or vice versa. Failing to protect that art would create an
anomaly: It would extend protection to two-dimensional designs that
cover a part of a useful article but would not protect the same
design if it covered the entire article. The statute does not
support that distinction, nor can it be reconciled with the
dissent’s recognition that “artwork printed on a t-shirt” could be
protected. Post, at 4 (internal quotation marks
omitted).
To be clear, the only feature of the
cheerleading uniform eligible for a copyright in this case is the
two-dimensional work of art fixed in the tangible medium of the
uniform fabric. Even if respondents ultimately succeed in
establishing a valid copyright in the surface decorations at issue
here, respondents have no right to prohibit any person from
manufacturing a cheerleading uniform of identical shape, cut, and
dimensions to the ones on which the decorations in this case
appear. They may prohibit only the reproduction of the surface
designs in any tangible medium of expression—a uniform or
otherwise.[ 2 ]
D
Petitioner and the Government raise several
objections to the approach we announce today. None is
meritorious.
1
Petitioner first argues that our reading of
the statute is missing an important step. It contends that a
feature may exist independently only if it can stand alone as a
copyrightable work and if the useful article from which it
was extracted would remain equally useful. In other words,
copyright extends only to “solely artistic” features of useful
articles. Brief for Petitioner 33. According to petitioner, if a
feature of a useful article “advance[s] the utility of the
article,” id., at 38, then it is categorically beyond the
scope of copyright, id. , at 33. The designs here are not
protected, it argues, because they are necessary to two of the
uniforms’ “inherent, essential, or natural functions”—identifying
the wearer as a cheerleader and enhancing the wearer’s physical
appearance. Id. , at 38, 48; Reply Brief 2, 16. Because the
uniforms would not be equally useful without the designs,
petitioner contends that the designs are inseparable from the
“utilitarian aspects” of the uniform. Brief for Petitioner 50.
The Government raises a similar argument,
although it reaches a different result. It suggests that the
appropriate test is whether the useful article with the artistic
feature removed would “remai[n] similarly useful.” Brief for
United States as Amicus Curiae 29 (emphasis added). In the
view of the United States, however, a plain white cheerleading
uniform is “similarly useful” to uniforms with respondents’
designs. Id., at 27–28.
The debate over the relative utility of a plain
white cheerleading uniform is unnecessary. The focus of the
separability inquiry is on the extracted feature and not on any
aspects of the useful article that remain after the imaginary
extraction. The statute does not require the decisionmaker to
imagine a fully functioning useful article without the artistic
feature. Instead, it requires that the separated feature qualify as
a nonuseful pictorial, graphic, or sculptural work on its own.
Of course, because the removed feature may not
be a useful article—as it would then not qualify as a pictorial,
graphic, or sculptural work—there necessarily would be some aspects
of the original useful article “left behind” if the feature were
conceptually removed. But the statute does not require the imagined
remainder to be a fully functioning useful article at all, much
less an equally useful one. Indeed, such a requirement would
deprive the Mazer statuette of protection had it been
created first as a lamp base rather than as a statuette. Without
the base, the “lamp” would be just a shade, bulb, and wires. The
statute does not require that we imagine a nonartistic replacement
for the removed feature to determine whether that feature is
capable of an independent existence.
Petitioner’s argument follows from its flawed
view that the statute protects only “solely artistic” features that
have no effect whatsoever on a useful article’s utilitarian
function. This view is inconsistent with the statutory text. The
statute expressly protects two- and three-dimensional “applied
art.” §101. “Applied art” is art “employed in the decoration,
design, or execution of useful objects,” Webster’s Third New
International Dictionary 105 (1976) (emphasis added), or “those
arts or crafts that have a primarily utilitarian function ,
or . . . the designs and decorations used in these arts,”
Random House Dictionary 73 (1966) (emphasis added); see also 1 OED
576 (2d ed. 1989) (defining “applied” as “[p]ut to practical use”).
An artistic feature that would be eligible for copyright protection
on its own cannot lose that protection simply because it was first
created as a feature of the design of a useful article, even if it
makes that article more useful.
Indeed, this has been the rule since Mazer . In holding that the statuette was protected, the
Court emphasized that the 1909 Act abandoned any “distinctions
between purely aesthetic articles and useful works of art.” 347
U. S., at 211. Congress did not enact such a distinction in
the 1976 Act. Were we to accept petitioner’s argument that the only
protectable features are those that play absolutely no role in an
article’s function, we would effectively abrogate the rule of Mazer and read “applied art” out of the statute.
Because we reject the view that a useful article
must remain after the artistic feature has been imaginatively
separated from the article, we necessarily abandon the distinction
between “physical” and “conceptual” separability, which some courts
and commentators have adopted based on the Copyright Act’s
legislative history. See H. R. Rep. No. 94–1476, p. 55 (1976).
According to this view, a feature is physically separable
from the underlying useful article if it can “be physically
separated from the article by ordinary means while leaving the
utilitarian aspects of the article completely intact.” Compendium
§924.2(A); see also Chosun Int’l, Inc. v. Chrisha
Creations , Ltd. , 413 F. 3d 324, 329 (CA2 2005). Conceptual separability applies if the feature physically
could not be removed from the useful article by ordinary means. See
Compendium §924.2(B); but see 1 P. Goldstein, Copyright §2.5.3, p.
2:77 (3d ed. 2016) (explaining that the lower courts have been
unable to agree on a single conceptual separability test); 2 Patry
§§3:140–3:144.40 (surveying the various approaches in the lower
courts).
The statutory text indicates that separability
is a conceptual undertaking. Because separability does not require
the underlying useful article to remain, the physical-conceptual
distinction is unnecessary.
2
Petitioner next argues that we should
incorporate two “objective” components, Reply Brief 9, into our
test to provide guidance to the lower courts: (1) “whether the
design elements can be identified as reflecting the designer’s
artistic judgment exercised independently of functional influence,”
Brief for Petitioner 34 (emphasis deleted and internal quotation
marks omitted), and (2) whether “there is [a] substantial
likelihood that the pictorial, graphic, or sculptural feature would
still be marketable to some significant segment of the community
without its utilitarian function,” id., at 35 (emphasis
deleted and internal quotation marks omitted).
We reject this argument because neither
consideration is grounded in the text of the statute. The first
would require the decisionmaker to consider evidence of the
creator’s design methods, purposes, and reasons. Id., at 48.
The statute’s text makes clear, however, that our inquiry is
limited to how the article and feature are perceived, not how or
why they were designed. See Brandir Int’l, Inc. v. Cascade Pacific Lumber Co. , 834 F. 2d 1142, 1152 (CA2
1987) (Winter, J., concurring in part and dissenting in part) (The
statute “expressly states that the legal test is how the final
article is perceived, not how it was developed through various
stages”).
The same is true of marketability. Nothing in
the statute suggests that copyrightability depends on market
surveys. Moreover, asking whether some segment of the market would
be interested in a given work threatens to prize popular art over
other forms, or to substitute judicial aesthetic preferences for
the policy choices embodied in the Copyright Act. See Bleistein v. Donaldson Lithographing Co. , 188
U. S. 239, 251 (1903) (“It would be a dangerous undertaking
for persons trained only to the law to constitute themselves final
judges of the worth of pictorial illustrations, outside of the
narrowest and most obvious limits”).
3
Finally, petitioner argues that allowing the
surface decorations to qualify as a “work of authorship” is
inconsistent with Congress’ intent to entirely exclude industrial
design from copyright. Petitioner notes that Congress refused to
pass a provision that would have provided limited copyright
protection for industrial designs, including clothing, when it
enacted the 1976 Act, see id., at 9–11 (citing S. 22, Tit.
II, 94th Cong., 2d Sess., 122 Cong. Rec. 3856–3859 (1976)), and
that it has enacted laws protecting designs for specific useful
articles—semiconductor chips and boat hulls, see 17
U. S. C. §§901–914, 1301–1332—while declining to enact
other industrial design statutes, Brief for Petitioner 29, 43. From
this history of failed legislation petitioner reasons that Congress
intends to channel intellectual property claims for industrial
design into design patents. It therefore urges us to approach this
question with a presumption against copyrightability. Id., at 27.
We do not share petitioner’s concern. As an
initial matter, “[c]ongressional inaction lacks persuasive
significance” in most circumstances. Pension Benefit Guaranty
Corporation v. LTV Corp. , 496 U. S. 633, 650 (1990)
(internal quotation marks omitted). Moreover, we have long held
that design patent and copyright are not mutually exclusive. See Mazer , 347 U. S., at 217. Congress has provided for
limited copyright protection for certain features of industrial
design, and approaching the statute with presumptive hostility
toward protection for industrial design would undermine Congress’
choice. In any event, as explained above, our test does not render
the shape, cut, and physical dimensions of the cheerleading
uniforms eligible for copyright protection.
III
We hold that an artistic feature of the design
of a useful article is eligible for copyright protection if the
feature (1) can be perceived as a two- or three-dimensional work of
art separate from the useful article and (2) would qualify as a
protectable pictorial, graphic, or sculptural work either on its
own or in some other medium if imagined separately from the useful
article. Because the designs on the surface of respondents’
cheerleading uniforms in this case satisfy these requirements, the
judgment of the Court of Appeals is affirmed.
It is so ordered. Notes 1 We do not today hold that
the surface decorations are copyrightable. We express no opinion on
whether these works are sufficiently original to qualify for
copyright protection, see Feist Publications , Inc. v. Rural Telephone Service Co. , 499 U. S. 340 –359 (1991), or
on whether any other prerequisite of a valid copyright has been
satisfied. 2 The dissent suggests that
our test would lead to the copyrighting of shovels. Post, at
7; Appendix to opinion of Breyer, J., fig. 4, post . But a
shovel, like a cheerleading uniform, even if displayed in an art
gallery, is “an article having an intrinsic utilitarian function
that is not merely to portray the appearance of the article or to
convey information.” 17 U. S. C. §101. It therefore
cannot be copyrighted. A drawing of a shovel could, of course, be
copyrighted. And, if the shovel included any artistic features that
could be perceived as art apart from the shovel, and which would
qualify as protectable pictorial, graphic, or sculptural works on
their own or in another medium, they too could be copyrighted. But
a shovel as a shovel cannot. SUPREME COURT OF THE UNITED STATES
_________________
No. 15–866
_________________
STAR ATHLETICA, L. L. C., PETITIONER v. VARSITY BRANDS, INC., et al.
on writ of certiorari to the united states
court of appeals for the sixth circuit
[March 22, 2017]
Justice Ginsburg, concurring in the
judgment.
I concur in the Court’s judgment but not in its
opinion. Unlike the majority, I would not take up in this case the
separability test appropriate under 17 U. S. C.
§101.[ 1 ] Consideration of that
test is unwarranted because the designs at issue are not designs of useful articles. Instead, the designs are themselves
copyrightable pictorial or graphic works reproduced on useful articles.[ 2 ]
A pictorial, graphic, or sculptural work (PGS
work) is copyrightable. §102(a)(5). PGS works include
“two-dimensional and three-dimensional works of fine, graphic, and
applied art.” §101. Key to this case, a copyright in a standalone
PGS work “includes the right to reproduce the work in or on any
kind of article, whether useful or otherwise.” §113(a). Because the
owner of a copyright in a pre-existing PGS work may exclude a
would-be infringer from reproducing that work on a useful article,
there is no need to engage in any separability inquiry to resolve
the instant petition.
The designs here in controversy are standalone
pictorial and graphic works that respondents Varsity Brands, Inc.,
et al. (Varsity) reproduce on cheerleading uniforms. Varsity’s
designs first appeared as pictorial and graphic works that
Varsity’s design team sketched on paper. App. 281. Varsity then
sought copyright protection for those two-dimensional designs, not
for cheerleading costumes; its registration statements claimed
“2-Dimensional artwork” and “fabric design (artwork).” Appendix, infra , at 4–7, 9–10, 12–14. Varsity next reproduced its
two-dimensional graphic designs on cheerleading uniforms, also on
other garments, including T-shirts and jackets. See, e.g. ,
App. 274, 276.[ 3 ]
In short, Varsity’s designs are not themselves
useful articles meet for separability determination under §101;
they are standalone PGS works that may gain copyright protection as
such, including the exclusive right to reproduce the designs on
useful articles.[ 4 ]
APPENDIX Notes 1 Courts “have struggled
mightily to formulate a test” for the separability analysis. 799
F. 3d 468, 484 (CA6 2015); see 2 W. Patry, Copyright §3:136,
p. 3–420 (2016) (noting “widespread interpretative disarray” over
the separability test); Ginsburg, “Courts Have Twisted Themselves
into Knots”: U. S. Copyright Protection for Applied Art, 40
Colum. J. L. & Arts 1, 2 (2016) (“The ‘separability’ test
. . . has resisted coherent application
. . . .”); 1 M. Nimmer & D. Nimmer, Copyright
§2A.08[B][6], p. 2A–84 (2016) (separability is a “perennially
tangled aspect of copyright doctrine”). 2 Like the Court, I express
no opinion on whether the designs otherwise meet the requirements
for copyrightable subject matter. See ante , at 11,
n. 1; 17 U. S. C. §102(a) (“Copyright protection
subsists, in accordance with this title, in original works of
authorship fixed in any tangible medium of expression, now known or
later developed, from which they can be perceived, reproduced, or
otherwise communicated.”). In view of the dissent’s assertion that
Varsity’s designs are “plainly unoriginal,” post , at 11,
however, I note this Court’s recognition that “the requisite level
of creativity [for copyrightability] is extremely low; even a
slight amount will suffice,” Feist Publications, Inc. v. Rural Telephone Service Co. , 499 U. S. 340, 345 (1991)
; see Atari Games Corp. v. Oman , 979 F. 2d 242
(CADC 1992). 3 That Varsity’s designs
can be placed on jackets or T-shirts without replicating a
cheerleader’s uniform supports their qualification as fabric
designs. The dissent acknowledges that fabric designs are
copyrightable, but maintains that Varsity’s designs do not count
because Varsity’s submissions depict clothing, not fabric designs. Post , at 10–11. But registrants claiming copyrightable
designs may submit drawings or photos of those designs as they
appear on useful articles. See Compendium of U. S. Copyright
Office Practices §1506 (3d ed. 2014) (“To register a copyrightable
design that has been applied to the back of a useful article, such
as a chair, the applicant may submit drawings of the design as it
appears on the chair[.]”), online at
https://www.copyright.gov/comp3/docs/compendium.pdf (as last
visited Mar. 8, 2017). And, as noted in text, Varsity’s
registration statements claimed “2-Dimensional artwork” and “fabric
design (artwork).” Appendix, infra , at 4–7, 9–10,
12–14. 4 The majority declines to
address this route to decision because, it says, Varsity has not
advanced it. Ante , at 5–6. I read Varsity’s brief
differently. See Brief for Respondents 25 (explaining that the
Copyright Act “expressly provides that PGS designs do not lose
their protection when they appear ‘in or on’ a useful article,”
quoting §113(a)); id. , at 52 (disclaiming the need for
separability analysis because the designs are themselves PGS
works). SUPREME COURT OF THE UNITED STATES
_________________
No. 15–866
_________________
STAR ATHLETICA, L. L. C., PETITIONER v. VARSITY BRANDS, INC., et al.
on writ of certiorari to the united states
court of appeals for the sixth circuit
[March 22, 2017]
Justice Breyer, with whom Justice Kennedy
joins, dissenting.
I agree with much in the Court’s opinion. But I
do not agree that the designs that Varsity Brands, Inc., submitted
to the Copyright Office are eligible for copyright protection. Even
applying the majority’s test, the designs cannot “be
perceived as . . . two- or three-dimensional work[s] of
art separate from the useful article.” Ante, at 1.
Look at the designs that Varsity submitted to
the Copyright Office. See Appendix to opinion of the Court, ante . You will see only pictures of cheerleader uniforms.
And cheerleader uniforms are useful articles. A picture of the
relevant design features, whether separately “perceived” on paper
or in the imagination, is a picture of, and thereby “replicate[s],”
the underlying useful article of which they are a part. Ante, at 1, 10. Hence the design features that Varsity seeks
to protect are not “capable of existing independently o[f] the
utilitarian aspects of the article.” 17 U. S. C.
§101.
I
The relevant statutory provision says that the
“design of a useful article” is copyrightable “only if, and only to
the extent that, such design incorporates pictorial, graphic, or
sculptural features that can be identified separately from, and are
capable of existing independently of, the utilitar-ian aspects of
the article.” Ibid . But what, we must ask, do the words
“identified separately” mean? Just when is a design separate from
the “utilitarian aspect of the [useful] article?” The most direct,
helpful aspect of the Court’s opinion answers this question by
stating:
“Nor could someone claim a copyright in a
useful article merely by creating a replica of that article in some
other medium—for example, a cardboard model of a car. Although the
replica could itself be copyright-able, it would not give rise to
any rights in the useful article that inspired it.” Ante, at
7–8.
Exactly so. These words help explain the Court’s
statement that a copyrightable work of art must be “perceived as a
two- or three-dimensional work of art separate from the useful
article.” Ante, at 1, 17. They help clarify the concept of
separateness. Cf. 1 M. Nimmer & D. Nimmer, Nimmer on Copyright
§2A.08[A][1] (2016) (Nimmer) (describing courts’ difficulty in
applying that concept). They are consistent with Congress’ own
expressed intent. 17 U. S. C. §101; H. R. Rep. No.
94–1476, pp. 55, 105 (1976) (H. R. Rep.). And they reflect
long held views of the Copyright Office. See Compendium of U. S.
Copyright Office Practices §924.2(B) (3d ed. 2014), online at
http://www.copyright.gov/comp3/docs/compendium.pdf (as last visited
Mar. 7, 2017) (Compendium).
Consider, for example, the explanation that the
House Report for the Copyright Act of 1976 provides. It says:
“Unless the shape of an automobile,
airplane, ladies’ dress, food processor, television set, or any
other industrial product contains some element that, physically
or conceptually , can be identified as separable from the
utilitarian aspects of that article, the design would not be
copyrighted . . . .” H. R. Rep., at 55 (emphasis
added).
These words suggest two exercises, one physical,
one mental. Can the design features (the picture, the graphic, the
sculpture) be physically removed from the article (and considered
separately), all the while leaving the fully functioning
utilitarian object in place? If not, can one nonetheless conceive
of the design features separately without replicating a picture of
the utilitarian object? If the answer to either of these questions
is “yes,” then the design is eligible for copyright protection.
Otherwise, it is not. The abstract nature of these questions makes
them sound difficult to apply. But with the Court’s words in mind,
the difficulty tends to disappear.
An example will help. Imagine a lamp with a
circular marble base, a vertical 10-inch tall brass rod (containing
wires) inserted off center on the base, a light bulb fixture
emerging from the top of the brass rod, and a lampshade sitting on
top. In front of the brass rod a porcelain Siamese cat sits on the
base facing outward. Obviously, the Siamese cat is physically
separate from the lamp, as it could be easily removed while
leaving both cat and lamp intact. And, assuming it otherwise
qualifies, the designed cat is eligible for copyright
protection.
Now suppose there is no long brass rod; instead
the cat sits in the middle of the base and the wires run up through
the cat to the bulbs. The cat is not physically separate from the
lamp, as the reality of the lamp’s construction is such that an
effort to physically separate the cat and lamp will destroy both
cat and lamp. The two are integrated into a single functional
object, like the similar configuration of the ballet dancer
statuettes that formed the lamp bases at issue in Mazer v. Stein , 347 U. S. 201 (1954) . But we can easily imagine
the cat on its own, as did Congress when conceptualizing the ballet
dancer. See H. R. Rep., at 55 (the statuette in Mazer was
“incorporated into a product without losing its ability to exist
independently as a work of art”). In doing so, we do not create a
mental picture of a lamp (or, in the Court’s words, a “replica” of
the lamp), which is a useful article. We simply perceive the cat
separately, as a small cat figurine that could be a copyrightable
design work standing alone that does not replicate the lamp. Hence
the cat is conceptually separate from the utilitarian
article that is the lamp. The pair of lamps pictured at Figures 1
and 2 in the Appendix to this opinion illustrate this
principle.
Case law, particularly case law that Congress
and the Copyright Office have considered, reflects the same
approach. Congress cited examples of copyrightable design works,
including “a carving on the back of a chair” and “a floral relief
design on silver flatware.” H. R. Rep., at 55. Copyright Office
guidance on copyrightable designs in useful articles include “an
engraving on a vase,” “[a]rtwork printed on a t-shirt,” “[a]
colorful pattern decorating the surface of a shopping bag,” “[a]
drawing on the surface of wallpaper,” and “[a] floral relief
decorating the handle of a spoon.” Compendium §924.2(B). Courts
have found copyrightable matter in a plaster ballet dancer
statuette encasing the lamp’s electric cords and forming its base,
see Mazer , supra , as well as carvings engraved onto
furniture, see Universal Furniture Int’l , Inc. v. Collezione Europa USA, Inc. , 618 F. 3d 417, 431–435 (CA4
2010) ( per curiam ), and designs on laminated floor
tiles, see Home Leg-end, LLC v. Mannington Mills,
Inc. , 784 F. 3d 1404, 1412–1413 (CA11 2015). See generally
Brief for Intellectual Property Professors as Amici
Curiae .
By way of contrast, Van Gogh’s painting of a
pair of old shoes, though beautifully executed and copyrightable as
a painting, would not qualify for a shoe design copyright. See
Appendix, fig. 3, infra ; 17 U. S. C. §§113(a)–(b).
Courts have similarly denied copyright protection to objects that
begin as three-dimensional designs, such as measuring spoons shaped
like heart-tipped arrows, Bonazoli v. R. S. V. P. Int’l,
Inc. , 353 F. Supp. 2d 218, 226–227 (RI 2005); candleholders
shaped like sailboats, Design Ideas, Ltd. v. Yankee
Candle Co., 889 F. Supp. 2d 1119, 1128 (CD Ill. 2012); and wire
spokes on a wheel cover, Norris Industries, Inc. v. International Tel. & Tel. Corp. , 696 F. 2d 918, 922–924
(CA11 1983). None of these designs could qualify for copyright
protection that would prevent others from selling spoons,
candleholders, or wheel covers with the same design. Why not?
Because in each case the design is not separable from the
utilitarian aspects of the object to which it relates. The designs
cannot be physically separated because they themselves make up the
shape of the spoon, candleholders, or wheel covers of which they
are a part. And spoons, candleholders, and wheel covers are useful
objects, as are the old shoes depicted in Van Gogh’s painting. More
importantly, one cannot easily imagine or otherwise conceptualize
the design of the spoons or the candleholders or the shoes without that picture, or image, or replica being a picture of
spoons, or candleholders, or wheel covers, or shoes . The
designs necessarily bring along the underlying utilitarian object.
Hence each design is not conceptually separable from the physical
useful object.
The upshot is that one could copyright the
floral design on a soupspoon but one could not copyright the shape
of the spoon itself, no matter how beautiful, artistic, or
esthetically pleasing that shape might be: A picture of the shape
of the spoon is also a picture of a spoon; the picture of a floral
design is not. See Compendium §924.2(B).
To repeat: A separable design feature must be
“capable of existing independently” of the useful article as a
separate artistic work that is not itself the useful article. If
the claimed feature could be extracted without replicating the
useful article of which it is a part, and the result would be a
copyrightable artistic work standing alone, then there is a
separable design. But if extracting the claimed features would
necessarily bring along the underlying useful article, the design
is not separable from the useful article. In many or most cases, to
decide whether a design or artistic feature of a useful article is
conceptually separate from the article itself, it is enough to
imagine the feature on its own and ask, “Have I created a picture
of a (useful part of a) useful article?” If so, the design is not
separable from the useful article. If not, it is.
In referring to imagined pictures and the like,
I am not speaking technically. I am simply trying to explain an
intuitive idea of what separation is about, as well as how I
understand the majority’s opinion. So understood, the opinion puts
design copyrights in their rightful place. The law has long
recognized that drawings or photographs of real world objects are
copyrightable as drawings or photographs, but the copyright does
not give protection against others making the underlying useful
objects. See, e.g. , Burrow-Giles Lithographic Co. v. Sarony , 111 U. S. 53 (1884) . That is why a copyright
on Van Gogh’s painting would prevent others from reproducing that
painting, but it would not prevent others from reproducing and
selling the comfortable old shoes that the painting depicts.
Indeed, the purpose of §113(b) was to ensure that “ ‘copyright
in a pictorial, graphic, or sculptural work, portraying a useful
article as such, does not extend to the manufacture of the useful
article itself.’ ” H. R. Rep., at 105.
II
To ask this kind of simple question—does the
design picture the useful article?—will not provide an answer in
every case, for there will be cases where it is difficult to say
whether a picture of the design is, or is not, also a picture of
the useful article. But the question will avoid courts focusing
primarily upon what I believe is an unhelpful feature of the
inquiry, namely, whether the design can be imagined as a “two- or
three-dimensional work of art.” Ante, at 1, 17. That is
because virtually any industrial design can be thought of
separately as a “work of art”: Just imagine a frame surrounding the
design, or its being placed in a gallery. Consider Marcel Duchamp’s
“readymades” series, the functional mass-produced objects he
designated as art. See Appendix, fig. 4, infra . What is
there in the world that, viewed through an esthetic lens, cannot be
seen as a good, bad, or indifferent work of art? What design
features could not be imaginatively reproduced on a painter’s
canvas? Indeed, great industrial design may well include design
that is inseparable from the useful article—where, as Frank Lloyd
Wright put it, “form and function are one.” F. Wright, An
Autobiography 146 (1943) (reprint 2005). Where they are one, the
designer may be able to obtain 15 years of protection through a
design patent. 35 U. S. C. §§171, 173; see also McKenna
& Strandburg, Progress and Competition in Design, 17 Stan.
Tech. L. Rev. 1, 48–51 (2013). But, if they are one, Congress did
not intend a century or more of copyright protection.
III
The conceptual approach that I have described
reflects Congress’ answer to a problem that is primarily practical
and economic. Years ago Lord Macaulay drew attention to the problem
when he described copyright in books as a “tax on readers for the
purpose of giving a bounty to writers.” 56 Parl. Deb. (3d Ser.)
(1841) 341, 350. He called attention to the main benefit of
copyright protection, which is to provide an incentive to produce
copyrightable works and thereby “promote the Progress of Science
and useful Arts.” U. S. Const., Art. I, §8, cl. 8. But
Macaulay also made clear that copyright protection imposes costs.
Those costs include the higher prices that can accompany the grant
of a copyright monopoly. They also can include (for those wishing
to display, sell, or perform a design, film, work of art, or piece
of music, for example) the costs of discovering whether there are
previous copyrights, of contacting copyright holders, and of
securing permission to copy. Eldred v. Ashcroft , 537
U. S. 186 –252 (2003) (Breyer, J., dissenting). Sometimes, as
Thomas Jefferson wrote to James Madison, costs can outweigh “the
benefit even of limited monopolies.” Letter from Thomas Jefferson
to James Madison (July 31, 1788), in 13 Papers of Thomas Jefferson
443 (J. Boyd ed. 1956) (Jefferson Letter). And that is particularly
true in light of the fact that Congress has extended the “limited
Times” of protection, U. S. Const., Art. I, §8, cl. 8, from
the “14 years” of Jefferson’s day to potentially more than a
century today. Jefferson Letter 443; see also Eldred , supra , at 246–252 (opinion of Breyer, J.).
The Constitution grants Congress primary
responsibility for assessing comparative costs and benefits and
drawing copyright’s statutory lines. Courts must respect those
lines and not grant copyright protection where Congress has decided
not to do so. And it is clear that Congress has not extended broad
copyright protection to the fashion design industry. See, e.g. , 1 Nimmer §2A.08[H][3][c] (describing how Congress
rejected proposals for fashion design protection within the 1976
Act and has rejected every proposed bill to this effect since
then); Esquire, Inc. v. Ringer , 591 F. 2d 796,
800, n. 12 (CADC 1978) (observing that at the time of the 1976
Copyright Act, Congress had rejected every one of the approximately
70 design protection bills that had been introduced since 1914); e.g., H. R. 5055, 109th Cong., 2d Sess.: “To Amend title 17,
United States Code, to provide protection for fashion design”
(introduced Mar. 30, 2006; unenacted). Congress has left “statutory
. . . protection . . . largely unavailable for
dress designs.” 1 Nimmer §2A.08[H][3][a]; Raustiala & Sprigman,
The Piracy Paradox: Innovation and Intellec-tual Property in
Fashion Design, 92 Va. L. Rev. 1687, 1698–1705 (2006).
Congress’ decision not to grant full copyright
protection to the fashion industry has not left the industry
without protection. Patent design protection is available. 35
U. S. C. §§171, 173. A maker of clothing can obtain
trademark protection under the Lanham Act for signature features of
the clothing. 15 U. S. C. §1051 et seq. And a
designer who creates an original textile design can receive
copyright protection for that pattern as placed, for example, on a
bolt of cloth, or anything made with that cloth. E.g. ,
Compendium §924.3(A)(1). “[T]his [type of] claim . . . is
generally made by the fabric producer rather than the garment or
costume designer,” and is “ordinarily made when the two-dimensional
design is applied to the textile fabric and before the garment is
cut from the fabric.” 56 Fed. Reg. 56531 (1991).
The fashion industry has thrived against this
backdrop, and designers have contributed immeasurably to artistic
and personal self-expression through clothing. But a decision by
this Court to grant protection to the design of a garment would
grant the designer protection that Congress refused to provide. It
would risk increased prices and unforeseeable disruption in the
clothing industry, which in the United States alone encompasses
nearly $370 billion in annual spending and 1.8 million jobs. Brief
for Council of Fashion Designers of America, Inc., as Amicus
Curiae 3–4 (citing U. S. Congress, Joint Economic
Committee, The New Economy of Fashion 1 (2016)). That is why I
believe it important to emphasize those parts of the Court’s
opinion that limit the scope of its interpretation. That language,
as I have said, makes clear that one may not “claim a copyright in
a useful article merely by creating a replica of that article in
some other medium,” which “would not give rise to any rights in the
useful article that inspired it.” Ante, at 7–8.
IV
If we ask the “separateness” question
correctly, the answer here is not difficult to find. The majority’s
opinion, in its appendix, depicts the cheerleader dress designs
that Varsity submitted to the Copyright Office. Can the design
features in Varsity’s pictures exist separately from the
utilitarian aspects of a dress? Can we extract those features as
copyrightable design works standing alone, without bringing along,
via picture or design, the dresses of which they constitute a
part?
Consider designs 074, 078, and 0815. They
certainly look like cheerleader uniforms. That is to say, they look
like pictures of cheerleader uniforms, just like Van Gogh’s old
shoes look like shoes. I do not see how one could see them
otherwise. Designs 299A and 2999B present slightly closer
questions. They omit some of the dresslike context that the other
designs possess. But the necklines, the sleeves, and the cut of the
skirt suggest that they too are pictures of dresses. Looking at all
five of Varsity’s pictures, I do not see how one could
conceptualize the design features in a way that does not picture,
not just artistic designs, but dresses as well.
Were I to accept the majority’s invitation to
“imaginatively remov[e]” the chevrons and stripes as they are
arranged on the neckline, waistline, sleeves, and skirt of each
uniform, and apply them on a “painter’s canvas,” ante, at
10, that painting would be of a cheerleader’s dress. The esthetic
elements on which Varsity seeks protection exist only as part of
the uniform design—there is nothing to separate out but for
dress-shaped lines that replicate the cut and style of the
uniforms. Hence, each design is not physically separate, nor is it
conceptually separate, from the useful article it depicts, namely,
a cheerleader’s dress. They cannot be copyrighted.
Varsity, of course, could have sought a design
patent for its designs. Or, it could have sought a copyright on a
textile design, even one with a similar theme of chevrons and
lines.
But that is not the nature of Varsity’s
copyright claim. It has instead claimed ownership of the particular
“ ‘treatment and arrangement’ ” of the chevrons and lines
of the design as they appear at the neckline, waist, skirt,
sleeves, and overall cut of each uniform. Brief for Respondents 50.
The majority imagines that Varsity submitted something
different—that is, only the surface decorations of chevrons and
stripes, as in a textile design. As the majority sees it, Varsity’s
copyright claim would be the same had it submitted a plain
rectangular space depicting chevrons and stripes, like swaths from
a bolt of fabric. But considered on their own, the simple stripes
are plainly unoriginal. Varsity, then, seeks to do indirectly what
it cannot do directly: bring along the design and cut of the
dresses by seeking to protect surface decorations whose “treatment
and arrangement” are coextensive with that design and cut .
As Varsity would have it, it would prevent its competitors from
making useful three-dimensional cheerleader uniforms by submitting
plainly unoriginal chevrons and stripes as cut and arranged on a
useful article. But with that cut and arrangement, the resulting
pictures on which Varsity seeks protection do not simply depict
designs. They depict clothing. They depict the useful articles of
which the designs are inextricable parts. And Varsity cannot obtain
copyright protection that would give them the power to prevent
others from making those useful uniforms, any more than Van Gogh
can copyright comfortable old shoes by painting their likeness.
I fear that, in looking past the
three-dimensional design inherent in Varsity’s claim by treating it
as if it were no more than a design for a bolt of cloth, the
majority has lost sight of its own important limiting principle.
One may not “claim a copyright in a useful article merely by
creating a replica of that article in some other medium,” such as
in a picture. Ante, at 7. That is to say, one cannot obtain
a copyright that would give its holder “any rights in the useful
article that inspired it.” Ante, at 8.
With respect, I dissent. | The Supreme Court ruled that a feature incorporated into the design of a useful article is eligible for copyright protection only if it meets two criteria: it can be perceived as a two- or three-dimensional work of art separate from the useful article, and it would qualify for copyright protection on its own or when fixed in another tangible medium. This case concerned the copyright eligibility of cheerleading uniform designs, with the Court finding that the designs could exist independently of the uniforms as two-dimensional works of art and thus were eligible for copyright protection. |
Taxes | Head Money Cases | https://supreme.justia.com/cases/federal/us/112/580/ | U.S. Supreme Court Head Money Cases, 112
U.S. 580 (1884) Head Money Cases Argued November 19, 20,
1884 Decided December 8,
1884 112
U.S. 580 I N ERROR TO THE CIRCUIT COURT OF THE UNITED
STATES FOR THE EASTERN DISTRICT OF NEW
YORK Syllabus The act of Congress of August 8, 1882, "to regulate
immigration," which imposes upon the owners of steam or sailing
vessels who shall bring passengers from a foreign port into a port
of the United States, a duty of fifty Page 112 U. S. 581 cents for every such passenger not a citizen of this country, is
a valid exercise of the power to regulate commerce with foreign
nations.
Though the previous cases in this court on that subject related
to State statutes only, they held those statutes void on the ground
that authority to enact them was vested exclusively in Congress by
the Constitution, and necessarily decided that, when Congress did
pass such a statute, which it has done in this case, it would be
valid.
The contribution levied on the ship owner by this statue is
designed to mitigate the evils incident to immigration from abroad
by raising a fund for that purpose, and it is not, in the sense of
the Constitution, a tax subject to the limitations imposed by that
instrument on the general taxing power of Congress.
A tax is uniform, within the meaning of the constitutional
provision on that subject, when it operates with the same effect in
all places where the subject of it is found, and is not wanting in
such uniformity because the thing taxed is not equally distributed
in all parts of the United States.
A treaty is primarily a compact between independent nations, and
depends for the enforcement of its provisions on the honor and the
interest of the governments which are parties to it. If these fail,
its infraction becomes the subject of international reclamation and
negotiation, which may lead to war to enforce them. With this,
judicial courts have nothing to do.
But a treaty may also confer private rights on citizens or
subjects of the contracting powers which are of a nature to be
enforced in n court of justice, and which, in cases otherwise
cognizable in such courts, furnish rules of decision. The
Constitution of the United States makes the treaty, while in force,
a part of the supreme law of the land in all courts where such
rights are to be tried.
But in this respect, so far as the provisions of a treaty can
become the subject of judicial cognizance in the courts of the
country, they are subject to such acts as Congress may pass for
their enforcement, modification, or repeal.
These suits were brought to recover back sums collected at
various times as duties on immigrants arriving in the United
States, under the provision of the act of August 3, 1882, 23 Stat.
21,
"that there shall be levied, collected, and paid a duty of fifty
cents for each and every passenger not a citizen of the United
States, who shall come by steam or sail vessel from a foreign port
to any port within the United States."
Protests were filed against each payment, and all other steps
required as foundations for the actions were taken. In the Edye
Case, there was a trial, jury being waived, a finding of facts, a
judgment, and exceptions. 18 Fed.Rep. 13. In the Cunard Cases,
judgment was entered in favor of the collector Page 112 U. S. 582 on demurrer to the complaints. The causes were brought here on
writs of error. Page 112 U. S. 586 MR. JUSTICE MILLER delivered the opinion of the court.
These cases all involve the same questions of law, and have been
argued before this court together.
The case at the head of the list presents all the facts in the
form of an agreed statement signed by counsel, and it therefore
brings the questions before us very fully. The other two were
decided by the Circuit Court on demurrer to the declaration.
They will be disposed of here in one opinion, which will have
reference to the case as made by the record in Edye &
Another v. Robertson. The suit is brought to recover from Robertson the sum of money
received by him, as collector of the port of New York, from
plaintiffs on account of their landing in that port passengers from
foreign ports, not citizens of the United States, at the rate of
fifty cents for each of such passengers, under the act of Congress
of August 3, 1882, entitled " An Act to regulate immigration."
The petition of plaintiffs and the agreed facts, which are Page 112 U. S. 587 also made the finding of the court to which the case was
submitted without a jury, are the same with regard to each of many
arrivals of vessels of the plaintiffs, except as to the name of the
vessel and the number and age of the passengers. The statement as
to the arrival first named, which is here given, will be sufficient
for them all for the purposes of this opinion.
The following are admitted to be the facts in this action:
"I. That the plaintiffs are partners in trade in the city of New
York under the firm name of Funch, Edye & Co., and carry on the
business of transporting passengers and freight upon the high seas
between Holland and the United States of America as consignees and
agents."
"That on the 2d day of October, 1882, there arrived, consigned
to the plaintiffs, the Dutch ship Leerdam, owned by certain
citizens or subjects of the Kingdom of Holland and belonging to the
nationality of Holland, at the port of New York. She had sailed
from the foreign port of Rotterdam, in Holland, bound to New York,
and carried 382 persons not citizens of tile United States."
"That, among said 382 persons, 20 were severally under the age
of one year, and 9 were severally between the ages of one year and
eight years."
"That, upon the arrival of said steamship Leerdam within the
collection district of New York, the master thereof gave, in
pursuance to section nine of the passenger act of 1882, and
delivered to the custom house officer, who first came on board the
vessel and made demand therefor, a correct list, signed by the
master, of all the passengers taken on board of said Leerdam at
said Rotterdam, specifying separately the names of the cabin
passengers, their age, sex, calling, and the country of which they
are citizens, and also the name, age, sex, calling, and native
country of each emigrant passenger or passengers other than cabin
passengers, and their intended destination or location, and in all
other respects complying with said ninth section, and a duplicate
of the aforesaid list of passengers, verified by the oath of the
master, was, with the manifest of the cargo, delivered by the
master to the defendant as collector Page 112 U. S. 588 of customs of the port of New York on the entry of said
vessel."
"That it appears from the said list of passengers and duplicate
that the said 382 persons were each and every one subjects of
Holland or other foreign powers in treaty of peace, amity, and
commerce with the United States."
"That the said passenger manifest also states the total number
of passengers, and shows that 20 of them were under one year of
age, and 59 between the ages of one year and eight years."
"That said collector, before allowing complete entry of said
vessel, as collector decided, on the 12th day of October, 1882,
that the plaintiffs must pay a duty of one hundred and ninety-one
dollars for said passengers, being fifty cents for each of said 382
passengers."
"That, by the regulations of the Treasury Department, the
nonpayment of said 191 dollars would have permitted the defendant
to refuse the complete entry of the vessel, or to refuse to give
her a clearance from the port of New York to her home port, and
such imposition would have created an apparent lien on said vessel
for said sum of 191 dollars."
"On the defendants' making such demand, the plaintiffs paid the
same and protested against the payment thereof."
"That a copy of the protest in regard to said Leerdam is annexed
to the complaint, marked No. 1, and is a correct copy of the
protest."
"That, on the same day, the plaintiffs duly appealed to the
Secretary of the Treasury from such decision of the collector, and
that the paper marked Appeal No. 2, annexed to the complaint, is a
copy of said appeal."
"On the 18th of October, 1882, the Secretary of the Treasury
sustained the action of the defendant, and this action is brought
within ninety days after the rendering of such decision."
"That the payment set forth in the complaint herein was levied
and collected by defendant, and the same was paid under and in
pursuance of an act of Congress, entitled 'An Act to regulate
Immigration,' approved August 3, 1882. " Page 112 U. S. 589 On the facts as thus agreed and as found by the Circuit Court, a
judgment was rendered in favor of defendant, which we are called
upon to review.
There is no complaint by plaintiffs that the defendant violated
this act in any respect but one, namely, that it did not authorize
him to demand anything for the twenty children under one year old,
and for the fifty-nine who were between the ages of one year and
eight years.
The supposed exception of this class of passengers does not
arise out of any language found in this act to regulate
immigration, nor any policy on which it is founded, but it is based
by counsel on a provision of an act approved one day earlier than
this, entitled "An Act to regulate the carriage of passengers by
sea." This provision limits the number of passengers which the
vessel may carry by the number of cubic feet of space in which they
are to be carried, and it declares that, in making this
calculation, children of the ages mentioned need not be counted. In
reference to the space they will occupy, this principle is
reasonable. But, as regards the purpose of the immigration act to
raise a fund for the sick, the poor, and the helpless immigrants,
children are as likely to require its aid as adults, probably more
so. They are certainly within the definition of the word passenger
when otherwise within the purview of the act. They are certainly
within the definition of the word "passenger" when otherwise within
the purview of the act. This branch of the case requires no further
consideration.
The other errors assigned, however numerous or in whatever
language presented, all rest on the proposition that the act of
Congress requiring the collector to demand and receive from the
master, owner, or consignee of each vessel arriving from a foreign
port fifty cents for every passenger whom he brings into a port of
the United States who is not a citizen, is without warrant in the
Constitution, and is void.
The substance of the act is found in its first section,
namely:
" An Act to Regulate Immigration" " Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled, That there
shall be levied, collected, and paid a duty of fifty cents Page 112 U. S. 590 for each and every passenger, not a citizen of the United
States, who shall come by steam or sail vessel from a foreign port
to any port within the United States. The said duty shall be paid
to the collector of customs of the port to which such passenger
shall come, or if there be no collector at such port, then to the
collector of customs nearest thereto, by the master, owner, agent,
or consignee of every such vessel, within twenty-four hours after
the entry thereof into such port. The money thus collected shall be
paid into the United States Treasury, and shall constitute a fund
to be called the immigrant fund, and shall be used, under the
direction of the Secretary of the Treasury, to defray the expense
of regulating immigration under this act, and for the care of
immigrants arriving in the United States, for the relief of such as
are in distress, and for the general purposes and expenses of
carrying this act into effect."
22 Stat. 214.
The act further authorizes the Secretary to use the aid of any
State organization or officer for carrying into effect the
beneficent objects of this law by distributing the fund in
accordance with the purpose for which it was raised, not exceeding
in any port the sum received from it, under rules and regulations
to be prescribed by him. It directs that such officers shall go on
board vessels arriving from abroad, and if, on examination, they
shall find any convict, lunatic, idiot, or any person unable to
take care of himself or herself without becoming a public charge,
they shall report to the collector, and such person shall not be
permitted to land.
It is also enacted that convicts, except for political offences,
shall be returned to the nations to which they belong. And the
Secretary is directed to prepare rules for the protection of the
immigrant who needs it, and for the return of those who are not
permitted to land.
This act of Congress is similar in its essential features to
many statutes enacted by States of the Union for the protection of
their own citizens and for the good of the immigrants who land at
seaports within their borders.
That the purpose of these statutes is humane, is highly
beneficial to the poor and helpless immigrant, and is essential
to Page 112 U. S. 591 the protection of the people in whose midst they are deposited
by the steamships, is beyond dispute. That the power to pass such
laws should exist in some legislative body in this country is
equally clear. This court has decided distinctly and frequently,
and always after a full hearing from able counsel, that it does not
belong to the States. That decision did not rest in any case on the
ground that the State and its people were not deeply interested in
the existence and enforcement of such laws, and were not capable of
enforcing them if they had the power to enact them, but on the
ground that the Constitution, in the division of powers which it
declares between the States and the general government, has
conferred this power on the latter to the exclusion of the former.
We are now asked to decide that it does not exist in Congress,
which is to hold that it does not exist at all -- that the framers
of the Constitution have so worded that remarkable instrument that
the ships of all nations, including our own, can, without restraint
or regulation, deposit here, if they find it to their interest to
do so, the entire European population of criminals, paupers, and
diseased persons without making any provision to preserve them from
starvation and its concomitant sufferings even for the first few
days after they have left the vessel.
This court is not only asked to decide this, but it is asked to
overrule its decision, several times made with unanimity, that the
power does reside in Congress, is conferred upon that body by the
express language of the Constitution, and the attention of Congress
directed to the duty which arises from that language to pass the
very law which is here in question.
That these statutes are regulations of commerce -- of commerce
with foreign nations -- is conceded in the argument in this case,
and that they constitute a regulation of that class which belongs
exclusively to Congress is held in all the cases in this court. It
is upon these propositions that the court has decided in all these
cases that the State laws are void. Let us examine those decisions
for a moment.
In the Passenger Cases, so called, the report of which
occupies the pages of 7 Howard from page 48 U. S. 283 to 48 U. S. 573 ,
mostly with opinions of the judges, the order of the court is
that
"it is the Page 112 U. S. 592 opinion of this court that the statute law of New York, by which
the health commissioner of the city of New York is declared
entitled to demand and receive from the master of every vessel from
a foreign port that should arrive in the port of said city the sum
of one dollar for each steerage passenger brought in such vessel,
is repugnant to the Constitution and laws of the United States, and
therefore void."
An examination of the opinions of the judges shows that, if the
majority agreed upon any one reason for this order, it was because
the law was a regulation of commerce, the power over which that
Constitution had placed exclusively in Congress. The same
examination will show that several judges denied this because they
held that this power belonged to the class which the States might
exercise until it was assumed by Congress. It is very clear that,
if any such act of Congress had existed then as the one now before
us, the decision of the court would have been nearer to
unanimity.
In the case of Henderson v. The Mayor of New York, 92 U. S. 259 , the
whole subject is reviewed, and, in the light of the division in
this court in the Passenger Cases, it is considered, on
principle, as if for the first time. In that case, after the
statute of New York had been modified in such a manner as was
supposed to remove the objections held good against it in the Passenger Cases, the question of its constitutional
validity was again brought before this court, when it was held void
by the unanimous judgment of all its members. And this was upon the
distinct ground that it was a regulation of commerce solely within
the power of Congress.
"As already indicated," says the court,
"the provisions of the Constitution of the United States on
which the principal reliance is placed to make void the statute of
New York is that which gives to Congress the right 'to regulate
commerce with foreign nations.'"
The court then, referring to the transportation of passengers
from European ports to those of the United States, says:
"It has become a part of our commerce with foreign nations, of
vast interest to this country as well as to the immigrants who come
among us, to find a welcome and a home within our borders. . .
. Page 112 U. S. 593 Is the regulation of this great system a regulation of commerce?
Can it be doubted that a law which prescribes the terms on which
vessels shall engage in it is a law regulating this branch of
commerce?"
The court adds:
"We are of opinion that this whole subject has been confided to
Congress by the Constitution; that Congress can more appropriately
and with more acceptance exercise it than any other body known to
our law, State or national; that, by providing a system of laws in
these matters, applicable to all ports and to all vessels, a
serious question, which has long been matter of contest and
complaint, may be effectually and satisfactorily settled."
And, for this reason, the statute of New York was held void.
In the case of the Commissioners of Immigration v. North
German Lloyd, 92 U. S. 259 , a
similar statute of Louisiana was held void for the same reason. And
in the case of Chy Lung v. Freeman, 92 U. S.
275 , decided at the same term, the statute of California
on the same subject was also held void because, in the language of
the headnote to the report, it "invades the right of Congress to
regulate commerce with foreign nations."
In the case of People v. Compagnie Generale
Transatlantique, 107 U. S. 59 , where
the State of New York, having again modified her statute, it was
again held void, the court said:
"It has been so repeatedly decided by this court that such a tax
as this is a regulation of commerce with foreign nations, confided
by the Constitution to the exclusive control of Congress"
(referring to the cases just cited), "that there is little to
say beyond affirming the judgment of the Circuit Court, which was
based on those decisions "
It cannot be said that these cases do not govern the present,
though there was not then before us any act of Congress whose
validity was in question, for the decisions rest upon the ground
that the State statutes were void only because Congress, and not
the States, was authorized by the Constitution to pass them, and
for the reason that Congress could enact such laws, and for that
reason alone were the acts of the State held void. It was,
therefore, of the essence of the decision which held the Page 112 U. S. 594 State statutes invalid, that a similar statute by Congress would
be valid.
We are not disposed to reconsider those cases, or to resort to
other reasons for holding that they were well decided. Nor do we
feel that further argument in support of them is needed.
But counsel for plaintiffs, assuming that Congress, in the
enactment of this law, is exercising the taxing power conferred by
the first clause of section of article I of the Constitution, and
can derive no aid in support of its action from any other grant of
power in that instrument, argues that all the restraints and
qualifications found there in regard to any form of taxation are
limitations upon the exercise of the power in this case. The clause
is in the following language:
"The Congress shall have power to lay and collect taxes, duties,
imposts, and excises, to pay the debts and provide for the common
defence and the general welfare of the United States; but all
duties, imposts, and excises shall be uniform throughout the United
States."
In this view, it is objected that the tax is not levied to
provide for the common defence and general welfare of the United
States, and that it is not uniform throughout the United
States.
The uniformity here prescribed has reference to the various
localities in which the tax is intended to operate. "It shall be
uniform throughout the United States." Is the tax on tobacco void
because, in many of the States, no tobacco is raised or
manufactured? Is the tax on distilled spirits void because a few
States pay three-fourths of the revenue arising from it?
The tax is uniform when it operates with the same force and
effect in every place where the subject of it is found. The tax in
this case, which, as far as it can be called a tax, is an excise
duty on the business of bringing passengers from foreign countries
into this, by ocean navigation, is uniform and operates precisely
alike in every port of the United States where such passengers can
be landed. It is said that the statute violates the rule of
uniformity and the provision of the Constitution that
"no preference shall be given by any regulation of commerce or
revenue to the ports of one State over those of Page 112 U. S. 595 another"
because it does not apply to passengers arriving in this country
by railroad or other inland mode of conveyance. But the law applies
to all ports alike, and evidently gives no preference to one over
another, but is uniform in its operation in all ports of the United
States. It may be added that the evil to be remedied by this
legislation has no existence on our inland borders, and immigration
in that quarter needed no such regulation. Perfect uniformity and
perfect equality of taxation, in all the aspects in which the human
mind can view it, is a baseless dream, as this court has said more
than once. State Railroad Tax Cases, 92 U. S.
575 , 92 U. S. 612 .
Here, there is substantial uniformity within the meaning and
purpose of the Constitution.
If it were necessary to prove that the imposition of this
contribution on owners of ships is made for the general welfare of
the United States, it would not be difficult to show that it is so,
and particularly that it is among the means which Congress may deem
necessary and proper for that purpose, and beyond this we are not
permitted to inquire.
But the true answer to all these objections is that the power
exercised in this instance is not the taxing power. The burden
imposed on the ship owner by this statute is the mere incident of
the regulation of commerce -- of that branch of foreign commerce
which is involved in immigration. The title of the act, "An Act to
regulate immigration," is well chosen. It describes, as well as any
short sentence can describe it, the real purpose and effect of the
statute. Its provisions, from beginning to end, relate to the
subject of immigration, and they are aptly designed to mitigate the
evils inherent in the business of bringing foreigners to this
country, as those evils affect both the immigrant and the people
among whom he is suddenly brought and left to his own
resources.
It is true, not much is said about protecting the ship owner.
But he is the man who reaps the profit from the transaction, who
has the means to protect himself, and knows well how to do it, and
whose obligations in the premises need the aid of the statute for
their enforcement. The sum demanded of him is not, therefore,
strictly speaking, a tax or duty within the Page 112 U. S. 596 meaning of the Constitution. The money thus raised, though paid
into the Treasury, is appropriated in advance to the uses of the
statute, and does not go to the general support of the government.
It constitutes a fund raised from those who are engaged in the
transportation of these passengers, and who make profit out of it,
for the temporary care of the passengers whom they bring among us
and for the protection of the citizens among whom they are
landed.
If this is an expedient regulation of commerce by Congress, and
the end to be attained is one falling within that power, the act is
not void, because, within a loose and more extended sense than was
used in the Constitution, it is called a tax. In the case of Veazie Bank v.
Fenno , 8 Wall. 533, 75 U. S. 549 ,
the enormous tax of eight percent per annum on the circulation of
State banks, which was designed and did have the effect to drive
all such circulation out of existence, was upheld because it was a
means properly adopted by Congress to protect the currency which it
had created, namely, the legal tender notes and the notes of the
national banks. It was not subject, therefore, to the rules which
would invalidate an ordinary, tax pure and simple.
So also, in the case of the Packet Co. v. Keokuk, 95 U. S. 80 , the
city of Keokuk, having by ordinance imposed a wharfage fee or tax
for the use of a wharf owned by the city, the amount of which was
regulated by the tonnage of the vessel, this was held not to be a
tonnage tax within the meaning of the constitutional provision that
"no State shall, without the consent of Congress, lay any duty of
tonnage." The reason of this is that, though it was a burden, or
tax, in some sense, and measured by the tonnage of the vessel, it
was but a charge for services rendered, or for conveniences
furnished by the city, and was not a tonnage tax within the meaning
of the Constitution. This principle was reaffirmed in the case of Packet Co. v. St. Louis, 100 U. S. 423 .
We are clearly of opinion that, in the exercise of its power to
regulate immigration, and in the very act of exercising that power,
it was competent for Congress to impose this contribution on the
ship owner engaged in that business. Page 112 U. S. 597 Another objection to the validity of this act of Congress is
that it violates provisions contained in numerous treaties of our
government with friendly nations, and several of the articles of
these treaties are annexed to the careful brief of counsel. We are
not satisfied that this act of Congress violates any of these
treaties on any just construction of them. Though laws similar to
this have long been enforced by the State of New York, in the great
metropolis of foreign trade where four-fifths of these passengers
have been landed, no complaint has been made by any foreign nation
to ours of the violation of treaty obligations by the enforcement
of those laws.
But we do not place the defence of the act of Congress against
this objection upon that suggestion.
We are of opinion that, so far as the provisions in that act may
be found to be in conflict with any treaty with a foreign nation,
they must prevail in all the judicial courts of this country. We
had supposed that the question here raised was set at rest in this
court by the decision in the case of The
Cherokee Tobacco , 11 Wall. 616. It is true, as
suggested by counsel, that three judges of the court did not sit in
the case, and two others dissented. But six judges took part in the
decision, and the two who dissented placed that dissent upon the
ground that Congress did not intend that the tax on tobacco should
extend to the Cherokee tribe. They referred to the existence of the
treaty which would be violated if the statute was so construed as
persuasive against such a construction, but they nowhere intimated
that, if the statute was correctly construed by the court, it was
void because it conflicted with the treaty, which they would have
done if they had held that view. On the point now in controversy,
it was therefore the opinion of all the judges who heard the case. See United States v. McBratney, 104 U.
S. 621 -623.
The precise question involved here, namely, a supposed conflict
between an act of Congress imposing a customs duty and a treaty
with Russia on that subject, in force when the act was passed, came
before the Circuit Court for the District of Massachusetts in 1855.
It received the consideration of that eminent jurist Mr. Justice
Curtis of this court, who, in a very learned Page 112 U. S. 598 opinion, exhausted the sources of argument on the subject,
holding that, if there were such conflict, the act of Congress must
prevail in a judicial forum. Taylor v. Morton, 2 Curtis
454. And Mr. Justice Field, in a very recent case in the Ninth
Circuit, that of Ah Lung, 18 Fed.Rep. 28, on a writ of
habeas corpus, has delivered an opinion sustaining the same
doctrine in reference to a statute regulating the immigration of
Chinamen into this country. In the Clinton Bridge Case, Woolworth 150, 156, the writer of this opinion expressed the same
views as did Judge Woodruff, on full consideration, in Ropes v.
Clinch, 8 Blatchford 304, and Judge Wallace, in the same
circuit, in Bartram v. Robertson, 15 Fed.Rep. 212.
It is very difficult to understand how any different doctrine
can be sustained.
A treaty is primarily a compact between independent nations. It
depends for the enforcement of its provisions on the interest and
the honor of the governments which are parties to it. If these
fail, its infraction becomes the subject of international
negotiations and reclamations, so far as the injured party chooses
to seek redress, which may, in the end, be enforced by actual war.
It is obvious that, with all this, the judicial courts have nothing
to do, and can give no redress. But a treaty may also contain
provisions which confer certain rights upon the citizens or
subjects of one of the nations residing in the territorial limits
of the other, which partake of the nature of municipal law and
which are capable of enforcement as between private parties in the
courts of the country. An illustration of this character is found
in treaties which regulate the mutual rights of citizens and
subjects of the contracting nations in regard to rights of property
by descent or inheritance when the individuals concerned are
aliens. The Constitution of the United States places such
provisions as these in the same category as other laws of Congress
by its declaration that
"this Constitution and the laws made in pursuance thereof, and
all treaties made or which shall be made under authority of the
United States, shall be the supreme law of the land."
A treaty, then, is a law of the land, as an act of Congress is
whenever its provisions prescribe a rule by which the rights of the
private Page 112 U. S. 599 citizen or subject may be determined. And when such rights are
of a nature to be enforced in a court of justice, that court
resorts to the treaty for a rule of decision for the case before it
as it would to a statute.
But, even in this aspect of the case, there is nothing in this
law which makes it irrepealable or unchangeable. The Constitution
gives it no superiority over an act of Congress in this respect,
which may be repealed or modified by an act of a later date. Nor is
there anything in its essential character, or in the branches of
the government by which the treaty is made, which gives it this
superior sanctity.
A treaty is made by the President and the Senate. Statutes are
made by the President, the Senate, and the House of
Representatives. The addition of the latter body to the other two
in making a law certainly does not render it less entitled to
respect in the matter of its repeal or modification than a treaty
made by the other two. If there be any difference in this regard,
it would seem to be in favor of an act in which all three of the
bodies participate. And such is, in fact, the case in a declaration
of war, which must be made by Congress and which, when made,
usually suspends or destroys existing treaties between the nations
thus at war.
In short, we are of opinion that, so far as a treaty made by the
United States with any foreign nation can become the subject of
judicial cognizance in the courts of this country, it is subject to
such acts as Congress may pass for its enforcement, modification,
or repeal.
Other objections are made to this statute. Some of these relate
not to the power of Congress to pass the act, but to the expediency
or justice of the measure, of which Congress, and not the courts,
are the sole judges -- such as its unequal operation on persons not
paupers or criminals and its effect in compelling the ultimate
payment of the sum demanded for each passenger by that passenger
himself. Also that the money is to be drawn from the Treasury
without an appropriation by Congress. The act itself makes the
appropriation, and, even if this be not warranted by the
Constitution, it does not make void the demand for contribution,
which may yet be appropriated Page 112 U. S. 600 by Congress, if that be necessary, by another statute.
It is enough to say that, Congress having the power to pass a
law regulating immigration as a part of commerce of this country
with foreign nations, we see nothing in the statute by which it has
here exercised that power forbidden by any other part of the
Constitution.
The judgment of the Circuit Court in all the cases is Affirmed. | The Head Money Cases (1884) centered on an 1882 act of Congress that imposed a duty of 50 cents on ship owners for every passenger they brought into US ports from foreign ports who was not a US citizen. The Supreme Court upheld the act as a valid exercise of Congress's power to regulate commerce with foreign nations. The Court further ruled that the contribution levied by the statute was not a tax in the constitutional sense and did not violate treaty provisions. While treaties are part of the supreme law of the land, they are subject to acts of Congress for their enforcement, modification, or repeal. The Court affirmed the Circuit Court's judgment, finding that Congress had the power to regulate immigration as part of its authority over foreign commerce. |
Copyrights | Warner Chappell Music, Inc. v. Nealy | https://supreme.justia.com/cases/federal/us/601/22-1078/ | NOTICE: This opinion is subject to
formal revision before publication in the United States Reports.
Readers are requested to notify the Reporter of Decisions, Supreme
Court of the United States, Washington, D. C. 20543,
pio@supremecourt.gov, of any typographical or other formal
errors.
SUPREME COURT OF THE UNITED STATES
_________________
No. 22–1078
_________________
WARNER CHAPPELL MUSIC, INC., et al.,
PETITIONERS v. SHERMAN NEALY, et al.
on writ of certiorari to the united states
court of appeals for the eleventh circuit
[May 9, 2024]
Justice Kagan delivered the opinion of the
Court.
The Copyright Act’s statute of limitations
provides that a copyright owner must bring an infringement claim
within three years of its accrual. See 17 U. S. C.
§507(b). In this case, we assume without deciding that a claim is
timely under that provision if brought within three years of when
the plaintiff discovered an infringement, no matter when the
infringement happened. We then consider whether a claim satisfying
that rule is subject to another time-based limit—this one,
preventing the recovery of damages for any infringement that
occurred more than three years before a lawsuit’s filing. We hold
that no such limit on damages exists. The Copyright Act entitles a
copyright owner to recover damages for any timely claim.
I
This dispute had its start in a decades-old,
short-lived music venture. In 1983, Sherman Nealy and Tony Butler
formed Music Specialist, Inc. That company recorded and released
one album and several singles, including the works at issue. But
the collaboration dissolved a few years later. And Nealy soon
afterward went to prison for drug-related offenses. He served one
prison term from 1989 to 2008, and another from 2012 to 2015.
Meanwhile, Butler (unbeknownst to Nealy) entered
into an agreement with Warner Chappell Music, Inc. to license works
from the Music Specialist catalog. And Warner Chappell found quite
a few takers. One Music Specialist work (“Jam the Box”) was
interpolated into Flo Rida’s hit song “In the Ayer,” which sold
millions of copies and reached No. 9 on the Billboard chart. Use of
that song was in turn licensed to several popular television shows,
including “So You Think You Can Dance.” Other Music Specialist
songs found their way into recordings by the Black Eyed Peas and
Kid Sister.
In 2018, following his second prison stint,
Nealy sued Warner Chappell for copyright infringement. Nealy
alleged that he held the copyrights to Music Specialist’s songs and
that Warner Chappell’s licensing activities infringed his rights.
The infringing activity, Nealy claimed, dated back to 2008—so ten
years before he brought suit. Nealy sought damages and profits for
the alleged misconduct, as the Copyright Act authorizes. See
§504.
For his claims to proceed, Nealy had to show
they were timely. Under the Copyright Act, a plaintiff must file
suit “within three years after the claim accrued.” §507(b). On one
understanding of that limitations provision, a copyright claim
“accrue[s]” when “an infringing act occurs.” Petrella v. Metro-Goldwyn-Mayer, Inc. , 572 U.S.
663 , 670 (2014). So a plaintiff can complain about
infringements going back only three years from the time he filed
suit. If that rule governed, many of Nealy’s claims would be
untimely, because they alleged infringements occurring as much as
ten years earlier. But under an alternative view of the Act’s
limitations provision, a claim accrues when “the plaintiff
discovers, or with due diligence should have discovered,” the
infringing act. Ibid. , n. 4. That so-called discovery
rule, used in the Circuit where Nealy sued, enables a diligent
plaintiff to raise claims about even very old infringements if he
discovered them within the prior three years. Nealy urged that all
his claims were timely under that rule because he did not learn of
Warner Chappell’s infringing conduct until 2016—just after he got
out of prison and less than three years before he sued.
In the District Court, though, Nealy ran into a
different timing objection, related not to his ability to bring
suit but to his recovery of damages. Warner Chappell accepted that
the discovery rule governed the timeliness of Nealy’s claims. But
it argued that even if Nealy could sue under that rule for
infringements going back ten years, he could recover damages or
profits for only those occurring in the last three. The District
Court agreed. Relying on a decision from the Second Circuit, the
court held that even when claims for old infringements are timely,
monetary relief is “limited” to “the three years prior to the
filing” of the action. App. to Pet. for Cert. 26a (citing Sohm v. Scholastic Inc. , 959 F.3d 39, 51–52 (CA2
2020)). So Nealy could bring claims for infringing acts beyond that
three-year period, but could not recover any money for them.
Appreciating the impact of that ruling, the District Court
certified it for interlocutory appeal. See App. to Pet. for Cert.
36a; 28 U. S. C. §1292(b).
The Court of Appeals for the Eleventh Circuit
reversed, rejecting the notion of a three-year damages bar on a
timely claim. The court “assume[d] for the purposes of answering”
the certified question that all of Nealy’s claims were “timely
under the discovery rule.” 60 F. 4th 1325, 1331 (2023). And on
that assumption, the court ruled, he could recover full damages.
Allying itself with the Ninth rather than the Second Circuit, the
court held that a plaintiff with a timely claim under the discovery
rule may obtain “retrospective relief for [an] infringement” even
if it “occurr[ed] more than three years before the lawsuit’s
filing.” Ibid. (citing Starz Entertainment v. MGM , 39 F. 4th 1236, 1244 (CA9 2022)). “[T]he plain
text of the Copyright Act,” the Eleventh Circuit stated, “does not
support the existence of a separate damages bar for an otherwise
timely copyright claim.” 60 F. 4th, at 1334. And imposing such
a bar, the court reasoned, “would gut the discovery rule by
eliminating any meaningful relief ” for the very claims it is
designed to preserve. Ibid. We granted certiorari, 600 U. S. ___
(2023), to resolve the Circuit split noted above, and we now affirm
the Eleventh Circuit’s decision.
II
The question on which this Court granted
certiorari is “[w]hether, under the discovery accrual rule applied
by the circuit courts,” a copyright plaintiff “can recover damages
for acts that allegedly occurred more than three years before the
filing of a lawsuit.” Ibid. That question, which the Court
substituted for Warner Chappell’s, incorporates an assumption: that
the discovery rule governs the timeliness of copyright claims. We
have never decided whether that assumption is valid— i.e. ,
whether a copyright claim accrues when a plaintiff discovers or
should have discovered an infringement, rather than when the
infringement happened. See Petrella , 572 U. S., at 670,
n. 4. But that issue is not properly presented here, because
Warner Chappell never challenged the Eleventh Circuit’s use of the
discovery rule below. See supra , at 3; cf. Cutter v. Wilkinson , 544 U.S.
709 , 718, n. 7 (2005) (“[W]e are a court of review, not of
first view”). And as noted above, a division exists among the many
Courts of Appeals applying a copyright discovery rule (11 at last
count) about whether to superimpose a three-year limit on damages.
See supra , at 3–4; Petrella , 572 U. S., at 670,
n. 4; Pet. for Cert. 4. We therefore confined our review to
that disputed remedial issue, excluding consideration of the
discovery rule and asking only whether a plaintiff with a timely
claim under the rule can get damages going back more than three
years.[ 1 ]
The text of the Copyright Act answers that
question in favor of copyright plaintiffs. The Act’s statute of
limitations provides in full: “No civil action shall be maintained
under the provisions of this title unless it is commenced within
three years after the claim accrued.” §507(b); see supra , at
2. That provision establishes a three-year period for filing suit,
beginning to run when a claim accrues—here, we assume, upon its
discovery. And that clock is a singular one. The “time-to-sue
prescription,” as we have called it, establishes no separate
three-year period for recovering damages, this one running from the
date of infringement. Petrella , 572 U. S., at 686. If
any time limit on damages exists, it must come from the Act’s
remedial sections. But those provisions likewise do not aid a
long-ago infringer. They state without qualification that an
infringer is liable either for statutory damages or for the owner’s
actual damages and the infringer’s profits. See §504(a)–(c). There
is no time limit on monetary recovery. So a copyright owner
possessing a timely claim for infringement is entitled to damages,
no matter when the infringement occurred.
The Second Circuit’s contrary view, on top of
having no textual support, is essentially self-defeating. With one
hand, that court recognizes a discovery rule, thus enabling some
copyright owners to sue for infringing acts occurring more than
three years earlier. And with the other hand, the court takes away
the value in what it has conferred, by preventing the recovery of
damages for those older infringements. As the court below noted,
the three-year damages bar thus “gut[s]” or “silently eliminate[s]”
the discovery rule. 60 F. 4th, at 1333–1334; see supra ,
at 4. Or said another way, the damages bar makes the discovery rule
functionally equivalent to its opposite number—an accrual rule
based on the timing of an infringement.[ 2 ] As noted above, we do not resolve today which of those
two rules should govern a copyright claim’s timeliness. See supra , at 4. But we reject applying a judicially invented
damages limit to convert one of them into the other.
And we have never before proposed that course.
The Second Circuit thought otherwise, relying on language in our Petrella decision to support a three-year damages cap. Sohm , 959 F. 3d, at 51–52. There we noted, as the
Second Circuit emphasized, that the Copyright Act’s statute of
limitations allows plaintiffs “to gain retrospective relief running
only three years back from” the filing of a suit. 572 U. S.,
at 672; see id., at 677. Taken out of context, that line
might seem to address the issue here. But in making that statement,
we merely described how the limitations provision works when a
plaintiff has no timely claims for infringing acts more than three
years old. That was the situation in Petrella . Because the
plaintiff had long known of the defendant’s infringing conduct, she
could not avail herself of the discovery rule. Rather, she sued
only for infringements that occurred in the three years before her
suit. The defendant argued that she could not recover for even that
much under the doctrine of laches, which protects against
unreasonable delay in filing suit. We rejected that doctrine’s
application, explaining that the Act’s limitations provision
already “takes account of delay” by—here is the language
again—allowing the plaintiff “to gain retrospective relief running
only three years back from” her suit’s filing. Id. , at 672,
677. But we did not go beyond the case’s facts to say that even if
the limitations provision allows a claim for an earlier
infringement, the plaintiff may not obtain monetary relief. To the
contrary: The plaintiff in Petrella could get damages
“running only three years back” from filing because she could sue
for infringements occurring only within that timeframe.
Nealy is in a different situation. He has
invoked the discovery rule to bring claims for infringing acts
occurring more than three years before he filed suit. And as we
have explained, we took this case on the assumption that such
claims may be timely under the Act’s limitations provision. See supra , at 4. If Nealy’s claims are thus timely, he may
obtain damages for them. The Copyright Act contains no separate
time-based limit on monetary recovery.
Accordingly, we affirm the judgment below.
It is so ordered. Notes 1 Disregarding the limit in
the reformulated question, Warner Chappell’s briefing in this Court
focuses almost entirely on the discovery rule itself. Compare Brief
for Petitioners 15–41 and Reply Brief 1–18 (disputing the discovery
rule), with Brief for Petitioners 41–44 and Reply Brief 19–21
(assuming the discovery rule’s existence). That choice is
especially surprising given that Warner Chappell’s own petition for
certiorari raised the broader discovery-rule issue only in a
footnote, which acknowledged that the issue was not raised below
and is not the subject of a Circuit split. See Pet. for Cert. 14,
n. But even supposing Warner Chappell’s petition had urged us to
opine on the discovery rule, our reformulation of the question
presented should have put an end to such arguments. “The Court
decides which questions to consider through well-established
procedures; allowing the able counsel who argue before us to alter
these questions or to devise additional questions at the last
minute would thwart this system.” Taylor v. Freeland
& Kronz , 503 U.S.
638 , 646 (1992). 2 Scholars have speculated
about “exceptional case[s]” in which a copy-right plaintiff could
get some benefit out of a discovery rule even when combined with a
three-year damages bar. 3 M. Nimmer & D. Nimmer, Copyright
§12.05[B][2][c][ii] (2023). Suffice to say that assuming those
cases exist at all, they are as rare as hen’s teeth. SUPREME COURT OF THE UNITED STATES
_________________
No. 22–1078
_________________
WARNER CHAPPELL MUSIC, INC., et al.,
PETITIONERS v. SHERMAN NEALY, et al.
on writ of certiorari to the united states
court of appeals for the eleventh circuit
[May 9, 2024]
Justice Gorsuch, with whom Justice Thomas and
Justice Alito join, dissenting.
The Court discusses how a discovery rule of
accrual should operate under the Copyright Act. But in doing so it
sidesteps the logically antecedent question whether the Act has
room for such a rule. Rather than address that question, the Court
takes care to emphasize that its resolution must await a future
case. The trouble is, the Act almost certainly does not tolerate a
discovery rule. And that fact promises soon enough to make anything
we might say today about the rule’s operational details a dead
letter.
“[O]rdinarily,” this Court has said, a claim
“accrues when a plaintiff has a complete and present cause of
action.” Petrella v. Metro-Goldwyn-Mayer, Inc. , 572 U.S.
663 , 670 (2014) (internal quotation marks and alteration
omitted). “In other words, the limitations period generally begins
to run at the point when the plaintiff can file suit and obtain
relief.” Ibid. (internal quotation marks omitted). We call
this the “incident of injury rule.” Ibid ., n. 4. And we
interpret statutes with that “ ‘standard rule’ ” in mind. Rotkiske v. Klemm , 589 U.S. 8, 13 (2019).
What of the discovery rule? It “starts the
limitations period when the plaintiff discovers, or with due
diligence should have discovered, the injury that forms the basis
for the claim.” Petrella , 572 U. S., at 670, n. 4
(internal quotation marks omitted) . We have said, however,
that the rule is not “applicable across all contexts.” TRW
Inc. v. Andrews , 534 U.S.
19 , 27 (2001). Far from it: Unless the statute at hand directs
otherwise, we proceed consistent with traditional equitable
practice and ordinarily apply the discovery rule only “in cases of
fraud or concealment.” Ibid . We have long warned lower
courts, too, against taking any more “expansive approach to the
discovery rule.” Rotkiske , 589 U. S., at 14; see TRW
Inc. , 534 U. S., at 27–28.
There is little reason to suppose the Copyright
Act’s provisions at issue in this case contemplate any departure
from the usual rules. Section 507(b) provides that “[n]o civil
action shall be maintained . . . unless it is commenced
within three years after the claim accrued.” As the Court observed
in Petrella v. Metro-Goldwyn-Mayer, Inc. , standard
language like that calls for the application of the standard
incident of injury rule: “A copyright claim thus arises or
‘accrue[s]’ when an infringing act occurs,” not at some later date.
572 U. S., at 670. What this should mean for the case before
us seems equally evident: Because everyone agrees Sherman Nealy
filed suit more than three years after many of Warner Chappell’s
alleged infringing acts, see ante , at 2, some (if not all)
of his claims are untimely. Everyone agrees, too, that he has not
alleged any fraud or concealment that would entitle him to
equitable tolling. See Brief for Petitioners 39; Brief for
Respondents 50–51. The discovery rule thus has no role to play
here—or, indeed, in the mine run of copyright cases.
In one sense, the Court’s decision to pass over
this complication may be understandable. After all, none of the
parties before us questioned the application of a discovery rule in
proceedings below, but joined issue only over how it should work.
See ante , at 5, n. 1. And the Court may, as it does,
resolve the parties’ dispute while leaving for another day the
antecedent question whether a discovery rule exists under the Act.
See ante , at 4–5.
But if that is a permissible course, it does not
strike me as the most sensible one. Nothing requires us to play
along with these particular parties and expound on the details of a
rule of law that they may assume but very likely does not exist.
Respectfully, rather than devote our time to this case, I would
have dismissed it as improvidently granted and awaited another
squarely presenting the question whether the Copyright Act
authorizes the discovery rule. Better, in my view, to answer a
question that does matter than one that almost certainly does
not. | The Supreme Court held that the Copyright Act's statute of limitations allows copyright owners to seek damages for any infringement claim brought within three years of its accrual, regardless of when the infringement occurred. The Court did not decide on the applicability of a "discovery rule," which starts the limitations period when the plaintiff discovers the infringement, as it was not questioned by the parties in this case. |
Copyrights | Andy Warhol Foundation for Visual Arts, Inc. v. Goldsmith | https://supreme.justia.com/cases/federal/us/598/21-869/ | NOTICE: This opinion is subject to formal revision before
publication in the United States Reports. Readers are requested to
notify the Reporter of Decisions, Supreme Court of the United
States, Washington, D. C. 20543, pio@supremecourt.gov, of any
typographical or other formal errors.
SUPREME COURT OF THE UNITED STATES _________________ No. 21-869 _________________ ANDY WARHOL FOUNDATION FOR THE VISUAL ARTS, INC., PETITIONER v. LYNN GOLDSMITH, et al.
on writ of certiorari to the united states court of appeals for
the second circuit
[May 18, 2023]
Justice Sotomayor delivered the opinion of the Court.
This copyright case involves not one, but two artists. The
first, Andy Warhol, is well known. His images of products like
Campbell's soup cans and of celebrities like Marilyn Monroe appear
in museums around the world. Warhol's contribution to contemporary
art is undeniable.
The second, Lynn Goldsmith, is less well known. But she too was
a trailblazer. Goldsmith began a career in rock-and-roll
photography when there were few women in the genre. Her
award-winning concert and portrait images, however, shot to the
top. Goldsmith's work appeared in Life, Time, Rolling Stone, and
People magazines, not to mention the National Portrait Gallery and
the Museum of Modern Art. She captured some of the 20th century's
greatest rock stars: Bob Dylan, Mick Jagger, Patti Smith, Bruce
Springsteen, and, as relevant here, Prince.
In 1984, Vanity Fair sought to license one of Goldsmith's Prince
photographs for use as an "artist reference." The magazine wanted
the photograph to help illustrate a story about the musician.
Goldsmith agreed, on the condition
that the use of her photo be for "one time" only. 1 App. 85. The
artist Vanity Fair hired was Andy Warhol. Warhol made a silkscreen
using Goldsmith's photo, and Vanity Fair published the resulting
image alongside an article about Prince. The magazine credited
Goldsmith for the "source photograph," and it paid her $400. 2 id. , at 323, 325-326.
Warhol, however, did not stop there. From Goldsmith's
photograph, he derived 15 additional works. Later, the Andy Warhol
Foundation for the Visual Arts, Inc. (AWF) licensed one of those
works to Condé Nast, again for the purpose of illustrating a
magazine story about Prince. AWF came away with $10,000. Goldsmith
received nothing.
When Goldsmith informed AWF that she believed its use of her
photograph infringed her copyright, AWF sued her. The District
Court granted summary judgment for AWF on its assertion of "fair
use," 17 U. S. C. §107, but the Court of Appeals for the Second
Circuit reversed. In this Court, the sole question presented is
whether the first fair use factor, "the purpose and character of
the use, including whether such use is of a commercial nature or is
for nonprofit educational purposes," §107(1), weighs in favor of
AWF's recent commercial licensing to Condé Nast. On that narrow
issue, and limited to the challenged use, the Court agrees with the
Second Circuit: The first factor favors Goldsmith, not AWF.
I
Lynn Goldsmith is a professional photographer. Her specialty is
concert and portrait photography of musicians. At age 16, Goldsmith
got one of her first shots: an image of the Beatles' "trendy boots"
before the band performed live on The Ed Sullivan Show. S. Michel,
Rock Portraits, N. Y. Times, Dec. 2, 2007, p. G64. Within 10 years,
Goldsmith had photographed everyone from Led Zeppelin to James
Brown (the latter in concert in Kinshasa, no less). At that time,
Goldsmith "had few female peers." Ibid. But she was a
self-starter. She quickly became "a leading rock photographer" in
an era "when women on the scene were largely dismissed as
groupies." Ibid. In 1981, Goldsmith convinced Newsweek magazine to hire her to
photograph Prince Rogers Nelson, then an "up and coming" and "hot
young musician." 2 App. 315. Newsweek agreed, and Goldsmith took
photos of Prince in concert at the Palladium in New York City and
in her studio on West 36th Street. Newsweek ran one of the concert
photos, together with an article titled " 'The Naughty Prince of
Rock.' " Id. , at 320. Goldsmith retained the other photos.
She holds copyright in all of them.
One of Goldsmith's studio photographs, a black and white
portrait of Prince, is the original copyrighted work at issue in
this case. See fig. 1, infra . Figure 1. A black and white portrait
photograph of Prince taken in 1981 by Lynn Goldsmith. In 1984, Goldsmith, through her agency, licensed that photograph
to Vanity Fair to serve as an "artist reference for an
illustration" in the magazine. 1 App. 85. The terms of the license
were that the illustration was "to be published in Vanity Fair
November 1984 issue. It can appear one time full page and one time
under one quarter page. No other usage right granted." Ibid .
Goldsmith was to receive $400 and a source credit.
To make the illustration, Vanity Fair hired pop artist Andy
Warhol. Warhol was already a major figure in American art, known
among other things for his silkscreen portraits of
celebrities.[ 1 ] From Goldsmith's photograph,
Warhol created a silkscreen portrait of Prince, which appeared
alongside an article about Prince in the November 1984 issue of
Vanity Fair. See fig. 2, infra . The article, titled "Purple
Fame," is primarily about the "sexual style" of the new celebrity
and his music. Vanity Fair, Nov. 1984, p. 66. Goldsmith received
her $400 fee, and Vanity Fair credited her for the "source
photograph." 2 App. 323, 325-326. Warhol received an unspecified
amount. Figure 2. A purple silkscreen portrait
of Prince created in 1984 by Andy Warhol to illustrate an article
in Vanity Fair. In addition to the single illustration
authorized by the Vanity Fair license, Warhol created 15 other
works based on Goldsmith's photograph: 13 silkscreen prints and two
pencil drawings. The works are collectively referred to as the
"Prince Series." See Appendix, infra . Goldsmith did not know
about the Prince Series until 2016, when she saw the image of an
orange silkscreen portrait of Prince ("Orange Prince") on the cover
of a magazine published by Vanity Fair's parent company, Condé
Nast. See fig. 3, infra . Figure 3. An orange silkscreen portrait of Prince on the cover
of a special edition magazine published in 2016 by Condé
Nast. By that time, Warhol had died, and the Prince Series had passed
to the Andy Warhol Foundation for the Visual Arts, Inc. AWF no
longer possesses the works,[ 2 ] but it asserts
copy- right in them. It has licensed images of the works for
commercial and editorial uses. In particular, after Prince died in
2016, Condé Nast contacted AWF about the possibility of reusing the
1984 Vanity Fair image for a special edition magazine that would
commemorate Prince. Once AWF informed Condé Nast about the other
Prince Series images, however, Condé Nast obtained a license to
publish Orange Prince instead. The magazine, titled "The Genius of
Prince," is a tribute to "Prince Rogers Nelson, 1958-2016." It is
"devoted to Prince." 2 App. 352. Condé Nast paid AWF $10,000 for
the license. Goldsmith received neither a fee nor a source
credit.
Remember that Goldsmith, too, had licensed her Prince images to
magazines such as Newsweek, to accompany a story about the
musician, and Vanity Fair, to serve as an artist reference. But
that was not all. Between 1981 and 2016, Goldsmith's photos of
Prince appeared on or between the covers of People, Readers Digest,
Guitar World, and Musician magazines. See, e.g. , fig. 4, infra . Figure 4. One of Lynn Goldsmith's photographs of Prince on the
cover of Musician magazine. People magazine, in fact, paid Goldsmith $1,000 to use one of
her copyrighted photographs in a special collector's edition,
"Celebrating Prince: 1958-2016," just after Prince died. People's
tribute, like Condé Nast's, honors the life and music of Prince.
Other magazines, including Rolling Stone and Time, also released
special editions. See fig. 5, infra . All of them depicted
Prince on the cover. All of them used a copyrighted photograph in
service of that object. And all of them (except Condé Nast)
credited the photographer. Figure 5. Four special edition magazines commemorating Prince
after he died in 2016. When Goldsmith saw Orange Prince on the cover of Condé
Nast's special edition magazine, she recognized her work. "It's the
photograph," she later testified. 1 App. 290. Orange Prince crops,
flattens, traces, and colors the photo but otherwise does not alter
it. See fig. 6, infra . Figure 6. Warhol's orange silkscreen portrait of Prince
superimposed on Goldsmith's portrait photograph. Goldsmith notified AWF of her belief that it had infringed her
copyright. AWF then sued Goldsmith and her agency for a declaratory
judgment of noninfringement or, in the alternative, fair use.
Goldsmith counterclaimed for infringement.
The District Court granted summary judgment for AWF. 382 F.
Supp. 3d 312, 316 (SDNY 2019). The court considered the four fair
use factors enumerated in17 U. S. C. §107 and held that the Prince
Series works made fair use of Goldsmith's photograph. As to the
first factor, the works were "transformative" because, looking at
them and the photograph "side-by-side," they "have a different
character, give Goldsmith's photograph a new expression, and employ
new aesthetics with creative and communicative results distinct
from Goldsmith's." 382 F. Supp. 3d, at 325-326 (internal quotation
marks and alterations omitted). In particular, the works "can
reasonably be perceived to have transformed Prince from a
vulnerable, uncomfortable person to an iconic, larger-than-life
figure," such that "each Prince Series work is immediately
recognizable as a 'Warhol' rather than as a photograph of Prince." Id. , at 326. Although the second factor, the nature of
Goldsmith's copyrighted work (creative and unpublished), "would
ordinarily weigh in [her] favor . . . , this factor [was] of
limited importance because the Prince Series works are
transformative." Id. , at 327. The third factor, the amount
and substantiality of the portion used in relation to the
copyrighted work, favored AWF because, according to the District
Court, "Warhol removed nearly all the photograph's protectible
elements in creating the Prince Series." Id. , at 330.
Finally, the fourth factor likewise favored AWF because "the Prince
Series works are not market substitutes that have harmed-or have
the potential to harm-Goldsmith." Id. , at 331.
The Court of Appeals for the Second Circuit reversed and
remanded. 11 F. 4th 26, 54 (2021). It held that all four fair use
factors favored Goldsmith. On the first factor, "the purpose and
character of the use," §107(1), the Court of Appeals rejected the
notion that "any secondary work that adds a new aesthetic or new
expression to its source material is necessarily transformative." Id. , at 38-39. The question was, instead, "whether the
secondary work's use of its source material is in service of a
fundamentally different and new artistic purpose and character." Id. , at 42 (internal quotation marks omitted). Such
"transformative purpose and character must, at bare minimum,
comprise something more than the imposition of another artist's
style on the primary work." Ibid. Here, however, "the
overarching purpose and function of the two works at issue . . . is
identical, not merely in the broad sense that they are created as
works of visual art, but also in the narrow but essential sense
that they are portraits of the same person." Ibid. (footnote
omitted). The Court of Appeals also rejected the District Court's
logic that " 'each Prince Series work' " is transformative because
it " 'is immediately recognizable as a "Warhol," ' " which the
Court of Appeals believed would "create a celebrity-plagiarist
privilege." Id. , at 43; see also ibid. ("[T]he fact
that Martin Scorsese's recent film The Irishman is
recognizably 'a Scorsese' does not absolve him of the obligation to
license the original book" (some internal quotation marks and
alterations omitted)).
On the other three factors, the Court of Appeals found that the
creative and unpublished nature of Goldsmith's photograph favored
her, id. , at 45; that the amount and substantiality of the
portion taken (here, "the 'essence' " of the photograph) was not
reasonable in relation to the purpose of the use, id. , at
45-47; and that AWF's commercial licensing encroached on
Goldsmith's protected market to license her photograph "to
publications for editorial purposes and to other artists to create
derivative works," id. , at 48-51.[ 3 ] The
court noted that there was "no material dispute that both Goldsmith
and AWF have sought to license (and indeed have successfully
licensed) their respective depictions of Prince to popular print
magazines to accompany articles about him." Id. , at 49
(footnote omitted).
Finally, although the District Court had not reached the issue,
the Court of Appeals rejected AWF's argument that the Prince Series
works were not substantially similar to Goldsmith's photograph. See id. , at 52-54.
Judge Jacobs concurred. He stressed that the Court of Appeals'
holding "d[id] not consider, let alone decide, whether the
infringement here encumbers the original Prince Series works." Id. , at 54. Instead, "the only use at issue" was "the
Foundation's commercial licensing" of images of the Prince Series. Id. , at 55.
This Court granted certiorari. 596 U. S. ___ (2022).
II
AWF does not challenge the Court of Appeals' holding that
Goldsmith's photograph and the Prince Series works are
substantially similar. The question here is whether AWF can defend
against a claim of copyright infringement because it made "fair
use" of Goldsmith's photograph.17 U. S. C. §107.
Although the Court of Appeals analyzed each fair use factor, the
only question before this Court is whether the court below
correctly held that the first factor, "the purpose and character of
the use, including whether such use is of a commercial nature or is
for nonprofit educational purposes," §107(1), weighs in Goldsmith's
favor. AWF contends that the Prince Series works are
"transformative," and that the first factor therefore weighs in its
favor, because the works convey a different meaning or message than
the photograph. Brief for Petitioner 33. The Court of Appeals
erred, according to AWF, by not considering that new expression. Id. , at 47-48.
But the first fair use factor instead focuses on whether an
allegedly infringing use has a further purpose or different
character, which is a matter of degree, and the degree of
difference must be weighed against other considerations, like
commercialism. Campbell v. Acuff-Rose Music,
Inc. , 510 U.S.
569 , 579 (1994). Although new expression may be relevant to
whether a copying use has a sufficiently distinct purpose or
character, it is not, without more, dispositive of the first
factor.
Here, the specific use of Goldsmith's photograph alleged to
infringe her copyright is AWF's licensing of Orange Prince to Condé
Nast. As portraits of Prince used to depict Prince in magazine
stories about Prince, the original photograph and AWF's copying use
of it share substantially the same purpose. Moreover, the copying
use is of a commercial nature. Even though Orange Prince adds new
expression to Goldsmith's photograph, as the District Court found,
this Court agrees with the Court of Appeals that, in the context of
the challenged use, the first fair use factor still favors
Goldsmith.
A
The Copyright Act encourages creativity by granting to the
author of an original work "a bundle of exclusive rights." Harper & Row, Publishers, Inc. v. Nation
Enterprises , 471 U.S.
539 , 546 (1985); see U. S. Const., Art. I, §8, cl. 8 ("The
Congress shall have Power . . . To Promote the Progress of Science
and useful Arts, by securing for limited Times to Authors and
Inventors the exclusive Right to their respective Writings and
Discoveries"). That bundle includes the rights to reproduce the
copyrighted work, to prepare derivative works, and, in the case of
pictorial or graphic works, to display the copyrighted work
publicly.17 U. S. C. §106.
The Act, however, "reflects a balance of competing claims upon
the public interest: Creative work is to be encouraged and
rewarded, but private motivation must ultimately serve the cause of
promoting broad public availability of literature, music, and the
other arts." Twentieth Century Music Corp. v. Aiken , 422 U.S.
151 , 156 (1975). Copyright thus trades off the benefits of
incentives to create against the costs of restrictions on copying.
The Act, for example, limits the duration of copyright, §§302-305,
as required by the Constitution; makes facts and ideas
uncopyrightable, §102; and limits the scope of copyright owners'
exclusive rights, §§107-122.
This balancing act between creativity and availability
(including for use in new works) is reflected in one such
limitation, the defense of "fair use." In 1976, Congress codified
the common-law doctrine of fair use in §107, which provides: "[T]he
fair use of a copyrighted work, . . . for purposes such as
criticism, comment, news reporting, teaching . . . , scholarship,
or research, is not an infringement of copy- right." To determine
whether a particular use is "fair," the statute sets out four
factors to be considered:
"(1) the purpose and character of the use, including whether
such use is of a commercial nature or is for nonprofit educational
purposes;
"(2) the nature of the copyrighted work;
"(3) the amount and substantiality of the portion used in
relation to the copyrighted work as a whole; and
"(4) the effect of the use upon the potential market for or
value of the copyrighted work."
The fair use doctrine "permits courts to avoid rigid application
of the copyright statute when, on occasion, it would stifle the
very creativity which that law is designed to foster." Stewart v. Abend , 495 U.S.
207 , 236 (1990) (internal quotation marks omitted). The Act's
fair use provision, in turn, "set[s] forth general principles, the
application of which requires judicial balancing, depending upon
relevant circumstances." Google LLC v. Oracle America,
Inc. , 593 U. S. ___, ___ (2021) (slip op., at 14). Because
those principles apply across a wide range of copyrightable
material, from books to photographs to software, fair use is a
"flexible" concept, and "its application may well vary depending on
context." Id. , at ___ (slip op., at 15). For example, in
applying the fair use provision, "copyright's protection may be
stronger where the copyrighted material . . . serves an artistic
rather than a utilitarian function." Ibid. 1
The first fair use factor is "the purpose and character of the
use, including whether such use is of a commercial nature or is for
nonprofit educational purposes." §107(1). This factor considers the
reasons for, and nature of, the copier's use of an original work.
The "central" question it asks is "whether the new work merely
'supersede[s] the objects' of the original creation . . .
('supplanting' the original), or instead adds something new, with a
further purpose or different character." Campbell , 510 U.
S., at 579 (quoting Folsom v. Marsh , 9 F. Cas. 342 , 348 (No. 4,901) (CC Mass. 1841) (Story, J.), and Harper & Row , 471 U. S., at 562). In that way, the first
factor relates to the problem of substitution-copyright's bête
noire. The use of an original work to achieve a purpose that is the
same as, or highly similar to, that of the original work is more
likely to substitute for, or " 'supplan[t],' " the work, ibid .
Consider the "purposes" listed in the preamble paragraph of
§107: "criticism, comment, news reporting, teaching . . . ,
scholarship, or research." Although the examples given are "
'illustrative and not limitative,' " they reflect "the sorts of
copying that courts and Congress most commonly ha[ve] found to be
fair uses," and so may guide the first factor inquiry. Campbell , 510 U. S., at 577-578 (quoting §101). As the Court
of Appeals observed, the "examples are easily understood," as they
contemplate the use of an original work to "serv[e] a manifestly
different purpose from the [work] itself." 11 F. 4th, at 37.
Criticism of a work, for instance, ordinarily does not supersede
the objects of, or supplant, the work. Rather, it uses the work to
serve a distinct end.[ 4 ]
Not every instance will be clear cut, however. Whether a use
shares the purpose or character of an original work, or instead has
a further purpose or different character, is a matter of degree.
Most copying has some further purpose, in the sense that copying is
socially useful ex post . Many secondary works add something
new. That alone does not render such uses fair. Rather, the first
factor (which is just one factor in a larger analysis) asks
"whether and to what extent " the use at issue has a purpose
or character different from the original. Campbell , 510 U.
S., at 579 (emphasis added). The larger the difference, the more
likely the first factor weighs in favor of fair use. The smaller
the difference, the less likely.
A use that has a further purpose or different character is said
to be " 'transformative.' " Ibid. (quoting P. Leval, Toward
a Fair Use Standard, 103 Harv. L. Rev. 1105, 1111 (1990)
(hereinafter Leval)). As before, "transformativeness" is a matter
of degree. See Campbell , 510 U. S., at 579. That is
important because the word "transform," though not included in
§107, appears elsewhere in the Copyright Act. The statute defines
derivative works, which the copyright owner has "the exclusive
righ[t]" to prepare, §106(2), to include "any other form in which a
work may be recast, transformed, or adapted," §101. In other words,
the owner has a right to derivative transformations of her work.
Such transformations may be substantial, like the adaptation of a
book into a movie. To be sure, this right is "[s]ubject to" fair
use. §106; see also §107. The two are not mutually exclusive. But
an overbroad concept of transformative use, one that includes any
further purpose, or any different character, would narrow the
copyright owner's exclusive right to create derivative works. To
preserve that right, the degree of transformation required to make
"transformative" use of an original must go beyond that required to
qualify as a derivative.[ 5 ]
For example, this Court in Campbell considered whether
parody may be fair use. In holding that it may, the Court explained
that "parody has an obvious claim to transformative value" because
"it can provide social benefit, by shedding light on an earlier
work, and, in the process, creating a new one." 510 U. S., at 579.
The use at issue in Campbell was 2 Live Crew's copying of
certain lyrics and musical elements from Roy Orbison's song, "Oh,
Pretty Woman," to create a rap derivative titled "Pretty Woman."
Without a doubt, 2 Live Crew transformed Orbison's song by adding
new lyrics and musical elements, such that "Pretty Woman" had a new
message and different aesthetic than "Oh, Pretty Woman." Indeed,
the whole genre of music changed from rock ballad to rap. That was
not enough for the first factor to weigh in favor of fair use,
however. The Court found it necessary to determine whether 2 Live
Crew's transformation of Orbison's song rose to the level of
parody, a distinct purpose of commenting on the original or
criticizing it. See id. , at 580-583.
Distinguishing between parody (which targets an author or work
for humor or ridicule) and satire (which ridicules society but does
not necessarily target an author or work), the Court further
explained that "[p]arody needs to mimic an original to make its
point, and so has some claim to use the creation of its victim's
(or collective victims') imagination, whereas satire can stand on
its own two feet and so requires justification for the very act of
borrowing." Id. , at 580-581. More generally, when
"commentary has no critical bearing on the substance or style of
the original composition, . . . the claim to fairness in borrowing
from another's work diminishes accordingly (if it does not vanish),
and other factors, like the extent of its commerciality, loom
larger." Id. , at 580; see also id. , at 597 (Kennedy,
J., concurring).
This discussion illustrates two important points: First, the
fact that a use is commercial as opposed to nonprofit is an
additional "element of the first factor." Id. , at 584. The
commercial nature of the use is not dispositive. Ibid. ; Google , 593 U. S., at ___ (slip op., at 27). But it is
relevant. As the Court explained in Campbell , it is to be
weighed against the degree to which the use has a further purpose
or different character. See 510 U. S., at 579 ("[T]he more
transformative the new work, the less will be the significance of
other factors, like commercialism, that may weigh against a finding
of fair use"); see also id. , at 580, 585.[ 6 ]
Second, the first factor also relates to the justification for
the use. In a broad sense, a use that has a distinct purpose is
justified because it furthers the goal of copyright, namely, to
promote the progress of science and the arts, without diminishing
the incentive to create. See id. , at 579; Authors
Guild v. Google, Inc. , 804 F.3d 202, 214 (CA2 2015)
(Leval, J.) ("The more the appropriator is using the copied
material for new, transformative purposes, the more it serves
copyright's goal of enriching public knowledge and the less likely
it is that the appropriation will serve as a substitute for the
original or its plausible derivatives, shrinking the protected
market opportunities of the copyrighted work"). A use that shares
the purpose of a copyrighted work, by contrast, is more likely to
provide "the public with a substantial substitute for matter
protected by the [copyright owner's] interests in the original
wor[k] or derivatives of [it]," id. , at 207, which
undermines the goal of copyright.
In a narrower sense, a use may be justified because copy- ing is
reasonably necessary to achieve the user's new purpose. Parody, for
example, "needs to mimic an original to make its point." Campbell , 510 U. S., at 580-581. Similarly, other commentary
or criticism that targets an original work may have compelling
reason to " 'conjure up' " the original by borrowing from it. Id. , at 588.[ 7 ] An independent
justification like this is particularly relevant to assessing fair
use where an original work and copying use share the same or highly
similar purposes, or where wide dissemination of a secondary work
would otherwise run the risk of substitution for the original or
licensed derivatives of it. See id. , at 580, n. 14; Harper & Row , 471 U. S., at 557. Once again, the
question of justification is one of degree. See Leval 1111 ("[I]t
is not sufficient simply to conclude whether or not justification
exists. The question remains how powerful, or persuasive, is the
justification, because the court must weigh the strength of the
secondary user's justification against factors favoring the
copyright owner").
In sum, the first fair use factor considers whether the use of a
copyrighted work has a further purpose or different character,
which is a matter of degree, and the degree of
difference must be balanced against the commercial nature of the
use. If an original work and a secondary use share the same or
highly similar purposes, and the secondary use is of a commercial
nature, the first factor is likely to weigh against fair use,
absent some other justification for copying.[ 8 ]
2
The fair use provision, and the first factor in particular,
requires an analysis of the specific "use" of a copyrighted work
that is alleged to be "an infringement." §107. The same copying may
be fair when used for one purpose but not another. See Campbell , 510 U. S., at 585 (contrasting the use of a
copyrighted work "to advertise a product, even in a parody," with
"the sale of a parody for its own sake, let alone one performed a
single time by students in school"); Sony Corp. of America v. Universal City Studios, Inc. , 464
U.S. 417 , 449-451 (1984) (contrasting the recording of TV
"for a commercial or profit-making purpose" with "private home
use").
Here, Goldsmith's copyrighted photograph has been used in
multiple ways: After Goldsmith licensed the photograph to Vanity
Fair to serve as an artist reference, Warhol used the photograph to
create the Vanity Fair illustration and the other Prince Series
works. Vanity Fair then used the photograph, pursuant to the
license, when it published Warhol's illustration in 1984. Finally,
AWF used the photograph when it licensed an image of Warhol's
Orange Prince to Condé Nast in 2016. Only that last use, however,
AWF's commercial licensing of Orange Prince to Condé Nast, is
alleged to be infringing.[ 9 ] We limit our
analysis accordingly. In particular, the Court expresses no opinion
as to the creation, display, or sale of any of the original Prince
Series works.[ 10 ]
A typical use of a celebrity photograph is to accompany stories
about the celebrity, often in magazines. For example, Goldsmith
licensed her photographs of Prince to illustrate stories about
Prince in magazines such as Newsweek, Vanity Fair, and People. Supra , at 3-6. She even licensed her photographs for that
purpose after Prince died in 2016. Supra , at 7. A
photographer may also license her creative work to serve as a
reference for an artist, like Goldsmith did in 1984 when Vanity
Fair wanted an image of Prince created by Warhol to illustrate an
article about Prince. As noted by the Court of Appeals, Goldsmith
introduced "uncontroverted" evidence "that photographers generally
license others to create stylized derivatives of their work in the
vein of the Prince Series." 11 F. 4th, at 50; see 2 App. 291-299.
In fact, Warhol himself paid to license photographs for some of his
artistic renditions. Such licenses, for photographs or derivatives
of them, are how photographers like Goldsmith make a living. They
provide an economic incentive to create original works, which is
the goal of copy- right.
In 2016, AWF licensed an image of Orange Prince to Condé Nast to
appear on the cover of a commemorative edition magazine about
Prince. The edition, titled "The Genius of Prince," celebrates the
life and work of "Prince Rogers Nelson, 1958-2016." It is
undisputed here that the edition is "devoted to Prince." 2 App.
352. In addition to AWF's image on the cover, the magazine contains
numerous concert and studio photographs of Prince. In that context,
the purpose of the image is substantially the same as that of
Goldsmith's photograph. Both are portraits of Prince used in
magazines to illustrate stories about Prince.[ 11 ] Such "environment[s]" are not "distinct and
different." Google , 593
U. S., at ___ (slip op., at 26). AWF's licensing of the Orange
Prince image thus " 'supersede[d] the objects,' " Campbell ,
510 U. S., at 579, i.e. , shared the objectives, of
Goldsmith's photograph, even if the two were not perfect
substitutes.[ 12 ]
The use also "is of a commercial nature." §107(1). Just as
Goldsmith licensed her photograph to Vanity Fair for $400, AWF
licensed Orange Prince to Condé Nast for $10,000. The undisputed
commercial character of AWF's use, though not dispositive, "tends
to weigh against a finding of fair use." Harper & Row ,
471 U. S., at 562.[ 13 ]
Taken together, these two elements-that Goldsmith's photograph
and AWF's 2016 licensing of Orange Prince share substantially the
same purpose, and that AWF's use of Goldsmith's photo was of a
commercial nature-counsel against fair use, absent some other
justification for copying. That is, although a use's
transformativeness may outweigh its commercial character, here,
both elements point in the same direction.[ 14 ]
The foregoing does not mean, however, that derivative works
borrowing heavily from an original cannot be fair uses. In Google , the Court suggested that "[a]n 'artistic painting'
might, for example, fall within the scope of fair use even though
it precisely replicates a copyrighted 'advertising logo to make a
comment about consumerism.' " 593 U. S., at ___-___ (slip op., at
24-25) (quoting 4 M. Nimmer & D. Nimmer, Copyright
§13.05[A][1][b] (2019), in turn quoting N. Netanel, Making Sense of
Fair Use, 15 Lewis & Clark L. Rev. 715, 746 (2011) (some
internal quotation marks omitted)). That suggestion refers to
Warhol's works that incorporate advertising logos, such as the
Campbell's Soup Cans series. See fig. 7, infra . Figure 7. A print based on the Campbell's soup can, one of
Warhol's works that replicates a copyrighted advertising
logo. Yet not all of Warhol's works, nor all uses of them, give rise
to the same fair use analysis. In fact, Soup Cans well illustrates
the distinction drawn here. The purpose of Campbell's logo is to
advertise soup. Warhol's canvases do not share that purpose.
Rather, the Soup Cans series uses Campbell's copyrighted work for
an artistic commentary on consumerism, a purpose that is orthogonal
to advertising soup. The use therefore does not supersede the
objects of the advertising logo.[ 15 ]
Moreover, a further justification for Warhol's use of Campbell's
logo is apparent. His Soup Cans series targets the logo. That is,
the original copyrighted work is, at least in part, the object of
Warhol's commentary. It is the very nature of Campbell's
copyrighted logo-well known to the public, designed to be
reproduced, and a symbol of an every- day item for mass
consumption-that enables the commentary. Hence, the use of the
copyrighted work not only serves a completely different purpose, to
comment on consumerism rather than to advertise soup, it also
"conjures up" the original work to "she[d] light" on the work
itself, not just the subject of the work. Campbell , 510 U.
S., at 579, 588.[ 16 ] Here, by contrast, AWF's
use of Goldsmith's photograph does not target the photograph, nor
has AWF offered another compelling justification for the use. See infra , at 34-35, and nn. 20-21.
B
AWF contends, however, that the purpose and character of its use
of Goldsmith's photograph weighs in favor of fair use because
Warhol's silkscreen image of the photograph, like the Campbell's
Soup Cans series, has a new meaning or message. The District Court,
for example, understood the Prince Series works to portray Prince
as "an iconic, larger-than-life figure." 382 F. Supp. 3d, at 326.
AWF also asserts that the works are a comment on celebrity. In
particular, "Warhol's Prince Series conveys the dehumanizing nature
of celebrity." Brief for Petitioner 44. According to AWF, that new
meaning or message, which the Court of Appeals ignored, makes the
use "transformative" in the fair use sense. See id. , at
44-48. We disagree.
1 Campbell did describe a transformative use as one that
"alter[s] the first [work] with new expression, meaning, or
message." 510 U. S., at 579; see also Google , 593 U. S., at
___ (slip op., at 24). That description paraphrased Judge Leval's
law review article, which referred to "new information, new
aesthetics, new insights and understandings." Leval 1111. (Judge
Leval contrasted such additions with secondary uses that "merely
repackag[e]" the original. Ibid .) But Campbell cannot
be read to mean that §107(1) weighs in favor of any use that adds
some new expression, meaning, or message.
Otherwise, "transformative use" would swallow the copyright
owner's exclusive right to prepare derivative works. Many
derivative works, including musical arrangements, film and stage
adaptions, sequels, spinoffs, and others that "recast, transfor[m]
or adap[t]" the original, §101, add new expression, meaning or
message, or provide new information, new aesthetics, new insights
and understandings. That is an intractable problem for AWF's
interpretation of transformative use. The first fair use factor
would not weigh in favor of a commercial remix of Prince's "Purple
Rain" just because the remix added new expression or had a
different aesthetic. A film or musical adaptation, like that of
Alice Walker's The Color Purple, might win awards for its
"significant creative contribution"; alter the meaning of a classic
novel; and add "important new expression," such as images,
performances, original music, and lyrics. Post , at 11, 23
(Kagan, J., dissenting) (internal quotation marks omitted). But
that does not in itself dispense with the need for
licensing.[ 17 ] Campbell is again instructive. 2 Live Crew's version of
Orbison's song easily conveyed a new meaning or message. It also
had a different aesthetic. Yet the Court went further, examining
whether and to what extent 2 Live Crew's song had the parodic
purpose of "commenting on the original or criticizing it." 510 U.
S., at 583. Parody is, of course, a kind of message. Moreover, the
Court considered what the words of the songs might have meant to
determine whether parody "reasonably could be perceived." Ibid. But new meaning or message was not sufficient. If it
had been, the Court could have made quick work of the first fair
use factor. Instead, meaning or message was simply relevant to
whether the new use served a purpose distinct from the original, or
instead superseded its objects. That was, and is, the "central"
question under the first factor. Id. , at 579.
The dissent commits the same interpretive error as AWF: It
focuses on Campbell 's paraphrase, yet ignores the rest of
that decision's careful reasoning. Indeed, upon reading the
dissent, someone might be surprised to learn that Campbell was about parody at all. Had expert testimony confirmed the obvious
fact that 2 Live Crew's "Pretty Woman" differed in aesthetics and
meaning from Orbison's original, that would have been the end of
the dissent's analysis. See post , at 14-17 (opinion of
Kagan, J.). Not the Court's, however. Campbell was the
culmination of a long line of cases and scholarship about parody's
claim to fairness in borrowing. "For purposes of copyright law,"
the Court explained, "the heart of any parodist's claim to quote
from existing material is the use of some elements of a prior
author's composition to create a new one that, at least in part,
comments on that author's works." 510 U. S., at 580. Campbell thus drew a nuanced distinction between parody and
satire: While parody cannot function unless it conjures up the
original, "satire can stand on its own two feet and so requires
justification for . . . borrowing." Id. , at 580-581. The
objective meaning or message of 2 Live Crew's song was relevant to
this inquiry into the reasons for copying, but any "new expression,
meaning, or message" was not the test.[ 18 ]
What role meaning or message played in the Court of Appeals'
analysis here is not entirely clear. The court correctly rejected
the idea "that any secondary work that adds a new aesthetic or new
expression to its source material is necessarily transformative."
11 F. 4th, at 38-39. It also appeared correctly to accept that
meaning or message is relevant to, but not dispositive of, purpose.
See id. , at 41 ("[T]he secondary work itself must reasonably
be perceived as embodying a distinct artistic purpose, one that
conveys a new meaning or message separate from its source
material"); id. , at 42 ("[T]he judge must examine whether
the secondary work's use of its source material is in service of a
fundamentally different and new artistic purpose and character,
[which] must, at a bare minimum, comprise something more than the
imposition of another artist's style on the primary work . . . "
(internal quotation marks omitted)).
Elsewhere, however, the Court of Appeals stated that "the
district judge should not assume the role of art critic and seek to
ascertain the intent behind or meaning of the works at issue." Id. , at 41. That statement is correct in part. A court
should not attempt to evaluate the artistic significance of a
particular work. See Bleistein v. Donaldson Lithographing
Co. , 188 U.S.
239 , 251 (1903) (Holmes, J.) ("It would be a dangerous
undertaking for persons trained only to the law to constitute
themselves final judges of the worth of [a work], outside of the
narrowest and most obvious limits").[ 19 ] Nor
does the subjective intent of the user (or the subjective
interpretation of a court) determine the purpose of the use. But
the meaning of a secondary work, as reasonably can be perceived,
should be considered to the extent necessary to determine whether
the purpose of the use is distinct from the original, for instance,
because the use comments on, criticizes, or provides otherwise
unavailable information about the original, see, e.g. , Authors Guild , 804 F. 3d, at 215-216.
2
The District Court determined that "[t]he Prince Series works
can reasonably be perceived to have transformed Prince from a
vulnerable, uncomfortable person to an iconic, larger-than-life
figure." 382 F. Supp. 3d, at 326. To make that determination, the
District Court relied, in part, on testimony by Goldsmith that her
photographs of Prince show that he "is 'not a comfortable person'
and that he is 'a vulnerable human being.' " Ibid. An expert
on Warhol, meanwhile, testified that the Prince Series works depict
"Prince as a kind of icon or totem of something," a "mask-like
simulacrum of his actual existence." 1 App. 249, 257.
The Court of Appeals noted, correctly, that "whether a work is
transformative cannot turn merely on the stated or perceived intent
of the artist or the meaning or impression that a critic-or for
that matter, a judge-draws from the work." 11 F. 4th, at 41.
"[O]therwise, the law may well 'recogniz[e] any alteration as
transformative.' " Ibid. (quoting 4 Nimmer, Copyright
§13.05[B][6]). Whether the purpose and character of a use weighs in
favor of fair use is, instead, an objective inquiry into what use
was made, i.e. , what the user does with the original
work.
Granting the District Court's conclusion that Orange Prince
reasonably can be perceived to portray Prince as iconic, whereas
Goldsmith's portrayal is photorealistic, that difference must be
evaluated in the context of the specific use at issue. The use is
AWF's commercial licensing of Orange Prince to appear on the cover
of Condé Nast's special commemorative edition. The purpose of that
use is, still, to illustrate a magazine about Prince with a
portrait of Prince. Although the purpose could be more specifically
described as illustrating a magazine about Prince with a portrait
of Prince, one that portrays Prince somewhat differently from
Goldsmith's photograph (yet has no critical bearing on her
photograph), that degree of difference is not enough for the first
factor to favor AWF, given the specific context of the use.
To hold otherwise would potentially authorize a range of
commercial copying of photographs, to be used for purposes that are
substantially the same as those of the originals. As long as the
user somehow portrays the subject of the photograph differently, he
could make modest alterations to the original, sell it to an outlet
to accompany a story about the subject, and claim transformative
use. Many photographs will be open to various interpretations. A
subject as open to interpretation as the human face, for example,
reasonably can be perceived as conveying several possible meanings.
The application of an artist's characteristic style to bring out a
particular meaning that was available in the photograph is less
likely to constitute a "further purpose" as Campbell used
the term. 510 U. S., at 579.
AWF asserts another, albeit related, purpose, which is to
comment on the "dehumanizing nature" and "effects" of celebrity.
Brief for Petitioner 44, 51. No doubt, many of Warhol's works, and
particularly his uses of repeated images, can be perceived as
depicting celebrities as commodities. But again, even if such
commentary is perceptible on the cover of Condé Nast's tribute to
"Prince Rogers Nelson, 1958-2016," on the occasion of the man's
death, AWF has a problem: The asserted commentary is at Campbell 's lowest ebb. Because it "has no critical bearing
on" Goldsmith's photograph,[ 20 ] the commentary's
"claim to fairness in borrowing from" her work "diminishes
accordingly (if it does not vanish)." 510 U. S., at 580.[ 21 ] The commercial nature of the use, on the other hand,
"loom[s] larger." Ibid. Here, the circumstances of AWF's 2016 licensing outweigh its
diminished claim to fairness in copying under the first factor.
Like satire that does not target an original work, AWF's asserted
commentary "can stand on its own two feet and so requires
justification for the very act of borrowing." Id. , at 581.
Moreover, because AWF's commercial use of Goldsmith's photograph to
illustrate a magazine about Prince is so similar to the
photograph's typical use, a particularly compelling justification
is needed. Yet AWF offers no independent justification, let alone a
compelling one, for copying the photograph, other than to convey a
new meaning or message. As explained, that alone is not enough for
the first factor to favor fair use.
Copying might have been helpful to convey a new meaning or
message. It often is. But that does not suffice under the first
factor. Nor does it distinguish AWF from a long list of would-be
fair users: a musician who finds it helpful to sample another
artist's song to make his own, a playwright who finds it helpful to
adapt a novel, or a filmmaker who would prefer to create a sequel
or spinoff, to name just a few.[ 22 ] As Judge
Leval has explained, "[a] secondary author is not necessarily at
liberty to make wholesale takings of the original author's
expression merely because of how well the original author's
expression would convey the secondary author's different message." Authors Guild , 804 F. 3d, at 215.
3
The dissent would rather not debate these finer points. See post , at 4, n. 2 (opinion of Kagan, J.). It offers no theory
of the relationship between transformative uses of original works
and derivative works that transform originals. No reason why AWF
was justified in using Goldsmith's original work in this specific
instance. And no limiting principle for its apparent position that
any use that is creative prevails under the first fair use factor.
Instead, the dissent makes the simple (and obvious) point that
restrictions on copying can inhibit follow-on works. " 'Nothing
comes from nothing,' " the dissent observes, " 'nothing ever
could.' " Post , at 11. So somewhere in the copyright
statute, there must be an "escape valve" to create something good. Post , at 12. If AWF must pay Goldsmith to use her creation, the dissent claims, this will "stifle creativity of every
sort," "thwart the expression of new ideas and the attainment of
new knowledge," and "make our world poorer." Post , at
36.
These claims will not age well. It will not impoverish our world
to require AWF to pay Goldsmith a fraction of the proceeds from its
reuse of her copyrighted work. Recall, payments like these are
incentives for artists to create original works in the first place.
Nor will the Court's decision, which is consistent with
longstanding principles of fair use, snuff out the light of Western
civilization, returning us to the Dark Ages of a world without
Titian, Shakespeare, or Richard Rodgers. The dissent goes on at
length about the basic premise that copyright (like other forms of
intellectual property) involves a tradeoff between stimulating
innovative activity, on the one hand, and allowing follow-on
innovation, on the other. See post , at 11-12, and n. 4,
24-35. This theme will be familiar to any student of copyright law.
In tracing the history of Renaissance painting, however, the
dissent loses sight of the statute and this Court's cases. The
Lives of the Artists undoubtedly makes for livelier reading than
the U. S. Code or the U. S. Reports, but as a court, we do not have
that luxury.
The dissent thus misses the forest for a tree. Its single-minded
focus on the value of copying ignores the value of original works.
It ignores the statute's focus on the specific use alleged to be
infringing. See n. 10, supra . It waves away the statute's
concern for derivative works. Supra , at 28-29, and n. 17. It
fails to appreciate Campbell 's nuance. Supra , at
29-30, 34, n. 21. And it disregards this Court's repeated emphasis
on justification. Supra , at 29-30, and n. 18, 34, n. 21.
The result of these omissions is an account of fair use that is
unbalanced in theory and, perhaps relatedly, in tone. The dissent's
conclusion-that whenever a use adds new meaning or message, or
constitutes creative progress in the opinion of a critic or judge,
the first fair use factor weighs in its favor-does not follow from
its basic premise. Fair use instead strikes a balance between
original works and secondary uses based in part on objective
indicia of the use's purpose and character, including whether the
use is commercial and, importantly, the reasons for copying.
Finally, copyright law is replete with escape valves: the
idea-expression distinction; the general rule that facts may not
receive protection; the requirement of originality; the legal
standard for actionable copying; the limited duration of copyright;
and, yes, the defense of fair use, including all its factors, such
as whether the amount taken is reasonable in relation to the
purpose of the use. These doctrines (and others) provide ample
space for artists and other creators to use existing materials to
make valuable new works. They account for most, if not all, of the
examples given by the dissent, as well as the dissent's own copying
(and the Court's, too). If the last century of American art,
literature, music, and film is any indication, the existing
copyright law, of which today's opinion is a continuation, is a
powerful engine of creativity.
III
Lynn Goldsmith's original works, like those of other
photographers, are entitled to copyright protection, even against
famous artists. Such protection includes the right to prepare
derivative works that transform the original. The use of a
copyrighted work may nevertheless be fair if, among other things,
the use has a purpose and character that is sufficiently distinct
from the original. In this case, however, Goldsmith's original
photograph of Prince, and AWF's copying use of that photograph in
an image licensed to a special edition magazine devoted to Prince,
share substantially the same purpose, and the use is of a
commercial nature. AWF has offered no other persuasive
justification for its unauthorized use of the photograph.
Therefore, the "purpose and character of the use, including whether
such use is of a commercial nature or is for nonprofit educational
purposes," §107(1), weighs in Goldsmith's favor.
The Court has cautioned that the four statutory fair use factors
may not "be treated in isolation, one from another. All are to be
explored, and the results weighed together, in light of the
purposes of copyright." Campbell , 510 U. S., at 578. AWF
does not challenge the Court of Appeals' determinations that the
second factor, "the nature of the copyrighted work," §107(2); third
factor, "the amount and substantiality of the portion used in
relation to the copyrighted work as a whole," §107(3); and fourth
factor, "the effect of the use upon the potential market for or
value of the copyrighted work," all favor Goldsmith. See 11 F. 4th,
at 45-51. Because this Court agrees with the Court of Appeals that
the first factor likewise favors her, the judgment of the Court of
Appeals is
Affirmed.
APPENDIX Andy Warhol created 16 works based on Lynn Goldsmith's
photograph:14 silkscreen prints and two pencil drawings. The works
are collectively known as the Prince Series. Notes 1 A silkscreen is a fine mesh fabric used in
screen printing. Warhol's practice was to deliver a photograph to a
professional silkscreen printer with instructions for alterations,
such as cropping and high contrasting. 1 App. 160, 163. The latter
alteration would "flatten" the image. Once Warhol approved, the
printer would "reproduc[e]" the altered image "like a photographic
negative onto the screen." Id. , at 164. For canvas prints,
Warhol "would then place the screen face down on the canvas, pour
ink onto the back of the mesh, and use a squeegee to pull the ink
through the weave and onto the canvas." Ibid. The resulting
"high-contrast half-tone impressions" served as an "
'under-drawing,' " over which Warhol painted colors by hand. Id. , at 165. 2 AWF sold 12 of the works to collectors and
galleries, and it transferred custody of the remaining four works
to the Andy Warhol Museum in Pittsburgh. 3 The Court of Appeals considered not only
the possibility of market harm caused by the actions of AWF but
also "whether 'unrestricted and widespread conduct of the sort
engaged in by [AWF] would result in a substantially adverse impact
on the potential market' " for the photograph, including the market
for derivative works. 11 F. 4th 26, 49-50 (CA2 2021) (quoting Campbell v. Acuff-Rose Music, Inc. , 510 U.S.
569 , 590 (1994)); see also Harper & Row, Publishers,
Inc. v. Nation Enterprises , 471 U.S.
539 , 568 (1985). 4 Take a critical book review, for example.
Not only does the review, as a whole, serve a different purpose
than the book; each quoted passage within the review likely serves
a different purpose (as an object of criticism) than it does in the
book. That may not always be so, however, and a court must consider
each use within the whole to determine whether the copying is fair.
W. Patry, Fair Use §3:1, pp. 129-130 (2022). 5 In theory, the question of transformative
use or transformative purpose can be separated from the question
whether there has been transformation of a work. In practice,
however, the two may overlap. Compare, e.g. , Núñez v. Caribbean Int'l News Corp. , 235 F.3d 18 , 21-23 (CA1 2000) (newspaper's reproduction,
without alteration, of photograph of beauty pageant winner to
explain controversy over whether her title should be withdrawn had
transformative purpose because " 'the pictures were the story' "),
with Leibovitz v. Paramount Pictures Corp. , 137 F.3d 109 , 114-115 (CA2 1998) (film advertisement's
alteration of well-known photograph by superimposing actor's face
on actress' body had transformative purpose of
parody). 6 The authors of the Copyright Act of 1976
included the language, " 'whether such use is of a commercial
nature or is for non-profit educational purposes,' " in the first
fair use factor "to state explicitly" that, "as under the present
law, the commercial or non-profit character of an activity, while
not conclusive with respect to fair use, can and should be weighed
along with other factors." H. R. Rep. No. 94-1476, p. 66
(1976). 7 Return to the example of a book review. The
review's use of quoted material may be justified in both the broad
and the narrower senses. First, the use is likely to serve a
different purpose than the material itself. See n. 4, supra .
Second, there may be compelling reason to borrow from the original
to achieve that purpose because the review targets the material for
comment or criticism. But again, the question of justification will
depend on the individual use or uses. See Patry, Fair Use §3:1, at
129-130. Even book reviews are not entitled to a presumption of
fairness. Campbell , 510 U. S., at 581. 8 Consider, for example, this Court's
analysis of the first factor in Google LLC v. Oracle
America, Inc. , 593 U. S. ___ (2021). Google stressed
that "[t]he fact that computer programs are primarily functional
makes it difficult to apply traditional copyright concepts in that
technological world." Id. , at ___ (slip op., at 35). Still,
in evaluating the purpose and character of Google's use of Sun
Microsystems' code, the Court looked, first, to whether the purpose
of the use was significantly different from that of the original;
and, second, to the strength of other justifications for the use.
Although Google's use was commercial in nature, it copied Sun's
code, which was "created for use in desktop and laptop computers,"
"only insofar as needed to include tasks that would be useful in
smartphone[s]." Id. , at ___ (slip op., at 26). That is,
Google put Sun's code to use in the "distinct and different
computing environment" of its own Android platform, a new system
created for new products. Ibid. Moreover, the use was
justified in that context because "shared interfaces are necessary
for different programs to speak to each other" and because
"reimplementation of interfaces is necessary if programmers are to
be able to use their acquired skills." Ibid. ; see also id. , at ___ (slip op., at 8). 9 AWF sought a declaratory judgment that
would cover the original Prince Series works, but Goldsmith has
abandoned all claims to relief other than her claim as to the 2016
Condé Nast license and her request for prospective relief as to
similar commercial licensing. Brief for Respondents 3, 17-18; Tr.
of Oral Arg. 80-82. 10 The dissent, however, focuses on a case
that is not before the Court. No, not whether Francis Bacon would
have made fair use of Velásquez's painting, had American copyright
law applied in Europe with a term of 300 years post mortem
auctoris . But cf. post , at 32-34 (opinion of Kagan, J.).
Rather, Congress has directed courts to examine the purpose and
character of the challenged "use."17 U. S. C. §107(1). Yet the
dissent assumes that any and all uses of an original work entail
the same first-factor analysis based solely on the content of a
secondary work. This assumption contradicts the fair use statute
and this Court's precedents. See supra , at 20-21. Had AWF's
use been solely for teaching purposes, that clearly would affect
the analysis, and the statute permits no other conclusion.
Preferring not to focus on the specific use alleged to infringe
Goldsmith's copyright, the dissent begins with a sleight of hand,
see post , at 1, n. 1, and continues with a false equivalence
between AWF's commercial licensing and Warhol's original creation.
The result is a series of misstatements and exaggerations, from the
dissent's very first sen- tence, post , at 1 ("Today, the
Court declares that Andy Warhol's eye-popping silkscreen of Prince
. . . is (in copyright lingo) not 'transformative' "), to its very
last, post , at 36 ("[The majority opinion] will make our
world poorer"). 11 The Court of Appeals observed that the
"purpose and function of the two works at issue here is identical,
not merely in the broad sense that they are created as works of
visual art, but also in the narrow but essential sense that they
are portraits of the same person." 11 F. 4th, at 42 (footnote
omitted). This Court goes somewhat "further and examine[s] the
copying's more specifically described 'purpose[s]' " in the context
of the particular use at issue (here, in a magazine about Prince). Google , 593 U. S., at ___ (slip op., at 25). The Court does
not define the purpose as simply "commercial" or "commercial
licensing." Post , at 18, 20, n. 7, 25, n. 8 (Kagan, J.,
dissenting). Nor does the Court view Goldsmith's photograph and
Warhol's illustration as "fungible products in the magazine
market." Post , at 18; see post , at 10. Rather, the
Court finds significant the degree of similarity between the
specific purposes of the original work and the secondary use at
issue. According to the dissent, the fact that a magazine editor
might prefer one image to the other must mean the secondary use is
transformative, either because it has a different aesthetic or
conveys a different message. Post , at 10. The Court, because
it fails to understand the difference, does not have "much of a
future in magazine publishing," the dissent chides. Ibid .
While the dissent is probably correct about the Court's business
prospects, the editors of People, Rolling Stone, and Time chose a
variety of different photos of Prince for their memorial issues.
See fig. 5, supra . Portrait photos, in fact. Some black and
white; some depicting Prince's " 'corporeality' "; some "realistic"
or "humanistic." Post , at 9, 16 (Kagan, J., dissenting).
These variations in aesthetics did not stop the photos from serving
the same essential purpose of depicting Prince in a magazine
commemorating his life and career. Fortunately, the dissent's
"magazine editor" test does not have much of a future in fair use
doctrine. The flaw in the dissent's logic is simple: If all that
mattered under the first factor were whether a buyer was "drawn
aesthetically" to a secondary work (instead of the pre-existing
work it adapted) or whether the buyer preferred "to convey the
message of " the secondary work, post , at 10, then every
derivative work would qualify. The New Yorker might prefer an
unauthorized sequel to a short story, rather than the original, but
that does not mean the purpose and character of the use would weigh
in its favor. Similarly, a rap label might prefer 2 Live Crew's
song, rather than Orbison's original, based on the new sound and
lyrics ( i.e. , new aesthetic and message), but that was not
enough in Campbell , and it is not enough here. 12 In this way, the first factor relates to
the fourth, market effect. See Campbell , 510 U. S., at 591;
cf. also Harper & Row , 471 U. S., at 568 ("The excerpts
were employed as featured episodes in a story about the Nixon
pardon-precisely the use petitioners had licensed to Time"). While
the first factor considers whether and to what extent an original
work and secondary use have substitutable purposes, the fourth
factor focuses on actual or potential market substitution. Under
both factors, the analysis here might be different if Orange Prince
appeared in an art magazine alongside an article about Warhol.
Brief for United States as Amicus Curiae 33. While keenly
grasping the relationship between The Two Lolitas, the dissent
fumbles the relationship between the first and fourth fair use
factors. Under today's decision, as before, the first factor does
not ask whether a secondary use causes a copyright owner economic
harm. Cf. post , at 21 (opinion of Kagan, J.). There is,
however, a positive association between the two factors: A
secondary use that is more different in purpose and character is
less likely to usurp demand for the original work or its
derivatives, as the Court has explained, see Campbell , 519
U. S., at 591. This relationship should be fairly obvious. But see post , at 22 (Kagan, J., dissenting) (suggesting that the
first factor can favor only the user and the fourth factor only the
copyright owner). Still, the relationship is not absolute. For
example, copies for classroom use might fulfill demand for an
original work. The first factor may still favor the copyist, even
if the fourth factor is shown not to. At the same time, other forms
of straight copying may be fair if a strong showing on the fourth
factor outweighs a weak showing on the first. 13 The dissent misconstrues the role of
commercialism in this analysis. The Court does not hold that "[a]ll
that matters is that [AWF] and the publisher entered into a
licensing transaction"; or that the first-factor inquiry "should
disregard Warhol's creative contributions because he licensed his
work"; or that an artist may not "market even a transformative
follow-on work." Post , at 3, 19, 34 (opinion of Kagan, J.).
Instead, consistent with the statute, "whether [a] use is of a
commercial nature or is for nonprofit educational purposes" is one
element of the first factor, §107(1); it does not dispose of that
factor, much less the fair use inquiry. As this opinion makes
clear, the commercial character of a secondary use should be
weighed against the extent to which the use is transformative or
otherwise justified. Supra , at 18 (citing Campbell ,
510 U. S., at 579-580, 585); see also supra , at 12, 19-20,
and n. 8, 25; infra , at 34-35. 14 The dissent contends that the Court gives
"little role" to "the key term 'character.' " Post , at 19
(opinion of Kagan, J.). This is somewhat puzzling, as the Court has
previously employed "character" to encompass exactly what the
dissent downplays: " 'the commercial or nonprofit character of an
activity.' " Sony Corp. of America v. Universal City
Studios, Inc. , 464 U.S.
417 , 448-449 (1984) (quoting H. R. Rep. No. 94-1476, at 66);
see also Campbell , 510 U. S., at 572, 584-585 (repeatedly
referring to "commercial character"). Rather than looking to this
case law, the dissent looks up the word "character" in a
dictionary. See post , at 13. But the dissent's preferred
definition-"a thing's 'main or essential nature[,] esp[ecially] as
strongly marked and serving to distinguish,' " post , at 20
(quoting Webster's Third New International Dictionary 376
(1976))-helps Goldsmith, not AWF. Even this definition does not
support the implication that "character" is determined by any
aesthetic distinctiveness, such as the addition of any new
expression. Instead, it is the "main or essential nature" that must
be "strongly marked and serv[e] to distinguish." So return to
Orange Prince on the cover of the Condé Nast issue commemorating
Prince, see fig. 5, supra , and ask, what is the main or essential nature of the secondary use of
Goldsmith's photograph in that context? 15 The situation might be different if AWF
licensed Warhol's Soup Cans to a soup business to serve as its
logo. That use would share much the same purpose of Campbell's
logo, even though Soup Cans has some new meaning or message. This
hypothetical, though fanciful, is parallel to the situation here:
Both Goldsmith and AWF sold images of Prince (AWF's copying
Goldsmith's) to magazines to illustrate stories about the
celebrity, which is the typical use made of Goldsmith's
photographs. 16 The dissent either does not follow, or
chooses to ignore, this analysis. The point is not simply that the
Soup Cans series comments on consumer culture, similar to how
Warhol's celebrity images comment on celebrity culture. Post , at 15 (opinion of Kagan, J.). Rather, as the
discussion makes clear, the degree of difference in purpose and
character between Campbell's soup label and Warhol's painting is
nearly absolute. Plus, Warhol's use targets Campbell's logo, at
least in part. These features (which are absent in this case)
strengthen Warhol's claim to fairness in copying that logo in a
painting. 17 The dissent is stumped. Buried in a
conclusory footnote, it suggests that the fourth fair use factor
alone takes care of derivative works like book-to-film adaptations. Post , at 12, n. 5. This idea appears to come from a Hail
Mary lobbed by AWF when it got caught in the same bind. See Tr. of
Oral Arg. 15-16. The Court is aware of no authority for the
proposition that the first factor favors such uses (on the
dissent's view, the first factor must, because the use modifies the
expressive content of an original work), leaving it to the fourth
factor to ensure that §106(2) is not a dead letter. Certainly Google , which merely noted in passing that "[m]aking a film
of an author's book may . . . mean potential or presumed losses to
the copyright owner," did not hold as much. 593 U. S., at ___ (slip
op., at 30); see id. , at ___-___, ___-___ (slip op., at
24-28, 30-35). 18 The dissent makes a similar mistake with Google : It fails to read the decision as a whole. So while
the dissent claims that the "[ Google ] Court would have told
this one to go back to school," it might be easier just to go back
and read Google . Post , at 2 (opinion of Kagan, J.).
The Court did not hold that any secondary use that is innovative,
in some sense, or that a judge or Justice considers to be creative
progress consistent with the constitutional objective of copyright,
is thereby transformative. The Court instead emphasized that Google
used Sun's code in a "distinct and different" context, and "only
insofar as needed" or "necessary" to achieve Google's new purpose. Google , 593 U. S., at ___ (slip op., at 26); see also n. 8, supra . In other words, the same concepts of use and
justification that the Court relied on in Google are the
ones that it applies today. 19 The dissent demonstrates the danger of this
approach. On its view, the first fair use factor favors AWF's use
of Goldsmith's photograph simply because Warhol created worthy art.
Goldsmith's original work, by contrast, is just an "old photo," one
of Warhol's "templates." Post , at 2, 17 (opinion of Kagan,
J.). In other words, the dissent (much like the District Court)
treats the first factor as determined by a single fact: "It's a
Warhol." This Court agrees with the Court of Appeals that such
logic would create a kind of privilege that has no basis in
copyright law. See 11 F. 4th, at 43. Again, the Court does not deny
that Warhol was a major figure in American art. But it leaves the
worth of his works to the critics. Compare, e.g. , D. Antin,
Warhol: The Silver Tenement, in Pop Art: A Critical History 287 (S.
Madoff ed. 1997), with R. Hughes, The Shock of the New 346-351 (2d
ed. 1991). Whatever the contribution of Orange Prince, Goldsmith's
photograph is part of that contribution. A court need not, indeed
should not, assess the relative worth of two works to decide a
claim of fair use. Otherwise, "some works of genius would be sure
to miss appreciation," and, "[a]t the other end, copyright would be
denied to [works] which appealed to a public less educated than the
judge." Bleistein , 188 U. S., at 251-252 (Holmes, J.). That
Goldsmith's photograph "had [its] worth and [its] success is
sufficiently shown by the desire to reproduce [it] without regard
to [her] rights." Id. , at 252. 20 At no point in this litigation has AWF
maintained that any of the Prince Series works, let alone Orange
Prince on the cover of the 2016 Condé Nast special edition, comment
on, criticize, or otherwise target Goldsmith's photograph. That
makes sense, given that the photograph was unpublished when
Goldsmith licensed it to Vanity Fair, and that neither Warhol nor
Vanity Fair selected the photograph, which was instead provided by
Goldsmith's agency. 21 The dissent wonders: Why does targeting
matter? See post , at 24 (opinion of Kagan, J.) . The
reason, as this opinion explains, is the first factor's attention
to justification. Supra , at 17-20, and nn. 7-8, 29-30, and
n. 18 (citing Campbell , 510 U. S., at 580-581; Google , 593 U. S., at ___ (slip op., at 26)). Compare, for
example, a film adaptation of Gone With the Wind with a novel, The
Wind Done Gone, that "inverts" the original's "portrait of race
relations" to expose its "romantic, idealized" portrayal of the
antebellum South. SunTrust Bank v. Houghton Mifflin
Co. , 268 F.3d 1257 , 1270 (CA11 2001); id. , at 1280 (Marcus,
J., specially concurring). Or, to build from one of the artistic
works the dissent chooses to feature, consider a secondary use that
borrows from Manet's Olympia to shed light on the original's
depiction of race and sex. See R. Storr & C. Armstrong, Lunch
With Olympia (2016). Although targeting is not always required,
fair use is an affirmative defense, and AWF bears the burden to
justify its taking of Goldsmith's work with some reason other than,
"I can make it better." 22 The dissent oddly suggests that under the
Court's opinion, the first fair use factor favors such uses. See post , at 12, n. 5. This ignores, well, pretty much the
entire opinion. See supra , at 14-17, 22-24, 26-27, 28-29,
32-33 (degree of difference in purpose and character); supra , at 18, 24 (commercial nature); supra , at
17-19, 27, 30, 34-35 (justification). In particular, the Court does
not hold that the first factor favors any user who "wants to reach
different buyers, in different markets, consuming different
products." Post , at 13, n. 5 (opinion of Kagan, J.). The
dissent apparently deduces this proposition from its inverse, which
is a common logical fallacy. SUPREME COURT OF THE UNITED STATES
_________________
No. 21–869
_________________
ANDY WARHOL FOUNDATION FOR THE VISUAL ARTS,
INC., PETITIONER v. LYNN GOLDSMITH, et al.
on writ of certiorari to the united states
court of appeals for the second circuit
[May 18, 2023]
Justice Gorsuch, with whom Justice Jackson
joins, concurring.
The question before us is a narrow one of
statutory interpretation. It concerns the meaning of one of four
factors Congress has instructed courts to consult when a party
invokes the affirmative defense of “fair use” to a claim of
copyright infringement. The statutory factor in question requires
courts to consider “the purpose and character of the use.” 17
U. S. C. §107(1). The parties disagree which “purpose”
and “character” counts.
On the Foundation’s telling, the statute
requires courts to focus on the purpose the creator had in
mind when producing his work and the character of his resulting
work. So what matters in this case is that Andy Warhol intended to
apply a “ ‘new aesthetic’ ” to Lynn Goldsmith’s
photograph and the character of his work
“ ‘transformed’ ” Prince from the “ ‘vulnerable,
uncomfortable person’ ” depicted in Ms. Goldsmith’s photograph
into “ ‘an iconic, larger-than-life figure.’ ” Ante , at 9–10; post, at 7–10, 18 (Kagan, J.,
dissenting). Because the purpose and character of Mr. Warhol’s work
is so different from Ms. Goldsmith’s, the Foundation insists, the
first statutory factor points in favor of finding a fair-use
affirmative defense.
By contrast, on Ms. Goldsmith’s reading of the
law and under the Second Circuit’s approach, the first fair-use
factor requires courts to assess the purpose and character of the challenged use . Ante, at 21. The Foundation now owns
Mr. Warhol’s image of Prince and it recently sought to license that
image to a magazine looking for a depiction of Prince to accompany
an article about Prince. Ibid. Ms. Goldsmith seeks to
license her copyrighted photograph to exactly these kinds of
buyers. And because the purpose and character of the Foundation’s
challenged use and the purpose and character of her own protected
use overlap so completely, Ms. Goldsmith argues that the first
statutory factor does not support a fair-use affirmative
defense.
As I see it, the second view of the law is the
better one. Nothing in the copyright statute calls on judges to
speculate about the purpose an artist may have in mind when working
on a particular project. Nothing in the law requires judges to try
their hand at art criticism and assess the aesthetic character of
the resulting work. Instead, the first statutory fair-use factor
instructs courts to focus on “the purpose and character of the
use , including whether such use is of a commercial
nature or is for nonprofit educational purposes .” §107(1)
(emphases added). By its terms, the law trains our attention on the
particular use under challenge. And it asks us to assess whether
the purpose and character of that use is different from (and thus
complements) or is the same as (and thus substitutes for) a
copyrighted work. It’s a comparatively modest inquiry focused on
how and for what reason a person is using a copyrighted work in the
world, not on the moods of any artist or the aesthetic quality of
any creation.
To my mind, three contextual clues confirm that
this reading of the statutory text is the correct one.
First, the statutory preamble to all four
fair-use factors instructs courts to assess whether the person
asserting a fair-use defense seeks to “use” a copyrighted work “for purposes such as criticism, comment, news reporting,
teaching . . . , scholarship, or research.” §107
(emphasis added). Once more, the statute indicates that a court
must examine the purpose of the particular use under challenge, not
the artistic purpose underlying a work. And once more, the statute
tasks courts with asking whether the challenged use serves a
different purpose (as, say, a “criticism” of or “comment” on the
original) or whether it seeks to serve the same purpose (as a
substitute for the original).
Second, the copyright statute expressly protects
a copyright holder’s exclusive right to create “derivative works”
that “transfor[m]” or “adap[t]” his original work. §§101, 106(2).
So saying that a later user of a copyrighted work “transformed” its
message and endowed it with a “new aesthetic” cannot automatically
mean he has made fair use of it. Contra, post, at 1–2,
22–23, 34–36 (Kagan, J., dissenting). To hold otherwise would risk
making a nonsense of the statutory scheme—suggesting that
transformative uses of originals belong to the copyright holder
(under §106) but that others may simultaneously claim those
transformative uses for themselves (under §107). We aren’t normally
in the business of putting a statute “at war with itself ” in
this way. United States v. American Tobacco Co. , 221 U.S.
106 , 180 (1911).
Finally, the fourth fair-use factor requires
courts to assess “the effect of the use upon the potential market
for or value of the copyrighted work.” §107(4). This Court has
described the fourth factor as the “most important” one. Harper
& Row, Publishers, Inc. v. Nation Enterprises , 471 U.S.
539 , 566 (1985). This Court has said, too, that no factor may
“be treated in isolation, one from another.” Campbell v. Acuff-Rose Music, Inc. , 510 U.S.
569 , 578 (1994). Nor does anything in the fourth factor call on
courts to speculate about artistic ambitions or aesthetics.
Instead, it requires courts to ask whether consumers treat a
challenged use “as a market replacement” for a copyrighted work or
a market complement that does not impair demand for the original. Id. , at 591. Reading §107 as a whole, then, it supplies
courts with a sequential chain of questions about the particular challenged use —starting with its purpose and character (in the first factor) and ending with its effect (in the fourth). There is no double counting here.
Contra, post , at 22 (Kagan, J., dissenting). Instead, the
statute proceeds from step to step, asking judges to assess whether
the challenged use (as revealed by its purpose, character, amount
of source material used, and effect) serves as a complement to or a
substitute for a copyrighted work.
With all this in mind, the Court’s decision
seems to me exactly right. Does Mr. Warhol’s image seek to depict
Prince as a “larger-than-life” icon while Ms. Goldsmith’s
photograph attempts to cast him in a more “vulnerable” light? See ante, at 28–35; post , at 9–10, 35 (Kagan, J.,
dissenting). Or are the artistic purposes latent in the two images
and their aesthetic character actually more similar than that?
Happily, the law does not require judges to tangle with questions
so far beyond our competence. Instead, the first fair-use factor
requires courts to assess only whether the purpose and character of
the challenged use is the same as a protected use. And here,
the undisputed facts reveal that the Foundation sought to use its
image as a commercial substitute for Ms. Goldsmith’s photograph. Of
course, competitive products often differ in material respects and
a buyer may find these differences reason to prefer one offering
over another. Cf. post, at 10, 18 (Kagan, J., dissenting).
But under the first fair-use factor the salient point is that the
purpose and character of the Foundation’s use involved competition
with Ms. Goldsmith’s image. To know that much is to know the first
fair-use factor favors Ms. Goldsmith.
It is equally important, however, to acknowledge
what this case does not involve and what the Court does not decide.
Worried about the fate of artists seeking to portray reclining
nudes or papal authorities, or authors hoping to build on classic
literary themes? Post , at 25–35 (Kagan, J., dissenting).
Worry not. This case does not call on us to strike a balance
between rewarding creators and enabling others to build on their
work. That is Congress’s job. See U. S. Const., Art. I, §8,
cl. 8. Nor does this case even call on us to interpret and apply
many of the reticulated elements of the Copyright Act that Congress
has adopted to balance these competing interests. Our only job
today is to interpret and apply faithfully one statutory factor
among many Congress has deemed relevant to the affirmative defense
of fair use.
That observation points the way to another. The
Court today does not even decide whether the Foundation’s image of
Prince infringes on Ms. Goldsmith’s copyright. To uphold a claim of
infringement under the Copyright Act, a court must find the
defendant copied elements of the plaintiff ’s work that are
themselves original. Feist Publications, Inc. v. Rural
Telephone Service Co. , 499 U.S.
340 , 361 (1991). As part of this process, a court must isolate
and vindicate only the truly original elements of a copyrighted
work. See 2 Nimmer on Copyright §8.01[D] (2022). The plaintiff must
usually show not only a similarity but a “substantial” similarity
between the allegedly infringing work and the original elements of
his own copyrighted work. See 4 Nimmer on Copyright §13.03[A]
(2023). And even when two works are substantially similar,
if both the plaintiff ’s and the defendant’s works copy from a
third source (reworking, say, a traditional artistic or literary
theme), a claim for infringement generally will not succeed. See 2
Nimmer on Copyright §8.01[C]. In this case, we address none of
these questions or other elements of the infringement standard
designed to ensure room for later artists to build on the work of
their predecessors. The district court concluded that it “need not
address” the merits of Ms. Goldsmith’s infringement claim because
the Foundation could prevail at summary judgment on its affirmative
defense of fair use. 382 F. Supp. 3d 312, 324 (SDNY
2019). The Second Circuit reversed, focused primarily on the
district court’s “application of the four fair-use factors.” 11
F. 4th 26, 32 (2021); see id., at 36–52. And this Court
granted review to decide only the question of fair use and only the
role of a single factor in that affirmative defense. 596 U. S.
___ (2022).
Last but hardly least, while our interpretation
of the first fair-use factor does not favor the Foundation in this
case, it may in others. If, for example, the Foundation had sought
to display Mr. Warhol’s image of Prince in a nonprofit museum or a
for-profit book commenting on 20th-century art, the purpose and
character of that use might well point to fair use. But those cases
are not this case. Before us, Ms. Goldsmith challenges only the
Foundation’s effort to use its portrait as a commercial substitute
for her own protected photograph in sales to magazines looking for
images of Prince to accompany articles about the musician. And our
only point today is that, while the Foundation may often have a
fair-use defense for Mr. Warhol’s work, that does not mean it
always will. Under the law Congress has given us, each challenged
use must be assessed on its own terms. SUPREME COURT OF THE UNITED STATES
_________________
No. 21-869
_________________
ANDY WARHOL FOUNDATION FOR THE VISUAL ARTS, INC., PETITIONER v. LYNN GOLDSMITH, et al.
on writ of certiorari to the united states court of appeals for
the second circuit
[May 18, 2023]
Justice Kagan, with whom The Chief Justice joins,
dissenting.
Today, the Court declares that Andy Warhols eye-popping
silkscreen of Prince-a work based on but dramatically altering an
existing photograph-is (in copyright lingo) not "transformative."
Still more, the Court decides that even if Warhol's portrait were
transformative-even if its expression and meaning were worlds away
from the photo-that fact would not matter. For in the majority's
view, copyright law's first fair-use factor-addressing "the purpose
and character" of "the use made of a work"-is uninterested in the
distinctiveness and newness of Warhol's portrait.17 U. S. C. §107.
What matters under that factor, the majority says, is instead a
marketing decision: In the majority's view, Warhol's licensing of
the silkscreen to a magazine precludes fair use.[ 1 ]
You've probably heard of Andy Warhol; you've probably seen his
art. You know that he reframed and reformulated-in a word,
transformed-images created first by others. Campbell's soup cans
and Brillo boxes. Photos of celebrity icons: Marilyn, Elvis,
Jackie, Liz-and, as most relevant here, Prince. That's how Warhol
earned his conspicuous place in every college's Art History 101. So
it may come as a surprise to see the majority describe the Prince
silkscreen as a "modest alteration[ ]" of Lynn Goldsmith's
photograph-the result of some "crop[ping]" and "flatten[ing]"-with
the same "essential nature." Ante , at 8, 25, n. 14, 33
(emphasis deleted). Or more generally, to observe the majority's
lack of appreciation for the way his works differ in both
aesthetics and message from the original templates. In a recent
decision, this Court used Warhol paintings as the perfect exemplar
of a "copying use that adds something new and important"-of a use
that is "transformative," and thus points toward a finding of fair
use. Google LLC v. Oracle America, Inc. , 593 U. S.
___, ___-___ (2021) (slip op., at 24-25). That Court would have
told this one to go back to school.
What is worse, that refresher course would apparently be
insufficient. For it is not just that the majority does not realize
how much Warhol added; it is that the majority does not care. In
adopting that posture of indifference, the majority does something
novel (though in law, unlike in art, it is rarely a good thing to
be transformative). Before today, we assessed "the purpose and
character" of a copier's use by asking the following question: Does
the work "add[ ] something new, with a further purpose or different
character, altering the [original] with new expression, meaning, or
message"? Campbell v. Acuff-Rose Music,
Inc. , 510 U.S.
569 , 579 (1994); see Google , 593 U. S., at ___ (slip
op., at 24). When it did so to a significant degree, we called the
work "transformative" and held that the fair-use test's first
factor favored the copier (though other factors could outweigh that
one). But today's decision-all the majority's protestations
notwithstanding-leaves our first-factor inquiry in shambles. The
majority holds that because Warhol licensed his work to a
magazine-as Goldsmith sometimes also did-the first factor goes
against him. See, e.g. , ante , at 35. It does not
matter how different the Warhol is from the original photo-how much
"new expression, meaning, or message" he added. It does not matter
that the silkscreen and the photo do not have the same aesthetic
characteristics and do not convey the same meaning. It does not
matter that because of those dissimilarities, the magazine
publisher did not view the one as a substitute for the other. All
that matters is that Warhol and the publisher entered into a
licensing transaction, similar to one Goldsmith might have done.
Because the artist had such a commercial purpose, all the
creativity in the world could not save him.
That doctrinal shift ill serves copyright's core purpose. The
law does not grant artists (and authors and composers and so on)
exclusive rights-that is, monopolies-for their own sake. It does so
to foster creativity-"[t]o promote the [p]rogress" of both arts and
science. U. S. Const., Art. I, §8, cl. 8. And for that same reason,
the law also protects the fair use of copyrighted material. Both
Congress and the courts have long recognized that an overly
stringent copyright regime actually "stifle[s]" creativity by
preventing artists from building on the work of others. Stewart v. Abend , 495 U.S.
207 , 236 (1990) (internal quotation marks omitted); see Campbell , 510 U. S., at 578-579. For, let's be honest,
artists don't create all on their own; they cannot do what they do
without borrowing from or otherwise making use of the work of
others. That is the way artistry of all kinds-visual, musical,
literary-happens (as it is the way knowledge and invention
generally develop). The fair-use test's first factor responds to
that truth: As understood in our precedent, it provides "breathing
space" for artists to use existing materials to make fundamentally
new works, for the public's enjoyment and benefit. Id. , at
579. In now remaking that factor, and thus constricting fair use's
boundaries, the majority hampers creative progress and undermines
creative freedom. I respectfully dissent.[ 2 ]
I
A
Andy Warhol is the avatar of transformative copying. Cf. Google , 593 U. S., at ___-___ (slip op., at 24-25)
(selecting Warhol, from the universe of creators, to illustrate
what transformative copying is). In his early career, Warhol worked
as a commercial illustrator and became experienced in varied
techniques of reproduction. By night, he used those techniques-in
particular, the silkscreen-to create his own art. His own-even
though in one sense not. The silkscreen enabled him to make
brilliantly novel art out of existing "images carefully selected
from popular culture." D. De Salvo, God Is in the Details, in Andy
Warhol Prints 22 (4th rev. ed. 2003). The works he produced,
connecting traditions of fine art with mass culture, depended on
"appropriation[s]": The use of "elements of an extant image[ ] is
Warhol's entire modus operandi." B. Gopnik, Artistic Appropriation
vs. Copyright Law, N. Y. Times, Apr. 6, 2021, p. C4 (internal
quotation marks omitted). And with that m.o., he changed modern
art; his appropriations and his originality were flipsides of each
other. To a public accustomed to thinking of art as formal works
"belong[ing] in gold frames"-disconnected from the everyday world
of products and personalities-Warhol's paintings landed like a
thunderclap. A. Danto, Andy Warhol 36 (2009). Think Soup Cans or,
in another vein, think Elvis. Warhol had created "something very
new"-"shockingly important, transformative art." B. Gopnik, Warhol
138 (2020); Gopnik, Artistic Appropriation.
To see the method in action, consider one of Warhol's pre-Prince
celebrity silkscreens-this one, of Marilyn Monroe. He began with a
publicity photograph of the actress. And then he went to work. He
reframed the image, zooming in on Monroe's face to "produc[e] the
disembodied effect of a cinematic close-up." 1 App. 161 (expert
declaration). At that point, he produced a high-contrast, flattened image on a
sheet of clear acetate. He used that image to trace an outline on
the canvas. And he painted on top-applying exotic colors with "a
flat, even consistency and an industrial appearance." Id. ,
at 165. The same high-contrast image was then reproduced in
negative on a silkscreen, designed to function as a selectively
porous mesh. Warhol would "place the screen face down on the
canvas, pour ink onto the back of the mesh, and use a squeegee to
pull the ink through the weave and onto the canvas." Id. , at
164. On some of his Marilyns (there are many), he reordered the
process-first ink, then color, then (perhaps) ink again. See id. , at 165-166. The result-see for yourself-is miles away
from a literal copy of the publicity photo. Andy Warhol, Marilyn, 1964, acrylic and silkscreen ink on
linen And the meaning is different from any the photo had. Of course,
meaning in great art is contestable and contested (as is the
premise that an artwork is great). But note what some experts say
about the complex message(s) Warhol's Marilyns convey. On one
level, those vivid, larger-than-life paintings are celebrity
iconography, making a "secular, profane subject[ ]" "transcendent"
and "eternal." Id. , at 209 (internal quotation marks
omitted). But they also function as a biting critique of the cult
of celebrity, and the role it plays in American life. With
misaligned, "Day-Glo" colors suggesting "artificiality and
industrial production," Warhol portrayed the actress as a "consumer
product." The Metropolitan Museum of Art Guide 233 (2012); The
Metropolitan Museum of Art, Marilyn (2023) (online source archived
at https://www.supremecourt.gov). And in so doing, he "exposed the
deficiencies" of a "mass-media culture" in which "such superficial
icons loom so large." 1 App. 208, 210 (internal quotation marks
omitted). Out of a publicity photo came both memorable portraiture
and pointed social commentary.
As with Marilyn, similarly with Prince. In 1984, Vanity Fair
commissioned Warhol to create a portrait based on a black-and-white
photograph taken by noted photographer Lynn Goldsmith: As he did in the Marilyn series, Warhol cropped the photo, so
that Prince's head fills the whole frame: It thus becomes
"disembodied," as if "magically suspended in space." Id. , at
174. And as before, Warhol converted the cropped photo into a
higher-contrast image, incorporated into a silkscreen. That image
isolated and exaggerated the darkest details of Prince's head; it
also reduced his "natural, angled position," presenting him in a
more face-forward way. Id. , at 223. Warhol traced, painted,
and inked, as earlier described. See supra , at 5-6. He also
made a second silkscreen, based on his tracings; the ink he passed
through that screen left differently colored, out-of-kilter lines
around Prince's face and hair (a bit hard to see in the
reproduction below-more pronounced in the original). Altogether,
Warhol made 14 prints and two drawings-the Prince series-in a range
of unnatural, lurid hues. See Appendix, ante , at 39. Vanity
Fair chose the Purple Prince to accompany an article on the
musician. Thirty-two years later, just after Prince died, Condé
Nast paid Warhol (now actually his foundation, see supra , at
1, n. 1) to use the Orange Prince on the cover of a special
commemorative magazine. A picture (or two), as the saying goes, is
worth a thousand words, so here is what those magazines
published: Andy Warhol, Prince, 1984, synthetic paint and silkscreen ink on
canvas It does not take an art expert to see a transformation-but in
any event, all those offering testimony in this case agreed there
was one. The experts explained, in far greater detail than I have,
the laborious and painstaking work that Warhol put into these and
other portraits. See 1 App. 160-185, 212-216, 222-224. They
described, in ways I have tried to suggest, the resulting visual
differences between the photo and the silkscreen. As one summarized
the matter: The two works are "materially distinct" in "their
composition, presentation, color palette, and media"- i.e. ,
in pretty much all their aesthetic traits. Id. , at
227.[ 3 ] And with the change in form came an
undisputed change in meaning. Goldsmith's focus-seen in what one
expert called the "corporeality and luminosity" of her
depiction-was on Prince's "unique human identity." Id. , at
176, 227. Warhol's focus was more nearly the opposite. His subject
was "not the private person but the public image." Id. , at
159. The artist's "flattened, cropped, exotically colored, and
unnatural depiction of Prince's disembodied head" sought to
"communicate a message about the impact of celebrity" in
contemporary life. Id. , at 227. On Warhol's canvas, Prince
emerged as "spectral, dark, [and] uncanny"-less a real person than
a "mask-like simulacrum." Id. , at 187, 249. He was reframed
as a "larger than life" "icon or totem." Id. , at 257. Yet he
was also reduced: He became the product of a "publicity machine"
that "packages and disseminates commoditized images." Id. ,
at 160. He manifested, in short, the dehumanizing culture of
celebrity in America. The message could not have been more
different.
A thought experiment may pound the point home. Suppose you were
the editor of Vanity Fair or Condé Nast, publishing an article
about Prince. You need, of course, some kind of picture. An
employee comes to you with two options: the Goldsmith photo, the
Warhol portrait. Would you say that you don't really care? That the
employee is free to flip a coin? In the majority's view, you
apparently would. Its opinion, as further discussed below, is built
on the idea that both are just "portraits of Prince" that may
equivalently be "used to depict Prince in magazine stories about
Prince." Ante , at 12-13; see ante , at 22-23, and n.
11, 27, n. 15, 33, 35. All I can say is that it's a good thing the
majority isn't in the magazine business. Of course you would care!
You would be drawn aesthetically to one, or instead to the other.
You would want to convey the message of one, or instead of the
other. The point here is not that one is better and the other
worse. The point is that they are fundamentally different. You
would see them not as "substitute[s]," but as divergent ways to (in
the majority's mantra) "illustrate a magazine about Prince with a
portrait of Prince." Ante , at 15, 33; see ante , at
22-23, and n. 11, 27, n. 15, 35. Or else you (like the majority)
would not have much of a future in magazine publishing.
In any event, the editors of Vanity Fair and Condé Nast
understood the difference-the gulf in both aesthetics and
meaning-between the Goldsmith photo and the Warhol portrait. They
knew about the photo; but they wanted the portrait. They saw that
as between the two works, Warhol had effected a transformation.
B
The question in this case is whether that transformation should
matter in assessing whether Warhol made "fair use" of Goldsmith's
copyrighted photo. The answer is yes-it should push toward
(although not dictate) a finding of fair use. That answer comports
with the copyright statute, its underlying policy, and our
precedent concerning the two. Under established copyright law
(until today), Warhol's addition of important "new expression,
meaning, [and] message" counts in his favor in the fair-use
inquiry. Campbell , 510 U. S., at 579.
Start by asking a broader question: Why do we have "fair use"
anyway? The majority responds that while copyrights encourage the
making of creative works, fair use promotes their "public
availability." Ante , at 13 (internal quotation marks
omitted). But that description sells fair use far short. Beyond
promoting "availability," fair use itself advances creativity and
artistic progress. See Campbell , 510 U. S., at 575, 579
(fair use is "necessary to fulfill copyright's very purpose"-to
"promote science and the arts"). That is because creative work does
not happen in a vacuum. "Nothing comes from nothing, nothing ever
could," said songwriter Richard Rodgers, maybe thinking not only
about love and marriage but also about how the Great American
Songbook arose from vaudeville, ragtime, the blues, and
jazz.[ 4 ] This Court has long understood the
point-has gotten how new art, new invention, and new knowledge
arise from existing works. Our seminal opinion on fair use quoted
the illustrious Justice Story:
"In truth, in literature, in science and in art, there are, and
can be, few, if any, things, which . . . are strictly new and
original throughout. Every book in literature, science and art,
borrows, and must necessarily borrow, and use much which was well
known and used before." Id. , at 575 (quoting Emerson v. Davies , 8 F. Cas. 615, 619 (No. 4,436) (CC Mass.
1845)).
Because that is so, a copyright regime with no escape valves
would "stifle the very creativity which [the] law is designed to
foster." Stewart , 495 U. S., at 236. Fair use is such an
escape valve. It "allow[s] others to build upon" copyrighted
material, so as not to "put manacles upon" creative progress. Campbell , 510 U. S., at 575 (internal quotation marks
omitted). In short, copyright's core value-promoting
creativity-sometimes demands a pass for copying.
To identify when that is so, the courts developed and Congress
later codified a multi-factored inquiry. As the majority describes,
see ante , at 14, the current statute sets out four
non-exclusive considerations to guide courts. They are: (1) "the
purpose and character of the use" made of the copyrighted work,
"including whether such use is of a commercial nature"; (2) "the
nature of the copyrighted work"; (3) "the amount and substantiality
of the portion used in relation to the copyrighted work as a
whole"; and (4) "the effect of the use upon the potential market
for or value of the copyrighted work."17 U. S. C. §107. Those
factors sometimes point in different directions; if so, a court
must weigh them against each other. In doing so, we have stated,
courts should view the fourth factor-which focuses on the copyright
holder's economic interests-as the "most important." See Harper
& Row, Publishers, Inc. v. Nation
Enterprises , 471 U.S.
539 , 566 (1985).[ 5 ] But the overall balance
cannot come out right unless each factor is assessed correctly.
This case, of course, is about (and only about) the first.
And that factor is distinctive: It is the only one that focuses
on what the copier's use of the original work accomplishes. The
first factor asks about the "character" of that use-its "main or
essential nature[,] esp[ecially] as strongly marked and serving to
distinguish." Webster's Third New International Dictionary 376
(1976). And the first factor asks about the "purpose" of the
use-the "object, effect, or result aimed at, intended, or
attained." Id. , at 1847. In that way, the first factor gives
the copier a chance to make his case. See P. Leval, Toward a Fair
Use Standard, 103 Harv. L. Rev. 1105, 1116 (1990) (describing
factor 1 as "the soul of " the "fair use defense"). Look, the
copier can say, at how I altered the original, and what I achieved
in so doing. Look at how (as Judge Leval's seminal article put the
point) the original was "used as raw material" and was "transformed
in the creation of new information, new aesthetics, new insights." Id. , at 1111. That is hardly the end of the fair-use inquiry
(commercialism, too, may bear on the first factor, and anyway there
are three factors to go), but it matters profoundly. Because when a
transformation of the original work has occurred, the user of the
work has made the kind of creative contribution that copyright law
has as its object.
Don't take it from me (or Judge Leval): The above is exactly
what this Court has held about how to apply factor 1. In Campbell , our primary case on the topic, we stated that the
first factor's purpose-and-character test "central[ly]" concerns
"whether and to what extent the new work is 'transformative.' " 510
U. S., at 579 (quoting Leval 1111). That makes sense, we explained,
because "the goal of copyright, to promote science and the arts, is
generally furthered by the creation of transformative works." 510
U. S., at 579. We then expounded on when such a transformation
happens. Harking back to Justice Story, we explained that a "new
work" might "merely 'supersede[ ] the objects' of the original
creation"-meaning, that it does no more, and for no other end, than
the first work had. Ibid. (quoting Folsom v. Marsh , 9 F. Cas. 342 , 348 (No. 4,901) (CC Mass. 1841)). But
alternatively, the new work could "add[ ] something new, with a
further purpose or different character, altering the first with new
expression, meaning, or message." 510 U. S., at 579. Forgive me,
but given the majority's stance (see, e.g. , ante , at
33), that bears repeating: The critical factor 1 inquiry, we held,
is whether a new work alters the first with "new expression,
meaning, or message." The more it does so, the more transformative
the new work. And (here is the final takeaway) "the more
transformative the new work, the less will be the significance of
other factors, like commercialism, that may weigh against a finding
of fair use." 510 U. S., at 579. Under that approach, the Campbell Court held, the rap group 2 Live Crew's
"transformative" copying of Roy Orbison's "Pretty Woman" counted in
favor of fair use. Id. , at 583. And that was so even though
the rap song was, as everyone agreed, recorded and later sold for
profit. See id. , at 573.
Just two Terms ago, in Google , we made all the same
points. We quoted Campbell in explaining that the factor 1
inquiry is "whether the copier's use 'adds something new, with a
further purpose or different character, altering' the copyrighted
work 'with new expression, meaning, or message.' " 593 U. S., at
___ (slip op., at 24). We again described "a copying use that adds
something new and important" as "transformative." Ibid. We
reiterated that protecting transformative uses "stimulate[s]
creativity" and thus "fulfill[s] the objective of copyright law." Ibid. (quoting Leval 1111). And then we gave an example.
Yes, of course, we pointed to Andy Warhol. (The majority claims not
to be embarrassed by this embarrassing fact because the specific
reference was to his Soup Cans, rather than his celebrity images.
But drawing a distinction between a "commentary on
consumerism"-which is how the majority describes his soup canvases, ante , at 27-and a commentary on celebrity culture, i.e. , the turning of people into consumption items, is
slicing the baloney pretty thin.) Finally, the Court conducted the
first-factor inquiry it had described. Google had replicated Sun
Microsystems' computer code as part of a "commercial endeavor,"
done "for commercial profit." 593 U. S., at ___ (slip op., at 27).
No matter, said the Court. "[M]any common fair uses are
indisputably commercial." Ibid. What mattered instead was
that Google had used Sun's code to make "something new and
important": a "highly creative and innovative" software platform. Id. , at ___-___ (slip op., at 24-25). The use of the code,
the Court held, was therefore "transformative" and "point[ed]
toward fair use." Id. , at ___, ___ (slip op., at 25,
28). Campbell and Google also illustrate the difference
it can make in the world to protect transformative works through
fair use. Easy enough to say (as the majority does, see ante , at 36) that a follow-on creator should just pay a
licensing fee for its use of an original work. But sometimes
copyright holders charge an out-of-range price for licenses. And
other times they just say no. In Campbell , for example,
Orbison's successor-in-interest turned down 2 Live Crew's request
for a license, hoping to block the rap take-off of the original
song. See 510 U. S., at 572-573. And in Google , the parties
could not agree on licensing terms, as Sun insisted on conditions
that Google thought would have subverted its business model. See
593 U. S., at ___ (slip op., at 3). So without fair use, 2 Live
Crew's and Google's works-however new and important-might never
have been made or, if made, never have reached the public. The
prospect of that loss to "creative progress" is what lay behind the
Court's inquiry into transformativeness-into the expressive novelty
of the follow-on work (regardless whether the original creator
granted permission). Id. , at ___ (slip op., at 25); see Campbell , 510 U. S., at 579.
Now recall all the ways Warhol, in making a Prince portrait from
the Goldsmith photo, "add[ed] something new, with a further purpose
or different character"-all the ways he "alter[ed] the [original
work's] expression, meaning, [and] message." Ibid. The
differences in form and appearance, relating to "composition,
presentation, color palette, and media." 1 App. 227; see supra , at 7-10. The differences in meaning that arose from
replacing a realistic-and indeed humanistic-depiction of the
performer with an unnatural, disembodied, masklike one. See ibid. The conveyance of new messages about celebrity culture
and its personal and societal impacts. See ibid. The
presence of, in a word, "transformation"-the kind of creative
building that copyright exists to encourage. Warhol's use, to be
sure, had a commercial aspect. Like most artists, Warhol did not
want to hide his works in a garret; he wanted to sell them. But as Campbell and Google both demonstrate (and as further
discussed below), that fact is nothing near the showstopper the
majority claims. Remember, the more transformative the work, the
less commercialism matters. See Campbell , 510 U. S., at 579; supra , at 14; ante , at 18 (acknowledging the point,
even while refusing to give it any meaning). The dazzling
creativity evident in the Prince portrait might not get Warhol all
the way home in the fair-use inquiry; there remain other factors to
be considered and possibly weighed against the first one. See supra , at 2, 10, 14. But the "purpose and character of
[Warhol's] use" of the copyrighted work-what he did to the
Goldsmith photo, in service of what objects-counts powerfully in
his favor. He started with an old photo, but he created a new new
thing.[ 6 ]
II
The majority does not see it. And I mean that literally. There
is precious little evidence in today's opinion that the majority
has actually looked at these images, much less that it has engaged
with expert views of their aesthetics and meaning. Whatever new
expression Warhol added, the majority says, was not transformative.
See ante , at 25. Apparently, Warhol made only "modest
alterations." Ante , at 33. Anyone, the majority suggests,
could have "crop[ped], flatten[ed], trace[d], and color[ed] the
photo" as Warhol did. Ante , at 8. True, Warhol portrayed
Prince "somewhat differently." Ante , at 33. But the "degree
of difference" is too small: It consists merely in applying
Warhol's "characteristic style"-an aesthetic gloss, if you will-"to
bring out a particular meaning" that was already "available in
[Goldsmith's] photograph." Ibid. So too, Warhol's commentary
on celebrity culture matters not at all; the majority is not
willing to concede that it even exists. See ante , at 34
("even if such commentary is perceptible"). And as for the District
Court's view that Warhol transformed Prince from a "vulnerable,
uncomfortable person to an iconic, larger-than-life figure," the
majority is downright dismissive. Ante , at 32. Vulnerable,
iconic-who cares? The silkscreen and the photo, the majority
claims, still have the same "essential nature." Ante , at 25,
n. 14 (emphasis deleted).
The description is disheartening. It's as though Warhol is an
Instagram filter, and a simple one at that ( e.g. ,
sepia-tinting). "What is all the fuss about?," the majority wants
to know. Ignoring reams of expert evidence-explaining, as every art
historian could explain, exactly what the fuss is about-the
majority plants itself firmly in the "I could paint that" school of
art criticism. No wonder the majority sees the two images as
essentially fungible products in the magazine market-publish this
one, publish that one, what does it matter? See ante , at
22-23; supra , at 10. The problem is that it does matter, for all the reasons given in the record and discussed
above. See supra , at 9-10. Warhol based his silkscreen on a
photo, but fundamentally changed its character and meaning. In
belittling those creative contributions, the majority guarantees
that it will reach the wrong result.
Worse still, the majority maintains that those contributions,
even if significant, just would not matter. All of Warhol's
artistry and social commentary is negated by one thing: Warhol
licensed his portrait to a magazine, and Goldsmith sometimes
licensed her photos to magazines too. That is the sum and substance
of the majority opinion. Over and over, the majority incants that
"[b]oth [works] are portraits of Prince used in magazines to
illustrate stories about Prince"; they therefore both "share
substantially the same purpose"-meaning, a commercial one. Ante , at 22-23, 38; see ante , at 12-13, 27, n. 15,
33, 35. Or said otherwise, because Warhol entered into a licensing
transaction with Condé Nast, he could not get any help from factor
1-regardless how transformative his image was. See, e.g. , ante , at 35 (Warhol's licensing "outweigh[s]" any "new
meaning or message" he could have offered). The majority's
commercialism-trumps-creativity analysis has only one way out. If
Warhol had used Goldsmith's photo to comment on or critique Goldsmith's photo , he might have availed himself of that
factor's benefit (though why anyone would be interested in that
work is mysterious). See ante , at 34. But because he instead
commented on society -the dehumanizing culture of
celebrity-he is (go figure) out of luck.
From top-to-bottom, the analysis fails. It does not fit the
copyright statute. It is not faithful to our precedent. And it does
not serve the purpose both Congress and the Court have understood
to lie at the core of fair use: "stimulat[ing] creativity," by
enabling artists and writers of every description to build on prior
works. Google , 593 U. S., at ___ (slip op., at 24). That is
how art, literature, and music happen; it is also how all forms of
knowledge advance. Even as the majority misconstrues the law, it
misunderstands-and threatens-the creative process.
Start with what the statute tells us about whether the factor 1
inquiry should disregard Warhol's creative contributions because he
licensed his work. (Sneak preview: It shouldn't.) The majority
claims the text as its strong suit, viewing our precedents' inquiry
into new expression and meaning as a faulty "paraphrase" of the
statutory language. Ante , at 28-30. But it is the majority,
not Campbell and Google , that misreads §107(1).
First, the key term "character" plays little role in the majority's
analysis. See ante , at 12-13, 22-23, and n. 11, 29
(statements of central test or holding referring only to
"purpose"). And you can see why, given the counter-intuitive
meaning the majority (every so often) provides. See ante , at
24-25, and n. 14. When referring to the "character" of what Warhol
did, the majority says merely that he "licensed Orange Prince to
Condé Nast for $10,000." See ante , at 24. But that
reductionist view rids the term of most of its ordinary meaning.
"Character" typically refers to a thing's "main or essential
nature[,] esp[ecially] as strongly marked and serving to
distinguish." Webster's Third 376; see supra , at 13. The
essential and distinctive nature of an artist's use of a work
commonly involves artistry-as it did here. See also Campbell , 510 U. S., at 582, 588-589 (discussing the
expressive "character" of 2 Live Crew's rap). So the term
"character" makes significant everything the record contains-and
everything everyone (save the majority) knows-about the differences
in expression and meaning between Goldsmith's photo and Warhol's
silkscreen.
Second, the majority significantly narrows §107(1)'s reference
to "purpose" (thereby paralleling its constriction of "character").
It might be obvious to you that artists have artistic purposes. And
surely it was obvious to the drafters of a law aiming to promote
artistic (and other kinds of ) creativity. But not to the majority,
which again cares only about Warhol's decision to license his art.
Warhol's purpose, the majority says, was just to "depict Prince in
[a] magazine stor[y] about Prince" in exchange for money. Ante , at 12-13. The majority spurns all that mattered to the
artist-evident on the face of his work-about "expression, meaning,
[and] message." Campbell , 510 U. S., at 579; Google ,
593 U. S., at ___ (slip op., at 24). That indifference to purposes
beyond the commercial-for what an artist, most fundamentally, wants
to communicate-finds no support in §107(1).[ 7 ]
Still more, the majority's commercialism-über-alles view of the
factor 1 inquiry fits badly with two other parts of the fair-use
provision. To begin, take the preamble, which gives examples of
uses often thought fair: "criticism, comment, news reporting,
teaching[,] . . . scholarship, or research." §107. As we have
explained, an emphasis on commercialism would "swallow" those
uses-that is, would mostly deprive them of fair-use
protection. Campbell , 510 U. S., at 584. For the listed
"activities are generally conducted for profit in this country." Ibid. (internal quotation marks omitted). "No man but a
blockhead," Samuel Johnson once noted, "ever wrote[ ] except for
money." 3 Boswell's Life of Johnson 19 (G. Hill ed. 1934). And
Congress of course knew that when it drafted the preamble.
Next, skip to the last factor in the fair-use test: "the effect
of the use upon the potential market for or value of the
copyrighted work." §107(4). You might think that when Congress
lists two different factors for consideration, it is because the
two factors are, well, different. But the majority transplants
factor 4 into factor 1. Recall that the majority conducts a kind of
market analysis: Warhol, the majority says, licensed his portrait
of Prince to a magazine that Goldsmith could have licensed her
photo to-and so may have caused her economic harm. See ante ,
at 22-23; see also ante , at 19 (focusing on whether a
follow-on work is a market "substitute" for the original); ante , at 4 (Gorsuch, J., concurring) (describing the
"salient point" as whether Warhol's "use involved competition with
Ms. Goldsmith's image"). That issue is no doubt important in the
fair-use inquiry. But it is the stuff of factor 4: how Warhol's use
affected the "value of " or "market for" Goldsmith's photo. Factor
1 focuses on the other side of the equation: the new expression,
meaning, or message that may come from someone else using the
original. Under the statute, courts are supposed to strike a
balance between the two-and thus between rewarding original
creators and enabling others to build on their works. That cannot
happen when a court, à la the majority, double-counts the first
goal and ignores the second.
Is it possible I overstate the matter? I would like for that to
be true. And a puzzling aspect of today's opinion is that it
occasionally acknowledges the balance that the fair-use provision
contemplates. So, for example, the majority notes after reviewing
the relevant text that "the central question [the first factor]
asks" is whether the new work "adds something new" to the
copyrighted one. Ante , at 15 (internal quotation marks
omitted). Yes, exactly. And in other places, the majority suggests
that a court should consider in the factor 1 analysis not merely
the commercial context but also the copier's addition of "new
expression," including new meaning or message. Ante , at 12;
see ante , at 18, 24-25, n. 13, 25, 32. In that way, the
majority opinion differs from Justice Gorsuch's concurrence, which
would exclude all inquiry into whether a follow-on work is
transformative. See ante , at 2, 4. And it is possible lower
courts will pick up on that difference, and ensure that the
"newness" of a follow-on work will continue to play a significant
role in the factor 1 analysis. If so, I'll be happy to discover
that my "claims [have] not age[d] well." Ante , at 36. But
that would require courts to do what the majority does not: make a
serious inquiry into the follow-on artist's creative contributions.
The majority's refusal to do so is what creates the oddity at the
heart of today's opinion. If "newness" matters (as the opinion
sometimes says), then why does the majority dismiss all the newness
Warhol added just because he licensed his portrait to Condé Nast?
And why does the majority insist more generally that in a
commercial context "convey[ing] a new meaning or message" is "not
enough for the first factor to favor fair use"? Ante , at
35.
Certainly not because of our precedent-which conflicts with
nearly all the majority says. As explained earlier, this Court has
decided two important cases about factor 1. See supra , at
14-16. In each, the copier had built on the original to make a
product for sale-so the use was patently commercial. And in each,
that fact made no difference, because the use was also
transformative. The copier, we held, had made a significant
creative contribution-had added real value. So in Campbell ,
we did not ask whether 2 Live Crew and Roy Orbison both meant to
make money by "including a catchy song about women on a record
album." But cf. ante , at 12-13 (asking whether Warhol and
Goldsmith both meant to charge for "depict[ing] Prince in magazine
stories about Prince"). We instead asked whether 2 Live Crew had
added significant "new expression, meaning, [and] message"; and
because we answered yes, we held that the group's rap song did not
"merely supersede the objects of the original creation." 510 U. S.,
at 579 (internal quotation marks and alteration omitted).
Similarly, in Google , we took for granted that Google (the
copier) and Sun (the original author) both meant to market software
platforms facilitating the same tasks-just as (in the majority's
refrain) Warhol and Goldsmith both wanted to market images
depicting the same subject. See 593 U. S., at ___, ___ (slip op.,
at 25, 27). "So what?" was our basic response. Google's copying had
enabled the company to make a "highly creative and innovative
tool," advancing "creative progress" and thus serving "the basic
constitutional objective of copyright." Id. , at ___ (slip
op., at 25) (internal quotation marks omitted). Search today's
opinion high and low, you will see no such awareness of how copying
can help produce valuable new works.
Nor does our precedent support the majority's strong distinction
between follow-on works that "target" the original and those that
do not. Ante , at 35. (Even the majority does not claim that
anything in the text does so.) True enough that the rap song in Campbell fell into the former category: 2 Live Crew urged
that its work was a parody of Orbison's song. But even in
discussing the value of parody, Campbell made clear the
limits of targeting's importance. The Court observed that as the
"extent of transformation" increases, the relevance of targeting
decreases. 510 U. S., at 581, n. 14. Google proves the
point. The new work there did not parody, comment on, or otherwise
direct itself to the old: The former just made use of the latter
for its own devices. Yet that fact never made an appearance in the
Court's opinion; what mattered instead was the "highly creative"
use Google had made of the copied code. That decision is on point
here. Would Warhol's work really have been more worthy of
protection if it had (somehow) "she[d] light" on Goldsmith's
photograph, rather than on Prince, his celebrity status, and
celebrity culture? Ante , at 27. Would that Goldsmith-focused
work (whatever it might be) have more meaningfully advanced
creative progress, which is copyright's raison d'être, than the
work he actually made? I can't see how; more like the opposite. The
majority's preference for the directed work, apparently on grounds
of necessity, see ante , at 27, 34-35, again reflects its
undervaluing of transformative copying as a core part of
artistry.
And there's the rub. (Yes, that's mostly Shakespeare.) As
Congress knew, and as this Court once saw, new creations come from
building on-and, in the process, transforming-those coming before.
Today's decision stymies and suppresses that process, in art and
every other kind of creative endeavor. The decision enhances a
copyright holder's power to inhibit artistic development, by
enabling her to block even the use of a work to fashion something
quite different. Or viewed the other way round, the decision
impedes non-copyright holders' artistic pursuits, by preventing
them from making even the most novel uses of existing materials. On
either account, the public loses: The decision operates to
constrain creative expression.[ 8 ]
The effect, moreover, will be dramatic. Return again to Justice
Story, see supra , at 11-12: "[I]n literature, in science and
in art, there are, and can be, few, if any, things" that are "new
and original throughout." Campbell , 510 U. S., at 575
(quoting Emerson , 8 F. Cas., at 619). Every work "borrows,
and must necessarily" do so. 510 U. S., at 575. Creators themselves
know that fact deep in their bones. Here is Mark Twain on the
subject: "The kern[e]l, the soul-let us go further and say the
substance, the bulk, the actual and valuable material" of creative
works-all are "consciously and unconsciously drawn from a million
outside sources." Letter from M. Twain to H. Keller, in 2 Mark
Twain's Letters 731 (1917); see also id. , at 732 (quoting
Oliver Wendell Holmes-no, not that one, his father the poet-as
saying "I have never originated anything altogether myself, nor met
anybody who had"). "[A]ppropriation, mimicry, quotation, allusion
and sublimated collaboration," novelist Jonathan Lethem has
explained, are "a kind of sine qua non of the creative act, cutting
across all forms and genres in the realm of cultural production."
The Ecstasy of Influence, in Harper's Magazine 61 (Feb. 2007). Or
as Mary Shelley once wrote, there is no such thing as "creating out
of [a] void." Frankenstein ix (1831).[ 9 ]
Consider, in light of those authorial references, how the
majority's factor 1 analysis might play out in literature. And why
not start with the best? Shakespeare borrowed over and over and
over. See, e.g. , 8 Narrative and Dramatic Sources of
Shakespeare 351-352 (G. Bullough ed. 1975) ("Shakespeare was an
adapter of other men's tales and plays; he liked to build a new
construction on something given"). I could point to a whole slew of
works, but let's take Romeo and Juliet as an example. Shakespeare's
version copied most directly from Arthur Brooke's The Tragical
History of Romeus and Juliet, written a few decades earlier (though
of course Brooke copied from someone, and that person copied from
someone, and that person . . . going back at least to Ovid's
story about Pyramus and Thisbe). Shakespeare took plot, characters,
themes, even passages: The friar's line to Romeo, "Art thou a man?
Thy form cries out thou art," appeared in Brooke as "Art thou a
man? The shape saith so thou art." Bullough 387. (Shakespeare was,
among other things, a good editor.) Of course Shakespeare also
added loads of genius, and so made the borrowed stories "uniquely
Shakespearian." G. Williams, Shakespeare's Basic Plot Situation, 2
Shakespeare Quarterly No. 4, p. 313 (Oct. 1951). But on the
majority's analysis? The two works-Shakespeare's and Brooke's-are
just two stories of star-crossed lovers written for commercial
gain. Shakespeare would not qualify for fair use; he would not even
come out ahead on factor 1.
And if you think that's just Shakespeare, here are a couple
more. (Once you start looking, examples are everywhere.) Lolita,
though hard to read today, is usually thought one of the greatest
novels of the 20th century. But the plotline-an adult man takes a
room as a lodger; embarks on an obsessive sexual relationship with
the preteen daughter of the house; and eventually survives her
death, remaining marked forever-appears in a story by Heinz von
Lichberg written a few decades earlier. Oh, and the girl's name is
Lolita in both versions. See generally M. Maar, The Two Lolitas
(2005). All that said, the two works have little in common
artistically; nothing literary critics admire in the second Lolita
is found in the first. But to the majority? Just two stories of
revoltingly lecherous men, published for profit. So even factor 1
of the fair-use inquiry would not aid Nabokov. Or take one of the
most famed adventure stories ever told. Here is the provenance of
Treasure Island, as Robert Louis Stevenson himself described
it:
"No doubt the parrot once belonged to Robinson Crusoe. No doubt
the skeleton is conveyed from [Edgar Allan] Poe. I think little of
these, they are trifles and details; and no man can hope to have a
monopoly of skeletons or make a corner in talking birds. . . . It
is my debt to Washington Irving that exercises my conscience, and
justly so, for I believe plagiarism was rarely carried farther. . .
. Billy Bones, his chest, the company in the parlor, the whole
inner spirit and a good deal of the material detail of my first
chapters-all were there, all were the property of Washington
Irving." My First Book- Treasure Island , in 21 Syracuse
University Library Associates Courier No. 2, p. 84 (1986).
Odd that a book about pirates should have practiced piracy? Not
really, because tons of books do-and not many in order to "target"
or otherwise comment on the originals. "Thomas Mann, himself a
master of [the art,] called [it] 'higher cribbing.' " Lethem 59.
The point here is that most writers worth their salt steal other
writers' moves-and put them to other, often better uses. But the
majority would say, again and yet again in the face of such
transformative copying, "no factor 1 help and surely no fair
use."
Or how about music? Positively rife with copying of all kinds.
Suppose some early blues artist (W. C. Handy, perhaps?) had
copyrighted the 12-bar, three-chord form-the essential foundation
(much as Goldsmith's photo is to Warhol's silkscreen) of many blues
songs. Under the majority's view, Handy could then have
controlled-meaning, curtailed-the development of the genre. And
also of a fair bit of rock and roll. "Just another rendition of
12-bar blues for sale in record stores," the majority would say to
Chuck Berry (Johnny B. Goode), Bill Haley (Rock Around the Clock),
Jimi Hendrix (Red House), or Eric Clapton (Crossroads). Or to
switch genres, imagine a pioneering classical composer (Haydn?) had
copyrighted the three-section sonata form. "One more piece built on
the same old structure, for use in concert halls," the majority
might say to Mozart and Beethoven and countless others: "Sure, some
new notes, but the backbone of your compositions is identical."
And then, there's the appropriation of those notes, and
accompanying words, for use in new and different ways. Stravinsky
reportedly said that great composers do not imitate, but instead
steal. See P. Yates, Twentieth Century Music 41 (1967). At any
rate, he would have known. He took music from all over-from Russian
folk melodies to Schoenberg-and made it inimitably his own. And
then-as these things go-his music became a source for others.
Charlie Parker turned The Rite of Spring into something of a jazz
standard: You can still hear the Stravinsky lurking, but jazz
musicians make the composition a thing of a different kind. And
popular music? I won't point fingers, but maybe rock's only Nobel
Laureate and greatest-ever lyricist is known for some
appropriations? See M. Gilmore, The Rolling Stone Interview,
Rolling Stone, Sept. 27, 2012, pp. 51, 81.[ 10 ]
He wouldn't be alone. Here's what songwriter Nick Cave (he of the
Bad Seeds) once said about how music develops:
"The great beauty of contemporary music, and what gives it its
edge and vitality, is its devil-may-care attitude toward
appropriation-everybody is grabbing stuff from everybody else, all the time . It's a feeding frenzy of borrowed ideas that
goes toward the advancement of rock music-the great artistic
experiment of our era." The Red Hand Files (Apr. 2020) (online
source archived at https://www.supremecourt.gov).
But not as the majority sees the matter. Are these guys making
money? Are they appropriating for some different reason than to
critique the thing being borrowed? Then they're "shar[ing] the
objectives" of the original work, and will get no benefit from
factor 1, let alone protection from the whole fair-use test. Ante , at 24.
Finally, back to the visual arts, for while Warhol may have been
the master appropriator within that field, he had plenty of
company; indeed, he worked within an established tradition going
back centuries (millennia?). The representatives of three giants of
modern art (you may know one for his use of comics) describe the
tradition as follows: "[T]he use and reuse of existing imagery" are
"part of art's lifeblood"-"not just in workaday practice or
fledgling student efforts, but also in the revolutionary moments of
art history." Brief for Robert Rauschenberg, Roy Lichtenstein, and
Joan Mitchell Foundations et al. as Amici Curiae 6.
Consider as one example the reclining nude. Probably the first
such figure in Renaissance art was Giorgione's Sleeping Venus.
(Note, though, in keeping with the "nothing comes from nothing"
theme, that Giorgione apparently modeled his canvas on a woodcut
illustration by Francesco Colonna.) Here is Giorgione's
painting: Giorgione, Sleeping Venus, c. 1510, oil on canvas But things were destined not to end there. One of Giorgione's
pupils was Titian, and the former student undertook to riff on his
master. The resulting Venus of Urbino is a prototypical example of
Renaissance imitatio -the creation of an original work from
an existing model. See id. , at 8; 1 G. Vasari, Lives of the
Artists 31, 444 (G. Bull transl. 1965). You can see the
resemblance-but also the difference: Titian, Venus of Urbino, 1538, oil on canvas The majority would presumably describe these Renaissance
canvases as just "two portraits of reclining nudes painted to sell
to patrons." Cf. ante , at 12-13, 22-23. But wouldn't that
miss something-indeed, everything-about how an artist engaged with
a prior work to create new expression and add new value?
And the reuse of past images was far from done. For here is
Édouard Manet's Olympia, now considered a foundational work of
artistic modernism, but referring in obvious ways to Titian's (and
back a step, to Giorgione's) Venus: Manet, Olympia, 1863, oil on canvas Here again consider the account of the Rauschenberg,
Lichtenstein, and Mitchell Foundations: "The revolutionary shock of
the painting depends on how traditional imagery remains the
painting's recognizable foundation, even as that imagery is
transformed and wrenched into the present." Brief as Amici
Curiae 9. It is an especially striking example of a recurrent
phenomenon-of how the development of visual art works across time
and place, constantly building on what came earlier. In fact, the
Manet has itself spawned further transformative paintings, from
Cézanne to a raft of contemporary artists across the globe. See id. , at 10-11. But the majority, as to these matters, is
uninterested and unconcerned.
Take a look at one last example, from a modern master very
different from Warhol, but availing himself of the same
appropriative traditions. On the left (below) is Velázquez's
portrait of Pope Innocent X; on the right is Francis Bacon's Study
After Velázquez's Portrait. Velázquez, Pope Innocent X,c. 1650,
oil on canvas Francis Bacon, Study After
Velazquez's Portrait of PopeInnocent X, 1953, oil on canvas To begin with, note the word "after"
in Bacon's title. Copying is so deeply rooted in the visual arts
that there is a naming convention for it, with "after" denoting
that a painting is some kind of "imitation of a known work." M.
Clarke, The Concise Oxford Dictionary of Art Terms 5 (2d ed. 2010).
Bacon made frequent use of that convention. He was especially taken
by Velázquez's portrait of Innocent X, referring to it in tens of
paintings. In the one shown above, Bacon retained the subject,
scale, and composition of the Velázquez original. Look at one, look
at the other, and you know Bacon copied. But he also transformed.
He invested his portrait with new "expression, meaning, [and]
message," converting Velázquez's study of magisterial power into
one of mortal dread. Campbell , 510 U. S., at 579.
But the majority, from all it says, would find the change
immaterial. Both paintings, after all, are "portraits of [Pope
Innocent X] used to depict [Pope Innocent X]" for hanging in some
interior space, ante , at 12-13; so on the majority's
reasoning, someone in the market for a papal portrait could use
either one, see ante , at 22-23. Velázquez's portrait,
although Bacon's model, is not "the object of [his] commentary." Ante , at 27; see A. Zweite, Bacon's Scream, in Francis
Bacon: The Violence of the Real 71 (A. Zweite ed. 2006) (Bacon "was
not seeking to expose Velázquez's masterpiece," but instead to
"adapt it" and "give it a new meaning"). And absent that
"target[ing]," the majority thinks the portraits' distinct messages
make no difference. Ante , at 27. Recall how the majority
deems irrelevant the District Court's view that the Goldsmith
Prince is vulnerable, the Warhol Prince iconic. Too small a "degree
of difference," according to the majority. Ante , at 33-34;
see supra , at 17. So too here, presumably: the stolid Pope,
the disturbed Pope-it just doesn't matter. But that once again
misses what a copier accomplished: the making of a wholly new piece
of art from an existing one.
The majority thus treats creativity as a trifling part of the
fair-use inquiry, in disregard of settled copyright principles and
what they reflect about the artistic process. On the majority's
view, an artist had best not attempt to market even a
transformative follow-on work-one that adds significant new
expression, meaning, or message. That added value (unless it comes
from critiquing the original) will no longer receive credit under
factor 1. And so it can never hope to outweigh factor 4's
assessment of the copyright holder's interests. The result will be
what this Court has often warned against: suppression of "the very
creativity which [copyright] law is designed to foster." Stewart , 495 U. S., at 236; see supra , at 11-12. And
not just on the margins. Creative progress unfolds through use and
reuse, framing and reframing: One work builds on what has gone
before; and later works build on that one; and so on through time.
Congress grasped the idea when it directed courts to attend to the
"purpose and character" of artistic borrowing-to what the borrower
has made out of existing materials. That inquiry recognizes the
value in using existing materials to fashion something new. And so
too, this Court-from Justice Story's time to two Terms ago-has
known that it is through such iterative processes that knowledge
accumulates and art flourishes. But not anymore. The majority's
decision is no "continuation" of "existing copyright law." Ante , at 37. In declining to acknowledge the importance of
transformative copying, the Court today, and for the first time,
turns its back on how creativity works.
III
And the workings of creativity bring us back to Andy Warhol. For
Warhol, as this Court noted in Google , is the very
embodiment of transformative copying. He is proof of concept-that
an artist working from a model can create important new expression.
Or said more strongly, that appropriations can help bring great art
into being. Warhol is a towering figure in modern art not despite
but because of his use of source materials. His work-whether Soup
Cans and Brillo Boxes or Marilyn and Prince-turned something not
his into something all his own. Except that it also became all of
ours, because his work today occupies a significant place not only
in our museums but in our wider artistic culture. And if the
majority somehow cannot see it-well, that's what evidentiary
records are for. The one in this case contained undisputed
testimony, and lots of it, that Warhol's Prince series conveyed a
fundamentally different idea, in a fundamentally different artistic
style, than the photo he started from. That is not the end of the
fair-use inquiry. The test, recall, has four parts, with one
focusing squarely on Goldsmith's interests. But factor 1 is
supposed to measure what Warhol has done. Did his "new work" "add[
] something new, with a further purpose or different character"? Campbell , 510 U. S., at 579. Did it "alter[ ] the first with
new expression, meaning, or message"? Ibid. It did, and it
did. In failing to give Warhol credit for that transformation, the
majority distorts ultimate resolution of the fair-use question.
Still more troubling are the consequences of today's ruling for
other artists. If Warhol does not get credit for transformative
copying, who will? And when artists less famous than Warhol cannot
benefit from fair use, it will matter even more. Goldsmith would
probably have granted Warhol a license with few conditions, and for
a price well within his budget. But as our precedents show,
licensors sometimes place stringent limits on follow-on uses,
especially to prevent kinds of expression they disapprove. And
licensors may charge fees that prevent many or most artists from
gaining access to original works. Of course, that is all well and
good if an artist wants merely to copy the original and market it
as his own. Preventing those uses-and thus incentivizing the
creation of original works-is what copyrights are for. But when the
artist wants to make a transformative use, a different issue is
presented. By now, the reason why should be obvious. "Inhibit[ing]
subsequent writers" and artists from "improv[ing] upon prior
works"-as the majority does today-will "frustrate the very ends
sought to be attained" by copyright law. Harper & Row ,
471 U. S., at 549. It will stifle creativity of every sort. It will
impede new art and music and literature. It will thwart the
expression of new ideas and the attainment of new knowledge. It
will make our world poorer. Notes 1 By the time of the licensing, Warhol had
died and the Warhol Foundation had stepped into his shoes. But for
ease of exposition, I will refer to both the artist and his
successor-in-interest as Warhol. 2 One preliminary note before beginning in
earnest. As readers are by now aware, the majority opinion is
trained on this dissent in a way majority opinions seldom are.
Maybe that makes the majority opinion self-refuting? After all, a
dissent with "no theory" and "[n]o reason" is not one usually
thought to merit pages of commentary and fistfuls of comeback
footnotes. Ante , at 36. In any event, I'll not attempt to
rebut point for point the majority's varied accusations; instead,
I'll mainly rest on my original submission. I'll just make two
suggestions about reading what follows. First, when you see that my
description of a precedent differs from the majority's, go take a
look at the decision. Second, when you come across an argument that
you recall the majority took issue with, go back to its response
and ask yourself about the ratio of reasoning to ipse dixit .
With those two recommendations, I'll take my chances on readers'
good judgment. 3 The majority attempts to minimize the
visual dissimilarities between Warhol's silkscreen and Goldsmith's
photograph by rotating the former image and then superimposing it
on the latter one. See ante , at 9 (fig. 6); see also Brief
for Goldsmith 17 (doing the same thing). But the majority is trying
too hard: Its manipulated picture in fact reveals the significance
of the cropping and facial reorientation that went into Warhol's
image. And the majority's WarGold combo of course cannot obscure
the other differences, of color and presentation, between the two
works. 4 In the spirit of this opinion, I might have
quoted that line without further ascription. But lawyers believe in
citations, so I will tell you that the Rodgers lyric (which is, of course , from the Sound of Music) is used-to make the same
point I do-in Rob Kapilow's Listening for America: Inside the Great
American Songbook From Gershwin to Sondheim (2019). One of that
book's themes is that even the most "radically new" music builds on
existing works-or as Irving Berlin put the point, "songs make
history, and history makes songs." Id. , at xv, 2. And so too
for every other form of art. See infra , at 26-34 (making
this point at greater length-and with pictures!). 5 The fourth factor has, to use the
majority's repeated example, forced many a filmmaker to pay for
adapting books into movies-as we noted two Terms ago. See Google
LLC v. Oracle America, Inc. , 593 U. S. ___, ___ (2021)
(slip op., at 30) (explaining that film adaptations may founder on
"[t]he fourth statutory factor" because "[m]aking a film of an
author's book" may result in "potential or presumed losses to the
copyright owner"). The majority asserts that it is "aware of no
authority for the proposition" that the fourth factor can thus
protect against unlicensed film adaptations, insisting that the
first factor must do (or at least share in) the work. Ante ,
at 29, n. 17; see ante , at 16, 28-29, 36. But Google is the "authority for the proposition": That's just what it said,
in so many words. And anyway, the majority's own first-factor test,
applied consistently, would favor, not stop, the freeloading
filmmaker. As you've seen (and I'll discuss below), that test boils
down to whether a follow-on work serves substantially the same
commercial purpose as the original-here, "depict[ing] Prince in
magazine stories about Prince." Ante , at 12-13; see ante , at 22-23, and n. 11, 27, n. 15, 33, 35. A film
adaptation doesn't fit that mold: The filmmaker (unlike Warhol, in
the majority's view) wants to reach different buyers, in different
markets, consuming different products. The majority at one point
suggests it might have some different factor 1 test in its back
pocket to deal with this problem. See ante , at 35, n. 22.
But assuming the majority's approach, as stated repeatedly in its
opinion, is truly the majority's approach, factor 1 won't help the
author in the book-to-film situation. Under that approach, it is
the fourth factor, not the first, which has to "take[ ] care of
derivative works like book-to-film adaptations." Ante , at
29, n. 17. It's a good thing the majority errs in believing that
the fourth factor isn't up to the job. 6 I have to admit, I stole that last phrase
from Michael Lewis's The New New Thing: A Silicon Valley Story
(2014). I read the book some time ago, and the phrase stuck with me
(as phrases often do). I wouldn't have thought of it on my
own. 7 The majority seeks some statutory backing
in what it describes as §107's reference to the "specific 'use' "
of a work "alleged to be 'an infringement.' " Ante , at 20;
see also ante , at 2, 4 (Gorsuch, J., concurring). Because
the challenged use here is a licensing (so says the majority), all
that matters is that Goldsmith engaged in similar commercial
transactions. But the majority is both rewriting and splicing the
statute. The key part of the statute simply asks whether the "use made of a [copyrighted] work " is fair. (The term "alleged
infringement," which the majority banks on, nowhere exists in the
text; indeed, all the statute says about infringement, and in a
separate sentence, is that a fair use doesn't count as one.) The
statute-that is, the actual one-thus focuses attention on what the
copier does with the underlying work. So when the statute more
particularly asks (in factor 1) about the "purpose and character of
the use"-meaning again, the "use made of [the copyrighted] work"-it
is asking to what end, and with what result, the copier made use of
the original. And that necessarily involves the issue of
transformation-more specifically here, how Warhol's silkscreen
transformed Goldsmith's photo. 8 No worries, the majority says: Today's
decision is only about the commercial licensing of artistic works,
not about their "creation" or their other uses. See ante , at
21, and n. 10. So, for example, if Warhol had used his Prince
silkscreen "for teaching purposes" or sought to "display [it] in a
nonprofit museum," the first factor could have gone the other way. Ante , at 21, n. 10; ante , at 6 (Gorsuch, J.,
concurring). But recall what Samuel Johnson said about
"blockheads": Unless an artist is one, he makes art for money. See supra , at 21. So when the majority denies follow-on artists
the full reward of their creativity, it diminishes their incentive
to create. And as should go without saying, works not created will
not appear in classrooms and museums. 9 OK, one last one: T. S. Eliot made the same
point more, shall we say, poetically. We often harp, he wrote, on
"the poet's difference from his predecessors." The Sacred Wood 43
(1921). "[But] we shall often find that not only the best, but the
most individual parts of his work may be those in which the dead
poets, his ancestors, assert their immortality most vigorously. . .
. No poet, no artist of any art, has his complete meaning alone." Id. , at 43-44. 10 He is, though, also one of modern music's
most bounteous sources. His work has been copied so often that
Rolling Stone (whose name was partly inspired by-OK, you guessed
it-Bob Dylan) recently published a list of the 80 greatest Dylan
covers. See J. Wenner, A Letter from the Editor, Rolling Stone,
Nov. 9, 1967, p. 2; J. Dolan et al., The 80 Greatest Dylan Covers
of All Time, Rolling Stone, May 24, 2021 (online source archived at
https://www.supremecourt.gov). (The list's collators noted that
Dylan so "loved the ide[a] of other people doing his songs" that
they struggled to settle on 80. Ibid. ) To see how important
all that copying was, consider Mr. Tambourine Man. When the Byrds
first heard Dylan's demo of the song, they weren't sure they could
use it. (David Crosby thought it was way too long.) But Roger
McGuinn decided he could "save" the tune. Ibid. Add a
Bach-inspired guitar lick (truly, J. S. Bach) and a
Beatles-inspired beat, and the "pound of Dylan's acoustic guitars"
was "transformed" into a "danceable" and "uplifting" megahit. R.
Unterberger, Turn! Turn! Turn! 137 (2002). And that rendition (not
Dylan's own) launched a thousand ships. Among other things, it
"spawned an entirely new style" of music-what soon came to be known
as "folk-rock." Id. , at 108, 132-133. | The case, *Andy Warhol Foundation for the Visual Arts, Inc. v. Lynn Goldsmith et al.*, involves a copyright dispute between two artists: Lynn Goldsmith and Andy Warhol. Goldsmith's photograph of Prince was used by Warhol as a reference to create a silkscreen image, which was then published in Vanity Fair. The case centers around the "fair use" doctrine and the commercial licensing of artistic works. The question presented is whether the first fair use factor, "the purpose and character of the use," weighs in favor of fair use when an artist creates a new work based on a copyrighted photograph and then licenses that work for commercial use. The Court's decision focuses on the transformation of Goldsmith's photograph by Warhol and the commercial nature of the use. The outcome of this case has implications for follow-on artists and their incentives to create, as well as the availability of artistic works for educational and nonprofit purposes. |
Climate Change & Environment | Michigan v. EPA | https://supreme.justia.com/cases/federal/us/576/14-46/ | NOTICE: This opinion is subject to
formal revision before publication in the preliminary print of the
United States Reports. Readers are requested to notify the Reporter
of Decisions, Supreme Court of the United States, Washington,
D. C. 20543, of any typographical or other formal errors, in
order that corrections may be made before the preliminary print
goes to press.
SUPREME COURT OF THE UNITED STATES
_________________
Nos. 14–46, 14–47, and 14–49
_________________
MICHIGAN, et al., PETITIONERS
14–46 v. ENVIRONMENTAL PROTECTION AGENCY,
et al.
UTILITY AIR REGULATORY GROUP,
PETITIONER
14–47 v. ENVIRONMENTAL PROTECTION AGENCY,
et al.
NATIONAL MINING ASSOCIATION,
PETITIONER
14–49 v. ENVIRONMENTAL PROTECTION AGENCY,
et al.
on writs of certiorari to the united states
court of appeals for the district of columbia circuit
[June 29, 2015]
Justice Scalia delivered the opinion of the
Court.
The Clean Air Act directs the Environmental
Protection Agency to regulate emissions of hazardous air pollutants
from power plants if the Agency finds regulation “appropriate and
necessary.” We must decide whether it was reasonable for EPA to
refuse to consider cost when making this finding.
I
The Clean Air Act establishes a series of
regulatory programs to control air pollution from stationary
sources (such as refineries and factories) and moving sources (such
as cars and airplanes). 69Stat. 322, as amended, 42
U. S. C. §§7401–7671q. One of these is the National
Emissions Standards for Hazardous Air Pollutants Program—the
hazardous-air-pollutants program, for short. Established in its
current form by the Clean Air Act Amendments of 1990, 104Stat.
2531, this program targets for regulation stationary-source
emissions of more than 180 specified “hazardous air pollutants.”
§7412(b).
For stationary sources in general, the
applicability of the program depends in part on how much pollution
the source emits. A source that emits more than 10 tons of a single
pollutant or more than 25 tons of a combination of pollutants per
year is called a major source. §7412(a)(1). EPA is required to
regulate all major sources under the program. §7412(c)(1)–(2). A
source whose emissions do not cross the just-mentioned thresholds
is called an area source. §7412(a)(2). The Agency is required to
regulate an area source under the program if it “presents a threat
of adverse effects to human health or the environment
. . . warranting regulation.” §7412(c)(3).
At the same time, Congress established a unique
procedure to determine the applicability of the program to
fossil-fuel-fired power plants. The Act refers to these plants as
electric utility steam generating units, but we will simply call
them power plants. Quite apart from the hazardous-air-pollutants
program, the Clean Air Act Amendments of 1990 subjected power
plants to various regulatory requirements. The parties agree that
these requirements were expected to have the collateral effect of
reducing power plants’ emissions of hazardous air pollutants,
although the extent of the reduction was unclear. Congress directed
the Agency to “perform a study of the hazards to public health
reasonably anticipated to occur as a result of emissions by [power
plants] of [hazardous air pollutants] after imposition of the
requirements of this chapter.” §7412(n)(1)(A). If the Agency “finds
. . . regulation is appropriate and necessary after
considering the results of the study,” it “shall regulate [power
plants] under [§7412].” Ibid. EPA has interpreted the Act to
mean that power plants become subject to regulation on the same
terms as ordinary major and area sources, see 77 Fed. Reg. 9330
(2012), and we assume without deciding that it was correct to do
so.
And what are those terms? EPA must first divide
sources covered by the program into categories and subcategories in
accordance with statutory criteria. §7412(c)(1). For each category
or subcategory, the Agency must promulgate certain minimum emission
regulations, known as floor standards. §7412(d)(1), (3). The
statute generally calibrates the floor standards to reflect the
emissions limitations already achieved by the best-performing 12%
of sources within the category or subcategory. §7412(d)(3). In some
circumstances, the Agency may also impose more stringent emission
regulations, known as beyond-the-floor standards. The statute
expressly requires the Agency to consider cost (alongside other
specified factors) when imposing beyond-the-floor standards.
§7412(d)(2).
EPA completed the study required by
§7412(n)(1)(A) in 1998, 65 Fed. Reg. 79826 (2000), and concluded
that regulation of coal- and oil-fired power plants was
“appropriate and necessary” in 2000, id., at 79830. In 2012,
it reaffirmed the appropriate-and-necessary finding, divided power
plants into subcategories, and promulgated floor standards. The
Agency found regulation “appropriate” because (1) power plants’
emissions of mercury and other hazardous air pollutants posed risks
to human health and the environment and (2) controls were available
to reduce these emissions. 77 Fed. Reg. 9363. It found regulation
“necessary” because the imposition of the Act’s other requirements
did not eliminate these risks. Ibid. EPA concluded that
“costs should not be considered” when deciding whether power plants
should be regulated under §7412. Id., at 9326.
In accordance with Executive Order, the Agency
issued a “Regulatory Impact Analysis” alongside its regulation.
This analysis estimated that the regulation would force power
plants to bear costs of $9.6 billion per year. Id., at 9306.
The Agency could not fully quantify the benefits of reducing power
plants’ emissions of hazardous air pollutants; to the extent it
could, it estimated that these benefits were worth $4 to $6 million
per year. Ibid. The costs to power plants were thus between
1,600 and 2,400 times as great as the quantifiable benefits from
reduced emissions of hazardous air pollutants. The Agency continued
that its regulations would have ancillary benefits—including
cutting power plants’ emissions of particulate matter and sulfur
dioxide, substances that are not covered by the
hazardous-air-pollutants program. Although the Agency’s
appropriate-and-necessary finding did not rest on these ancillary
effects, id., at 9320, the regulatory impact analysis took
them into account, increasing the Agency’s estimate of the
quantifiable benefits of its regulation to $37 to $90 billion per
year, id., at 9306 . EPA concedes that the regulatory
impact analysis “played no role” in its appropriate-and-necessary
finding. Brief for Federal Respondents 14.
Petitioners (who include 23 States) sought
review of EPA’s rule in the Court of Appeals for the D. C.
Circuit. As relevant here, they challenged the Agency’s refusal to
consider cost when deciding whether to regulate power plants. The
Court of Appeals upheld the Agency’s decision not to consider cost,
with Judge Kavanaugh concurring in part and dissenting in part. White Stallion Energy Center, LLC v. EPA , 748
F. 3d 1222 (2014) ( per curiam ). We granted certiorari.
574 U. S. ___ (2014).
II
Federal administrative agencies are required
to engage in “reasoned decisionmaking.” Allentown Mack Sales
& Service, Inc. v. NLRB , 522 U. S. 359, 374
(1998) (internal quotation marks omitted). “Not only must an
agency’s decreed result be within the scope of its lawful
authority, but the process by which it reaches that result must be
logical and rational.” Ibid. It follows that agency action
is lawful only if it rests “on a consideration of the relevant
factors.” Motor Vehicle Mfrs. Assn. of United States, Inc. v. State Farm Mut. Automobile Ins. Co. , 463 U. S. 29,
43 (1983) (internal quotation marks omitted).
EPA’s decision to regulate power plants under
§7412 allowed the Agency to reduce power plants’ emissions of
hazardous air pollutants and thus to improve public health and the
environment. But the decision also ultimately cost power plants,
according to the Agency’s own estimate, nearly $10 billion a year.
EPA refused to consider whether the costs of its decision
outweighed the benefits. The Agency gave cost no thought at
all , be-cause it considered cost irrelevant to its initial
decision to regulate.
EPA’s disregard of cost rested on its
interpretation of §7412(n)(1)(A), which, to repeat, directs the
Agency to regulate power plants if it “finds such regulation is
appropriate and necessary.” The Agency accepts that it could have interpreted this provision to mean that cost is relevant to
the decision to add power plants to the program. Tr. of Oral Arg.
44. But it chose to read the statute to mean that cost makes no
difference to the initial decision to regulate. See 76 Fed. Reg.
24988 (2011) (“We further interpret the term ‘appropriate’ to not
allow for the consideration of costs”); 77 Fed. Reg. 9327 (“Cost
does not have to be read into the definition of
‘appropriate’ ”).
We review this interpretation under the standard
set out in Chevron U. S. A. Inc. v. Natural
Resources Defense Council, Inc. , 467 U. S. 837 (1984) . Chevron directs courts to accept an agency’s reasonable
resolution of an ambigu-ity in a statute that the agency
administers. Id., at 842–843. Even under this deferential
standard, however, “agencies must operate within the bounds of
reasonable interpretation. ” Utility Air Regulatory
Group v. EPA , 573 U. S. ___, ___ (2014) (slip op.,
at 16) (internal quotation marks omitted). EPA strayed far beyond
those bounds when it read §7412(n)(1) to mean that it could ignore
cost when deciding whether to regulate power plants.
A
The Clean Air Act treats power plants
differently from other sources for purposes of the
hazardous-air-pollutants program. Elsewhere in §7412, Congress
established cabined criteria for EPA to apply when deciding whether
to include sources in the program. It required the Agency to
regulate sources whose emissions exceed specified numerical
thresholds (major sources). It also required the Agency to regulate
sources whose emissions fall short of these thresholds (area
sources) if they “presen[t] a threat of adverse effects to human
health or the environment . . . warranting regulation.”
§7412(c)(3). In stark contrast, Congress instructed EPA to add
power plants to the program if (but only if) the Agency finds
regulation “appropriate and necessary.” §7412(n)(1)(A). One does
not need to open up a dictionary in order to realize the
capaciousness of this phrase. In particular, “appropriate” is “the
classic broad and all-encompassing term that naturally and
traditionally includes consideration of all the relevant factors.”
748 F. 3d, at 1266 (opinion of Kavanaugh, J.). Although this
term leaves agencies with flexibility, an agency may not “entirely
fai[l] to consider an important aspect of the problem” when
deciding whether regulation is appropriate. State Farm , supra , at 43.
Read naturally in the present context, the
phrase “appropriate and necessary” requires at least some attention
to cost. One would not say that it is even rational, never mind
“appropriate,” to impose billions of dollars in economic costs in
return for a few dollars in health or environmental benefits. In
addition, “cost” includes more than the expense of complying with
regulations; any disadvantage could be termed a cost. EPA’s
interpretation precludes the Agency from considering any type of cost—including, for instance, harms that regulation might
do to human health or the environment. The Government concedes that
if the Agency were to find that emissions from power plants do
damage to human health, but that the technologies needed to
eliminate these emissions do even more damage to human health, it
would still deem regulation appropriate. See Tr. of Oral
Arg. 70. No regulation is “appropriate” if it does significantly
more harm than good.
There are undoubtedly settings in which the
phrase “appropriate and necessary” does not encompass cost. But
this is not one of them. Section 7412(n)(1)(A) directs EPA to
determine whether “ regulation is appropriate and necessary.”
(Emphasis added.) Agencies have long treated cost as a centrally
relevant factor when deciding whether to regulate. Consideration of
cost reflects the understanding that reasonable regulation
ordinarily requires paying attention to the advantages and the disadvantages of agency decisions. It also reflects the reality
that “too much wasteful expenditure devoted to one problem may well
mean considerably fewer resources available to deal effectively
with other (perhaps more serious) problems.” Entergy Corp. v. Riverkeeper, Inc. , 556 U. S. 208, 233 (2009)
(Breyer, J., concurring in part and dissenting in part). Against
the backdrop of this established administrative practice, it is
unreasonable to read an instruction to an administrative agency to
determine whether “regulation is appropriate and necessary” as an
invitation to ignore cost.
Statutory context reinforces the relevance of
cost. The procedures governing power plants that we consider today
appear in §7412(n)(1), which bears the caption “Electric utility
steam generating units.” In subparagraph (A), the part of the law
that has occupied our attention so far, Congress required EPA to
study the hazards to public health posed by power plants and to
determine whether regulation is appropriate and necessary. But in
subparagraphs (B) and (C), Congress called for two additional
studies. One of them, a study into mercury emissions from power
plants and other sources, must consider “the health and
environmental effects of such emissions, technologies which are
available to control such emissions, and the costs of such
technologies .” §7412(n)(1)(B) (emphasis added). This directive
to EPA to study cost is a further indication of the relevance of
cost to the decision to regulate.
In an effort to minimize this express reference
to cost, EPA now argues that §7412(n)(1)(A) requires it to consider
only the study mandated by that provision, not the separate mercury
study, before deciding whether to regulate power plants. But when
adopting the regulations before us, the Agency insisted that the
provisions concerning all three studies “provide a framework for
[EPA’s] determination of whether to regulate [power plants].” 76
Fed. Reg. 24987. It therefore decided “to interpret the scope of
the appropriate and necessary finding in the context of all three studies .” 77 Fed. Reg. 9325 (emphasis added). For
example:
EPA considered environmental effects
relevant to the appropriate-and-necessary finding. It deemed the
mercury study’s reference to this factor “direct evidence that
Congress was concerned with environmental effects.” 76 Fed. Reg.
24987.
EPA considered availability of controls
relevant to the appropriate-and-necessary finding. It thought that
doing so was “consistent with” the mercury study’s reference to
availability of controls. Id., at 24989.
EPA concluded that regulation of power
plants would be appropriate and necessary even if a single
pollutant emitted by them posed a hazard to health or the
environment. It believed that “Congress’ focus” on a single
pollutant in the mercury study “support[ed]” this interpretation. Ibid. EPA has not explained why §7412(n)(1)(B)’s
reference to “environmental effects . . . and
. . . costs” provides “direct evidence that Congress was
concerned with environmental effects,” but not “direct evidence”
that it was concerned with cost. Chevron allows agencies to
choose among competing reasonable interpretations of a statute; it
does not license interpretive gerrymanders under which an agency
keeps parts of statutory context it likes while throwing away parts
it does not.
B
EPA identifies a handful of reasons to
interpret §7412(n)(1)(A) to mean that cost is irrelevant to the
initial decision to regulate. We find those reasons
unpersuasive.
EPA points out that other parts of the Clean Air
Act expressly mention cost, while §7412(n)(1)(A) does not. But this
observation shows only that §7412(n)(1)(A)’s broad reference to
appropriateness encompasses multiple relevant factors (which
include but are not limited to cost); other provisions’ specific
references to cost encompass just cost. It is unreasonable to infer
that, by expressly making cost relevant to other decisions, the Act
implicitly makes cost irrelevant to the appropriateness of
regulating power plants. (By way of analogy, the Fourth Amendment’s
Reasonableness Clause requires searches to be “[r]easonable,” while
its Warrant Clause requires warrants to be supported by “probable
cause.” Nobody would argue that, by expressly making level of
suspicion relevant to the validity of a warrant, the Fourth
Amendment implicitly makes level of suspicion categorically irrelevant to the reasonableness of a search. To the
contrary, all would agree that the expansive word “reasonable”
encompasses degree of suspicion alongside other relevant
circumstances.) Other parts of the Clean Air Act also expressly
men-tion environmental effects, while §7412(n)(1)(A) does not. Yet
that did not stop EPA from deeming environmental effects relevant
to the appropriateness of regulating power plants.
Along similar lines, EPA seeks support in this
Court’s decision in Whitman v. American Trucking Assns.,
Inc. , 531 U. S. 457 (2001) . There, the Court addressed a
provision of the Clean Air Act requiring EPA to set ambient air
quality standards at levels “requisite to protect the public
health” with an “adequate margin of safety.” 42 U. S. C.
§7409(b). Read naturally, that discrete criterion does not
encompass cost; it encompasses health and safety. The Court refused
to read that provision as carrying with it an implicit
authorization to consider cost, in part because authority to
consider cost had “elsewhere, and so often, been expressly
granted.” 531 U. S., at 467. American Trucking thus
establishes the modest principle that where the Clean Air Act
expressly directs EPA to regulate on the basis of a factor that on
its face does not include cost, the Act normally should not be read
as implicitly allowing the Agency to consider cost anyway. That
principle has no application here. “Appropriate and necessary” is a
far more comprehensive criterion than “requisite to protect the
public health”; read fairly and in context, as we have explained,
the term plainly subsumes consideration of cost.
Turning to the mechanics of the
hazardous-air-pollutants program, EPA argues that it need not
consider cost when first deciding whether to regulate power
plants because it can consider cost later when deciding how
much to regulate them. The question before us, however, is the
meaning of the “appropriate and necessary” standard that governs
the initial decision to regulate. And as we have discussed, context
establishes that this expansive standard encompasses cost. Cost may
become relevant again at a later stage of the regulatory process,
but that possibility does not establish its irrelevance at this stage. In addition, once the Agency decides to regulate
power plants, it must promulgate certain minimum or floor standards
no matter the cost (here, nearly $10 billion a year); theAgency may
consider cost only when imposing regulations beyond these
minimum standards. By EPA’s logic, someone could decide whether it
is “appropriate” to buy a Ferrari without thinking about cost,
because he plans to think about cost later when deciding whether to
upgrade the sound system.
EPA argues that the Clean Air Act makes cost
irrelevant to the initial decision to regulate sources other than
power plants. The Agency claims that it is reasonable to interpret
§7412(n)(1)(A) in a way that “harmonizes” the program’s treatment
of power plants with its treatment of other sources. This line of
reasoning overlooks the whole point of having a separate provision
about power plants: treating power plants differently from
other stationary sources. Congress crafted narrow standards for EPA
to apply when deciding whether to regulate other sources; in
general, these standards concern the volume of pollution emitted by
the source, §7412(c)(1), and the threat posed by the source “to
human health or the environment,” §7412(c)(3). But Congress wrote
the provision before us more expansively, directing the Agency to
regulate power plants if “appropriate and necessary.” “That
congressional election settles this case. [The Agency’s] preference
for symmetry cannot trump an asymmetrical statute.” CSX Transp.,
Inc. v. Alabama Dept. of Revenue , 562 U. S. 277,
296 (2011) .
EPA persists that Congress treated power plants
differently from other sources because of uncertainty about whether
regulation of power plants would still be needed after the
application of the rest of the Act’s requirements. That is
undoubtedly one of the reasons Congress treated power plants
differently; hence §7412(n)(1)(A)’s requirement to study hazards
posed by power plants’ emissions “after imposition of the
requirements of [the rest of the Act].” But if uncertainty about
the need for regulation were the only reason to treat power
plants differently, Congress would have required the Agency to
decide only whether regulation remains “necessary,” not whether
regulation is “appropriate and necessary.” In any event, EPA
stated when it adopted the rule that “Congress did not limit [the]
appropriate and necessary inquiry to [the study mentioned in
§7412(n)(1)(A)].” 77 Fed. Reg. 9325. The Agency instead decided
that the appropriate-and-necessary finding should be understood in
light of all three studies required by §7412(n)(1), and as we have
discussed, one of those three studies reflects concern about
cost.
C
The dissent does not embrace EPA’s far-reaching
claim that Congress made costs altogether irrelevant to the
decision to regulate power plants. Instead, it maintains that EPA
need not “explicitly analyze costs” before deeming regulation
appropriate, because other features of the regulatory program will
on their own ensure the cost-effectiveness of regulation. Post, at 2 (opinion of Kagan, J.). This line of reasoning
contradicts the foundational principle of administrative law that a
court may uphold agency action only on the grounds that the agency
invoked when it took the action. SEC v. Chenery
Corp. , 318 U. S. 80, 87 (1943). When it deemed regulation
of power plants appropriate, EPA said that cost was irrelevant to that determination—not that cost-benefit
analysis would be deferred until later. Much less did it say
(what the dissent now concludes) that the consideration of cost at
subsequent stages will ensure that the costs are not
disproportionate to the benefits. What it said is that cost is
irrelevant to the decision to regulate.
That is enough to decide these cases. But for
what it is worth, the dissent vastly overstates the influence of
cost at later stages of the regulatory process. For example, the
dissent claims that the floor standards—which the Act calibrates to
reflect emissions limitations already achieved by the
best-performing sources in the industry—reflect cost
considerations, because the best-performing power plants “must have
considered costs in arriving at their emissions outputs.” Post, at 10. EPA did not rely on this argument, and it is
not obvious that it is correct. Because power plants are regulated
under other federal and state laws, the best-performing power
plants’ emissions limitations might reflect cost-blind regulation
rather than cost-conscious decisions. Similarly, the dissent
suggests that EPA may consider cost when dividing sources into
categories and subcategories. Post, at 11–12. Yet according
to EPA, “it is not appropriate to premise subcategorization
on costs.” 77 Fed. Reg. 9395 (emphasis added). That statement
presumably explains the dissent’s carefully worded observation that
EPA considered “technological, geographic, and other factors” when
drawing categories, post, at 13, n. 4, which factors
were in turn “related to costs” in some way, post, at 11.
Attenuated connections such as these hardly support the assertion
that EPA’s regulatory process featured “exhaustive consideration of
costs,” post, at 2.
All in all, the dissent has at most shown that
some elements of the regulatory scheme mitigate cost in limited
ways; it has not shown that these elements ensure
cost-effectiveness. If (to take a hypothetical example) regulating
power plants would yield $5 million in benefits, the prospect of
mitigating cost from $11 billion to $10 billion at later stages of
the program would not by itself make regulation appropriate. In all
events, we need not pursue these points, because EPA did not say
that the parts of the regulatory program mentioned by the dissent
prevent the imposition of costs far in excess of benefits. “[EPA’s]
action must be measured by what [it] did, not by what it might have
done.” Chenery , supra , at 93–94.
D
Our reasoning so far establishes that it was
unreasonable for EPA to read §7412(n)(1)(A) to mean that cost is
irrelevant to the initial decision to regulate power plants. The
Agency must consider cost—including, most importantly, cost of
compliance—before deciding whether regulation is appropriate and
necessary. We need not and do not hold that the law unambiguously
required the Agency, when making this preliminary estimate, to
conduct a formal cost-benefit analysis in which each advantage and
disadvantage is assigned a monetary value. It will be up to the
Agency to decide (as always, within the limits of reasonable
interpretation) how to account for cost.
Some of the respondents supporting EPA ask us to
uphold EPA’s action because the accompanying regulatory impact
analysis shows that, once the rule’s ancillary benefits are
considered, benefits plainly outweigh costs. The dissent similarly
relies on these ancillary benefits when insisting that “the outcome
here [was] a rule whose benefits exceed its costs.” Post, at
16. As we have just explained, however, we may uphold agency action
only upon the grounds on which the agency acted. Even if the Agency could have considered ancillary benefits when deciding
whether regulation is appropriate and necessary—a point we need not
address—it plainly did not do so here. In the Agency’s own words,
the administrative record “utterly refutes [the] assertion that
[ancillary benefits] form the basis for the appropriate and
necessary finding.” 77 Fed. Reg. 9323. The Government concedes,
moreover, that “EPA did not rely on the [regulatory impact
analysis] when deciding to regulate power plants,” and that “[e]ven
if EPA had considered costs, it would not necessarily have adopted
. . . the approach set forth in [that analysis].” Brief
for Federal Respondents 53–54.
* * *
We hold that EPA interpreted §7412(n)(1)(A)
unreasonably when it deemed cost irrelevant to the decision to
regulate power plants. We reverse the judgment of the Court of
Appeals for the D. C. Circuit and remand the cases for further
proceedings consistent with this opinion.
It is so ordered . SUPREME COURT OF THE UNITED STATES
_________________
Nos. 14–46, 14–47, and 14–49
_________________
MICHIGAN, et al., PETITIONERS
14–46 v. ENVIRONMENTAL PROTECTION AGENCY,
et al.
UTILITY AIR REGULATORY GROUP,
PETITIONER
14–47 v. ENVIRONMENTAL PROTECTION AGENCY,
et al.
NATIONAL MINING ASSOCIATION,
PETITIONER
14–49 v. ENVIRONMENTAL PROTECTION AGENCY,
et al.
on writs of certiorari to the united states
court of appeals for the district of columbia circuit
[June 29, 2015]
Justice Thomas, concurring.
The Environmental Protection Agency (EPA) asks
the Court to defer to its interpretation of the phrase “appropriate
and necessary” in §112(n)(1)(A) of the Clean Air Act, 42
U. S. C. §7412. Justice Scalia’s opinion for the Court
demonstrates why EPA’s interpretation deserves no deference under
our precedents. I write separately to note that its request for
deference raises serious questions about the constitutionality of
our broader practice of deferring to agency interpretations of
federal statutes. See Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc. , 467 U. S. 837
(1984) . Chevron deference is premised on “a
presumption that Congress, when it left ambiguity in a statute
meant for implementation by an agency, understood that the
ambiguity would be resolved, first and foremost, by the agency, and
desired the agency (rather than the courts) to possess whatever
degree of discretion the ambiguity allows.” Smiley v. Citibank (South Dakota), N. A. , 517 U. S. 735 –741
(1996). We most often describe Congress’ supposed choice to leave
matters to agency discretion as an allocation of interpretive
authority. See, e.g., National Cable &
Telecommunications Assn. v. Brand X Internet Services ,
545 U. S. 967, 983 (2005) (referring to the agency as “the
authoritative interpreter (within the limits of reason) of
[ambiguous] statutes”). But we sometimes treat that discretion as
though it were a form of legislative power. See, e.g., United
States v. Mead Corp. , 533 U. S. 218, 229 (2001)
(noting that the agency “speak[s] with the force of law when it
addresses ambiguity in the statute or fills a space in the enacted
law” even when “ ‘Congress did not actually have an intent’ as
to a particular result”). Either way, Chevron deference
raises serious separation-of-powers questions.
As I have explained elsewhere, “[T]he judicial
power, as originally understood, requires a court to exercise its
independent judgment in interpreting and expounding upon the laws.” Perez v. Mortgage Bankers Assn. , 575 U. S. ___,
___ (2015) (opinion concurring in judgment) (slip op., at 8).
Interpreting federal statutes—including ambiguous ones administered
by an agency—“calls for that exercise of independent judgment.” Id., at ___ (slip op., at 12). Chevron deference
precludes judges from exercising that judgment, forcing them to
abandon what they believe is “the best reading of an ambiguous
statute” in favor of an agency’s construction. Brand X , supra, at 983. It thus wrests from Courts the ultimate
interpretative authority to “say what the law is,” Marbury v. Madison , 1 Cranch 137, 177 (1803), and hands it over to
the Executive. See Brand X , supra, at 983 (noting
that the judicial construction of an ambiguous statute is “not
authoritative”). Such a transfer is in tension with Article III’s
Vesting Clause, which vests the judicial power exclusively in
Article III courts, not administrative agencies. U. S. Const.,
Art. III, §1.
In reality, as the Court illustrates in the
course of dismantling EPA’s interpretation of §112(n)(1)(A),
agencies “interpreting” ambiguous statutes typically are not
engaged in acts of interpretation at all. See, e.g., ante, at 9. Instead, as Chevron itself acknowledged,
they are engaged in the “ ‘formulation of policy.’ ” 467
U. S., at 843. Statu-tory ambiguity thus becomes an implicit
delegation of rule-making authority, and that authority is used not
to find the best meaning of the text, but to formulate legally
binding rules to fill in gaps based on policy judgments made by the
agency rather than Congress.
Although acknowledging this fact might allow us
to escape the jaws of Article III’s Vesting Clause, it runs
headlong into the teeth of Article I’s, which vests “[a]ll
legislative Powers herein granted” in Congress. U. S. Const.,
Art I., §1. For if we give the “force of law” to agency
pronouncements on matters of private conduct as towhich
“ ‘Congress did not actually have an intent,’ ” Mead , supra, at 229, we permit a body other than
Congress to perform a function that requires an exercise of the
legislative power. See Department of Transportation v. Association of American Railroads , 575 U. S. ___,
___–___ (2015) (Thomas, J., concurring in judgment) (slip op., at
21–22).
These cases bring into bold relief the scope of
the potentially unconstitutional delegations we have come to
countenance in the name of Chevron deference. What EPA
claims for itself here is not the power to make political judgments
in implementing Congress’ policies, nor even the power to make
tradeoffs between competing policy goals set by Congress, American Railroads , supra , at ___–___ (opinion of
Thomas, J.) (slip op., at 20–21) (collecting cases involving
statutes that delegated this legislative authority). It is the
power to decide—without any particular fidelity to the text—which
policy goals EPA wishes to pursue. Should EPA wield its vast powers
over electric utilities to protect public health? A pristine
environment? Economic security? We are told that the breadth of the
word “appropriate” authorizes EPA to decide for itself how to
answer that question. Compare 77 Fed. Reg. 9327 (2012) (“[N]othing
about the definition [of “appropriate”] compels a
consideration of costs” (emphasis added)) with Tr. of Oral Arg. 42
(“[T]he phrase appropriate and necessary doesn’t, by its terms, preclude the EPA from considering cost” (emphasis
added)).[ 1 ]
Perhaps there is some unique historical
justification for deferring to federal agencies, see Mead , supra, at 243 (Scalia, J., dissenting), but these cases
reveal how paltry an effort we have made to understand it or to
confine ourselves to its boundaries. Although we hold today that
EPA exceeded even the extremely permissive limits on agency power
set by our precedents, we should be alarmed that it felt
sufficiently emboldened by those precedents to make the bid for
deference that it did here.[ 2 ]
As in other areas of our jurisprudence concerning administrative
agencies, see, e.g., B&B Hardware, Inc. v. Hargis
Industries, Inc. , 575 U. S. ___, ___–___ (2015) (Thomas,
J., dissenting) (slip op., at 10–14), we seem to be straying
further and further from the Constitution without so much as
pausing to ask why. We should stop to consider that document before
blithely giving the force of law to any other agency
“interpretations” of federal statutes. Notes 1 I can think of no name
for such power other than “legislative power.” Had we deferred to
EPA’s interpretation in these cases, then, we might have violated
another constitutional command by abdicating our check on the
political branches—namely, our duty to enforce the rule of law
through an exercise of the judicial power. Perez v. Mortgage Bankers Assn. , 575 U. S. ___, ___–___ (2015)
(Thomas, J., concurring in judgment) (slip op., at
14–16). 2 This is not the first
time an agency has exploited our practice of deferring to agency
interpretations of statutes. See, e.g., Texas Dept. of Housing
and Community Affairs v. Inclusive Communities Project,
Inc., ante, at 6–7 (Thomas, J., dissenting). SUPREME COURT OF THE UNITED STATES
_________________
Nos. 14–46, 14–47, and 14–49
_________________
MICHIGAN, et al., PETITIONERS
14–46 v. ENVIRONMENTAL PROTECTION AGENCY,
et al.
UTILITY AIR REGULATORY GROUP,
PETITIONER
14–47 v. ENVIRONMENTAL PROTECTION AGENCY,
et al.
NATIONAL MINING ASSOCIATION,
PETITIONER
14–49 v. ENVIRONMENTAL PROTECTION AGENCY,
et al.
on writs of certiorari to the united states
court of appeals for the district of columbia circuit
[June 29, 2015]
Justice Kagan, with whom Justice Ginsburg,
Justice Breyer, and Justice Sotomayor join,dissenting.
The Environmental Protection Agency placed
emissions limits on coal and oil power plants following a lengthy
regulatory process during which the Agency carefully considered
costs. At the outset, EPA determined that regulating plants’
emissions of hazardous air pollutants is “appropriate and
necessary” given the harm they cause, and explained that it would
take costs into account in developing suitable emissions standards.
Next, EPA divided power plants into groups based on technological
and other characteristics bearing significantly on their cost
structures. It required plants in each group to match the emissions
levels already achieved by the best-performing members of the same
group—benchmarks necessarily reflecting those plants’ own cost
analyses. EPA then adopted a host of measures designed to make
compliance with its proposed emissions limits less costly for
plants that needed to catch up with their cleaner peers. And with
only one narrow exception, EPA decided not to impose any more
stringent standards (beyond what some plants had already achieved
on their own) because it found that doing so would not be
cost-effective. After all that, EPA conducted a formal cost-benefit
study which found that the quantifiable benefits of its regulation
would exceed the costs up to nine times over—by as much as $80
billion each year. Those benefits include as many as 11,000 fewer
premature deaths annually, along with a far greater number of
avoided illnesses.
Despite that exhaustive consideration of costs,
the Court strikes down EPA’s rule on the ground that the Agency
“unreasonably . . . deemed cost irrelevant.” Ante ,
at 15. On the majority’s theory, the rule is invalid because EPA
did not explicitly analyze costs at the very first stage of the
regulatory process, when making its “appropriate and necessary”
finding. And that is so even though EPA later took costs into
account again and again and . . . so on. The majority
thinks entirely immaterial, and so entirely ignores, all the
subsequent times and ways EPA considered costs in deciding what any
regulation would look like.
That is a peculiarly blinkered way for a court
to assess the lawfulness of an agency’s rulemaking. I agree with
the majority—let there be no doubt about this—that EPA’s power
plant regulation would be unreasonable if “[t]he Agency gave cost
no thought at all .” Ante , at 5 (emphasis in
original). But that is just not what happened here. Over more than
a decade, EPA took costs into account at multiple stages and
through multiple means as it set emissions limits for power plants.
And when making its initial “appropriate and necessary” finding,
EPA knew it would do exactly that—knew it would thoroughly consider
the cost-effectiveness of emissions standards later on. That
context matters. The Agency acted well within its authority in
declining to consider costs at the opening bell of the regulatory
process given that it would do so in every round thereafter—and
given that the emissions limits finally issued would depend
crucially on those accountings. Indeed, EPA could not have measured
costs at the process’s initial stage with any accuracy. And the
regulatory path EPA chose parallels the one it has trod in setting
emissions limits, at Congress’s explicit direction, for every other
source of hazardous air pollutants over two decades. The majority’s
decision that EPA cannot take the same approach here—its
micromanagement of EPA’s rulemaking, based on little more than the
word “appropriate”—runs counter to Congress’s allocation of
authority between the Agency and the courts. Because EPA reasonably
found that it was “appropriate” to decline to analyze costs at a
single stage of a regulatory proceeding otherwise imbued with cost
concerns, I respectfully dissent
I
A
The Clean Air Act Amendments of 1990, as the
majority describes, obligate EPA to regulate emissions of mercury
and other hazardous air pollutants from stationary sources
discharging those substances in large quantities. See ante ,
at 2. For most industries, the statute prescribes the same
multi-step regulatory process. At the initial stage, EPA must
decide whether to regulate a source, based solely on the quantity
of pollutants it emits and their health and environmental effects.
See 42 U. S. C. §§7412(a)(1), (a)(2), (c)(1), (c)(3); ante , at 2. Costs enter the equation after that, affecting
the emissions limits that the eventual regulation will require.
Under the statute, EPA must divide sources into categories and
subcategories and then set “floor standards” that reflect the
average emissions level already achieved by the best-performing 12%
of sources within each group. See §7412(d)(3); ante , at 3.
Every 12% floor has cost concerns built right into it because the
top sources, as successful actors in a market economy, have had to
consider costs in choosing their own emissions levels. Moreover, in
establishing categories and subcategories at this first stage, EPA
can (significantly) raise or lower the costs of regulation for each
source, because different classification schemes will alter the
group—and so the emissions level—that the source has to
match.[ 1 ] Once the floor is
set, EPA has to decide whether to impose any stricter
(“beyond-the-floor”) standards, “taking into consideration,” among
other things, “the cost of achieving such emissions reduction.”
§7412(d)(2); see ante , at 3. Finally, by virtue of a
longstanding Executive Order applying to significant rules issued
under the Clean Air Act (as well as other statutes), the Agency
must systematically assess the regulation’s costs and benefits. See
Exec. Order No. 12866, 58 Fed. Reg. 51735, 51738, 51741 (1993)
(applying to all rules with an annual economic effect of at least
$100 million).
Congress modified that regulatory scheme for
power plants. It did so because the 1990 amendments established a
separate program to control power plant emissions contributing to
acid rain, and many thought that just by complying with those
requirements, plants might reduce their emissions of hazardous air
pollutants to acceptable levels. See ante , at 2. That
prospect counseled a “wait and see” approach, under which EPA would
give the Act’s acid rain provisions a chance to achieve that side
benefit before imposing any further regulation. Accord-ingly,
Congress instructed EPA to “perform a study of the hazards to
public health reasonably anticipated” to result from power plants’
emissions after the 1990 amendments had taken effect.
§7412(n)(1)(A). And Congress provided that EPA “shall regulate”
those emissions only if the Agency “finds such regulation is
appropriate and necessary after considering the results of the
[public health] study.” Ibid. Upon making such a finding,
however, EPA is to regulate power plants as it does every other
stationary source: first, by categorizing plants and setting floor
standards for the different groups; then by deciding whether to
regulate beyond the floors; and finally, by conducting the
cost-benefit analysis required by Executive Order.
EPA completed the mandated health study in 1998,
and the results gave much cause for concern. The Agency concluded
that implementation of the acid rain provisions had failed to curb
power plants’ emissions of hazardous air pollutants. Indeed, EPA
found, coal plants were on track to increase those emissions by as
much as 30% over the next decade. See 1 EPA, Study of Hazardous Air
Pollutant Emissions from Electric Utility Steam Generating
Units—Final Report to Congress, p. ES–25 (1998). And EPA
determined, focusing especially on mercury, that the substances
released from power plants cause substantial health harms. Noting
that those plants are “the largest [non-natural] source of mercury
emissions,” id. , §1.2.5.1, at 1–7, EPA found that children
of mothers exposed to high doses of mercury during pregnancy “have
exhibited a variety of developmental neurological abnormalities,”
including delayed walking and talking, altered muscles, and
cerebral palsy. Id. , §7.2.2, at 7–17 to 7–18; see also 7
EPA, Mercury Study Report to Congress, p. 6–31 (1997) (Mercury
Study) (estimating that 7% of women of childbearing age are exposed
to mercury in amounts exceeding a safe level).
Informed by its public health study and
additional data, EPA found in 2000 that it is “appropriate and
necessary” to regulate power plants’ emissions of mercury and other
hazardous air pollutants. 65 Fed. Reg. 79830.[ 2 ] Pulling apart those two adjectives, the Agency
first stated that such regulation is “appropriate” because those
pollutants “present[ ] significant hazards to public health
and the environment” and because “a number of control options” can
“effectively reduce” their emission. Ibid. EPA then
determined that regulation is “necessary” because other parts of
the 1990 amendments—most notably, the acid rain provisions—“will
not adequately address” those hazards. Ibid. In less
bureaucratic terms, EPA decided that it made sense to kick off the
regulatory process given that power plants’ emissions pose a
serious health problem, that solutions to the problem are
available, and that the problem will remain unless action is
taken.
B
If the regulatory process ended as well as
started there, I would agree with the majority’s conclusion that
EPA failed to adequately consider costs. Cost is almost always a
relevant—and usually, a highly important—factor in regulation.
Unless Congress provides otherwise, an agency acts unreasonably in
establishing “a standard-setting proc-ess that ignore[s] economic
considerations.” Industrial Union Dept., AFL–CIO v. American Petroleum Institute , 448 U. S. 607, 670 (1980)
(Powell, J., concurring in part and concurring in judgment). At a
minimum, that is because such a process would “threaten[ ] to
impose massive costs far in excess of any benefit.” Entergy
Corp. v. Riverkeeper, Inc. , 556 U. S. 208, 234 (2009)
(Breyer, J., concurring in part and dissenting in part). And
accounting for costs is particularly important “in an age of
limited resources available to deal with grave environmental
problems, where too much wasteful expenditure devoted to one
problem may well mean considerably fewer resources available to
deal effectively with other (perhaps more serious) problems.” Id. , at 233; see ante , at 7. As the Court notes, that
does not require an agency to conduct a formal cost-benefit
analysis of every administrative action. See ante , at 14.
But (absent contrary indication from Congress) an agency must take
costs into account in some manner before imposing significant
regulatory burdens.
That proposition, however, does not decide the
issue before us because the “appropriate and necessary” finding was
only the beginning. At that stage, EPA knew that a lengthy
rulemaking process lay ahead of it; the determination of emissions
limits was still years away. And the Agency, in making its kick-off
finding, explicitly noted that consideration of costs would follow:
“As a part of developing a regulation” that would impose those
limits, “the effectiveness and costs of controls will be examined.”
65 Fed. Reg. 79830. Likewise, EPA explained that, in the course of
writing its regulation, it would explore regula-tory approaches
“allowing for least-cost solutions.” Id. , at 79830–79831.
That means the Agency, when making its “appropriate and necessary”
finding, did not decline to consider costs as part of the
regulatory process. Rather, it declined to consider costs at a
single stage of that process, knowing that they would come in later
on.
The only issue in these cases, then, is whether
EPA acted reasonably in structuring its regulatory process in that
way—in making its “appropriate and necessary finding” based on
pollution’s harmful effects and channeling cost considerations to
phases of the rulemaking in which emission levels are actually set.
Said otherwise, the question is not whether EPA can reasonably find
it “appropriate” to regulate without thinking about costs, full
stop. It cannot, and it did not. Rather, the question is whether
EPA can reasonably find it “appropriate” to trigger the regulatory
process based on harms (and technological feasibility) alone, given
that costs will come into play, in multiple ways and at multiple
stages, before any emission limit goes into effect.
In considering that question, the very nature of
the word “appropriate” matters. “[T]he word ‘appropriate,’ ”
this Court has recognized, “is inherently context-dependent”:
Giving it content requires paying attention to the surrounding
circumstances. Sossamon v. Texas , 563 U. S. 277 , ___
(2011) (slip op., at 7). (That is true, too, of the word
“necessary,” although the majority spends less time on it. See Armour & Co. v. Wantock , 323 U. S. 126 –130
(1944) (“[T]he word ‘necessary’ . . . has always been recognized as
a word to be harmonized with its context”).) And here that means
considering the place of the “appropriate and necessary” finding in
the broader regulatory scheme—as a triggering mechanism that gets a
complex rulemaking going. The interpretive task is thus at odds
with the majority’s insistence on staring fixedly “at this stage.” Ante , at 11 (emphasis in original). The task instead
demands taking account of the entire regulatory process in thinking
about what is “appropriate” in its first phase. The statutory
language, in other words, is a directive to remove one’s blinders
and view things whole—to consider what it is fitting to do at the
threshold stage given what will happen at every other.
And that instruction is primarily given to EPA,
not to courts: Judges may interfere only if the Agency’s way of
ordering its regulatory process is unreasonable— i.e. ,
something Congress would never have allowed. The question here, as
in our seminal case directing courts to defer to agency
interpretations of their own statutes, arises “not in a sterile
textual vacuum, but in the context of implementing policy decisions
in a technical and complex arena.” Chevron U. S. A.
Inc. v. Natural Resources DefenseCouncil, Inc. , 467
U. S. 837, 863 (1984) . EPA’s experience and expertise in that
arena—and courts’ lack of those attributes—demand that judicial
review proceed with caution and care. The majority actually phrases
this principle well, though honors it only in the breach: Within
wide bounds, it is “up to the Agency to decide . . . how
to account for cost.” Ante , at 14. That judges might have
made different regulatory choices—might have considered costs in
different ways at different times—will not suffice to overturn
EPA’s action where Congress, as here, chose not to speak directly
to those matters, but to leave them to the Agency to decide.
All of that means our decision here properly
rests on something the majority thinks irrelevant: an understanding
of the full regulatory process relating to power plants and of
EPA’s reasons for considering costs only after making its initial
“appropriate and necessary” finding. I therefore turn to those
issues, to demonstrate the simple point that should resolve these
cases: that EPA, in regulating power plants’ emissions of hazardous
air pollutants, accounted for costs in a reasonable way.
II
A
In the years after its “appropriate and
necessary” finding, EPA made good on its promise to account for
costs “[a]s a part of developing a regulation.” 65 Fed. Reg. 79830;
see supra , at 7. For more than a decade, as EPA deliberated
on and then set emissions limits, costs came into the calculus at
nearly every turn. Reflecting that consideration, EPA’s final rule
noted that steps taken during the regulatory process had focused on
“flexib[ility] and cost-effective[ness]” and had succeeded in
making “the rule less costly and compliance more readily
manageable.” 77 Fed. Reg. 9306, 9376. And the regulation concluded
that “the benefits of th[e] rule” to public health and the
environment “far outweigh the costs.” Id. , at 9306.
Consistent with the statutory framework, EPA
initially calculated floor standards: emissions levels of the
best-performing 12% of power plants in a given category or
subcategory. The majority misperceives this part of the rulemaking
process. It insists that EPA “must promulgate certain
. . . floor standards no matter the cost.” Ante ,
at 11. But that ignores two crucial features of the top-12% limits:
first, the way in which any such standard intrinsically accounts
for costs, and second, the way in which the Agency’s categorization
decisions yield different standards for plants with different cost
structures.
The initial point is a fact of life in a market
economy: Costs necessarily play a role in any standard that uses
power plants’ existing emissions levels as a benchmark. After all,
the best-performing 12% of power plants must have considered costs
in arriving at their emissions outputs; that is how profit-seeking
enterprises make decisions. And in doing so, they must have
selected achievable levels; else, they would have gone out of
business. (The same would be true even if other regulations
influenced some of those choices, as the majority casually
speculates. See ante , at 13.) Indeed, this automatic
accounting for costs is why Congress adopted a market-leader-based
standard. As the Senate Report accompanying the 1990 amendments
explained: “Cost considerations are reflected in the selection of
emissions limitations which have been achieved in practice (rather
than those which are merely theoretical) by sources of a similar
type or character.” S. Rep. No. 101–228, pp. 168–169 (1989).
Of course, such a standard remains technology-forcing: It requires
laggards in the industry to catch up with frontrunners, sometimes
at significant expense. But the benchmark is, by definition, one
that some power plants have achieved economically. And when EPA
made its “appropriate and necessary” finding, it knew that
fact—knew that the consequence of doing so was to generate floor
standards with cost considerations baked right in.
Still more, EPA recognized that in making
categorization decisions, it could take account of multiple factors
related to costs of compliance—and so avoid impracticable
regulatory burdens. Suppose, to use a simple example, that curbing
emissions is more technologically difficult—and therefore more
costly—for plants burning coal than for plants burning oil. EPA can
then place those two types of plants in different categories, so
that coal plants need only match other coal plants rather than
having to incur the added costs of meeting the top oil plants’
levels. Now multiply and complexify that example many times over.
As the Agency noted when making its “appropriate and necessary”
finding, EPA “build[s] flexibility” into the regulatory regime by
“bas[ing] subcategorization on . . . the size of a
facility; the type of fuel used at the facility; and the plant
type,” and also “may consider other relevant factors such as
geographic conditions.” 65 Fed. Reg. 79830; see S. Rep. No.
101–228, at 166 (listing similar factors and noting that “[t]he
proper definition of categories . . . will assure maximum
protection of public health and the environment while minimizing
costs imposed on the regulated community”). Using that
classification tool, EPA can ensure that plants have to attain only
the emissions levels previously achieved by peers facing comparable
cost constraints, so as to further protect plants from unrealistic
floor standards.
And that is exactly what EPA did over the course
of its rulemaking process, insisting on apples-to-apples
comparisons that bring floor standards within reach of diverse
kinds of power plants. Even in making its “appropriate and
necessary” finding, the Agency announced it would divide plants
into the two categories mentioned above: “coal-fired” and
“oil-fired.” 65 Fed. Reg. 79830.[ 3 ] Then, as the rulemaking progressed, EPA went further.
Noting that different technologies significantly affect the ease of
attaining a given emissions level, the Agency’s proposed rule
subdivided those two classes into five: plants designed to burn
high-rank coal; plants designed to burn low-rank virgin coal;
plants that run on a technology termed integrated gasification
combined cycle; liquid oil units; and solid oil units. See 76 Fed.
Reg. 25036–25037. EPA explained that by subcategorizing in that
way, it had spared many plants the need to “retrofit[ ],”
“redesign[ ],” or make other “extensive changes” to their
facilities. Id. , at 25036. And in its final rule, EPA
further refined its groupings in ways that eased compliance. Most
notably, the Agency established a separate subcategory, and
attendant (less stringent) floor, for plants in Hawaii, Puerto
Rico, Guam, and the Virgin Islands on the ground that plants in
those places have “minimal control over the quality of available
fuel[ ] and disproportionately high operational and
maintenance costs.” 77 Fed. Reg. 9401.[ 4 ]
Even after establishing multiple floor standards
that factored in costs, EPA adopted additional “compliance options”
to “minimize costs” associated with attaining a given floor—just as
its “appropriate and necessary” finding explicitly contemplated. Id. , at 9306; 76 Fed. Reg. 25057; see 65 Fed. Reg. 79830.
For example, the Agency calculated each floor as both an
“input-based” standard (based on emissions per unit of energy used ) and an“output-based” standard (based on emissions per
unit of use-ful energy produced ), and allowed plants to
choose which standard they would meet. That option, EPA explained,
can “result in . . . reduced compliance costs.” 76 Fed.
Reg. 25063. Similarly, EPA allowed plants to meet a given 12% floor
by averaging emissions across all units at the same site, instead
of having to meet the floor at each unit. Some plants, EPA
understood, would find such averaging a “less costly alternative.”
77 Fed. Reg. 9385. Yet again: EPA permitted “limited use”
plants—those primarily burning natural gas but sometimes switching
to oil—to comply with the final rule by meeting qualitative “work
practice standards” rather than numeric emissions limits. Id. , at 9400–9401. EPA explained that it would be
“economically impracticable” for those plants to demonstrate
compliance through emissions testing, and that an alternative
standard, focused on their adoption of pollution control
techniques, would allow them to both reduce emissions and avoid
“extra cost.” Id. , at 9401. And the list goes on. See, e.g. , id. , at 9409–9410 (allowing extra year for
plants to comply with emissions limits where “source-specific
construction, permitting, or labor, procurement or resource
challenges” arise); id. , at 9417 (describing additional
“compliance options”).
With all that cost-consideration under its belt,
EPA next assessed whether to set beyond-the-floor standards, and
here too, as it knew it would, the Agency took costs into account.
For the vast majority of coal and oil plants, EPA decided that
beyond-the-floor standards would not be “reasonable after
considering costs.” Id. , at 9331. The Agency set such a
standard for only a single kind of plant, and only after
determining that the technology needed to meet the more lenient
limit would also achieve the more stringent one. See id. , at
9393; 76 Fed. Reg. 25046–25047. Otherwise, EPA determined, the
market-leader-based standards were enough.
Finally, as required by Executive Order and as
anticipated at the time of the “appropriate and necessary” finding,
EPA conducted a formal cost-benefit analysis of its new emissions
standards and incorporated those findings into its proposed and
final rules. See id. , at 25072–25078; 77 Fed. Reg.
9305–9306, 9424–9432. That analysis estimated that the regulation’s
yearly costs would come in at under $10 billion, while its annual
measureable benefits would total many times more—between $37 and
$90 billion. See id. , at 9305–9306; ante , at 4. On
the costs side, EPA acknowledged that plants’ compliance with the
rule would likely cause electricity prices to rise by about 3%, but
projected that those prices would remain lower than they had been
as recently as 2010. See 77 Fed. Reg. 9413–9414. EPA also thought
the rule’s impact on jobs would be about a wash, with jobs lost at
some high-emitting plants but gained both at cleaner plants and in
the pollution control industry. See ibid. On the benefits
side, EPA noted that it could not quantify many of the health gains
that would result from reduced mercury exposure. See id. , at
9306. But even putting those aside, the rule’s annual benefits
would include between 4,200 and 11,000 fewer premature deaths from
respiratory and cardiovascular causes, 3,100 fewer emergency room
visits for asthmatic children, 4,700 fewer non-fatal heart attacks,
and 540,000 fewer days of lost work. See id. , at 9429.
Those concrete findings matter to these
cases—which, after all, turn on whether EPA reasonably took costs
into account in regulating plants’ emissions of hazardous air
pollutants. The majority insists that it may ignore EPA’s
cost-benefit analysis because “EPA did not rely on” it when issuing
the initial “appropriate and necessary” finding. Ante , at 15
(quoting Solicitor General); see also SEC v. Chenery
Corp. , 318 U. S. 80 –94 (1943). At one level, that
description is true—indeed, a simple function of chronology: The
kick-off finding preceded the cost-benefit analysis by years and so
could not have taken its conclusions into account. But more
fundamentally, the majority’s account is off, because EPA knew when
it made that finding that it would consider costs at every
subsequent stage, culminating in a formal cost-benefit study. And
EPA knew that, absent unusual circumstances, the rule would need to
pass that cost-benefit review in order to issue. See Exec. Order
No. 12866, 58 Fed. Reg. 51736 (“Each agency shall . . .
adopt a regulation only upon a reasoned determination that the
benefits of the intended regulation justify its costs”). The
reasonableness of the Agency’s decision to consider only the harms
of emissions at the threshold stage must be evaluated in that
broader context. And in thinking about that issue, it is well to
remember the outcome here: a rule whose benefits exceed its costs
by three to nine times. In making its “appropriate and necessary”
finding, EPA had committed to assessing and mitigating costs
throughout the rest of its rulemaking; if nothing else, the
findings of the Agency’s cost-benefit analysis—making clear that
the final emissions standards were cost-effective—show that EPA did
just that.
B
Suppose you were in charge of designing a
regulatory process. The subject matter—an industry’s emissions of
hazardous material—was highly complex, involving multivarious
factors demanding years of study. Would you necessarily try to do
everything at once? Or might you try to break down this lengthy and
complicated process into discrete stages? And might you consider
different factors, in different ways, at each of those junctures? I
think you might. You know that everything must get done in the
end—every relevant factor considered. But you tend to think that
“in the end” does not mean “in the beginning.” And you structure
your rulemaking process accordingly, starting with a threshold
determination that does not mirror your end-stage analysis. Would
that be at least (which is all it must be) a “reasonable policy
choice”? Chevron , 467 U. S., at 845.
That is the question presented here, and it
nearly answers itself. Setting emissions levels for hazardous air
pollutants is necessarily a lengthy and complicated process,
demanding analysis of many considerations over many years. Costs
are a key factor in that process: As I have said, sensible
regulation requires careful scrutiny of the burdens that potential
rules impose. See supra , at 6–7. But in ordering its
regulatory process, EPA knew it would have the opportunity to
consider costs in one after another of that rulemaking’s stages—in
setting the level of floor standards, in providing a range of
options for plants to meet them, in deciding whether or where to
require limits beyond the floor, and in finally completing a formal
cost-benefit analysis. See 65 Fed. Reg. 79830–79831; supra ,
at 9–15. Given that context, EPA reasonably decided that it was
“appropriate”—once again, the only statutory requirement relevant
here—to trigger the regulatory process based on the twin findings
that the emissions in question cause profound health and
environmental harms and that available pollution control
technologies can reduce those emissions. By making that decision,
EPA did no more than commit itself to developing a realistic and
cost-effective regulation—a rule that would take account of every
relevant factor, costs and benefits alike. And indeed, particular
features of the statutory scheme here indicate that EPA’s policy
choice was not just a minimally reasonable option but an eminently
reasonable one.
To start, that decision brought EPA’s regulation
of power plants into sync with its regulation of every other
significant source of hazardous pollutants under the Clean Air Act.
For all those types of sources (totaling over 100), the Act
instructs EPA to make the threshold decision to regulate based
solely on the quantity and effects of pollutants discharged; costs
enter the picture afterward, when the Agency takes up the task of
actually establishing emissions limits. See supra , at 3–4.
Industry after industry, year after year, EPA has followed that
approach to standard-setting, just as Congress contemplated. See, e.g. , 58 Fed. Reg. 49354 (1993) (dry cleaning facilities);
59 Fed. Reg. 64303 (1994) (gasoline distributors); 60 Fed. Reg.
45948 (1995) (aerospace manufacturers). And apparently with
considerable success. At any rate, neither those challenging this
rule nor the Court remotely suggests that these regulatory regimes
have done “significantly more harm than good.” Ante , at 7.
So when making its “appropriate and necessary” finding for power
plants, EPA had good reason to continue in the same vein. See, e.g. , Entergy , 556 U. S., at 236 (opinion of
Breyer, J.) (noting that the reasonableness of an agency’s approach
to considering costs rests in part on whether that tack has met
“with apparent success in the past”). And that is exactly how EPA
explained its choice. Stating that it would consider the “costs of
controls” when “developing a regulation,” the Agency noted that
such an “approach has helped build flexibility in meeting
environmental objectives in the past,” thereby preventing the
imposition of disproportionate costs. 65 Fed. Reg. 79830. Indeed,
as EPA further commented in issuing its rule, it would seem
“inequitable to impose a regulatory regime on every industry in
Amer-ica and then to exempt one category” after finding it
repre-sented “a significant part of the air toxics problem.” 77
Fed. Reg. 9322 (quoting 136 Cong. Rec. 36062 (1990) (statement of
Sen. Durenberger)).
The majority’s attempt to answer this point
founders on even its own statement of facts. The majority objects
that “the whole point of having a separate provision about power
plants” is to “treat[ ] power plants differently from
other stationary sources.” Ante , at 11 (emphasis in
original). But turn back about 10 pages, and read what the majority
says about why Congress treated power plants differently:
because, as all parties agree, separate regulatory requirements
involving acid rain “were expected to have the collateral effect of
reducing power plants’ emissions of hazardous air pollutants,
although the extent of the reduction was unclear.” Ante , at
2; see supra , at 4–5. For that reason alone (the majority
does not offer any other), Congress diverted EPA from its usual
regulatory path, instructing the Agency, as a preliminary matter,
to complete and consider a study about the residual harms to public
health arising from those emissions. See ante , at 2–3; supra , at 5. But once EPA found in its study that the acid
rain provisions would not significantly affect power plants’
emissions of hazardous pollutants, any rationale for treating power
plants differently from other sources discharging the same
substances went up in smoke. See 65 Fed. Reg. 79830. At that point,
the Agency would have had far more explaining to do if, rather than
following a well-tested model, it had devised a new scheme of
regulation for power plants only.
Still more, EPA could not have accurately
assessed costs at the time of its “appropriate and necessary”
finding. See 8 Mercury Study, at 6–2 (noting the “many
uncertainties” in any early-stage analysis of pollution control
costs). Under the statutory scheme, that finding comes before—years
before—the Agency designs emissions standards. And until EPA knows
what standards it will establish, it cannot know what costs they
will impose. Nor can those standards even be reasonably
guesstimated at such an early stage. Consider what it takes to set
floor standards alone. First, EPA must divide power plants into
categories and subcategories; as explained earlier, those
classification decisions significantly affect what floors are
established. See supra , at 4, and n. 1, 11–12. And
then, EPA must figure out the average emissions level already
achieved by the top 12% in each class so as to set the new
standards. None of that can realistically be accomplished in
advance of the Agency’s regulatory process: Indeed, those steps are
the very stuff of the rulemaking. Simi-larly, until EPA knows what
“compliance options” it will develop, it cannot know how they will
mitigate the costs plants must incur to meet the floor standards.
See supra , at 13–14. And again, deciding on those options
takes substantial time. So there is good reason for different
considerations to go into the threshold finding than into the final
rule. Simply put, calculating costs before starting to write a
regulation would put the cart before the horse.
III
The central flaw of the majority opinion is
that it ignores everything but one thing EPA did. It forgets that
EPA’s “appropriate and necessary” finding was only a first step
which got the rest of the regulatory process rolling. It narrows
its field of vision to that finding in isolation, with barely a
glance at all the ways in which EPA later took costs into account.
See supra , at 10–11 (in establishing floor standards); supra , at 13–14 (in adopting compliance options); supra , at 14 (in deciding whether to regulate beyond the
floor); supra , at 14–15 (in conducting a formal cost-benefit
analysis as a final check). In sum, the major-ity disregards how
consideration of costs infused the regulatory process, resulting
not only in EPA’s adoption of mitigation measures, ante , at
13–14, but also in EPA’s crafting of emissions standards that
succeed in producing benefits many times their price.
That mistake accounts for the majority’s primary
argument that the word “appropriate,” as used in §7412(n)(1)(A),
demands consideration of costs. See ante , at 6–7. As I have
noted, that would be true if the “appropriate and necessary”
finding were the only step before imposing regulations on power
plants. See supra , at 6–7. But, as should be more than clear
by now, it was just the first of many: Under the Clean Air Act, a
long road lay ahead in which the Agency would have more—and far
better—opportunities to evaluate the costs of diverse emissions
standards on power plants, just as it did on all other sources. See supra , at 4, 7, 9–15. EPA well understood that fact: “We
evaluate the terms ‘appropriate’ and ‘necessary,’ ” it
explained, in light of their “statutory context.” 76 Fed. Reg.
24986. And EPA structured its regulatory process accordingly, with
consideration of costs coming (multiple times) after the threshold
finding. The only way the majority can cast that choice as
unreasonable, given the deference this Court owes to such agency
decisions, is to blind itself to the broader rulemaking scheme.
The same fault inheres in the majority’s
secondary argument that EPA engaged in an “interpretive
gerrymander[ ]” by considering environmental effects but not
costs in making its “appropriate and necessary” finding. Ante , at 8–9. The majority notes—quite rightly—that Congress
called for EPA to examine both subjects in a study of mercury
emissions from all sources (separate from the study relating to
power plants’ emissions alone). See ante , at 8. And the
majority states—again, rightly—that Congress’s demand for that
study “provides direct evidence that Congress was concerned with
[both] environmental effects [and] cost.” Ante , at 9
(internal quotation marks omitted). But nothing follows from that
fact, because EPA too was concerned with both. True enough, EPA
assessed the two at different times: environmental harms (along
with health harms) at the threshold, costs afterward. But that was
for the very reasons earlier described: because EPA wanted to treat
power plants like other sources and because it thought harms, but
not costs, could be accurately measured at that early stage. See supra , at 17–20. Congress’s simple request for a study of
mercury emissions in no way conflicts with that choice of when and
how to consider both harms and costs. Once more, the majority
perceives a conflict only because it takes so partial a view of the
regulatory process.
And the identical blind spot causes the
majority’s sports-car metaphor to run off the road. The majority
likens EPA to a hypothetical driver who decides that “it is
‘appropriate’ to buy a Ferrari without thinking about cost, because
he plans to think about cost later when deciding whether to upgrade
the sound system.” Ante , at 11. The comparison is witty but
wholly inapt. To begin with, emissions limits are not a luxury
good: They are a safety measure, designed to curtail the
significant health and environmental harms caused by power plants
spewing hazardous pollutants. And more: EPA knows from past
experience and expertise alike that it will have the opportunity to
purchase that good in a cost-effective way. A better analogy might
be to a car owner who decides without first checking prices that it
is “appropriate and necessary” to replace her worn-out brake-pads,
aware from prior experience that she has ample time to
comparison-shop and bring that purchase within her budget. Faced
with a serious hazard and an available remedy, EPA moved forward
like that sensible car owner, with a promise that it would, and
well-grounded confidence that it could, take costs into account
down the line.
That about does it for the majority’s opinion,
save for its final appeal to Chenery —and Chenery cannot save its holding. See ante , at 14. Of course a court
may not uphold agency action on grounds different from those the
agency gave. See Chenery , 318 U. S., at 87. But
equally, a court may not strike down agency action without
considering the reasons the agency gave. Id. , at 95. And
that is what the majority does. Indeed, it is difficult to know
what agency document the majority is reading. It denies that “EPA
said . . . that cost-benefit analysis would be deferred
until later.” Ante , at 13. But EPA said exactly that: The
“costs of controls,” the Agency promised, “will be examined” as “a
part of developing a regulation.” 65 Fed. Reg. 79830. Tellingly,
these words appear nowhere in the majority’s opinion. But what are
they other than a statement that cost concerns, contra the
majority, are not “irrelevant,” ante , at 13 (without
citation)—that they are simply going to come in later?
And for good measure, EPA added still extra
explanation. In its “appropriate and necessary” finding, the Agency
committed to exploring “least-cost solutions” in “devel-oping a
standard for utilities.” 65 Fed. Reg. 79830. The Agency explained
that such an approach—particularly mentioning the use of averaging
and subcategorization—had offered “opportunit[ies] for lower cost
solutions” and “helped build flexibility in meeting environmental
objectives in the past.” Ibid. ; see supra , at 7,
18 . Then, in issuing its proposed and final rules, EPA
affirmed that it had done just what it said. EPA recognized that
standard-setting must “allow the industry to make practical
investment decisions that minimize costs.” 76 Fed. Reg. 25057.
Accordingly, the Agency said, it had “provid[ed] flexibility and
compliance options” so as to make the rule “less costly” for
regulated parties. 77 Fed. Reg. 9306. EPA added that it had
rejected beyond-the-floor standards for almost all power plants
because they would not be “reasonable after considering costs.” Id. , at 9331. And it showed the results of a formal analysis
finding that the rule’s costs paled in comparison to its benefits.
In sum, EPA concluded, it had made the final standards
“cost-efficient.” Id. , at 9434. What more would the majority
have EPA say?
IV
Costs matter in regulation. But when Congress
does not say how to take costs into account, agencies have broad
discretion to make that judgment. Accord, ante , at 14
(noting that it is “up to the Agency to decide (as always, within
the limits of reasonable interpretation) how to account for cost”).
Far more than courts, agencies have the expertise and experience
necessary to design regula-tory processes suited to “a technical
and complex arena.” Chevron , 467 U. S., at 863. And in
any event, Congress has entrusted such matters to them, not to
us.
EPA exercised that authority reasonably and
responsibly in setting emissions standards for power plants. The
Agency treated those plants just as it had more than 100 other
industrial sources of hazardous air pollutants, at Congress’s
direction and with significant success. It made a threshold finding
that regulation was “appropriate and necessary” based on the harm
caused by power plants’ emissions and the availability of
technology to reduce them. In making that finding, EPA knew that
when it decided what a regulation would look like—what emissions
standards the rule would actually set—the Agency would consider
costs. Indeed, EPA expressly promised to do so. And it fulfilled
that promise. The Agency took account of costs in setting floor
standards as well as in thinking about beyond-the-floor standards.
It used its full kit of tools to minimize the expense of complying
with its proposed emissions limits. It capped the regulatory
proc-ess with a formal analysis demonstrating that the bene-fits of
its rule would exceed the costs many times over. In sum, EPA
considered costs all over the regulatory process, except in making
its threshold finding—when it could not have measured them
accurately anyway. That approach is wholly consonant with the
statutory scheme. Its adoption was “up to the Agency to decide.” Ante , at 14.
The majority arrives at a different conclusion
only by disregarding most of EPA’s regulatory process. It insists
that EPA must consider costs—when EPA did just that, over and over
and over again. It concedes the importance of “context” in
determining what the “appropriate and necessary” standard means,
see ante , at 7, 10—and then ignores every aspect of the
rulemaking context in which that standard plays a part. The result
is a decision that deprives the Agency of the latitude Congress
gave it to design an emissions-setting process sensibly accounting
for costs and benefits alike. And the result is a decision that
deprives the American public of the pollution control measures that
the responsible Agency, acting well within its delegated authority,
found would save many, many lives. I respectfully dissent. Notes 1 Consider it this way:
Floor standards equal the top 12% of something, but until you know
the something, you can’t know what it will take to attain that
level. To take a prosaic example, the strongest 12% of NFL players
can lift a lot more weight than the strongest 12% of human beings
generally. To match the former, you will have to spend many more
hours in the gym than to match the latter—and you will probably
still come up short. So everything depends on the comparison
group. 2 EPA reaffirmed its
“appropriate and necessary” finding in 2011 and 2012 when it issued
a proposed rule and a final rule. See 76 Fed. Reg. 24980 (2011)
(“The Agency’s appropriate and necessary finding was correct in
2000, and it remains correct today”); accord, 77 Fed. Reg.
9310–9311 (2012). 3 EPA also determined at
that stage that it is “not appropriate or necessary” to regulate
natural gas plants’ emissions of hazardous air pollutants because
they have only “negligible” impacts. 65 Fed. Reg. 79831. That
decision meant that other plants would not have to match their
cleaner natural gas counterparts, thus making the floor standards
EPA established that much less costly to achieve. 4 The majority insists on
disregarding how EPA’s categorization decisions made floor
standards less costly for various power plants to achieve, citing
the Agency’s statement that “it is not appropriate to premise
subcategorization on costs.” 77 Fed. Reg. 9395 (quoted ante ,
at 13). But that misunderstands EPA’s point. It is quite true that
EPA did not consider costs separate and apart from all other
factors in crafting categories and subcategories. See S. Rep.
No. 101–128, p. 166 (1989) (noting that EPA may not make
classifications decisions “based wholly on economic grounds”); 77
Fed. Reg. 9395 (citing Senate Report). That approach could have
subverted the statutory scheme: To use an extreme example, it would
have allowed EPA, citing costs of compliance, to place the top few
plants in one category, the next few in another category, the third
in a third, and all the way down the line, thereby insulating every
plant from having to make an appreciable effort to catch up with
cleaner facilities. But in setting up categories and subcategories,
EPA did consider technological, geographic, and other factors
directly relevant to the costs that diverse power plants would bear
in trying to attain a given emissions level. (For some reason, the
majority calls this a “carefully worded observation,” ante ,
at 13, but it is nothing other than the fact of the matter.) The
Agency’s categorization decisions (among several other measures,
see supra , at 10–11; infra this page and 14) thus
refute the majority’s suggestion, see ante , at 11, that the
“appropriate and necessary” finding automatically generates floor
standards with no relation to cost. To the contrary, the Agency
used its categorization authority to establish different floor
standards for different types of plants with different cost
structures. | The Clean Air Act directs the Environmental Protection Agency (EPA) to regulate hazardous air pollutants from power plants if found "appropriate and necessary." The Supreme Court ruled that it was unreasonable for the EPA to refuse to consider the cost of compliance when making this finding, as it would result in floor standards unrelated to cost. The EPA's refusal to consider cost was not in keeping with the statutory scheme and could have led to impractical and costly regulations. |
Taxes | Santa Clara County v. Southern Pacific Railroad Co. | https://supreme.justia.com/cases/federal/us/118/394/ | U.S. Supreme Court Santa Clara County v. Southern Pacific
R. Co., 118
U.S. 394 (1886) Santa Clara County v. Southern
Pacific Railroad Company Argued January 26-29,
1886 Decided May 10, 1886 118
U.S. 394 ERROR TO THE CIRCUIT COURT OF THE
UNITED STATES FOR THE DISTRICT OF
CALIFORNIA Syllabus The defendant Corporations are persons within the intent of the
clause in section 1 of the Fourteenth Amendment to the Constitution
of the United Page 118 U. S. 395 States, which forbids a state to deny to any person within its
jurisdiction the equal protection of the laws.
Under the Constitution and laws of California relating to
taxation, fences erected upon the line between the roadway of a
railroad and the land of coterminous proprietors are not part of
"the roadway," to be included by the State Board in its valuation
of the property of the corporation, but are "improvements"
assessable by the local authorities of the proper county.
An assessment of a tax is invalid, and will not support an
action for the recovery of the tax, if, being laid upon different
kinds of property as a unit, it includes property not legally
assessable, and if the part of the tax assessed upon the latter
property cannot be separated from the other part of it.
The State Board of Equalization of California were required by
law to assess the franchise, roadway &c., of all railroads
operated in more than one county and apportion the same to the
different counties in proportion to the number of miles of railway
in each. They made such assessment of the Southern Pacific
Railroad, improperly including therein the fences between the
roadway and the coterminous proprietor, and apportioned it and
returned it as required to the different counties. In a suit by one
of the counties to recover its proportion of the tax levied in
accordance with such apportionment and return, the court below at
the trial found that "said fences were valued at $300 per mile,"
which was the only finding on the subject, and it did not appear
that the county, plaintiff, offered to take judgment for a sum
excluding the rate on the value of the fences within the county at
that valuation. Held (1) that the finding was too vague
and indefinite to serve as a basis for estimating the aggregate
valuation of the fences included in the assessment, or the amount
thereof apportioned to the respective counties; (2) that under the
circumstances, the Court could not assume that the State Board
included the fences in their assessment at the rate of $300 per
mile for every mile of the railroad within the state, counting one
or both sides of the roadway, and could not, after eliminating that
amount from the assessment, give judgment for the balance of the
tax, if any.
These actions, which were argued together, were brought to
recover unpaid taxes assessed against the several railroad
corporations, defendants, under the laws of the California. The
main -- almost the only -- questions discussed by counsel in the
elaborate arguments related to the constitutionality of the taxes.
This Court, in its opinion passed by these questions and decided
the cases upon the questions whether under the Constitution and
laws of California, the fences on the line of the railroads should
have been valued and assessed, if at all, by the local officers, or
by the State Board of Equalization; whether, Page 118 U. S. 396 on the record, the assessments and taxation upon the fences are
separable from the rest of the assessment and taxation, and what
was the effect of the record upon the rights of the state and the
county.
One of the points made and discussed at length in the brief of
counsel for defendants in error was that "corporations are persons
within the meaning of the Fourteenth Amendment to the Constitution
of the United States." Before argument, MR. CHIEF JUSTICE WAITE
said:
"The Court does not wish to hear argument on the question
whether the provision in the Fourteenth Amendment to the
Constitution which forbids a state to deny to any person within its
jurisdiction the equal protection of the laws applies to these
corporations. We are all of opinion that it does. " Page 118 U. S. 397 MR. JUSTICE HARLAN delivered the opinion of the Court.
These several actions were brought -- the first one in the
Superior Court of Santa Clara County, California, the others in the
Superior Court of Fresno County, in the same state -- for the
recovery of certain county and state taxes claimed to be due from
the Southern Pacific Railroad Company and the Central Pacific
Railroad Company under assessments made by the State Board of
Equalization upon their respective franchises, roadways, roadbeds,
rails, and rolling stock. In the action by Santa Clara County, the
amount claimed is $13,366.53 for the fiscal year of 1882. For that
sum, with five percent penalty, interest at the rate of two percent
per month from December 27, 1882, cost of advertising, and ten
percent for attorney's fees, judgment is asked against the Souther
Pacific Page 118 U. S. 398 Railroad Company. In the other action against the same company,
the amount claimed is $5,029.27 for the fiscal year of 1881, with
five percent added for nonpayment of taxes and costs of collection.
In the action against the Central Pacific Railroad Company,
judgment is asked for $25,950.50 for the fiscal year of 1881, with
like penalty and costs of collection.
The answer in each case puts in issue all the material
allegations of the complaint and sets up various special defenses,
to which reference will be made further on.
With its answer, the defendant in each case filed a petition,
with a proper bond, for the removal of the action into the circuit
court of the United States for the district as one arising under
the Constitution and laws of the United States. The right of
removal was recognized by the state court, and the action proceeded
in the circuit court. Each case, the parties having filed a written
stipulation waiving a jury, was tried by the court. There was a
special finding of facts, upon which judgment was entered in each
case for the defendant. The general question to be determined is
whether the judgment can be sustained upon all or either of the
grounds upon which the defendants rely.
The case as made by the pleadings and the special finding of
facts is as follows:
By an Act of Congress approved July 27, 1866, the Atlantic &
Pacific Railroad Company was created, with power to construct and
maintain, by certain designated routes, a continuous railroad and
telegraph line from Springfield, Missouri, to the Pacific. For the
purpose -- which is avowed by Congress -- of facilitating the
construction of the line and thereby securing the safe and speedy
transportation of mails, troops, munitions of war, and public
stores, a right of way over the public domain was given to the
company and a liberal grant of the public lands was made to it. The
railroad so to be constructed, and every part of it, was declared
to be a post route and military road, subject to the use of the
United States for postal, military, naval, and all other government
service, and to such regulations as Congress might impose for
restricting the charges for government transportation. By the Page 118 U. S. 399 18th section of the act, the Southern Pacific Railroad Company
-- a corporation previously organized under a general statute of
California passed May 20, 1861, Stat.Cal. 1861, p. 607 -- was
authorized to connect with the Atlantic and Pacific Railroad at
such point near the boundary line of that state as the former
company deemed most suitable for a railroad to San Francisco, with
"uniform gauge and rate of freight or fare with said road," and in
consideration thereof, and "to aid in its construction," the act
declared that it should have similar grants of land, "subject to
all the conditions and limitations" provided in said act of
Congress, "and shall be required to construct its road on like
regulations, as to time and manner, with the Atlantic and Pacific
Railroad." 14 Stat. 292, §§ 1, 2, 3, 11, 18.
In November, 1866, the Atlantic and Pacific Railroad Company and
the Southern Pacific Railroad Company filed in the office of the
Secretary of the Interior their respective acceptances of the
act.
By an Act of the Legislature of California passed April 4, 1870,
to aid in giving effect to the act of Congress relating to the
Southern Pacific Railroad Company, it was declared that
"To enable the said company to more fully and completely comply
with and perform the requirements, provisions, and conditions of
the said act of Congress and all other acts of Congress now in
force or which may hereafter be enacted, the State of California
hereby consents to said act, and the said company, its successors
and assigns, are hereby authorized to change the line of its
railroad so as to reach the eastern boundary line of the State of
California by such route as the company shall determine to be the
most practicable, and to file new and amendatory articles of
association, and the right, power, and privilege is hereby granted
to, conferred upon, and vested in them to construct, maintain, and
operate, by steam or other power, the said railroad and telegraph
line mentioned in said acts of Congress, hereby confirming to and
vesting in the said company, its successors and assigns all the
rights, privileges, franchises, power, and authority conferred
upon, Page 118 U. S. 400 granted to, or vested in said company by the said acts of
Congress and any act of Congress which may be hereafter
enacted."
Subsequently, by the Act of March 3, 1871, Congress incorporated
the Texas Pacific Railroad Company, with power to construct and
maintain a continuous railroad and telegraph line from Marshall, in
the State of Texas, to a point at or near El Paso, thence through
New Mexico and Arizona to San Diego, pursuing as near as might be
the thirty-second parallel of latitude. To aid in its construction,
Congress gave it also the right of way over the public domain, and
made to it a liberal grant of public lands. The 19th section
provided
"That the Texas Pacific Railroad Company shall be, and it is
hereby, declared to be a military and post road, and for the
purpose of insuring the carrying of the mails, troops, munitions of
war, supplies, and stores of the United States, no act of the
company nor any law of any state or territory shall impede, delay,
or prevent the said company from performing its obligations to the
United States in that regard, provided that said road
shall be subject to the use of the United States for postal,
military, and all other governmental services at fair and
reasonable rates of compensation, not to exceed the price paid by
private parties for the same kind of service, and the government
shall at all times have the preference in the use of the same for
the purpose aforesaid."
The twenty-third section of that act has special reference to
the Southern Pacific Railroad Company, and is as follows:
"SEC. 23. That for the purpose of connecting the Texas Pacific
Railroad with the City of San Francisco, the Southern Pacific
Railroad Company of California is hereby authorized (subject to the
laws of California) to construct a line of railroad from a point at
or near Tehacapa Pass, by way of Los Angeles, to the Texas Pacific
Railroad at or near the Colorado River, with the same rights,
grants, and privileges, and subject to the same limitations,
restrictions, and conditions as were granted to said Southern
Pacific Railroad Company of California by the Act of July 27, 1866, provided however that this section shall in no way Page 118 U. S. 401 affect or impair the rights, present or prospective, of the
Atlantic and Pacific Railroad Company or any other company."
Under the authority of this legislation, federal and state, the
Southern Pacific Railroad Company constructed a line of railroad
from San Francisco, connecting with the Texas and Pacific Railroad
(formerly the Texas Pacific Railroad) at Sierra Banca in Texas,
and, with other railroads, it is operated as one continuous line
(except for that part of the route occupied by the Central Pacific
Railroad) from Marshall, Texas, to San Francisco. It is stated in
the record that the Southern Pacific Railroad Company of
California, since the commencement of this action, has completed
its road to the Colorado River at or near the Needles, to connect
with the Atlantic and Pacific Railroad, and that with the latter
road it constitutes a continuous line from Springfield, Missouri,
to the Pacific, except as to the connection, for a relatively short
distance, over the road of the Central Pacific Railroad
Company.
On the 17th of December, 1877, the said Southern Pacific
Railroad Company, and other railroad corporations then existing
under the laws of California, were legally consolidated, and a new
corporation thereby formed under the name of the Southern Pacific
Railroad Company, the present defendant in error, 59.30 miles of
whose road is in Santa Clara County and 17.93 miles in Fresno
County.
On the 1st of April, 1875, this company was indebted to divers
persons in large sums of money advanced to construct and equip its
road. To secure that indebtedness, it executed on that day a
mortgage for $32,520,000 on its road, franchises, rolling stock,
and appurtenances and on a large number of tracts of land in
different counties of California aggregating over 11,000,000 acres.
These lands were granted to the company by Congress under the
above-mentioned acts, and are used for agricultural, grazing, and
other purposes not connected with the business of the railroad. Of
those patented, 3,138 acres are in Santa Clara County and 18,789
acres in Fresno County. When these proceedings were instituted, no
part of its above mortgage debt had been paid except the accruing
interest Page 118 U. S. 402 and $1,632,000 of the principal, leaving outstanding against it
$30,898,000.
In the year 1852, California, by legislative enactment, granted
a right of way through that state to the United States for the
purpose of constructing a railroad from the Atlantic to the Pacific
Ocean, declaring that the interests of California, as well as the
whole union,
"require the immediate action of the government of the United
States for the construction of a national thoroughfare connecting
the navigable waters of the Atlantic and Pacific Oceans for the
purpose of the national safety in the event of war, and to promote
the highest commercial interests of the Republic."
Stat.Cal. 1852, p. 150. By an act passed July 1, 1862, 12 Stat.
489, §§ 1, 8, Congress incorporated the Union Pacific Railroad
Company, with power to construct and maintain a continuous railroad
and telegraph line to the western boundary of what was then Nevada
Territory, "there to meet and connect with the line of the Central
Pacific Railroad Company of California." The declared object of
extending government aid to these enterprises was to effect the
construction of a railroad and telegraph line from the Missouri
River to the Pacific, which, for all purposes of communication,
travel, and transportation, so far as the public and the general
government are concerned, should be operated "as one connected,
continuous line." Ibid., §§ 6, 9, 10, 12, 17, 18.
In 1864, the State of California passed an act to aid in
carrying out the provisions of this act of Congress, the first
section of which declared that
"To enable said company more fully and completely to comply with
and perform the provisions and conditions of said act of Congress,
the said company, their successors and assigns, are hereby
authorized and empowered, and the right, power, and privilege is
hereby granted to, conferred upon, and vested in them to construct,
maintain, and operate the said railroad and telegraph line not only
in the State of California, but also in the said territories lying
east of and between said state and the Missouri River, with such
branches and extensions of said railroad and telegraph line, or
either of them, as said company may deem necessary or proper, and
also the right of way for said railroad and telegraph line over any
lands belonging to Page 118 U. S. 403 this state, and on, over, and along any streets, roads,
highways, rivers, streams, water, and watercourses, but the same to
be so constructed as not to obstruct or destroy the passage or
navigation of the same, and also the right to condemn and
appropriate to the use of said company such private property,
rights, privileges, and franchises as may be proper, necessary, or
convenient for the purposes of said railroad and telegraph, the
compensation therefor to be ascertained and paid under and by
special proceedings, as prescribed in the act providing for the
incorporation of railroad companies, approved May 20, 1861, and the
act supplementary and amendatory thereof, said company to be
subject to all the laws of this state concerning railroad and
telegraph lines except that messages and property of the United
States, of this state, and of said company shall have priority of
transportation and transmission over said line of railroad and
telegraph, hereby confirming to and vesting in said company all the
rights, privileges, franchises, power, and authority conferred
upon, granted to, and vested in said company by said act of
Congress, hereby repealing all laws and parts of laws inconsistent
or in conflict with the provisions of this act, or the rights and
privileges herein granted."
In 1870, the Central Pacific Railroad Company of California and
the Western Pacific Railroad Company formed themselves into one
corporation under the name of the Central Pacific Railroad Company,
the defendant in one of these actions, 61.06 miles of whose road is
in Fresno County. The company complied with the several acts of
Congress, and there is in operation a continuous line of railway
from the Missouri River to the Pacific Ocean, the Central Pacific
Railroad Company owning and operating the portion thereof between
Ogden, in the Territory of Utah, and San Francisco.
When the present action was instituted against this company, the
United States had and now have a lien, created by the acts of
Congress of 1862 and 1864, for $30,000,000, with a large amount of
interest, upon its road, rolling stock, fixtures, and franchises,
and there were also outstanding bonds for a like amount issued by
the company prior to January 1, 1875, and secured by a mortgage
upon the same property.
Such were the relations which these two companies held to Page 118 U. S. 404 the United States and to the state when the assessments in
question were made for purposes of taxation.
It is necessary now to refer to those provisions of the
constitution and laws of the state which, it is claimed, sustain
these assessments. The Constitution of California, adopted in 1879,
exempts from taxation growing crops, property used exclusively for
public schools, and such as may belong to the United States or to
that state or to any of her county or municipal corporations, and
declares that the legislature "may provide, except in the case of
credits secured by mortgage or trust deed, for a reduction from
credits of debts due to bona fide residents" of the state.
It is provided in the first section of Article XIII that, with
these exceptions,
"all property in the state not exempt under the laws of the
United States shall be taxed in proportion to its value, to be
ascertained as provided by law. The word 'property,' as used in
this article and section, is hereby declared to include moneys,
credits, bonds, stocks, dues, franchises, and all other matters and
things, real, personal, and mixed, capable of private
ownership."
The fourth section of the same article provides:
"A mortgage, deed of trust, contract, or other obligation by
which a debt is secured shall, for the purposes of assessment and
taxation, be deemed and treated as an interest in the property
affected thereby. Except as to railroad and other quasi -public corporations, in case of debts so secured,
the value of the property affected by such mortgage, deed of trust,
contract, or obligation, less the value of such security, shall be
assessed and taxed to the owner of the property, and the value of
such security shall be assessed and taxed to the owner thereof, in
the county, city, or district in which the property affected
thereby is situate. The taxes so levied shall be a lien upon the
property and security, and may be paid by either party to such
security. If paid by the owner of the security, the tax so levied
upon the property affected thereby shall become a part of the debt
so secured; if the owner of the property shall pay the tax so
levied on such security, it shall constitute a payment thereon, and
to the extent of such payment, a full discharge thereof, provided that if any such security or indebtedness shall
be Page 118 U. S. 405 paid by any such debtor or debtors, after assessment and before
the tax levy, the amount of such levy may likewise be retained by
such debtor or debtors, and shall be computed according to the tax
levy of the preceding year."
The ninth section makes provision for the election of a State
Board of Equalization, "whose duty it shall be to equalize the
valuation of the taxable property of the several counties in the
state for the purpose of taxation." The boards of supervisors of
the several counties constitute boards of equalization for their
respective counties, and they equalize the valuation of the taxable
property therein for purposes of taxation; assessments, whether by
the state or county boards, to "conform to the true value in money
of the property" contained in the assessment roll.
The tenth section declares:
"All property, except as hereinafter in this section
provided, shall be assessed in the county, city, city and
county, town, township, or district in which it is situated, in the
manner prescribed by law. The franchise, roadway, roadbed,
rails, and rolling stock of all railroads operated in more than one
county in this state shall be assessed by the State Board of
Equalization at their actual value, and the same shall be
apportioned to the counties, cities and counties, cities, towns,
townships, and districts in which such railroads are located in
proportion to the number of miles of railway laid in such counties,
cities and counties, cities, towns, townships, and districts."
The assessments in question, it is contended, were made in
conformity with these constitutional provisions, and with what is
known as § 3664 of the Political Code of California. That section
made it the duty of the State Board of Equalization, on or before
the first Monday in May in each year, to "assess the franchise,
roadway, roadbed, rails, and rolling, stock of railroads operated
in more than one county," to which class belonged the defendants.
It required every corporation of that class, by certain officers,
or by such officer as the state board should designate, to furnish
the board with a sworn statement showing, among other things, in
detail, for the year ending March 1, the whole number of miles of
railway owned, operated, or leased by it in the state, the value
thereof Page 118 U. S. 406 per mile, and all of its property of every kind located in the
state; the number and value of its engines, passenger, mail,
express, baggage, freight, and other cars, or property used in
operating and repairing its railway in the state, and on railways
which are parts of lines extending beyond the limits of the state.
It is also directed that "the said property shall be assessed at
its actual value," that the "assessment shall be made upon the
entire railway within the state, and shall include the right of
way, roadbed, track, bridges, culverts, and rolling stock," and
that "the depots, station grounds, shops, buildings, and gravel
beds shall be assessed by the assessors of the county where
situated, as other property." It further declares:
"On or before the fifteenth day of May in each year, said board
shall transmit to the county assessor of each county through which
any railway operated in more than one county may run a statement
showing the length of the main track or tracks of such railway
within the county, together with a description of the whole of said
tracks within the county, including the right of way by metes and
bounds or other description sufficient for identification, and the
assessed value per mile of the same, as fixed by a pro
rata distribution per mile of the assessed value of the whole
franchise, roadway, roadbed, rails, and rolling stock of such
railway within this state. Said statement shall be entered on the
assessment roll of the county. At the first meeting of the board of
supervisors after such statement is received by the county
assessor, they shall make and cause to be entered in the proper
record book an order stating and declaring the length of the main
track and the assessed value of such railway lying in each city,
town, township, school district, or lesser taxing district in their
county through which such railway runs as fixed by the State Board
of Equalization, which shall constitute the taxable value of said
property for taxable purposes in such city, town, township, school,
road, or other district."
Stat.Cal. 1881, c. 73, § 1, page 82.
These companies, within due time, filed with the state board the
detailed statement required by that section.
At the trials below, no record of assessment against the
respective defendants, as made by the state board, was given in
evidence, and there was introduced no written evidence of the Page 118 U. S. 407 assessment except an official communication from the state board
to each of the assessors of Santa Clara and Fresno Counties,
called, in the special findings, the assessment roll for the
particular county. The roll for Fresno County, in 1881, relating to
the Southern Pacific Railroad Company, is as follows:
" Original -- Assessment Book of the Property of Fresno
County for the Year 1881. Assessed to all Known Owners or
Claimants, and when Unknown to Unknown Owners or
Claimants. "
image:a Page 118 U. S. 408 There were similar rolls in reference to the Central Pacific
Railroad in the same county, for the same year, and the Southern
Pacific in Santa Clara County for 1882. For each of those years,
the board of supervisors of the respective counties made an
apportionment of the taxes among the legal subdivisions of such
counties.
It is stated in the findings that the delinquent lists for those
years, so far as they related to the taxes in question, were duly
made up in form corresponding with the original assessment roll;
that, in pursuance of § 3738 of the Political Code of California,
the board of supervisors of the respective counties duly passed an
order, entered on the minutes, dispensing with the duplicate
assessment roll for that year; that the comptroller of the state
transmitted a letter to the tax collector of the county, in
pursuance of the provisions of § 3899 of that Code, directing him
to offer the property for sale but once, and, if there were no bona fide purchasers, to withdraw it from sale; that the
tax collector, in obedience to the provisions of that section,
transmitted to the comptroller, with his endorsement thereon of the
action had in the premises, a certified copy of the entry upon the
delinquent list relating to the tax in question in these several
actions; that such endorsement shows that the tax collector had
offered the property for sale, and had withdrawn it because there
was no purchaser for the same, and that the comptroller, in
pursuance of the provisions of the same section, transmitted to the
tax collector of the county a letter directing him to bring
suit.
In each case, there were also the following findings:
"The State Board of Equalization, in assessing said value of
said property to and against defendant, assessed the full cash
value of said railroad, roadway, roadbed, rails, rolling stock, and
franchises, without deducting therefrom the value of the mortgage,
or any part thereof, given and existing thereon as aforesaid, to
secure the indebtedness of said company to the holders of said
bonds, notwithstanding they had full knowledge of the existence of
the said mortgage, and in making said assessment, the said State
Board of Equalization did not consider or treat said mortgage as an
interest in said property, but assessed Page 118 U. S. 409 the whole value thereof to the defendant in the same meaner as
if there had been no mortgage thereon. The State Board of
Equalization, in making the supposed assessment of said roadway of
defendant, did knowingly and designedly include in the valuation of
said roadway the value of fences erected upon the line between said
roadway and the land of coterminous proprietors. Said fences were
valued at $300 per mile."
The special grounds of defense by each of the defendants
were:
1. That its road is a part of a continuous postal and military
route, constructed and maintained under the authority of the United
States by means in part obtained from the general government; that
the company having, with the consent of the state, become subject
to the requirements, conditions, and provisions of the acts of
Congress, it thereby ceased to be merely a state corporation and
became one of the agencies or instrumentalities employed by the
general government to execute its constitutional powers, and that
the franchise to operate a postal and military route, for the
transportation of troops, munitions of war, public stores, and the
mails, being derived from the United States, cannot without their
consent be subjected to state taxation.
2. That the provisions of the Constitution and laws of
California in respect to the assessment for taxation of the
property of railway corporations operating railroads in more than
one county, are in violation of the Fourteenth Amendment of the
Constitution insofar as they require the assessment of their
property at its full money value without making deduction, as in
the case of railroads operated in one county and of other
corporations and of natural persons, for the value of the mortgages
covering the property assessed, thus imposing upon the defendant
unequal burdens, and to that extent denying to it the equal
protection of the laws.
3. That what is known as § 3664 of the Political Code of
California, under the authority of which, in part, the assessment
was made, was not constitutionally enacted by the legislature, and
had not the force of law.
4. That no void assessment appears in fact to have been made by
the state board.
5. That no interest is recoverable in this action until after
judgment.
6. Page 118 U. S. 410 That the assessment upon which the action is based is void
because it included property which the State Board of Equalization
had no jurisdiction under any circumstances to assess, and that as
such illegal part was so blended with the balance that it cannot be
separated, the entire assessment must be treated as a nullity.
The record contains elaborate opinions stating the grounds upon
which judgments were ordered for the defendants. Mr. Justice Field
overruled the first of the special defenses above named, but
sustained the second. The circuit judge in addition held that §
3664 of the Political Code had not been passed in the mode required
by the state constitution, and consequently was no part of the law
of California. These opinions are reported as the Santa Clara
Railroad Tax Case, 18 F. 385.
The propositions embodied in the conclusions reached in the
circuit court were discussed with marked ability by counsel who
appeared in this Court for the respective parties. Their importance
cannot well be over-estimated, for they not only involve a
construction of the recent amendments to the national Constitution
in their application to the constitution and the legislation of a
state, but upon their determination, if it were necessary to
consider them, would depend the system of taxation devised by that
state for raising revenue from certain corporations for the support
of her government. These questions belong to a class which this
Court should not decide unless their determination is essential to
the disposal of the case in which they arise. Whether the present
cases require a decision of them depends upon the soundness of
another proposition upon which the court below, in view of its
conclusions upon other issues, did not deem it necessary to pass.
We allude to the claim of the defendant in each case that the
entire assessment is a nullity upon the ground that the State Board
of Equalization included therein property which it was without
jurisdiction to assess for taxation.
The argument in behalf of the defendant is that the state board
knowingly and designedly included in its assessment of "the
franchise, roadway, roadbed, rails, and rolling stock" of Page 118 U. S. 411 each company, the value of the fences erected upon the line
between its roadway and the land of coterminous proprietors; that
the fences did not constitute a part of such roadway, and therefore
could only be assessed for taxation by the proper officer of the
several counties in which they were situated, and that an entire
assessment which includes property not assessable by the state
board against the party assessed, is void, and therefore
insufficient to support an action, at least when -- and such is
claimed to be the case here -- it does not appear with reasonable
certainty from the face of the assessment or otherwise what part of
the aggregate valuation represents the property so illegally
included therein.
If these positions are tenable, there will be no occasion to
consider the grave questions of constitutional law upon which the
case was determined below, for in that event the judgment can be
affirmed upon the ground that the assessment cannot properly be the
basis of a judgment against the defendant.
That the state board purposely included in its assessment and
valuation the fences erected on the line between the railroads and
the lands of adjacent proprietors at the rate of $300 per mile is
undoubtedly true, for it is so stated in the special finding of
facts, and that finding must be taken here to be indisputable. It
is equally true that that tribunal has no general power of
assessment, but only jurisdiction to assess "the franchise,
roadway, roadbed, rails, and rolling stock" of railroad
corporations operating roads in more than one county, and that all
other property of such corporations, subject to taxation, is
assessable only "in the county, city, city and county, town,
township, or district in which it is situated, in the manner
prescribed by law." Such is the declaration of the state
constitution. People v. Sacramento County, 59 Cal. 324;
Art. XIII, § 10. It must also be conceded that "fences" erected on
the line between these railroads and the lands of adjoining
proprietors were improperly included by the state board in its
assessments unless they constituted a part of the "roadway". Some
light is thrown upon this question by that clause of § 3664 of the
Political Code of California, which, in the view Page 118 U. S. 412 we take of these cases, may be regarded as having been legally
enacted, providing that "the depots, station grounds, shops,
buildings, and gravel beds" shall be assessed in the county where
situated as other property. From this it seems that there is much
of the property daily used in the business of a railroad operated
in more than one county that is not assessable by the state board,
but only by the proper authorities of the municipality where it is
situated, so that even if it appeared that the fences assessed by
the state board were the property of the railroad companies, and
not of the adjoining proprietors, they could not be included in an
assessment by that board unless they were part of the roadway
itself, for, as shown, the jurisdiction of that board is restricted
to the assessment of the "franchise, roadway, roadbed, rails, and
rolling stock." We come back, then, to the vital inquiry, whether
the fences could be assessed under the head of roadway. We are of
opinion that they cannot be regarded as part of the roadway for
purposes of taxation.
The Constitution of California provides that "land, and
improvements thereon, shall be separately assessed." Art. XIII, §
2, and although that instrument does not define what are
improvements upon land, the Political Code of the state expressly
declares that the term "improvements" includes "all buildings,
structures, fixtures, fences, and improvements erected upon or
affixed to the land." § 3617. It would seem from these provisions
that fences erected upon the roadway, even if owned by the railroad
company, must be separately assessed as "improvements," in the mode
required in the case of depots, station grounds, shops, and
buildings owned by the company -- namely by local officers in the
county where they are situated. The same considerations of public
interest or convenience upon which rest existing regulations for
the assessments of depots, station grounds, shops, and buildings of
a railroad company operated in more than one county would apply
equally to the assessment and valuation for taxation of fences
erected upon the line of railway of the same company.
In San Francisco & Northern Pacific Railroad Co. v.
State Board of Equalization, 60 Cal. 12, 34, which was an
application Page 118 U. S. 413 on certiorari to annul certain orders of the state board
assessing the property of a railroad corporation, one of the
questions was as to the meaning of the words "roadbed" and
"roadway." The court there said:
"The roadbed is the foundation on which the superstructure of a
railroad rests. Webster. The roadway is the right of way, which has
been held to be the property liable to taxation. Appeal of N.
B. & M. R. Co., 32 Cal. 499. The rails in place constitute
the superstructure resting upon the roadbed."
This definition was approved in San Francisco v. Central
Pacific Railroad Co., 63 Cal. 467, 469. In the latter case,
the question was whether certain steamers owned by the railroad
company, upon which were laid railroad tracks and with which its
passenger and freight cars were transported from the eastern shore
of the Bay of San Francisco to its western shore, where the railway
again commenced, were to be assessed by the City and County of San
Francisco, or by the State Board of Equalization. The contention of
the company was that they constituted a part of its roadbed or
roadway, and must therefore be assessed by the state board, but the
supreme court of the state held otherwise. After observing that all
the property of the company, other than its franchise, roadway,
roadbed, rails, and rolling stock, was required by the constitution
to be assessed by the local assessors, the court said:
"They are certainly not the franchise of the defendant
corporation. They may constitute an element to be taken into
computation to arrive at the value of the franchise of the
corporation, but they are not such franchise. It is equally as
clear that they are not rails or rolling stock. . . . Are they,
then, embraced within the words 'roadway' or 'roadbed,' in the
ordinary and popular acceptation of such words as applied to
railroads? These two words, as applied to common roads, ordinarily
mean the same thing, but as applied to railroads, their meaning is
not the same. The 'roadbed' referred to in § 10, in our judgment,
is the bed or foundation on which the superstructure of the
railroad rests. Such is the definition given by both Worcester and
Webster, and we think it correct. The 'roadway' has a more extended
signification as applied to railroads. In addition to the part
denominated Page 118 U. S. 414 roadbed, the roadway includes whatever space of ground the
company is allowed by law in which to construct its roadbed and lay
its track. Such space is defined in subdivision 4 of the 17th
section and the 20th section of the act 'to provide for the
incorporation of railroad companies,' etc., approved May 20, 1861.
Stat. 1861, p. 607; S.F. & N.P. R. Co., 60 Cal.
12."
The argument in support of the proposition, that these steamers
-- constituting, as they did, a necessary link in the line of the
company's railway, and upon which rails were actually laid for the
running of cars -- were a part either of the roadbed or roadway of
the railroad is much more cogent than the argument that the fences
erected upon the line between a roadway and the lands of adjoining
proprietors are a part of the roadway itself. It seems to the Court
that the fences in question are not, within the meaning of the
local law, a part of the roadway for purposes of taxation, but are
"improvements" assessable by the local authorities of the proper
county, and therefore were improperly included by the state board
in its valuation of the property of the defendants.
The next inquiry that naturally arises is whether the different
kinds of property assessed by the state board are distinct and
separable upon the face of the assessment, so that the company,
being thereby informed of the amount of taxes levied upon each,
could be held to have been in default in not tendering such sum, if
any, as was legally due. Upon the transcript before us, this
question must be answered in the negative. No record of assessment
as made by the state board was introduced at the trial, and
presumably no such record existed. Nor is there any documentary
evidence of such assessment, except the official communication of
the state board to the local assessors, called in the findings the
assessment roll of the county. That roll shows only the aggregate
valuation of the company's franchise, roadway, roadbed, rails, and
rolling stock in the state; the length of the company's main track
in the state; its length in the county; the assessed value per mile
of the railway, as fixed by the pro rata distribution per
mile of the assessed value of its whole franchise, roadway,
roadbed, rails, Page 118 U. S. 415 and rolling stock in the state, and the apportionment of the
property so assessed to the county.
It appears, as already stated, from the evidence that the fences
were included in the valuation of the defendants' property, but
under what head -- whether of franchise, roadway, or roadbed --
does not appear. Nor can it be ascertained with reasonable
certainty either from the assessment roll or from other evidence
what was the aggregate valuation of the fences or what part of such
valuation was apportioned to the respective counties through which
the railroad was operated. If the presumption is that the state
board included in its valuation only such property as it had
jurisdiction under the state constitution to assess -- namely such
as could be rightfully classified under the heads of franchise,
roadway, roadbed, rails, or rolling stock -- that presumption was
overthrown by proof that it did in fact include, under some one or
more of these heads, the fences in question. It was then incumbent
upon the plaintiff by satisfactory evidence to separate that which
was illegal from that which was legal -- assuming for the purposes
of this case only that the assessment was in all other respects
legal -- and thus impose upon the defendant the duty of tendering,
or enable the court to render judgment for, such amount, if any, as
was justly due. But no such evidence was introduced. The finding
that the fences were valued at $300 per mile is too vague and
indefinite as a basis for estimating the aggregate valuation of the
fences included in the assessment or the amount thereof apportioned
to the respective counties. Were the fences the property of
adjacent proprietors? Were they assessed at that rate for every
mile of the railroad within the state? Were they erected on the
line of the railroad in every county through which it was operated,
or only in some of them? Wherever erected, were they assessed for
each side of the railway, or only for one side? These questions, so
important in determining the extent to which the assessment
included a valuation of the fences erected upon the line between
the railroad and coterminous proprietors, find no solution in the
record presented to this Court.
If it be suggested that under the circumstances, the court Page 118 U. S. 416 might have assumed that the state board included the fences in
their assessment at the rate of $300 per mile for every mile of the
railroad within the state, counting one or both sides of the
roadway, and, having thus eliminated from the assessment the
aggregate so found, given judgment for such sum, if any, as, upon
that basis, would have been due upon the valuation of the
franchise, roadbed, roadway, rails, and rolling stock of the
defendant, the answer is that the plaintiff did not offer to take
such a judgment, and the court could not have rendered one of that
character without concluding the plaintiff hereafter, and upon a
proper assessment, from claiming against the defendant taxes for
the years in question upon such of its property as constituted its
franchise, roadway, roadbed, rails, and rolling stock. The case, as
presented to the court below, was therefore one in which the
plaintiff sought judgment for an entire tax arising upon an
assessment of different kinds of property as a unit, such
assessment including property not legally assessable by the state
board, and the part of the tax assessed against the latter property
not being separable from the other part. Upon such an issue, the
law, we think, is for the defendant. An assessment of that kind is
invalid, and will not support an action for the recovery of the
entire tax so levied. Cooley on Taxation 295, 296, and authorities
there cited; Libby v. Burnham, 15 Mass. 147; State v.
City of Plainfield, 38 N.J.Law 94; Gamble v. Witty, 55 Miss. 35; Stone v. Bean, 15 Gray 45; Mosher v.
Robie, 11 Me. 137; Johnson v. Colburn. 36 Vt. 695; Wells v. Burbank, 17 N.H. 412.
It results that the court below might have given judgment in
each case for the defendant upon the ground that the assessment,
which was the foundation of the action, included property of
material value which the state board was without jurisdiction to
assess, and the tax levied upon which cannot, from the record, be
separated from that imposed upon other property embraced in the
same assessment. As the judgment can be sustained upon this ground,
it is not necessary to consider any other questions raised by the
pleadings and the facts found by the court. Page 118 U. S. 417 It follows that there is no occasion to determine under what
circumstances the plaintiffs would be entitled to judgment against
a delinquent taxpayer for penalties, interest, or attorney's fees,
for if the plaintiffs are not entitled to judgment for the taxes
arising out of the assessments in question, no liability for
penalties, interest, or attorney's fees could result from a refusal
or failure to pay such taxes. Judgment affirmed. | In Santa Clara County v. Southern Pacific Railroad Company (1886), the U.S. Supreme Court held that corporations are considered "persons" under the Fourteenth Amendment, which protects equal protection under the law. The case addressed taxation issues in California, specifically regarding the inclusion of fences erected along railroad property in tax assessments. The Court found that these fences were not part of the "roadway" and should be assessed by local authorities, not the state. An assessment that includes property not legally assessable, without a way to separate the tax on that property from the rest, is invalid. The Court affirmed the lower court's judgment, finding that the tax assessment included valuable property that the state board had no authority to assess, making the entire assessment invalid. |
Taxes | Eisner v. Macomber | https://supreme.justia.com/cases/federal/us/252/189/ | U.S. Supreme Court Eisner v. Macomber, 252
U.S. 189 (1920) Eisner v. Macomber No. 318 Argued April 16, 1919 Restored to docket for reargument
May 19, 1919 Reargued October 17, 20,
1919 Decided March 8, 1920 252
U.S. 189 ERROR TO THE DISTRICT COURT OF THE
UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW
YORK Syllabus Congress was not empowered by the Sixteenth Amendment to tax, as
income of the stockholder, without apportionment, a stock dividend
made lawfully and in good faith against profits accumulated by the
corporation since March 1, 1913. P. 252 U. S. 201 . Towne v. Eisner, 245 U. S. 418 .
The Revenue Act of September 8, 1916, c. 463, 39 Stat. 756,
plainly evinces the purpose of Congress to impose such taxes, and
is to that extent in conflict with Art. I, § 2, cl. 3, and Art. I,
§ 9, cl. 4, of the Constitution. Pp. 252 U. S. 199 , 252 U. S.
217 .
These provisions of the Constitution necessarily limit the
extension, by construction, of the Sixteenth Amendment. P. 252 U. S.
205 .
What is or is not "income" within the meaning of the Amendment
must be determined in each case according to truth and substance,
without regard to form. P. 252 U. S. 206 .
Income may be defined as the gain derived from capital, from
labor, or from both combined, including profit gained through sale
or conversion of capital. P. 252 U. S.
207 .
Mere growth or increment of value in a capital investment is not
income; income is essentially a gain or profit, in itself, of
exchangeable value, proceeding from capital, severed from it, and
derived or received by the taxpayer for his separate use, benefit,
and disposal. Id. A stock dividend, evincing merely a transfer of an accumulated
surplus to the capital account of the corporation, takes nothing
from the property of the corporation and adds nothing to that of
the shareholder; a tax on such dividends is a tax an capital
increase, and not on income, and, to be valid under the
Constitution, such taxes must be apportioned according to
population in the several states. P. 252 U. S.
208 .
Affirmed. Page 252 U. S. 190 The case is stated in the opinion. Page 252 U. S. 199 MR. JUSTICE PITNEY delivered the opinion of the Court.
This case presents the question whether, by virtue of the
Sixteenth Amendment, Congress has the power to tax, as income of
the stockholder and without apportionment, a stock dividend made
lawfully and in good faith against profits accumulated by the
corporation since March 1, 1913.
It arises under the Revenue Act of September 8, 1916, 39 Stat.
756 et seq., which, in our opinion (notwithstanding a
contention of the government that will be Page 252 U. S. 200 noticed), plainly evinces the purpose of Congress to tax stock
dividends as income. * The facts, in outline, are as follows:
On January 1, 1916, the Standard Oil Company of California, a
corporation of that state, out of an authorized capital stock of
$100,000,000, had shares of stock outstanding, par value $100 each,
amounting in round figures to $50,000,000. In addition, it had
surplus and undivided profits invested in plant, property, and
business and required for the purposes of the corporation,
amounting to about $45,000,000, of which about $20,000,000 had been
earned prior to March 1, 1913, the balance thereafter. In January,
1916, in order to readjust the capitalization, the board of
directors decided to issue additional shares sufficient to
constitute a stock dividend of 50 percent of the outstanding stock,
and to transfer from surplus account to capital stock account an
amount equivalent to such issue. Appropriate resolutions were
adopted, an amount equivalent to the par value of the proposed new
stock was transferred accordingly, and the new stock duly issued
against it and divided among the stockholders.
Defendant in error, being the owner of 2,200 shares of the old
stock, received certificates for 1, 100 additional Page 252 U. S. 201 shares, of which 18.07 percent, or 198.77 shares, par value
$19,877, were treated as representing surplus earned between March
1, 1913, and January 1, 1916. She was called upon to pay, and did
pay under protest, a tax imposed under the Revenue Act of 1916,
based upon a supposed income of $19,877 because of the new shares,
and, an appeal to the Commissioner of Internal Revenue having been
disallowed, she brought action against the Collector to recover the
tax. In her complaint, she alleged the above facts and contended
that, in imposing such a tax the Revenue Act of 1916 violated
article 1, § 2, cl. 3, and Article I, § 9, cl. 4, of the
Constitution of the United States, requiring direct taxes to be
apportioned according to population, and that the stock dividend
was not income within the meaning of the Sixteenth Amendment. A
general demurrer to the complaint was overruled upon the authority
of Towne v. Eisner, 245 U. S. 418 ,
and, defendant having failed to plead further, final judgment went
against him. To review it, the present writ of error is
prosecuted.
The case was argued at the last term, and reargued at the
present term, both orally and by additional briefs.
We are constrained to hold that the judgment of the district
court must be affirmed, first, because the question at issue is
controlled by Towne v. Eisner, supra; secondly, because a
reexamination of the question with the additional light thrown upon
it by elaborate arguments has confirmed the view that the
underlying ground of that decision is sound, that it disposes of
the question here presented, and that other fundamental
considerations lead to the same result.
In Towne v. Eisner, the question was whether a stock
dividend made in 1914 against surplus earned prior to January 1,
1913, was taxable against the stockholder under the Act of October
3, 1913, c. 16, 38 Stat. 114, 166, which provided (§ B, p. 167)
that net income should include "dividends," and also "gains or
profits and income derived Page 252 U. S. 202 from any source whatever." Suit having been brought by a
stockholder to recover the tax assessed against him by reason of
the dividend, the district court sustained a demurrer to the
complaint. 242 F. 702. The court treated the construction of the
act as inseparable from the interpretation of the Sixteenth
Amendment; and, having referred to Pollock v. Farmers' Loan
& Trust Co., 158 U. S. 601 , and
quoted the Amendment, proceeded very properly to say (p. 704):
"It is manifest that the stock dividend in question cannot be
reached by the Income Tax Act and could not, even though Congress
expressly declared it to be taxable as income, unless it is in fact
income."
It declined, however, to accede to the contention that, in Gibbons v. Mahon, 136 U. S. 549 ,
"stock dividends" had received a definition sufficiently clear to
be controlling, treated the language of this Court in that case as obiter dictum in respect of the matter then before it (p.
706), and examined the question as res nova, with the
result stated. When the case came here, after overruling a motion
to dismiss made by the government upon the ground that the only
question involved was the construction of the statute, and not its
constitutionality, we dealt upon the merits with the question of
construction only, but disposed of it upon consideration of the
essential nature of a stock dividend disregarding the fact that the
one in question was based upon surplus earnings that accrued before
the Sixteenth Amendment took effect. Not only so, but we rejected
the reasoning of the district court, saying (245 U.S. 245 U. S.
426 ):
"Notwithstanding the thoughtful discussion that the case
received below we cannot doubt that the dividend was capital as
well for the purposes of the Income Tax Law as for distribution
between tenant for life and remainderman. What was said by this
Court upon the latter question is equally true for the former."
"A stock dividend really takes nothing from the property of the
corporation, and adds nothing to the Page 252 U. S. 203 interests of the shareholders. Its property is not diminished,
and their interests are not increased. . . . The proportional
interest of each shareholder remains the same. The only change is
in the evidence which represents that interest, the new shares and
the original shares together representing the same proportional
interest that the original shares represented before the issue of
the new ones."
" Gibbons v. Mahon, 136 U. S. 549 , 136 U. S.
559 -560. In short, the corporation is no poorer and the
stockholder is no richer than they were before. Logan County v.
United States, 169 U. S. 255 , 169 U. S.
261 . If the plaintiff gained any small advantage by the
change, it certainly was not an advantage of $417,450, the sum upon
which he was taxed. . . . What has happened is that the plaintiff's
old certificates have been split up in effect and have diminished
in value to the extent of the value of the new."
This language aptly answered not only the reasoning of the
district court, but the argument of the Solicitor General in this
Court, which discussed the essential nature of a stock dividend.
And if, for the reasons thus expressed, such a dividend is not to
be regarded as "income" or "dividends" within the meaning of the
Act of 1913, we are unable to see how it can be brought within the
meaning of "incomes" in the Sixteenth Amendment, it being very
clear that Congress intended in that act to exert its power to the
extent permitted by the amendment. In Towne v. Eisner, it
was not contended that any construction of the statute could make
it narrower than the constitutional grant; rather the contrary.
The fact that the dividend was charged against profits earned
before the Act of 1913 took effect, even before the amendment was
adopted, was neither relied upon nor alluded to in our
consideration of the merits in that case. Not only so, but had we
considered that a stock dividend constituted income in any true
sense, it would have been held taxable under the Act of 1913
notwithstanding it was Page 252 U. S. 204 based upon profits earned before the amendment. We ruled at the
same term, in Lynch v. Hornby, 247 U.
S. 339 , that a cash dividend extraordinary in amount,
and in Peabody v. Eisner, 247 U.
S. 347 , that a dividend paid in stock of another
company, were taxable as income although based upon earnings that
accrued before adoption of the amendment. In the former case,
concerning "corporate profits that accumulated before the act took
effect," we declared (pp. 247 U. S.
343 -344):
"Just as we deem the legislative intent manifest to tax the
stockholder with respect to such accumulations only if and when,
and to the extent that, his interest in them comes to fruition as
income, that is, in dividends declared, so we can perceive no
constitutional obstacle that stands in the way of carrying out this
intent when dividends are declared out of a preexisting surplus. .
. . Congress was at liberty under the amendment to tax as income,
without apportionment, everything that became income, in the
ordinary sense of the word, after the adoption of the amendment,
including dividends received in the ordinary course by a
stockholder from a corporation, even though they were extraordinary
in amount and might appear upon analysis to be a mere realization
in possession of an inchoate and contingent interest that the
stockholder had in a surplus of corporate assets previously
existing."
In Peabody v. Eisner, 247 U. S. 349 , 247 U. S. 350 , we
observed that the decision of the district court in Towne v.
Eisner had been reversed
"only upon the ground that it related to a stock dividend which
in fact took nothing from the property of the corporation and added
nothing to the interest of the shareholder, but merely changed the
evidence which represented that interest,"
and we distinguished the Peabody case from the Towne case upon the ground that "the dividend of Baltimore
& Ohio shares was not a stock dividend but a distribution in
specie of a portion of the assets of the Union Pacific."
Therefore, Towne v. Eisner cannot be regarded as
turning Page 252 U. S. 205 upon the point that the surplus accrued to the company before
the act took effect and before adoption of the amendment. And what
we have quoted from the opinion in that case cannot be regarded as obiter dictum, it having furnished the entire basis for
the conclusion reached. We adhere to the view then expressed, and
might rest the present case there not because that case in terms
decided the constitutional question, for it did not, but because
the conclusion there reached as to the essential nature of a stock
dividend necessarily prevents its being regarded as income in any
true sense.
Nevertheless, in view of the importance of the matter, and the
fact that Congress in the Revenue Act of 1916 declared (39 Stat.
757) that a "stock dividend shall be considered income, to the
amount of its cash value," we will deal at length with the
constitutional question, incidentally testing the soundness of our
previous conclusion.
The Sixteenth Amendment must be construed in connection with the
taxing clauses of the original Constitution and the effect
attributed to them before the amendment was adopted. In Pollock
v. Farmers' Loan & Trust Co., 158 U.
S. 601 , under the Act of August 27, 1894, c. 349, § 27,
28 Stat. 509, 553, it was held that taxes upon rents and profits of
real estate and upon returns from investments of personal property
were in effect direct taxes upon the property from which such
income arose, imposed by reason of ownership, and that Congress
could not impose such taxes without apportioning them among the
states according to population, as required by Article I, § 2, cl.
3, and § 9, cl. 4, of the original Constitution.
Afterwards, and evidently in recognition of the limitation upon
the taxing power of Congress thus determined, the Sixteenth
Amendment was adopted, in words lucidly expressing the object to be
accomplished:
"The Congress shall have power to lay and collect taxes on
incomes, from whatever source derived, without apportionment
among Page 252 U. S. 206 the several states and without regard to any census or
enumeration."
As repeatedly held, this did not extend the taxing power to new
subjects, but merely removed the necessity which otherwise might
exist for an apportionment among the states of taxes laid on
income. Brushaber v. Union Pacific R. Co., 240 U. S.
1 , 240 U. S. 17 -19; Stanton v. Baltic Mining Co., 240 U. S.
1 03, 240 U. S. 112 et seq.; Peck & Co. v. Lowe, 247 U.
S. 165 , 247 U. S.
172 -173.
A proper regard for its genesis, as well as its very clear
language, requires also that this amendment shall not be extended
by loose construction, so as to repeal or modify, except as applied
to income, those provisions of the Constitution that require an
apportionment according to population for direct taxes upon
property, real and personal. This limitation still has an
appropriate and important function, and is not to be overridden by
Congress or disregarded by the courts.
In order, therefore, that the clauses cited from Article I of
the Constitution may have proper force and effect, save only as
modified by the amendment, and that the latter also may have proper
effect, it becomes essential to distinguish between what is and
what is not "income," as the term is there used, and to apply the
distinction, as cases arise, according to truth and substance,
without regard to form. Congress cannot by any definition it may
adopt conclude the matter, since it cannot by legislation alter the
Constitution, from which alone it derives its power to legislate,
and within whose limitations alone that power can be lawfully
exercised.
The fundamental relation of "capital" to "income" has been much
discussed by economists, the former being likened to the tree or
the land, the latter to the fruit or the crop; the former depicted
as a reservoir supplied from springs, the latter as the outlet
stream, to be measured by its flow during a period of time. For the
present purpose, we require only a clear definition of the term
"income," Page 252 U. S. 207 as used in common speech, in order to determine its meaning in
the amendment, and, having formed also a correct judgment as to the
nature of a stock dividend, we shall find it easy to decide the
matter at issue.
After examining dictionaries in common use (Bouv. L.D.; Standard
Dict.; Webster's Internat. Dict.; Century Dict.), we find little to
add to the succinct definition adopted in two cases arising under
the Corporation Tax Act of 1909 ( Stratton's Independence v.
Howbert, 231 U. S. 399 , 231 U. S. 415 ; Doyle v. Mitchell Bros. Co., 247 U.
S. 179 , 247 U. S.
185 ), "Income may be defined as the gain derived from
capital, from labor, or from both combined," provided it be
understood to include profit gained through a sale or conversion of
capital assets, to which it was applied in the Doyle case,
pp. 247 U. S.
183 -185.
Brief as it is, it indicates the characteristic and
distinguishing attribute of income essential for a correct solution
of the present controversy. The government, although basing its
argument upon the definition as quoted, placed chief emphasis upon
the word "gain," which was extended to include a variety of
meanings; while the significance of the next three words was either
overlooked or misconceived. " Derived from capital; " "the gain derived from capital, " etc. Here, we have the
essential matter: not a gain accruing to capital;
not a growth or increment of value in the investment; but a gain, a profit, something of exchangeable
value, proceeding from the property, severed from the capital, however invested or employed, and coming in, being " derived " -- that is, received or drawn
by the recipient (the taxpayer) for his separate use,
benefit and disposal -- that is income derived from
property. Nothing else answers the description.
The same fundamental conception is clearly set forth in the
Sixteenth Amendment -- "incomes, from whatever source
derived " -- the essential thought being expressed Page 252 U. S. 208 with a conciseness and lucidity entirely in harmony with the
form and style of the Constitution.
Can a stock dividend, considering its essential character, be
brought within the definition? To answer this, regard must be had
to the nature of a corporation and the stockholder's relation to
it. We refer, of course, to a corporation such as the one in the
case at bar, organized for profit, and having a capital stock
divided into shares to which a nominal or par value is
attributed.
Certainly the interest of the stockholder is a capital interest,
and his certificates of stock are but the evidence of it. They
state the number of shares to which he is entitled and indicate
their par value and how the stock may be transferred. They show
that he or his assignors, immediate or remote, have contributed
capital to the enterprise, that he is entitled to a corresponding
interest proportionate to the whole, entitled to have the property
and business of the company devoted during the corporate existence
to attainment of the common objects, entitled to vote at
stockholders' meetings, to receive dividends out of the
corporation's profits if and when declared, and, in the event of
liquidation, to receive a proportionate share of the net assets, if
any, remaining after paying creditors. Short of liquidation, or
until dividend declared, he has no right to withdraw any part of
either capital or profits from the common enterprise; on the
contrary, his interest pertains not to any part, divisible or
indivisible, but to the entire assets, business, and affairs of the
company. Nor is it the interest of an owner in the assets
themselves, since the corporation has full title, legal and
equitable, to the whole. The stockholder has the right to have the
assets employed in the enterprise, with the incidental rights
mentioned; but, as stockholder, he has no right to withdraw, only
the right to persist, subject to the risks of the enterprise, and
looking only to dividends for his return. If he desires to
dissociate himself Page 252 U. S. 209 from the company, he can do so only by disposing of his
stock.
For bookkeeping purposes, the company acknowledges a liability
in form to the stockholders equivalent to the aggregate par value
of their stock, evidenced by a "capital stock account." If profits
have been made and not divided, they create additional bookkeeping
liabilities under the head of "profit and loss," "undivided
profits," "surplus account," or the like. None of these, however,
gives to the stockholders as a body, much less to any one of them,
either a claim against the going concern for any particular sum of
money or a right to any particular portion of the assets or any
share in them unless or until the directors conclude that dividends
shall be made and a part of the company's assets segregated from
the common fund for the purpose. The dividend normally is payable
in money, under exceptional circumstances in some other divisible
property, and when so paid, then only (excluding, of course, a
possible advantageous sale of his stock or winding-up of the
company) does the stockholder realize a profit or gain which
becomes his separate property, and thus derive income from the
capital that he or his predecessor has invested.
In the present case, the corporation had surplus and undivided
profits invested in plant, property, and business, and required for
the purposes of the corporation, amounting to about $45,000,000, in
addition to outstanding capital stock of $50,000,000. In this, the
case is not extraordinary. The profits of a corporation, as they
appear upon the balance sheet at the end of the year, need not be
in the form of money on hand in excess of what is required to meet
current liabilities and finance current operations of the company.
Often, especially in a growing business, only a part, sometimes a
small part, of the year's profits is in property capable of
division, the remainder having been absorbed in the acquisition of
increased plant, Page 252 U. S. 210 equipment, stock in trade, or accounts receivable, or in
decrease of outstanding liabilities. When only a part is available
for dividends, the balance of the year's profits is carried to the
credit of undivided profits, or surplus, or some other account
having like significance. If thereafter the company finds itself in
funds beyond current needs, it may declare dividends out of such
surplus or undivided profits; otherwise it may go on for years
conducting a successful business, but requiring more and more
working capital because of the extension of its operations, and
therefore unable to declare dividends approximating the amount of
its profits. Thus, the surplus may increase until it equals or even
exceeds the par value of the outstanding capital stock. This may be
adjusted upon the books in the mode adopted in the case at bar --
by declaring a "stock dividend." This, however, is no more than a
book adjustment, in essence -- not a dividend, but rather the
opposite; no part of the assets of the company is separated from
the common fund, nothing distributed except paper certificates that
evidence an antecedent increase in the value of the stockholder's
capital interest resulting from an accumulation of profits by the
company, but profits so far absorbed in the business as to render
it impracticable to separate them for withdrawal and distribution.
In order to make the adjustment, a charge is made against surplus
account with corresponding credit to capital stock account, equal
to the proposed "dividend;" the new stock is issued against this
and the certificates delivered to the existing stockholders in
proportion to their previous holdings. This, however, is merely
bookkeeping that does not affect the aggregate assets of the
corporation or its outstanding liabilities; it affects only the
form, not the essence, of the "liability" acknowledged by the
corporation to its own shareholders, and this through a
readjustment of accounts on one side of the balance sheet only,
increasing "capital stock" at the expense of Page 252 U. S. 211 "surplus"; it does not alter the preexisting proportionate
interest of any stockholder or increase the intrinsic value of his
holding or of the aggregate holdings of the other stockholders as
they stood before. The new certificates simply increase the number
of the shares, with consequent dilution of the value of each
share.
A "stock dividend" shows that the company's accumulated profits
have been capitalized, instead of distributed to the stockholders
or retained as surplus available for distribution in money or in
kind should opportunity offer. Far from being a realization of
profits of the stockholder, it tends rather to postpone such
realization, in that the fund represented by the new stock has been
transferred from surplus to capital, and no longer is available for
actual distribution.
The essential and controlling fact is that the stockholder has
received nothing out of the company's assets for his separate use
and benefit; on the contrary, every dollar of his original
investment, together with whatever accretions and accumulations
have resulted from employment of his money and that of the other
stockholders in the business of the company, still remains the
property of the company, and subject to business risks which may
result in wiping out the entire investment. Having regard to the
very truth of the matter, to substance and not to form, he has
received nothing that answers the definition of income within the
meaning of the Sixteenth Amendment.
Being concerned only with the true character and effect of such
a dividend when lawfully made, we lay aside the question whether,
in a particular case, a stock dividend may be authorized by the
local law governing the corporation, or whether the capitalization
of profits may be the result of correct judgment and proper
business policy on the part of its management, and a due regard for
the interests of the stockholders. And we are considering the
taxability of bona fide stock dividends only. Page 252 U. S. 212 We are clear that not only does a stock dividend really take
nothing from the property of the corporation and add nothing to
that of the shareholder, but that the antecedent accumulation of
profits evidenced thereby, while indicating that the shareholder is
the richer because of an increase of his capital, at the same time
shows he has not realized or received any income in the
transaction.
It is said that a stockholder may sell the new shares acquired
in the stock dividend, and so he may, if he can find a buyer. It is
equally true that, if he does sell, and in doing so realizes a
profit, such profit, like any other, is income, and, so far as it
may have arisen since the Sixteenth Amendment, is taxable by
Congress without apportionment. The same would be true were he to
sell some of his original shares at a profit. But if a shareholder
sells dividend stock, he necessarily disposes of a part of his
capital interest, just as if he should sell a part of his old
stock, either before or after the dividend. What he retains no
longer entitles him to the same proportion of future dividends as
before the sale. His part in the control of the company likewise is
diminished. Thus, if one holding $60,000 out of a total $100,000 of
the capital stock of a corporation should receive in common with
other stockholders a 50 percent stock dividend, and should sell his
part, he thereby would be reduced from a majority to a minority
stockholder, having six-fifteenths instead of six-tenths of the
total stock outstanding. A corresponding and proportionate decrease
in capital interest and in voting power would befall a minority
holder should he sell dividend stock, it being in the nature of
things impossible for one to dispose of any part of such an issue
without a proportionate disturbance of the distribution of the
entire capital stock and a like diminution of the seller's
comparative voting power -- that "right preservative of rights" in
the control of a corporation. Page 252 U. S. 213 Yet, without selling, the shareholder, unless possessed of other
resources, has not the wherewithal to pay an income tax upon the
dividend stock. Nothing could more clearly show that to tax a stock
dividend is to tax a capital increase, and not income, than this
demonstration that, in the nature of things, it requires conversion
of capital in order to pay the tax.
Throughout the argument of the government, in a variety of
forms, runs the fundamental error already mentioned -- a failure to
appraise correctly the force of the term "income" as used in the
Sixteenth Amendment, or at least to give practical effect to it.
Thus, the government contends that the tax "is levied on income
derived from corporate earnings," when in truth the stockholder has
"derived" nothing except paper certificates, which, so far as they
have any effect, deny him present participation in such earnings.
It contends that the tax may be laid when earnings "are received by
the stockholder," whereas he has received none; that the profits
are "distributed by means of a stock dividend," although a stock
dividend distributes no profits; that, under the Act of 1916, "the
tax is on the stockholder's share in corporate earnings," when in
truth a stockholder has no such share, and receives none in a stock
dividend; that "the profits are segregated from his former capital,
and he has a separate certificate representing his invested profits
or gains," whereas there has been no segregation of profits, nor
has he any separate certificate representing a personal gain, since
the certificates, new and old, are alike in what they represent --
a capital interest in the entire concerns of the corporation.
We have no doubt of the power or duty of a court to look through
the form of the corporation and determine the question of the
stockholder's right in order to ascertain whether he has received
income taxable by Congress without apportionment. But, looking
through the form, Page 252 U. S. 214 we cannot disregard the essential truth disclosed, ignore the
substantial difference between corporation and stockholder, treat
the entire organization as unreal, look upon stockholders as
partners when they are not such, treat them as having in equity a
right to a partition of the corporate assets when they have none,
and indulge the fiction that they have received and realized a
share of the profits of the company which in truth they have
neither received nor realized. We must treat the corporation as a
substantial entity separate from the stockholder not only because
such is the practical fact, but because it is only by recognizing
such separateness that any dividend -- even one paid in money or
property -- can be regarded as income of the stockholder. Did we
regard corporation and stockholders as altogether identical, there
would be no income except as the corporation acquired it, and while
this would be taxable against the corporation as income under
appropriate provisions of law, the individual stockholders could
not be separately and additionally taxed with respect to their
several shares even when divided, since, if there were entire
identity between them and the company, they could not be regarded
as receiving anything from it, any more than if one's money were to
be removed from one pocket to another.
Conceding that the mere issue of a stock dividend makes the
recipient no richer than before, the government nevertheless
contends that the new certificates measure the extent to which the
gains accumulated by the corporation have made him the richer.
There are two insuperable difficulties with this. In the first
place, it would depend upon how long he had held the stock whether
the stock dividend indicated the extent to which he had been
enriched by the operations of the company; unless he had held it
throughout such operations, the measure would not hold true.
Secondly, and more important for present purposes, enrichment
through increase in value Page 252 U. S. 215 of capital investment is not income in any proper meaning of the
term.
The complaint contains averments respecting the market prices of
stock such as plaintiff held, based upon sales before and after the
stock dividend, tending to show that the receipt of the additional
shares did not substantially change the market value of her entire
holdings. This tends to show that, in this instance, market
quotations reflected intrinsic values -- a thing they do not always
do. But we regard the market prices of the securities as an unsafe
criterion in an inquiry such as the present, when the question must
be not what will the thing sell for, but what is it in truth and in
essence.
It is said there is no difference in principle between a simple
stock dividend and a case where stockholders use money received as
cash dividends to purchase additional stock contemporaneously
issued by the corporation. But an actual cash dividend, with a real
option to the stockholder either to keep the money for his own or
to reinvest it in new shares, would be as far removed as possible
from a true stock dividend, such as the one we have under
consideration, where nothing of value is taken from the company's
assets and transferred to the individual ownership of the several
stockholders and thereby subjected to their disposal.
The government's reliance upon the supposed analogy between a
dividend of the corporation's own shares and one made by
distributing shares owned by it in the stock of another company
calls for no comment beyond the statement that the latter
distributes assets of the company among the shareholders, while the
former does not, and for no citation of authority except Peabody v. Eisner, 247 U. S. 347 , 247 U. S.
349 -350.
Two recent decisions, proceeding from courts of high
jurisdiction, are cited in support of the position of the
government. Page 252 U. S. 216 Swan Brewery Co., Ltd. v. Rex, [1914] A.C. 231, arose
under the Dividend Duties Act of Western Australia, which provided
that "dividend" should include "every dividend, profit, advantage,
or gain intended to be paid or credited to or distributed among any
members or directors of any company," except, etc. There was a
stock dividend, the new shares being allotted among the
shareholders pro rata, and the question was whether this
was a distribution of a dividend within the meaning of the act. The
Judicial Committee of the Privy Council sustained the dividend duty
upon the ground that, although "in ordinary language the new shares
would not be called a dividend, nor would the allotment of them be
a distribution of a dividend," yet, within the meaning of the act,
such new shares were an "advantage" to the recipients. There being
no constitutional restriction upon the action of the lawmaking
body, the case presented merely a question of statutory
construction, and manifestly the decision is not a precedent for
the guidance of this Court when acting under a duty to test an act
of Congress by the limitations of a written Constitution having
superior force.
In Tax Commissioner v. Putnam, (1917) 227 Mass. 522, it
was held that the Forty-Fourth amendment to the Constitution of
Massachusetts, which conferred upon the legislature full power to
tax incomes, "must be interpreted as including every item which by
any reasonable understanding can fairly be regarded as income" (pp.
526, 531), and that under it, a stock dividend was taxable as
income, the court saying (p. 535):
"In essence, the thing which has been done is to distribute a
symbol representing an accumulation of profits, which, instead of
being paid out in cash, is invested in the business, thus
augmenting its durable assets. In this aspect of the case, the
substance of the transaction is no different from what it would be
if a cash dividend had been declared with the privilege of
subscription to an equivalent amount of new shares. " Page 252 U. S. 217 We cannot accept this reasoning. Evidently, in order to give a
sufficiently broad sweep to the new taxing provision, it was deemed
necessary to take the symbol for the substance, accumulation for
distribution, capital accretion for its opposite, while a case
where money is paid into the hand of the stockholder with an option
to buy new shares with it, followed by acceptance of the option,
was regarded as identical in substance with a case where the
stockholder receives no money and has no option. The Massachusetts
court was not under an obligation, like the one which binds us, of
applying a constitutional amendment in the light of other
constitutional provisions that stand in the way of extending it by
construction.
Upon the second argument, the government, recognizing the force
of the decision in Towne v. Eisner, supra, and virtually
abandoning the contention that a stock dividend increases the
interest of the stockholder or otherwise enriches him, insisted as
an alternative that, by the true construction of the Act of 1916,
the tax is imposed not upon the stock dividend, but rather upon the
stockholder's share of the undivided profits previously accumulated
by the corporation, the tax being levied as a matter of convenience
at the time such profits become manifest through the stock
dividend. If so construed, would the act be constitutional?
That Congress has power to tax shareholders upon their property
interests in the stock of corporations is beyond question, and that
such interests might be valued in view of the condition of the
company, including its accumulated and undivided profits, is
equally clear. But that this would be taxation of property because
of ownership, and hence would require apportionment under the
provisions of the Constitution, is settled beyond peradventure by
previous decisions of this Court.
The government relies upon Collector v.
Hubbard , (1870) Page 252 U. S. 218 12 Wall. 1, which arose under § 117 of the Act of June 30, 1864,
c. 173, 13 Stat. 223, 282, providing that
"The gains and profits of all companies, whether incorporated or
partnership, other than the companies specified in that section,
shall be included in estimating the annual gains, profits, or
income of any person, entitled to the same, whether divided or
otherwise."
The court held an individual taxable upon his proportion of the
earnings of a corporation although not declared as dividends and
although invested in assets not in their nature divisible.
Conceding that the stockholder for certain purposes had no title
prior to dividend declared, the court nevertheless said (p. 79 U. S. 18 ):
"Grant all that, still it is true that the owner of a share of
stock in a corporation holds the share with all its incidents, and
that among those incidents is the right to receive all future
dividends -- that is, his proportional share of all profits not
then divided. Profits are incident to the share to which the owner
at once becomes entitled provided he remains a member of the
corporation until a dividend is made. Regarded as an incident to
the shares, undivided profits are property of the shareholder, and
as such are the proper subject of sale, gift, or devise. Undivided
profits invested in real estate, machinery, or raw material for the
purpose of being manufactured are investments in which the
stockholders are interested, and when such profits are actually
appropriated to the payment of the debts of the corporation, they
serve to increase the market value of the shares, whether held by
the original subscribers or by assignees."
Insofar as this seems to uphold the right of Congress to tax
without apportionment a stockholder's interest in accumulated
earnings prior to dividend declared, it must be regarded as
overruled by Pollock v. Farmers' Loan & Trust Co., 158 U. S. 601 , 158 U. S.
627 -628, 158 U. S. 637 .
Conceding Collector v. Hubbard was inconsistent with the
doctrine of that case, because it sustained a direct tax upon
property not apportioned Page 252 U. S. 219 among the states, the government nevertheless insists that the
sixteenth Amendment removed this obstacle, so that now the Hubbard case is authority for the power of Congress to
levy a tax on the stockholder's share in the accumulated profits of
the corporation even before division by the declaration of a
dividend of any kind. Manifestly this argument must be rejected,
since the amendment applies to income only, and what is called the
stockholder's share in the accumulated profits of the company is
capital, not income. As we have pointed out, a stockholder has no
individual share in accumulated profits, nor in any particular part
of the assets of the corporation, prior to dividend declared.
Thus, from every point of view, we are brought irresistibly to
the conclusion that neither under the Sixteenth Amendment nor
otherwise has Congress power to tax without apportionment a true
stock dividend made lawfully and in good faith, or the accumulated
profits behind it, as income of the stockholder. The Revenue Act of
1916, insofar as it imposes a tax upon the stockholder because of
such dividend, contravenes the provisions of Article I, § 2, cl. 3,
and Article I, § 9, cl. 4, of the Constitution, and to this extent
is invalid notwithstanding the Sixteenth Amendment. Judgment affirmed. *
" Title I. -- Income Tax" " Part I. -- On Individuals" "Sec. 2. (a) That, subject only to such exemptions and
deductions as are hereinafter allowed, the net income of a taxable
person shall include gains, profits, and income derived, . . . also
from interest, rent, dividends, securities, or the transaction of
any business carried on for gain or profit, or gains or profits and
income derived from any source whatever: Provided, that
the term 'dividends' as used in this title shall be held to mean
any distribution made or ordered to be made by a corporation, . . .
out of its earnings or profits accrued since March first, nineteen
hundred and thirteen, and payable to its shareholders, whether, in
cash or in stock of the corporation, . . . which stock dividend
shall be considered income, to the amount of its cash value."
MR. JUSTICE HOLMES, dissenting.
I think that Towne v. Eisner, 245 U.
S. 418 , was right in its reasoning and result, and that,
on sound principles, the stock dividend was not income. But it was
clearly intimated in that case that the construction of the statute
then before the Court might be different from that of the
Constitution. 245 U.S. 245 U. S. 425 .
I think that the word "incomes" in the Sixteenth Amendment should
be read in Page 252 U. S. 220 "a sense most obvious to the common understanding at the time of
its adoption." Bishop v. State, 149 Ind. 223, 230; State v. Butler, 70 Fla. 102, 133. For it was for public
adoption that it was proposed. McCulloch v.
Maryland , 4 Wheat. 316, 17 U. S. 407 .
The known purpose of this Amendment was to get rid of nice
questions as to what might be direct taxes, and I cannot doubt that
most people not lawyers would suppose when they voted for it that
they put a question like the present to rest. I am of opinion that
the Amendment justifies the tax. See Tax Commissioner v.
Putnam, 227 Mass. 522, 532, 533.
MR. JUSTICE DAY concurs in this opinion.
MR. JUSTICE BRANDEIS delivered the following opinion, in which
MR. JUSTICE CLARKE concurred.
Financiers, with the aid of lawyers, devised long ago two
different methods by which a corporation can, without increasing
its indebtedness, keep for corporate purposes accumulated profits,
and yet, in effect, distribute these profits among its
stockholders. One method is a simple one. The capital stock is
increased; the new stock is paid up with the accumulated profits,
and the new shares of paid-up stock are then distributed among the
stockholders pro rata as a dividend. If the stockholder
prefers ready money to increasing his holding of the stock in the
company, he sells the new stock received as a dividend. The other
method is slightly more complicated. .arrangements are made for an
increase of stock to be offered to stockholders pro rata at par, and at the same time for the payment of a cash dividend
equal to the amount which the stockholder will be required to pay
to Page 252 U. S. 221 the company, if he avails himself of the right to subscribe for
his pro rata of the new stock. If the stockholder takes
the new stock, as is expected, he may endorse the dividend check
received to the corporation, and thus pay for the new stock. In
order to ensure that all the new stock so offered will be taken,
the price at which it is offered is fixed far below what it is
believed will be its market value. If the stockholder prefers ready
money to an increase of his holdings of stock, he may sell his
right to take new stock pro rata, which is evidenced by an
assignable instrument. In that event the purchaser of the rights
repays to the corporation, as the subscription price of the new
stock, an amount equal to that which it had paid as a cash dividend
to the stockholder.
Both of these methods of retaining accumulated profits while in
effect distributing them as a dividend had been in common use in
the United States for many years prior to the adoption of the
Sixteenth Amendment. They were recognized equivalents. Whether a
particular corporation employed one or the other method was
determined sometimes by requirements of the law under which the
corporation was organized; sometimes it was determined by
preferences of the individual officials of the corporation, and
sometimes by stock market conditions. Whichever method was
employed, the resultant distribution of the new stock was commonly
referred to as a stock dividend. How these two methods have been
employed may be illustrated by the action in this respect (as
reported in Moody's Manual, 1918 Industrial, and the Commercial and
Financial Chronicle) of some of the Standard Oil companies since
the disintegration pursuant to the decision of this Court in 1911. Standard Oil Co. v. United States, 221 U. S.
1 .
(a) Standard Oil Co. (of Indiana), an Indiana corporation. It
had on December 31, 1911, $1,000,000 capital stock (all common),
and a large surplus. On May 15, Page 252 U. S. 222 1912, it increased its capital stock to $30,000,000, and paid a
simple stock dividend of 2,900 percent in stock. [ Footnote 1 ]
(b) Standard Oil Co. (of Nebraska), a Nebraska corporation. It
had on December 31, 1911, $600,000 capital stock (all common), and
a substantial surplus. On April 15, 1912, it paid a simple stock
dividend of 33 1/3 percent, increasing the outstanding capital to
$800,000. During the calendar year 1912, it paid cash dividends
aggregating 20 percent, but it earned considerably more, and had at
the close of the year again a substantial surplus. On June 20,
1913, it declared a further stock dividend of 25 percent, thus
increasing the capital to $1,000,000. [ Footnote 2 ]
(c) The Standard Oil Co. (of Kentucky), a Kentucky corporation.
It had on December 31, 1913, $1,000,000 capital stock (all common)
and $3,701,710 surplus. Of this surplus, $902,457 had been earned
during the calendar year 1913, the net profits of that year having
been $1,002,457 and the dividends paid only $100,000 (10 percent).
On December 22, 1913, a cash dividend of $200 per share was
declared payable on February 14, 1914, to stockholders of record
January 31, 1914, and these stockholders were offered the right to
subscribe for an equal amount of new stock at par and to apply the
cash dividend in payment therefor. The outstanding stock was thus
increased to $3,000,000. During the calendar years 1914, 1915, and
1916, quarterly dividends were paid on this stock at an annual rate
of between 15 percent and 20 percent, but the company's surplus
increased by $2,347,614, so that, on December 31, 1916, it had a
large surplus over its $3,000,000 capital stock. On December 15,
1916, the company issued a circular to the stockholders,
saying:
"The company's business for this year has shown a Page 252 U. S. 223 very good increase in volume and a proportionate increase in
profits, and it is estimated that, by January 1, 1917, the company
will have a surplus of over $4,000,000. The board feels justified
in stating that, if the proposition to increase the capital stock
is acted on favorably, it will be proper in the near future to
declare a cash dividend of 100 percent and to allow the
stockholders the privilege pro rata according to their
holdings, to purchase the new stock at par, the plan being to allow
the stockholders, if they desire, to use their cash dividend to pay
for the new stock."
The increase of stock was voted. The company then paid a cash
dividend of 100 percent, payable May 1, 1917, again offering to
such stockholders the right to subscribe for an equal amount of new
stock at par and to apply the cash dividend in payment
therefor.
Moody's Manual, describing the transaction with exactness, says
first that the stock was increased from $3,000,000 to $6,000,000,
"a cash dividend of 100 percent, payable May 1, 1917, being
exchanged for one share of new stock, the equivalent of a 100
percent stock dividend." But later in the report giving, as
customary in the Manual, the dividend record of the company, the
Manual says: "A stock dividend of 200 percent was paid February 14,
1914, and one of 100 percent on May 1, 1197." And, in reporting
specifically the income account of the company for a series of
years ending December 31, covering net profits, dividends paid, and
surplus for the year, it gives, as the aggregate of dividends for
the year 1917, $660,000 (which was the aggregate paid on the
quarterly cash dividend -- 5 percent January and April; 6 percent
July and October), and adds in a note: "In addition, a stock
dividend of 100 percent was paid during the year." [ Footnote 3 ] The Wall Street Journal of Page 252 U. S. 224 May 2, 1917, p. 2, quotes the 1917 "high" price for Standard Oil
of Kentucky as "375 ex stock dividend."
It thus appears that, among financiers and investors, the
distribution of the stock, by whichever method effected, is called
a stock dividend; that the two methods by which accumulated profits
are legally retained for corporate purposes and at the same time
distributed as dividends are recognized by them to be equivalents,
and that the financial results to the corporation and to the
stockholders of the two methods are substantially the same, unless
a difference results from the application of the federal income tax
law.
Mrs. Macomber, a citizen and resident of New York, was, in the
year 1916, a stockholder in the Standard Oil Company (of
California), a corporation organized under the laws of California
and having its principal place of business in that state. During
that year, she received from the company a stock dividend
representing profits earned since March 1, 1913. The dividend was
paid by direct issue of the stock to her according to the simple
method described above, pursued also by the Indiana and Nebraska
companies. In 1917, she was taxed under the federal law on the
stock dividend so received at its par value of $100 a share, as
income received during the year 1916. Such a stock dividend is
income, as distinguished from capital, both under the law of New
York and under the law of California, because in both states every
dividend representing profits is deemed to be income, whether paid
in cash or in stock. It had been so held in New York, where the
question arose as between life tenant and remainderman, Lowry
v. Farmers' Loan & Trust Co., 172 N.Y. 137; Matter of
Osborne, 209 N.Y. 450, and also, where the question arose in
matters of taxation, People v. Glynn, Page 252 U. S. 225 130 App.Div. 332, 198 N.Y. 605. It has been so held in
California, where the question appears to have arisen only in
controversies between life tenant and remainderman. Estate of
Duffill, 58 Cal.Dec. 97, 180 Cal. 748.
It is conceded that, if the stock dividend paid to Mrs. Macomber
had been made by the more complicated method pursued by the
Standard Oil Company of Kentucky -- that is, issuing rights to take
new stock pro rata and paying to each stockholder
simultaneously a dividend in cash sufficient in amount to enable
him to pay for this pro rata of new stock to be purchased
-- the dividend so paid to him would have been taxable as income,
whether he retained the cash or whether he returned it to the
corporation in payment for his pro rata of new stock. But
it is contended that, because the simple method was adopted of
having the new stock issued direct to the stockholders as paid-up
stock, the new stock is not to be deemed income, whether she
retained it or converted it into cash by sale. If such a different
result can flow merely from the difference in the method pursued,
it must be because Congress is without power to tax as income of
the stockholder either the stock received under the latter method
or the proceeds of its sale, for Congress has, by the provisions in
the Revenue Act of 1916, expressly declared its purpose to make
stock dividends, by whichever method paid, taxable as income.
The Sixteenth Amendment, proclaimed February 25, 1913,
declares:
"The Congress shall have power to lay and collect taxes on
incomes, from whatever source derived, without apportionment among
the several states, and without regard to any census or
enumeration."
The Revenue Act of September 8, 1916, c. 463, § 2a, 39 Stat.
756, 757, provided:
"That the term 'dividends' as used in this title shall Page 252 U. S. 226 be held to mean any distribution made or ordered to be made by a
corporation, . . . out of its earnings or profits accrued since
March first, nineteen hundred and thirteen, and payable to its
shareholders, whether in cash or in stock of the corporation, . . .
which stock dividend shall be considered income, to the amount of
its cash value."
Hitherto, powers conferred upon Congress by the Constitution
have been liberally construed, and have been held to extend to
every means appropriate to attain the end sought. In determining
the scope of the power, the substance of the transaction, not its
form, has been regarded. Martin v.
Hunter , 1 Wheat. 304, 14 U. S. 326 ; McCulloch v.
Maryland , 4 Wheat. 316, 17 U. S. 407 , 17 U. S. 415 ; Brown v.
Maryland , 12 Wheat. 419, 25 U. S. 446 ; Craig v.
Missouri , 4 Pet. 410, 29 U. S. 433 ; Jarrolt v. Moberly, 103 U. S. 580 , 103 U. S.
585 -587; Legal Tender Case, 110 U.
S. 421 , 110 U. S. 444 ; Lithograph Co. v. Sarony, 111 U. S.
53 , 111 U. S. 58 ; United States v. Realty Co., 163 U.
S. 427 , 163 U. S.
440 -442; South Carolina v. United States, 199 U. S. 437 , 199 U. S.
448 -449. Is there anything in the phraseology of the
Sixteenth Amendment or in the nature of corporate dividends which
should lead to a departure from these rules of construction and
compel this Court to hold that Congress is powerless to prevent a
result so extraordinary as that here contended for by the
stockholder? First. The term "income," when applied to the
investment of the stockholder in a corporation, had, before the
adoption of the Sixteenth Amendment, been commonly understood to
mean the returns from time to time received by the stockholder from
gains or earnings of the corporation. A dividend received by a
stockholder from a corporation may be either in distribution of
capital assets or in distribution of profits. Whether it is the one
or the other is in no way affected by the medium in which it is
paid, nor by the method or means through which the particular thing
distributed as a dividend was procured. If the Page 252 U. S. 227 dividend is declared payable in cash, the money with which to
pay it is ordinarily taken from surplus cash in the treasury. But
(if there are profits legally available for distribution and the
law under which the company was incorporated so permits) the
company may raise the money by discounting negotiable paper, or by
selling bonds, scrip or stock of another corporation then in the
treasury, or by selling its own bonds, scrip or stock then in the
treasury, or by selling its own bonds, scrip or stock issued
expressly for that purpose. How the money shall be raised is wholly
a matter of financial management. The manner in which it is raised
in no way affects the question whether the dividend received by the
stockholder is income or capital, nor can it conceivably affect the
question whether it is taxable as income.
Likewise whether a dividend declared payable from profits shall
be paid in cash or in some other medium is also wholly a matter of
financial management. If some other medium is decided upon, it is
also wholly a question of financial management whether the
distribution shall be, for instance, in bonds, scrip or stock of
another corporation or in issues of its own. And if the dividend is
paid in its own issues, why should there be a difference in result
dependent upon whether the distribution was made from such
securities then in the treasury or from others to be created and
issued by the company expressly for that purpose? So far as the
distribution may be made from its own issues of bonds, or preferred
stock created expressly for the purpose, it clearly would make no
difference, in the decision of the question whether the dividend
was a distribution of profits, that the securities had to be
created expressly for the purpose of distribution. If a dividend
paid in securities of that nature represents a distribution of
profits, Congress may, of course, tax it as income of the
stockholder. Is the result different where the security distributed
is common stock? Page 252 U. S. 228 Suppose that a corporation having power to buy and sell its own
stock purchases, in the interval between its regular dividend
dates, with moneys derived from current profits, some of its own
common stock as a temporary investment, intending at the time of
purchase to sell it before the next dividend date and to use the
proceeds in paying dividends, but later, deeming it inadvisable
either to sell this stock or to raise by borrowing the money
necessary to pay the regular dividend in cash, declares a dividend
payable in this stock; can anyone doubt that, in such a case, the
dividend in common stock would be income of the stockholder and
constitutionally taxable as such? See Green v. Bissell, 79
Conn. 547; Leland v. Hayden, 102 Mass. 542. And would it
not likewise be income of the stockholder subject to taxation if
the purpose of the company in buying the stock so distributed had
been from the beginning to take it off the market and distribute it
among the stockholders as a dividend, and the company actually did
so? And, proceeding a short step further, suppose that a
corporation decided to capitalize some of its accumulated profits
by creating additional common stock and selling the same to raise
working capital, but after the stock has been issued and
certificates therefor are delivered to the bankers for sale,
general financial conditions make it undesirable to market the
stock, and the company concludes that it is wiser to husband, for
working capital, the cash which it had intended to use in paying
stockholders a dividend, and, instead, to pay the dividend in the
common stock which it had planned to sell; would not the stock so
distributed be a distribution of profits, and hence, when received,
be income of the stockholder and taxable as such? If this be
conceded, why should it not be equally income of the stockholder,
and taxable as such, if the common stock created by capitalizing
profits had been originally created for the express purpose of
being distributed Page 252 U. S. 229 as a dividend to the stockholder who afterwards received it? Second. It has been said that a dividend payable in
bonds or preferred stock created for the purpose of distributing
profits may be income and taxable as such, but that the case is
different where the distribution is in common stock created for
that purpose. Various reasons are assigned for making this
distinction. One is that the proportion of the stockholder's
ownership to the aggregate number of the shares of the company is
not changed by the distribution. But that is equally true where the
dividend is paid in its bonds or in its preferred stock.
Furthermore, neither maintenance nor change in the proportionate
ownership of a stockholder in a corporation has any bearing upon
the question here involved. Another reason assigned is that the
value of the old stock held is reduced approximately by the value
of the new stock received, so that the stockholder, after receipt
of the stock dividend, has no more than he had before it was paid.
That is equally true whether the dividend be paid in cash or in
other property -- for instance, bonds, scrip, or preferred stock of
the company. The payment from profits of a large cash dividend, and
even a small one, customarily lowers the then market value of stock
because the undivided property represented by each share has been
correspondingly reduced. The argument which appears to be most
strongly urged for the stockholders is that, when a stock dividend
is made, no portion of the assets of the company is thereby
segregated for the stockholder. But does the issue of new bonds or
of preferred stock created for use as a dividend result in any
segregation of assets for the stockholder? In each case, he
receives a piece of paper which entitles him to certain rights in
the undivided property. Clearly, segregation of assets in a
physical sense is not an essential of income. The year's gains of a
partner is taxable as income although there likewise no Page 252 U. S. 230 segregation of his share in the gains from that of his partners
is had.
The objection that there has been no segregation is presented
also in another form. It is argued that, until there is a
segregation, the stockholder cannot know whether he has really
received gains, since the gains may be invested in plant or
merchandise or other property, and perhaps be later lost. But is
not this equally true of the share of a partner in the year's
profits of the firm or, indeed, of the profits of the individual
who is engaged in business alone? And is it not true also when
dividends are paid in cash? The gains of a business, whether
conducted by an individual, by a firm, or by a corporation are
ordinarily reinvested in large part. Many a cash dividend honestly
declared as a distribution of profits proves later to have been
paid out of capital because errors in forecast prevent correct
ascertainment of values. Until a business adventure has been
completely liquidated, it can never be determined with certainty
whether there have been profits unless the returns at least
exceeded the capital originally invested. Businessmen, dealing with
the problem practically, fix necessarily periods and rules for
determining whether there have been net profits -- that is, income
or gains. They protect themselves from being seriously misled by
adopting a system of depreciation charges and reserves. Then they
act upon their own determination whether profits have been made.
Congress, in legislating, has wisely adopted their practices as its
own rules of action. Third. The government urges that it would have been
within the power of Congress to have taxed as income of the
stockholder his pro rata share of undistributed profits
earned even if no stock dividend representing it had been paid.
Strong reasons may be assigned for such a view. See Collector v.
Hubbard , 12 Wall. 1. The undivided share of a
partner in the year's undistributed profits of his firm Page 252 U. S. 231 is taxable as income of the partner although the share in the
gain is not evidenced by any action taken by the firm. Why may not
the stockholder's interest in the gains of the company? The law
finds no difficulty in disregarding the corporate fiction whenever
that is deemed necessary to attain a just result. Linn Timber
Co. v. United States, 236 U. S. 574 . See Morawetz on Corporations, 2d ed., §§ 227-231; Cook on
Corporations, 7th ed., §§ 663, 664. The stockholder's interest in
the property of the corporation differs not fundamentally, but in
form only, from the interest of a partner in the property of the
firm. There is much authority for the proposition that, under our
law, a partnership or joint stock company is just as distinct and
palpable an entity in the idea of the law, as distinguished from
the individuals composing it, as is a corporations. [ Footnote 4 ] No reason appears, why Congress,
in legislating under a grant of power so comprehensive as that
authorizing the levy of an income tax, should be limited by the
particular view of the relation of the stockholder to the
corporation and its property which may, in the absence of
legislation, have been taken by this Court. But we have no occasion
to decide the question whether Congress might have taxed to the
stockholder his undivided share of the corporation's earnings. For
Congress has in this act limited the income tax to that share of
the stockholder in the earnings which is, in effect, distributed by
means of the stock dividend paid. In other words, to render the
stockholder taxable, there must be both earnings made and a
dividend paid. Neither earnings without dividend nor a dividend
without earnings subjects the Page 252 U. S. 232 stockholder to taxation under the Revenue Act of 1916. Fourth. The equivalency of all dividends representing
profits, whether paid of all dividends in stock, is so complete
that serious question of the taxability of stock dividends would
probably never have been made if Congress had undertaken to tax
only those dividends which represented profits earned during the
year in which the dividend was paid or in the year preceding. But
this Court, construing liberally not only the constitutional grant
of power but also the revenue Act of 1913, held that Congress might
tax, and had taxed, to the stockholder dividends received during
the year, although earned by the company long before, and even
prior to the adoption of the Sixteenth Amendment. Lynch v.
Hornby, 247 U. S. 339 .
[ Footnote 5 ] That rule, if
indiscriminatingly applied to all stock dividends representing
profits earned, might, in view of corporate practice, have worked
considerable hardship and have raised serious questions. Many
corporations, without legally capitalizing any part of their
profits, had assigned definitely some part or all of the annual
balances remaining after paying the usual cash dividends to the
uses to which permanent capital is ordinarily applied. Some of the
corporations doing this transferred such balances on their books to
"surplus" account -- distinguishing between such permanent
"surplus" and the "undivided profits" account. Other corporations,
without this formality, had assumed that the annual accumulating
balances carried as undistributed profits were to be treated as
capital permanently invested in the business. And still others,
without definite assumption of any kind, had Page 252 U. S. 233 so used undivided profits for capital purposes. To have made the
revenue law apply retroactively so as to reach such accumulated
profits, if and whenever it should be deemed desirable to
capitalize them legally by the issue of additional stock
distributed as a dividend to stockholders, would have worked great
injustice. Congress endeavored in the Revenue Act of 1916 to guard
against any serious hardship which might otherwise have arisen from
making taxable stock dividends representing accumulated profits. It
did not limit the taxability to stock dividends representing
profits earned within the tax year or in the year preceding, but it
did limit taxability to such dividends representing profits earned
since March 1, 1913. Thereby stockholders were given notice that
their share also in undistributed profits accumulating thereafter
was at some time to be taxed as income. And Congress sought by § 3
to discourage the postponement of distribution for the illegitimate
purpose of evading liability to surtaxes. Fifth. The decision of this Court that earnings made
before the adoption of the Sixteenth Amendment, but paid out in
cash dividend after its adoption, were taxable as income of the
stockholder involved a very liberal construction of the amendment.
To hold now that earnings both made and paid out after the adoption
of the Sixteenth Amendment cannot be taxed as income of the
stockholder, if paid in the form of a stock dividend, involves an
exceedingly narrow construction of it. As said by Mr. Chief Justice
Marshall in Brown v.
Maryland , 12 Wheat. 419, 25 U. S.
446 :
"To construe the power so as to impair its efficacy would tend
to defeat an object in the attainment of which the American public
took, and justly took, that strong interest which arose from a full
conviction of its necessity."
No decision heretofore rendered by this Court requires us to
hold that Congress, in providing for the taxation of Page 252 U. S. 234 stock dividends, exceeded the power conferred upon it by the
Sixteenth Amendment. The two cases mainly relied upon to show that
this was beyond the power of Congress are Towne v. Eisner, 245 U. S. 418 ,
which involved a question not of constitutional power, but of
statutory construction, and Gibbons v. Mahon, 136 U.
S. 549 , which involved a question arising between life
tenant and remainderman. So far as concerns Towne v.
Eisner, we have only to bear in mind what was there said (p. 245 U. S.
425 ): "But it is not necessarily true that income means
the same thing in the Constitution and the [an] act." [ Footnote 6 ] Gibbons v. Mahon is even less an authority for a narrow construction of the power to
tax incomes conferred by the Sixteenth Amendment. In that case, the
court was required to determine how, in the administration of an
estate in the District of Columbia, a stock dividend, representing
profits, received after the decedent's death, should be disposed of
as between life tenant and remainderman. The question was, in
essence, what shall the intention of the testator be presumed to
have been? On this question, there was great diversity of opinion
and practice in the courts of English-speaking countries. Three
well defined rules were then competing for acceptance. Two of these
involves an arbitrary rule of distribution, the third equitable
apportionment. See Cook on Corporations, 7th ed., §§
552-558.
1. The so-called English rule, declared in 1799 by Brander
v. Brander, 4 Ves. Jr. 800, that a dividend representing Page 252 U. S. 235 profits, whether in cash, stock or other property, belongs to
the life tenant if it was a regular or ordinary dividend, and
belongs to the remainderman if it was an extraordinary
dividend.
2. The so-called Massachusetts rule, declared in 1868 by Minot v. Paine, 99 Mass. 101, that a dividend representing
profits, whether regular, ordinary, or extraordinary, if in cash
belongs to the life tenant, and if in stock belongs to the
remainderman.
3. The so-called Pennsylvania rule, declared in 1857 by Earp's Appeal, 28 Pa. 368, that, where a stock dividend is
paid, the court shall inquire into the circumstances under which
the fund had been earned and accumulated out of which the dividend,
whether a regular, an ordinary, or an extraordinary one, was paid.
If it finds that the stock dividend was paid out of profits earned
since the decedent's death, the stock dividend belongs to the life
tenant; if the court finds that the stock dividend was paid from
capital or from profits earned before the decedent's death, the
stock dividend belongs to the remainderman.
This Court adopted in Gibbons v. Mahon as the rule of
administration for the District of Columbia the so-called
Massachusetts rule, the opinion being delivered in 1890 by Mr.
Justice Gray. Since then, the same question has come up for
decision in many of the states. The so-called Massachusetts rule,
although approved by this Court, has found favor in only a few
states. The so-called Pennsylvania rule, on the other hand, has
been adopted since by so many of the states (including New York and
California) that it has come to be known as the "American rule."
Whether, in view of these facts and the practical results of the
operation of the two rules as shown by the experience of the 30
years which have elapsed since the decision in Gibbons v.
Mahon, it might be desirable for this Court to reconsider the
question there decided, as Page 252 U. S. 236 some other courts have done ( see 29 Harvard Law Review
551), we have no occasion to consider in this case. For, as this
Court there pointed out (p. 136 U. S.
560 ), the question involved was one "between the owners
of successive interests in particular shares," and not, as in Bailey v. Railroad
Co. , 22 Wall. 604, a question
"between the corporation and the government, and [which]
depended upon the terms of a statute carefully framed to prevent
corporations from evading payment of the tax upon their
earnings."
We have, however, not merely argument; we have examples which
should convince us that "there is no inherent, necessary and
immutable reason why stock dividends should always be treated as
capital." Tax Commissioner v. Putnam, 227 Mass. 522, 533.
The Supreme Judicial Court of Massachusetts has steadfastly
adhered, despite ever-renewed protest, to the rule that every stock
dividend is, as between life tenant and remainderman, capital, and
not income. But, in construing the Massachusetts Income Tax
Amendment, which is substantially identical with the federal
amendment, that court held that the legislature was thereby
empowered to levy an income tax upon stock dividends representing
profits. The courts of England have, with some relaxation, adhered
to their rule that every extraordinary dividend is, as between life
tenant and remainderman, to be deemed capital. But, in 1913, the
Judicial Committee of the Privy Council held that a stock dividend
representing accumulated profits was taxable like an ordinary cash
dividend, Swan Brewery Co., Ltd. v. Rex, [1914] A.C. 231.
In dismissing the appeal, these words of the Chief Justice of the
Supreme Court of Western Australia were quoted (p. 236), which show
that the facts involved were identical with those in the case at
bar:
"Had the company distributed the �101,450 among the
shareholders, and had the shareholders repaid such sums to the
company as the price of the 81, 160 new shares, the duty on the
�101,450 Page 252 U. S. 237 would clearly have been payable. Is not this virtually the
effect of what was actually done? I think it is." Sixth. If stock dividends representing profits are held
exempt from taxation under the Sixteenth Amendment, the owners of
the most successful businesses in America will, as the facts in
this case illustrate, be able to escape taxation on a large part of
what is actually their income. So far as their profits are
represented by stock received as dividends, they will pay these
taxes not upon their income, but only upon the income of their
income. That such a result was intended by the people of the United
States when adopting the Sixteenth Amendment is inconceivable. Our
sole duty is to ascertain their intent as therein expressed.
[ Footnote 7 ] In terse,
comprehensive language befitting the Constitution, they empowered
Congress "to lay and collect taxes on incomes from whatever source
derived." They intended to include thereby everything which by
reasonable understanding can fairly be regarded as income. That
stock dividends representing profits are so regarded not only by
the plain people, but by investors and financiers and by most of
the courts of the country, is shown beyond peradventure by their
acts and by their utterances. It seems to me clear, therefore, that
Congress possesses the power which it exercised to make dividends
representing profits taxable as income whether the medium in which
the dividend is paid be cash or stock, and that it may define, as
it has done, what dividends representing Page 252 U. S. 238 profits shall be deemed income. It surely is not clear that the
enactment exceeds the power granted by the Sixteenth Amendment.
And, as this Court has so often said, the high prerogative of
declaring an act of Congress invalid should never be exercised
except in a clear case. [ Footnote
8 ]
"It is but a decent respect due to the wisdom, the integrity,
and the patriotism of the legislative body by which any law is
passed to presume in favor of its validity until its violation of
the Constitution is proved beyond all reasonable doubt." Ogden v.
Saunders , 12 Wheat. 213, 25 U. S.
269 .
MR. JUSTICE CLARKE concurs in this opinion.
[ Footnote 1 ]
Moody's p. 1544; Commercial and Financial Chronicle, Vol. 94, p.
831; Vol. 98, pp. 1005, 1076.
[ Footnote 2 ]
Moody's, p. 1548; Commercial and Financial Chronicle, Vol. 94,
p. 771; Vol. 96, p. 1428; Vol. 97, p. 1434; Vol. 98, p. 1541.
[ Footnote 3 ]
Moody's, p. 1547; Commercial and Financial Chronicle, Vol. 97,
pp. 1589, 1827, 1903; Vol. 98, pp. 76, 457; Vol. 103, p. 2348.
Poor's Manual of Industrials (1918), p. 2240, in giving the
"comparative income account" of the company, describes the 1914
dividend as "stock dividend paid (200 percent) -- $2,000,000," and
describes the 1917 dividend as "$3,000,000 special cash
dividend."
[ Footnote 4 ] See Some Judicial Myths, by Francis M. Burdick, 22
Harvard Law Review, 393, 394-396; The Firm as a Legal Person, by
William Hamilton Cowles, 57 Cent.L.J. 343, 348; The Separate
Estates of Non-Bankrupt Partners, by J. D. Brannan, 20 Harvard Law
Review, 589-592. Compare Harvard Law Review, Vol. 7, p.
426; Vol. 14, p. 222; Vol. 17, p. 194.
[ Footnote 5 ]
The hardship supposed to have resulted from such a decision has
been removed in the Revenue Act of 1916 as amended, by providing in
§ 31b that such cash dividends shall thereafter be exempt from
taxation if, before they are made, all earnings made since February
28, 1913, shall have been distributed. Act Oct. 3, 1917, c. 63, §
1211, 40 Stat. 338, Act Feb. 24, 1919, c. 18, § 201(b), 40 Stat.
1059.
[ Footnote 6 ] Compare Rugg, C.J., in Tax Commissioner v.
Putnam, 227 Mass. 522, 533:
"However strong such an argument might be when urged as to the
interpretation of a statute, it is not of prevailing force as to
the broad considerations involved in the interpretation of an
amendment to the Constitution adopted under the conditions
preceding and attendant upon the ratification of the forty-fourth
amendment."
[ Footnote 7 ] Compare Rugg, C.J., Tax Commissioner v.
Putnam, 227 Mass. 522, 524:
"It is a grant from the sovereign people, and not the exercise
of a delegated power. It is a statement of general principles, and
not a specification of details. Amendments to such a charter of
government ought to be construed in the same spirit and according
to the same rules as the original. It is to be interpreted as the
Constitution of a state, and not as a statute or an ordinary piece
of legislation. Its words must be given a construction adapted to
carry into effect its purpose."
[ Footnote 8 ]
"It is our duty, when required in the regular course of judicial
proceedings, to declare an act of Congress void if not within the
legislative power of the United States; but this declaration should
never be made except in a clear case. Every possible presumption is
in favor of the validity of a statute, and this continues until the
contrary is shown beyond a rational doubt. One branch of the
government cannot encroach on the domain of another without danger.
The safety of our institutions depends in no small degree on a
strict observance of this salutary rule." The Sinking Fund Cases, 99 U. S.
700 , 99 U. S. 718 (1878). See also Legal Tender
Cases , 12 Wall. 457, 79 U. S. 531 (1870); Trade-Mark Cases, 100 U. S.
82 , 100 U. S. 96 (1879). See American Doctrine of Constitutional Law by
James B. Thayer, 7 Harvard Law Review 129, 142.
"With the exception of the extraordinary decree rendered in the Dred Scott case, . . . all of the acts or the portions of
the acts of Congress invalidated by the courts before 1868 related
to the organization of courts. Denying the power of Congress to
make notes legal tender seems to be the first departure from this
rule."
Haines, American Doctrine of Judicial Supremacy, p. 288. The
first legal tender decision was overruled in part two years later
(1870), Legal Tender
Cases , 12 Wall. 457, and again in 1883, Legal
Tender Case, 110 U. S. 421 . | In Eisner v. Macomber, the U.S. Supreme Court ruled that Congress cannot tax stock dividends as income without apportionment, even with the 16th Amendment. The Court defined income as gains from capital or labor and distinguished it from mere growth in value. This decision interpreted the 16th Amendment narrowly, prioritizing original constitutional principles. |
Taxes | Lucas v. Earl | https://supreme.justia.com/cases/federal/us/281/111/ | U.S. Supreme Court Lucas v. Earl, 281
U.S. 111 (1930) Lucas v. Earl No. 99 Argued March 3, 1930 Decided March 17,
1930 281
U.S. 111 CERTIORARI TO THE CIRCUIT COURT OF
APPEALS FOR THE NINTH
CIRCUIT Syllabus Under the Revenue Act of 1918, which taxes the income of every
individual, including "income derived from salaries, wages, or
compensation for personal service . . . of whatever kind and in
whatever form paid," the income of a husband by way of salary and
attorney's fees is taxable to him notwithstanding that, by a
contract between him and his wife, assumed to be valid in
California where they reside, all their several earnings, including
salaries and fees, are to be received, held, and owned by both as
joint tenants. P. 281 U. S.
113 .
30 F.2d 898 reversed.
Certiorari, 280 U.S. 538, to review a judgment of the circuit
court of appeals which reversed a decision of the Board of Tax
Appeals upholding a tax upon the respondent's income. Page 281 U. S. 113 MR. JUSTICE HOLMES delivered the opinion of the Court.
This case presents the question whether the respondent, Earl,
could be taxed for the whole of the salary and attorney's fees
earned by him in the years 1920 and 1921, or should be taxed for
only a half of them in view of a contract with his wife which we
shall mention. The Commissioner of Internal Revenue and the Board
of Tax Appeals imposed a tax upon the whole, but their decision was
reversed by the circuit court of appeals, 30 F.2d 898. A writ of
certiorari was granted by this Court.
By the contract, made in 1901, Earl and his wife agreed
"that any property either of us now has or may hereafter Page 281 U. S. 114 acquire . . . in any way, either by earnings (including
salaries, fees, etc.), or any rights by contract or otherwise,
during the existence of our marriage, or which we or either of us
may receive by gift, bequest, devise, or inheritance, and all the
proceeds, issues, and profits of any and all such property shall be
treated and considered, and hereby is declared to be received,
held, taken, and owned by us as joint tenants, and not otherwise,
with the right of survivorship."
The validity of the contract is not questioned, and we assume it
to be unquestionable under the law of the California, in which the
parties lived. Nevertheless we are of opinion that the Commissioner
and Board of Tax Appeals were right.
The Revenue Act of 1918 approved February 24, 1919, c. 18, §§
210, 211, 212(a), 213(a), 40 Stat. 1057, 1062, 1064, 1065, imposes
a tax upon the net income of every individual including "income
derived from salaries, wages, or compensation for personal service
. . . of whatever kind and in whatever form paid," § 213(a). The
provisions of the Revenue Act of 1921, c. 136, 42 Stat. 227, 233,
237, 238, in sections bearing the same numbers are similar to those
of the above. A very forcible argument is presented to the effect
that the statute seeks to tax only income beneficially received,
and that, taking the question more technically, the salary and fees
became the joint property of Earl and his wife on the very first
instant on which they were received. We well might hesitate upon
the latter proposition, because, however the matter might stand
between husband and wife, he was the only party to the contracts by
which the salary and fees were earned, and it is somewhat hard to
say that the last step in the performance of those contracts could
be taken by anyone but himself alone. But this case is not to be
decided by attenuated subtleties. It turns on the import and
reasonable construction of the taxing act. There is no doubt that
the statute could tax salaries to those who earned them, and Page 281 U. S. 115 provide that the tax could not be escaped by anticipatory
arrangements and contracts, however skillfully devised, to prevent
the salary when paid from vesting even for a second in the man who
earned it. That seems to us the import of the statute before us,
and we think that no distinction can be taken according to the
motives leading to the arrangement by which the fruits are
attributed to a different tree from that on which they grew.
Judgment reversed.
THE CHIEF JUSTICE took no part in this case. | The Supreme Court ruled that a husband's income from salary and attorney's fees is taxable to him, despite a contract with his wife treating their earnings as joint property. The Revenue Act of 1918 taxes the income of individuals, including salaries and compensation for personal services, and the Court interpreted the Act to tax income to those who earned it, regardless of subsequent arrangements. |
Taxes | Bailey v. Drexel Furniture Co. | https://supreme.justia.com/cases/federal/us/259/20/ | U.S. Supreme Court Bailey v. Drexel Furniture Co., 259 U.S.
20 (1922) Bailey v. Drexel Furniture
Company No. 657 Argued March 7, 8,
1922 Decided May 15, 1922 259 U.S.
20 ERROR TO THE DISTRICT COURT OF THE
UNITED STATES FOR THE WESTERN DISTRICT OF NORTH
CAROLINA Syllabus 1. An act of Congress which clearly, on its face, is designed to
penalize, and thereby to discourage or suppress, conduct the
regulation of which is reserved by the Constitution exclusively to
the States, cannot be sustained under the federal taxing power by
calling the penalty a tax. P. 259 U. S. 37 . Veazie Bank v.
Fenno , 8 Wall. 533; McCray v. United
States, 195 U. S. 27 ; Flint v. Stone Tracy Co., 220 U.
S. 107 , and United States v. Doremus, 249 U. S. 86 ,
distinguished. Page 259 U. S. 21 2. Title XII of the Revenue Act of February 24, 1919, c. 18, 40
Stat. 1138, entitled "Tax on Employment of Child Labor," provides
that any person operating (a) any mine or quarry in which children
under the age of sixteen years have been employed or permitted to
work during any portion of the taxable year, or (b) any mill,
cannery, workshop or factory in which children under the age of
fourteen years have been employed or permitted to work, or children
between the ages of fourteen and sixteen have been employed or
permitted to work more than eight hour in any day, or more than six
days in any week, or after 7 o'clock P.M. or before 6 o'clock A.M.,
during any portion of the taxable year, shall pay for such taxable
year an excise equivalent to ten percent of the entire net profits
received or accrued for such year from the sale or disposition of
the product of his mine or other establishment, but relieves from
liability one who employs a child believing him to be above the
specified ages, relying on a certificate issued under authority of
a board consisting of the Secretary of the Treasury, the
Commissioner of Internal Revenue and the Secretary of Labor, or
under the laws of a State designated by them. Provision is made for
inspection of the mines, etc., by or under authority of the
Commissioner of Internal Revenue, or by or under authority of the
Secretary of Labor upon request of the Commissioner, and
obstruction of such inspections is made punishable by fine and
imprisonment. Held unconstitutional. P. 259 U. S.
34 .
276 Fed. 452, affirmed.
Error to a judgment of the District Court for the plaintiff in
an action against an internal revenue collector to recover the
amount of a tax previously paid under protest. Page 259 U. S. 34 MR. CHIEF JUSTICE TAFT delivered the opinion of the Court.
This case presents the question of the constitutional validity
of the Child Labor Tax Law. The plaintiff below, the Drexel
Furniture Company, is engaged in the manufacture of furniture in
the Western District of North Carolina. On September 20, 1921, it
received a notice from Bailey, United States Collector of Internal
Revenue for the District, that it had been assessed $6,312.79 for
having during the taxable year 1919 employed and permitted to work
in its factory a boy under fourteen years of age, thus incurring
the tax of ten percent on its net profits for that year. The
Company paid the tax under protest, and after rejection of its
claim for a refund, brought this suit. On demurrer to an amended
complaint, judgment was entered for the Company against the
Collector for the full amount with interest. The writ of error is
prosecuted by the Collector direct from the District Court under §
238 of the Judicial Code.
The Child Labor Tax Law is Title XII of an act entitled "An Act
To provide revenue, and for other purposes", approved February 24,
1919, c. 18, 40 Stat. 1057, 1138. The heading of the title is "Tax
on Employment of Child Labor". It begins with § 1200, and includes
eight sections. Section 1200 is as follows:
"SEC. 1200. That every person (other than a bona fide boys' or
girls' canning club recognized by the Agricultural Department of a
State and of the United States) operating (a) any mine or quarry
situated in the United States in which children under the age of
sixteen years have been employed or permitted to work during any
portion of the taxable year; or (b) any mill, cannery, workshop,
factory, or manufacturing establishment situated in the United
States in which children under the age of fourteen years have been
employed or permitted to Page 259 U. S. 35 work, or children between the ages of fourteen and sixteen have
been employed or permitted to work more than eight hours in any day
or more than six days in any week, or after the hour of seven
o'clock post meridian, or before the hour of six o'clock ante
meridian, during any portion of the taxable year, shall pay for
each taxable year, in addition to all other taxes imposed by law,
an excise tax equivalent to 10 percentum of the entire net profits
received or accrued for such year from the sale or disposition of
the product of such mine, quarry, mill, cannery, workshop, factory,
or manufacturing establishment."
Section 1203 relieves from liability to the tax anyone who
employs a child, believing him to be of proper age, relying on a
certificate to this effect issued by persons prescribed by a Board
consisting of the Secretary of the Treasury, the Commissioner of
Internal Revenue and the Secretary of Labor, or issued by state
authorities. The section also provides in paragraph (b) that
"the tax imposed by this title shall not be imposed in the case
of any person who proves to the satisfaction of the Secretary that
the only employment or permission to work which but for this
section would subject him to the tax has been of a child employed
or permitted to work under a mistake of fact as to the age of such
child, and without intention to evade the tax."
Section 1206 gives authority to the Commissioner of Internal
Revenue, or any other person authorized by him, "to enter and
inspect at any time any mine, quarry, mill, cannery, workshop,
factory, or manufacturing establishment." The Secretary of Labor,
or any person whom he authorizes, is given like authority in order
to comply with a request of the Commissioner to make such
inspection and report the same. Any person who refuses entry or
obstructs inspection is made subject to fine or imprisonment or
both. Page 259 U. S. 36 The law is attacked on the ground that it is a regulation of the
employment of child labor in the States -- an exclusively state
function under the Federal Constitution and within the reservations
of the Tenth Amendment. It is defended on the ground that it is a
mere excise tax levied by the Congress of the United States under
its broad power of taxation conferred by § 8, Article I, of the
Federal Constitution. We must construe the law and interpret the
intent and meaning of Congress from the language of the act. The
words are to be given their ordinary meaning unless the context
shows that they are differently used. Does this law impose a tax
with only that incidental restraint and regulation which a tax must
inevitably involve? Or does it regulate by the use of the so-called
tax as a penalty? If a tax, it is clearly an excise. If it were an
excise on a commodity or other thing of value, we might not be
permitted under previous decisions of this court to infer solely
from its heavy burden that the act intends a prohibition, instead
of a tax. But this act is more. It provides a heavy exaction for a
departure from a detailed and specified course of conduct in
business. That course of business is that employers shall employ in
mines and quarries children of an age greater than sixteen years;
in mills and factories, children of an age greater than fourteen
years, and shall prevent children of less than sixteen years in
mills and factories from working more than eight hours a day or six
days in the week. If an employer departs from this prescribed
course of business, he is to pay to the Government one-tenth of his
entire net income in the business for a full year. The amount is
not to be proportioned in any degree to the extent or frequency of
the departures, but is to be paid by the employer in full measure
whether he employs five hundred children for a year, or employs
only one for a day. Moreover, if he does not know the child is
within the named age limit, he is not to pay; Page 259 U. S. 37 that is to say, it is only where he knowingly departs from the
prescribed course that payment is to be exacted. Scienter is associated with penalties, not with taxes. The employer's
factory is to be subject to inspection at any time not only by the
taxing officers of the Treasury, the Department normally charged
with the collection of taxes, but also by the Secretary of Labor
and his subordinates, whose normal function is the advancement and
protection of the welfare of the workers. In the light of these
features of the act, a court must be blind not to see that the
so-called tax is imposed to stop the employment of children within
the age limits prescribed. Its prohibitory and regulatory effect
and purpose are palpable. All others can see and understand this.
How can we properly shut our minds to it?
It is the high duty and function of this court in cases
regularly brought to its bar to decline to recognize or enforce
seeming laws of Congress, dealing with subjects not entrusted to
Congress, but left or committed by the supreme law of the land to
the control of the States. We cannot avoid the duty even though it
require us to refuse to give effect to legislation designed to
promote the highest good. The good sought in unconstitutional
legislation is an insidious feature because it leads citizens and
legislators of good purpose to promote it without thought of the
serious breach it will make in the ark of our covenant or the harm
which will come from breaking down recognized standards. In the
maintenance of local self-government, on the one hand, and the
national power, on the other, our country has been able to endure
and prosper for near a century and a half.
Out of a proper respect for the acts of a coordinate branch of
the Government, this court has gone far to sustain taxing acts as
such, even though there has been ground for suspecting from the
weight of the tax it was intended to destroy its subject. But, in
the act before Page 259 U. S. 38 us, the presumption of validity cannot prevail, because the
proof of the contrary is found on the very face of its provisions.
Grant the validity of this law, and all that Congress would need to
do, hereafter, in seeking to take over to its control anyone of the
great number of subjects of public interest, jurisdiction of which
the States have never parted with, and which are reserved to them
by the Tenth Amendment, would be to enact a detailed measure of
complete regulation of the subject and enforce it by a so-called
tax upon departures from it. To give such magic to the word "tax"
would be to break down all constitutional limitation of the powers
of Congress and completely wipe out the sovereignty of the
States.
The difference between a tax and a penalty is sometimes
difficult to define, and yet the consequences of the distinction in
the required method of their collection often are important. Where
the sovereign enacting the law has power to impose both tax and
penalty, the difference between revenue production and mere
regulation may be immaterial, but not so when one sovereign can
impose a tax only, and the power of regulation rests in another.
Taxes are occasionally imposed in the discretion of the legislature
on proper subjects with the primary motive of obtaining revenue
from them and with the incidental motive of discouraging them by
making their continuance onerous. They do not lose their character
as taxes because of the incidental motive. But there comes a time
in the extension of the penalizing features of the so-called tax
when it loses its character as such and becomes a mere penalty with
the characteristics of regulation and punishment. Such is the case
in the law before us. Although Congress does not invalidate the
contract of employment or expressly declare that the employment
within the mentioned ages is illegal, it does exhibit its intent
practically to achieve the latter result by adopting the criteria
of wrongdoing and imposing its principal consequence on those who
transgress its standard. Page 259 U. S. 39 The case before us cannot be distinguished from that of Hammer v. Dagenhart, 247 U. S. 251 .
Congress there enacted a law to prohibit transportation in
interstate commerce of goods made at a factory in which there was
employment of children within the same ages and for the same number
of hours a day and days in a week as are penalized by the act in
this case. This court held the law in that case to be void. It
said:
"In our view, the necessary effect of this act is, by means of a
prohibition against the movement in interstate commerce of ordinary
commercial commodities, to regulate the hours of labor of children
in factories and mines within the States, a purely state
authority."
In the case at the bar, Congress in the name of a tax which, on
the face of the act, is a penalty seeks to do the same thing, and
the effort must be equally futile.
The analogy of the Dagenhart Case is clear. The
congressional power over interstate commerce is, within its proper
scope, just as complete and unlimited as the congressional power to
tax, and the legislative motive in its exercise is just as free
from judicial suspicion and inquiry. Yet when Congress threatened
to stop interstate commerce in ordinary and necessary commodities,
unobjectionable as subjects of transportation, and to deny the same
to the people of a State in order to coerce them into compliance
with Congress' regulation of state concerns, the Court said this
was not, in fact, regulation of interstate commerce, but rather
that of State concerns, and was invalid. So here, the so-called tax
is a penalty to coerce people of a State to act as Congress wishes
them to act in respect of a matter completely the business of the
state government under the Federal Constitution. This case
requires, as did the Dagenhart case, the application of
the principle announced by Chief Justice Marshall in McCulloch v.
Maryland , 4 Wheat. 316, 17 U. S. 423 ,
in a much quoted passage: Page 259 U. S. 40 "Should Congress, in the execution of its powers, adopt measures
which are prohibited by the Constitution, or should Congress, under
the pretext of executing its powers, pass laws for the
accomplishment of objects not intrusted to the government, it would
become the painful duty of this tribunal, should a case requiring
such a decision come before it, to say that such an act was not the
law of the land."
But it is pressed upon us that this court has gone so far in
sustaining taxing measures the effect or tendency of which was to
accomplish purposes not directly within congressional power that we
are bound by authority to maintain this law.
The first of these is Veazie Bank v.
Fenno , 8 Wheat. 533. In that case, the validity of
a law which increased a tax on the circulating notes of persons and
state banks from one percentum to ten percentum was in question.
The main question was whether this was a direct tax to be
apportioned among the several States "according to their respective
numbers" This was answered in the negative. The second objection
was stated by the Court:
"It is insisted, however, that the tax in the case before us is
excessive, and so excessive as to indicate a purpose on the part of
Congress to destroy the franchise of the bank, and is, therefore,
beyond the constitutional power of Congress."
To this the Court answered (p. 21 U. S.
548 ):
"The first answer to this is that the judicial cannot prescribe
to the legislative departments of the government limitations upon
the exercise of its acknowledged powers. The power to tax may be
exercised oppressively upon persons, but the responsibility of the
legislature is not to the courts, but to the people by whom its
members are elected. So if a particular tax bears heavily upon a
corporation, or a class of corporations, it cannot, for that reason
only, be pronounced contrary to the Constitution. " Page 259 U. S. 41 It will be observed that the sole objection to the tax there was
its excessive character. Nothing else appeared on the face of the
act. It was an increase of a tax admittedly legal to a higher rate,
and that was all. There were no elaborate specifications on the
face of the act, as here, indicating the purpose to regulate
matters of state concern and jurisdiction through an exaction so
applied as to give it the qualities of a penalty for violation of
law, rather than a tax.
It should be noted, too, that the Court, speaking of the extent
of the taxing power, used these cautionary words (p. 21 U. S.
541 ):
"There are, indeed, certain virtual limitations, arising from
the principles of the Constitution itself. It would undoubtedly be
an abuse of the power if so exercised as to impair the separate
existence and independent self-government of the States, or if
exercised for ends inconsistent with the limited grants of power in
the Constitution."
But, more than this, what was charged to be the object of the
excessive tax was within the congressional authority, as appears
from the second answer which the Court gave to the objection. After
having pointed out the legitimate means taken by Congress to secure
a national medium or currency, the Court said (p. 549):
"Having thus, in the exercise of undisputed constitutional
powers, undertaken to provide a currency for the whole country, it
cannot be questioned that Congress may, constitutionally, secure
the benefit of it to the people by appropriate legislation. To this
end, Congress has denied the quality of legal tender to foreign
coins, and has provided by law against the imposition of
counterfeit and base coin on the community. To the same end,
Congress may restrain, by suitable enactments, the circulation as
money of any notes not issued under its own authority. Without this
power, indeed, its attempts to secure Page 259 U. S. 42 a sound and uniform currency for the country must be
futile."
The next case is that of McCray v. United States, 195 U. S. 27 . That,
like the Veazie Bank case, was the increase of an excise
tax upon a subject properly taxable in which the taxpayers claimed
that the tax had become invalid because the increase was excessive.
It was a tax on oleomargarine, a substitute for butter. The tax on
the white oleomargarine was one-quarter of a cent a pound, and on
the yellow oleomargarine was first two cents and was then by the
act in question increased to ten cents per pound. This court held
that the discretion of Congress in the exercise of its
constitutional powers to levy excise taxes could not be controlled
or limited by the Courts because the latter might deem the
incidence of the tax oppressive, or even destructive. It was the
same principle as that applied in the Veazie Bank case.
This was that Congress, in selecting its subjects for taxation,
might impose the burden where and as it would, and that a motive
disclosed in its selection to discourage sale or manufacture of an
article by a higher tax than on some other did not invalidate the
tax. In neither of these cases did the law objected to show on its
face, as does the law before, us the detailed specifications of a
regulation of a state concern and business with a heavy exaction to
promote the efficacy of such regulation.
The third case is that of Flint v. Stone Tracy Co., 220 U. S. 107 . It
involved the validity of an excise tax levied on the doing of
business by all corporations, joint stock companies, associations
organized for profit having a capital stock represented by shares,
and insurance companies, and measured the excise by the net income
of the corporations. There was not in that case the slightest doubt
that the tax was a tax, and a tax for revenue, but it was attacked
on the ground that such a tax could be made excessive, and thus
used by Congress to destroy the existence Page 259 U. S. 43 of state corporations. To this, this court gave the same answer
as in the Veazie Bank and McCray cases. It is not
so strong an authority for the Government's contention as they
are.
The fourth case is United States v. Doremus, 249 U. S. 86 . That
involved the validity of the Narcotic Drug Act, 38 Stat. 785, which
imposed a special tax on the manufacture, importation and sale or
gift of opium or coca leaves or their compounds or derivatives. It
required every person subject to the special tax to register with
the Collector of Internal Revenue his name and place of business,
and forbade him to sell except upon the written order of the person
to whom the sale was made on a form prescribed by the Commissioner
of Internal Revenue. The vendor was required to keep the order for
two years, and the purchaser to keep a duplicate for the same time,
and both were to be subject to official inspection. Similar
requirements were made as to sales upon prescriptions of a
physician and as to the dispensing of such drugs directly to a
patient by a physician. The validity of a special tax in the nature
of an excise tax on the manufacture, importation and sale of such
drugs was, of course, unquestioned. The provisions for subjecting
the sale and distribution of the drugs to official supervision and
inspection were held to have a reasonable relation to the
enforcement of the tax, and were therefore held valid.
The court said that the act could not be declared invalid just
because another motive than taxation, not shown on the face of the
act, might have contributed to its passage. This case does not
militate against the conclusion we have reached in respect of the
law now before us. The court there made manifest its view that the
provisions of the so-called taxing act must be naturally and
reasonably adapted to the collection of the tax, and not solely to
the achievement of some other purpose plainly within state
power. Page 259 U. S. 44 For the reason given, we must hold the Child Labor Tax Law
invalid, and the judgment of the District Court is Affirmed. MR. JUSTICE CLARKE dissents. | The Supreme Court ruled that the Child Labor Tax Law, which imposed an excise tax on businesses that employed child labor, was unconstitutional. The Court found that the law was designed to penalize and discourage child labor, a matter reserved for state regulation, rather than a legitimate use of the federal taxing power. |
Taxes | Burnet v. Sanford & Brooks Co. | https://supreme.justia.com/cases/federal/us/282/359/ | U.S. Supreme Court Burnet v. Sanford & Brooks Co., 282
U.S. 359 (1931) Burnet v. Sanford & Brooks
Company No. 31 Argued December 5, 8,
1930 Decided January 5,
1931 282
U.S. 359 CERTIORARI TO THE CIRCUIT COURT OF
APPEALS FOR THE FOURTH
CIRCUIT Syllabus 1. In its income tax returns for 1913-16, the taxpayer included
in gross income for each year payments received in that year under
a dredging contract with the United States and deducted for each
year expenditures made by the taxpayer during that year in
performing the contract. The sum of the expenditures exceeded the
sum of the payments received. The work was abandoned, and, in 1920,
as the result of a suit on the contract for breach of warranty, the
taxpayer received from the United States as compensatory damages an
amount equal to such excess. It did not appear that the taxpayer
ever filed returns on the accrual basis, or otherwise sought the
benefit of the statutory provision in that regard or of Treasury
regulations which, with respect to certain long-term contracts,
allowed report of all receipts and expenditures on account of a
particular contract in the year in which the work was completed, or
report each year of the estimated profit corresponding to estimated
expenditures of that year. Held: (1) That, under the Revenue Act of 1918, the money received in
1920 was properly included by the Commissioner as part of the gross
income for that year in ascertaining the taxable income for that
year. P. 282 U. S.
363 .
(2) That a judgment in effect eliminating this money from the
1920 computation upon the condition that the taxpayer amend the
earlier returns by omitting therefrom the deductions of related
expenditures, was erroneous. P. 282 U. S. 362 et seq. 2. Receipts from the conduct of a business enterprise are to be
included in the taxpayer's return as a part of gross income,
regardless of whether the particular transaction results in net
profit. P. 282 U. S.
364 .
3. The excess of gross income over deductions in this case does
not any the less constitute net income for the taxable period
because the taxpayer, in an earlier period, suffered net losses in
its business which were in some measure attributable to
expenditures made to produce the net income of the later period. Id. Page 282 U. S. 360 4. The familiar and practical system of taxing annually the net
income resulting from all transactions within the tax year, rather
than the gains derived from particular transactions, is sustained
by the Sixteenth Amendment. P. 282 U. S.
365 .
35 F.2d 312 reversed.
Certiorari, 281 U.S. 707, to review a judgment reversing an
order of the Board of Tax Appeals which sustained an assessment of
income and profits taxes. Page 282 U. S. 361 MR. JUSTICE STONE delivered the opinion of the Court.
In this case, certiorari was granted, 281 U.S. 707, to review a
judgment of the court of appeals for the Fourth Circuit, 35 F.2d
312, reversing an order of the Board of Tax Appeals, 11 B.T.A. 452,
which had sustained the action of the Commissioner of Internal
Revenue in making a deficiency assessment against respondent for
income and profits taxes for the year 1920.
From 1913 to 1915, inclusive, respondent, a Delaware corporation
engaged in business for profit, was acting for the Atlantic
Dredging Company in carrying out a contract for dredging the
Delaware River, entered into by that company with the United
States. In making its income tax returns for the years 1913 to
1916, respondent added to gross income for each year the payments
made under the contract that year, and deducted its expenses paid
that year in performing the contract. The total expenses exceeded
the payments received by $176,271.88. The tax returns for 1913,
1915, and 1916 showed net losses. That for 1914 showed net
income.
In 1915, work under the contract was abandoned, and in 1916 suit
was brought in the Court of Claims to recover for a breach of
warranty of the character of the material Page 282 U. S. 362 to be dredged. Judgment for the claimant, 53 Ct.Cls. 490, was
affirmed by this Court in 1920. United States v. Atlantic
Dredging Co., 253 U. S. 1 . It held
that the recovery was upon the contract, and was "compensatory of
the cost of the work, of which the government got the benefit."
From the total recovery, petitioner received in that year the sum
of $192,577.59, which included the $176,271.88 by which its
expenses under the contract had exceeded receipts from it, and
accrued interest amounting to $16,305.71. Respondent having failed
to include these amounts as gross income in its tax returns for
1920, the Commissioner made the deficiency assessment here
involved, based on the addition of both items to gross income for
that year.
The court of appeals ruled that only the item of interest was
properly included, holding, erroneously, as the government
contends, that the item of $176,271.88 was a return of losses
suffered by respondent in earlier years, and hence was wrongly
assessed as income. Notwithstanding this conclusion, its judgment
of reversal and the consequent elimination of this item from gross
income for 1920 were made contingent upon the filing by respondent
of amended returns for the years 1913 to 1916, from which were to
be omitted the deductions of the related items of expenses paid in
those years. Respondent insists that, as the Sixteenth Amendment
and the Revenue Act of 1918, which was in force in 1920, plainly
contemplate a tax only on net income or profits, any application of
the statute which operates to impose a tax with respect to the
present transaction, from which respondent received no profit,
cannot be upheld.
If respondent's contention that only gain or profit may be taxed
under the Sixteenth Amendment be accepted without qualification, see Eisner v. Macomber, 252 U. S. 189 ; Doyle v. Mitchell Brothers Co., 247 U.
S. 179 , the question remains whether the gain or profit
which is the Page 282 U. S. 363 subject of the tax may be ascertained, as here, on the basis of
fixed accounting periods, or whether, as is pressed upon us, it can
only be net profit ascertained on the basis of particular
transactions of the taxpayer when they are brought to a
conclusion.
All the revenue acts which have been enacted since the adoption
of the Sixteenth Amendment have uniformly assessed the tax on the
basis of annual returns showing the net result of all the
taxpayer's transactions during a fixed accounting period, either
the calendar year or, at the option of the taxpayer, the particular
fiscal year which he may adopt. Under §§ 230, 232 and 234(a) of the
Revenue Act of 1918, 40 Stat. 1057, respondent was subject to tax
upon its annual net income, arrived at by deducting from gross
income for each taxable year all the ordinary and necessary
expenses paid during that year in carrying on any trade or
business, interest and taxes paid, and losses sustained, during the
year. By §§ 233(a) and 213(a), gross income
"includes . . . income derived from . . . business . . . or the
transaction of any business carried on for gain or profit, or gains
or profits and income derived from any source whatever."
The amount of all such items is required to be included in the
gross income for the taxable year in which received by the
taxpayer, unless they may be properly accounted for on the accrual
basis under Section 212(b). See United States v. Anderson, 269 U. S. 422 ; Aluminum Castings Co. v. Rotzahn, ante, p. 282 U. S. 92 .
That the recovery made by respondent in 1920 was gross income
for that year within the meaning of these sections cannot, we
think, be doubted. The money received was derived from a contract
entered into in the course of respondent's business operations for
profit. While it equalled, and in a loose sense was a return of,
expenditures made in performing the contract, still, as the Board
of Tax Appeals found, the expenditures were Page 282 U. S. 364 made in defraying the expenses incurred in the prosecution of
the work under the contract, for the purpose of earning profits.
They were not capital investments, the cost of which, if converted,
must first be restored from the proceeds before there is a capital
gain taxable as income. See Doyle v. Mitchell Brothers Co.,
supra, p. 247 U. S.
185 .
That such receipts from the conduct of a business enterprise are
to be included in the taxpayer's return as a part of gross income,
regardless of whether the particular transaction results in net
profit, sufficiently appears from the quoted words of § 213(a) and
from the character of the deductions allowed. Only by including
these items of gross income in the 1920 return would it have been
possible to ascertain respondent's net income for the period
covered by the return, which is what the statute taxes. The excess
of gross income over deductions did not any the less constitute net
income for the taxable period because respondent, in an earlier
period, suffered net losses in the conduct of its business which
were in some measure attributable to expenditures made to produce
the net income of the later period. Bowers v. Kerbaugh-Empire Co., 271 U.
S. 170 , on which respondent relies, does not support its
position. In that case, the taxpayer, which had lost, in business,
borrowed money, which was to be repaid in German marks, and which
was later repaid in depreciated currency, had neither made a profit
on the transaction nor received any money or property which could
have been made subject to the tax.
But respondent insists that, if the sum which it recovered is
the income defined by the statute, still it is not income, taxation
of which without apportionment is permitted by the Sixteenth
Amendment, since the particular transaction from which it was
derived did not result in any net gain or profit. But we do not
think the amendment is to be so narrowly construed. A taxpayer may
be in receipt of net income in one year and not in another. Page 282 U. S. 365 The net result of the two years, if combined in a single taxable
period, might still be a loss, but it has never been supposed that
that fact would relieve him from a tax on the first, or that it
affords any reason for postponing the assessment of the tax until
the end of a lifetime, or for some other indefinite period, to
ascertain more precisely whether the final outcome of the period,
or of a given transaction, will be a gain or a loss.
The Sixteenth Amendment was adopted to enable the government to
raise revenue by taxation. It is the essence of any system of
taxation that it should produce revenue ascertainable, and payable
to the government, at regular intervals. Only by such a system is
it practicable to produce a regular flow of income and apply
methods of accounting, assessment, and collection capable of
practical operation. It is not suggested that there has ever been
any general scheme for taxing income on any other basis. The
computation of income annually as the net result of all
transactions within the year was a familiar practice, and taxes
upon income so arrived at were not unknown, before the Sixteenth
Amendment. See Bowers v. Kerbaugh-Empire Co., supra, p. 271 U. S. 174 ; Pacific Insurance Co. v.
Soule , 7 Wall. 433; Pollock v. Farmers' Loan
& Trust Co., 158 U. S. 601 , 158 U. S. 630 .
It is not to be supposed that the amendment did not contemplate
that Congress might make income so ascertained the basis of a
scheme of taxation such as had been, in actual operation, within
the United States before its adoption. While, conceivably, a
different system might be devised by which the tax could be
assessed, wholly or in part, on the basis of the finally
ascertained results of particular transactions, Congress is not
required by the amendment to adopt such a system in preference to
the more familiar method, even if it were practicable. It would not
necessarily obviate the kind of inequalities of which respondent
complains. If losses from particular transactions were to be set
off against Page 282 U. S. 366 gains in others, there would still be the practical necessity of
computing the tax on the basis of annual or other fixed taxable
periods, which might result in the taxpayer's being required to pay
a tax on income in one period exceeded by net losses in
another.
Under the statutes and regulations in force in 1920, two methods
were provided by which, to a limited extent, the expenses of a
transaction incurred in one year might be offset by the amounts
actually received from it in another. One was by returns on the
accrual basis under Section 212(b), which provides that a taxpayer
keeping accounts upon any basis other than that of actual receipts
and disbursements, unless such basis does not clearly reflect its
income, may, subject to regulations of the Commissioner, make its
return upon the basis upon which its books are kept. See United
States v. Anderson, and Aluminum Castings Co. v. Routzahn,
supra. The other was under Treasury Regulations (Article 121
of Reg. 33 of Jan. 2, 1918, under the Revenue Acts of 1916 and
1917; Article 36 of Reg. 45, April 19, 1919, under the Revenue Act
of 1918) providing that, in reporting the income derived from
certain long-term contracts, the taxpayer might either report all
of the receipts and all of the expenditures made on account of a
particular contract in the year in which the work was completed or
report in each year the percentage of the estimated profit
corresponding to the percentage of the total estimated expenditures
which was made in that year.
The court of appeals said that the case of the respondent here
fell within the spirit of these regulations. But the court did not
hold, nor does respondent assert, that it ever filed returns in
compliance either with these regulations, or Section 212(b), or
otherwise attempted to avail itself of their provisions; nor, on
this record, do any facts appear tending to support the burden,
resting on the taxpayer, of establishing that the Commissioner
erred in failing to Page 282 U. S. 367 apply them. See Niles Bement Pond Co. v. United States, 281 U. S. 357 , 281 U. S.
361 .
The assessment was properly made under the statutes. Relief from
their alleged burdensome operation, which may not be secured under
these provisions, can be afforded only by legislation, not by the
courts. Reversed. | The U.S. Supreme Court case of Burnet v. Sanford & Brooks Co. (1931) dealt with the taxation of income from a dredging contract with the United States. The key points of the case are as follows:
- Sanford & Brooks Co. included payments received and deducted expenditures related to the contract in their income tax returns for 1913-1916. The expenditures exceeded the payments, and they abandoned the work.
- In 1920, the company received compensatory damages from the US government due to a breach of warranty, equaling the excess of expenditures over payments.
- The Court held that the money received in 1920 was correctly included by the Commissioner as part of the gross income for that year when determining taxable income.
- The Court also ruled that eliminating this money from the 1920 computation on the condition that the taxpayer amends earlier returns by removing related expenditure deductions was incorrect.
- Receipts from business transactions are part of gross income, regardless of whether a particular transaction results in a net profit.
- The excess of gross income over deductions in this case still constitutes net income for the taxable period, despite earlier net losses related to expenditures made to generate the later period's net income.
- The Sixteenth Amendment supports the standard practice of taxing annual net income from all transactions within the tax year, rather than gains from specific transactions.
- The Court reversed the lower court's judgment and upheld the Commissioner's assessment. |
Taxes | Taft v. Bowers | https://supreme.justia.com/cases/federal/us/278/470/ | U.S. Supreme Court Taft v. Bowers, 278
U.S. 470 (1929) Taft v. Bowers Nos. 16 and 17 Argued April 26, 1928 Reargued October 9,
1928 Decided February 18,
1929 278
U.S. 470 CERTIORARI TO THE CIRCUIT COURT OF
APPEALS FOR THE SECOND
CIRCUIT Syllabus 1. Under par. (2), § 202 of the Revenue Act of 1921, where one
who purchased shares of stock after February 28, 1913, gave them to
another after December 31, 1920, when their market value had
increased over the investment, and the donee afterwards sold them
at a price still higher, the gain taxable to the donee is the
difference between the price realized by him and the price paid by
the donor. P. 278 U. S.
481 . Page 278 U. S. 471 2. In such case, Congress has power under the Sixteenth
Amendment to treat the entire increase in value, when separated
from the investment by the sale, as income of the donee. P. 278 U. S.
482 .
20 F.2d 561, affirmed.
Certiorari, 275 U.S. 520, to judgments of the circuit court of
appeals reversing judgments in favor of the present petitioners, 15
F.2d 890, in actions against the Collector to recover money paid as
income taxes. Page 278 U. S. 478 MR. JUSTICE McREYNOLDS delivered the opinion of the Court.
Petitioners, who are donees of stocks, seek to recover income
taxes exacted because of advancement in the market value of those
stocks while owned by the donors. The facts are not in dispute.
Both causes must turn upon the effect of paragraph (2), § 202,
Revenue Act 1921 (c. 136, Page 278 U. S. 479 42 Stat. 227, 229), which prescribes the basis for estimating
taxable gain when one disposes of property which came to him by
gift. The records do not differ essentially, and a statement of the
material circumstances disclosed by No. 16 will suffice.
During the calendar years 1921 and 1922, the father of
petitioner, Elizabeth C. Taft, gave her certain shares of Nash
Motors Company stock, then more valuable than when acquired by him.
She sold them during 1923 for more than their market value when the
gift was made.
The United States demanded an income tax reckoned upon the
difference between cost to the donor and price received by the
donee. She paid accordingly, and sued to recover the portion
imposed because of the advance in value while the donor owned the
stock. The right to tax the increase in value after the gift is not
denied.
Abstractly stated, this is the problem:
In 1916, A purchased 100 shares of stock for $1,000, which he
held until 1923, when their fair market value had become $2,000. He
then gave them to B, who sold them during the year 1923 for $5,000.
The United States claim that, under the Revenue Act of 1921, B must
pay income tax upon $4,000, as realized profits. B maintains that
only $3,000 -- the appreciation during her ownership -- can be
regarded as income; that the increase during the donor's ownership
is not income assessable against her within intendment of the
Sixteenth Amendment.
The district court ruled against the United States; the circuit
court of appeals held with them.
Act of Congress approved November 23, 1921, Chap. 136, 42 Stat.
227, 229, 237 --
"Sec. 202. (a) That the basis for ascertaining the gain derived
or loss sustained from a sale or other disposition of property,
real, personal, or mixed, acquired after February 28, 1913, shall
be the cost of such property; except that --"
"(1) . . . " Page 278 U. S. 480 "(2) In the case of such property, acquired by gift after
December 31, 1920, the basis shall be the same as that which it
would have in the hands of the donor or the last preceding owner by
whom it was not acquired by gift. If the facts necessary to
determine such basis are unknown to the donee, the Commissioner
shall, if possible, obtain such facts from such donor or last
preceding owner, or any other person cognizant thereof. If the
Commissioner finds it impossible to obtain such facts, the basis
shall be the value of such property as found by the Commissioner as
of the date or approximate date at which, according to the best
information the Commissioner is able to obtain, such property was
acquired by such donor or last preceding owner. In the case of such
property acquired by gift on or before December 31, 1920, the basis
for ascertaining gain or loss from a sale or other disposition
thereof shall be the fair market price or value of such property at
the time of such acquisition."
"Sec. 213. That for the purposes of this title (except as
otherwise provided in § 233) the term 'gross income' --"
"(a) Includes gains, profits, and income derived from salaries,
wages, or compensation for personal service . . . or gains or
profits and income derived from any source whatever. The amount of
all such items (except as provided in subdivision (e) of § 201)
shall be included in the gross income for the taxable year in which
received by the taxpayer, unless, under methods of accounting
permitted under subdivision (b) of § 212, any such amounts are to
be properly accounted for as of a different period; but"
"(b) Does not include the following items, which shall be exempt
from taxation under this title;"
" * * * *" "(3) The value of property acquired by gift, bequest, devise, or
descent (but the income from such property shall be included in
gross income). . . . " Page 278 U. S. 481 We think the manifest purpose of Congress expressed in paragraph
(2), § 202, supra, was to require the petitioner to pay
the enacted tax.
The only question subject to serious controversy is whether
Congress had power to authorize the exaction.
It is said that the gift became a capital asset of the donee to
the extent of its value when received, and therefore when disposed
of by her no part of that value could be treated as taxable income
in her hands.
The Sixteenth Amendment provides:
"The Congress shall have power to lay and collect taxes on
incomes, from whatever source derived, without apportionment among
the several states, and without regard to any census or
enumeration."
Income is the thing which may be taxed -- income from any
source. The amendment does not attempt to define income or to
designate how taxes may be laid thereon, or how they may be
enforced.
Under former decisions here, the settled doctrine is that the
Sixteenth Amendment confers no power upon Congress to define and
tax as income without apportionment something which theretofore
could not have been properly regarded as income.
Also, this Court has declared:
"Income may be defined as the gain derived from capital, from
labor, or from both combined, provided it be understood to include
profit gained through a sale or conversion of capital assets." Eisner v. Macomber, 252 U. S. 189 , 252 U. S. 207 .
The "gain derived from capital," within the definition, is
"not a gain accruing to capital, nor a growth or increment of
value in the investment, but a gain, a profit, something of
exchangeable value proceeding from the property, severed from the
capital however invested, and coming in -- that is, received or
drawn by the claimant for his separate use, benefit and
disposal." United States v. Phellis, 257 U.
S. 156 , 257 U. S.
169 . Page 278 U. S. 482 If, instead of giving the stock to petitioner, the donor had
sold it at market value, the excess over the capital he invested
(cost) would have been income therefrom and subject to taxation
under the Sixteenth Amendment. He would have been obliged to share
the realized gain with the United States. He held the stock -- the
investment -- subject to the right of the sovereign to take part of
any increase in its value when separated through sale or conversion
and reduced to his possession. Could he, contrary to the express
will of Congress, by mere gift enable another to hold this stock
free from such right, deprive the sovereign of the possibility of
taxing the appreciation when actually severed, and convert the
entire property into a capital asset of the donee, who invested
nothing, as though the latter had purchased at the market price?
And, after a still further enhancement of the property, could the
donee make a second gift with like effect, etc.? We think not.
In truth, the stock represented only a single investment of
capital -- that made by the donor. And when, through sale or
conversion, the increase was separated therefrom, it became income
from that investment in the hands of the recipient subject to
taxation according to the very words of the Sixteenth Amendment. By
requiring the recipient of the entire increase to pay a part into
the public treasury, Congress deprived her of no right and
subjected her to no hardship. She accepted the gift with knowledge
of the statute and, as to the property received, voluntarily
assumed the position of her donor. When she sold the stock, she
actually got the original sum invested, plus the entire
appreciation and out of the latter only was she called on to pay
the tax demanded.
The provision of the statute under consideration seems entirely
appropriate for enforcing a general scheme of lawful taxation. To
accept the view urged in behalf of petitioner undoubtedly would
defeat, to some extent, the Page 278 U. S. 483 purpose of Congress to take part of all gain derived from
capital investments. To prevent that result and insure enforcement
of its proper policy, Congress had power to require that, for
purposes of taxation, the donee should accept the position of the
donor in respect of the thing received. And, in so doing, it acted
neither unreasonably nor arbitrarily.
The power of Congress to require a succeeding owner, in respect
of taxation, to assume the place of his predecessor is pointed out
by United States v. Phellis, 257 U.
S. 156 , 257 U. S.
171 :
"Where, as in this case, the dividend constitutes a distribution
of profits accumulated during an extended period and bears a large
proportion to the par value of the stock, if an investor happened
to buy stock shortly before the dividend, paying a price enhanced
by an estimate of the capital plus the surplus of the company, and
after distribution of the surplus, with corresponding reduction in
the intrinsic and market value of the shares, he were called upon
to pay a tax upon the dividend received, it might look in his case
like a tax upon his capital. But it is only apparently so. In
buying at a price that reflected the accumulated profits, he, of
course, acquired as a part of the valuable rights purchased the
prospect of a dividend from the accumulations -- bought 'dividend
on,' as the phrase goes -- and necessarily took subject to the
burden of the income tax proper to be assessed against him by
reason of the dividend if and when made. He simply stepped into the
shoes, in this, as in other respects, of the stockholder whose
shares he acquired, and presumably the prospect of a dividend
influenced the price paid, and was discounted by the prospect of an
income tax to be paid thereon. In short, the question whether a
dividend made out of company profits constitutes income of the
stockholder is not affected by antecedent transfers of the stock
from hand to hand. " Page 278 U. S. 484 There is nothing in the Constitution which lends support to the
theory that gain actually resulting from the increased value of
capital can be treated as taxable income in the hands of the
recipient only so far as the increase occurred while he owned the
property. And Irwin v. Gavit, 268 U.
S. 161 , 268 U. S. 167 ,
is to the contrary.
The judgment below is Affirmed. THE CHIEF JUSTICE took no part in the consideration or decision
of these causes. | Here is a summary of the Supreme Court case Taft v. Bowers (1929):
Issue: Whether, under the Revenue Act of 1921, the taxable gain for the donee of a gift of stock is the difference between the price paid by the donor and the price received by the donee upon sale.
Holding: Yes. The taxable gain for the donee is the difference between the donor's purchase price and the donee's selling price. Congress has the power under the Sixteenth Amendment to tax the entire increase in value as income to the donee when the stock is sold.
Facts: Elizabeth C. Taft received shares of Nash Motors Company stock as a gift from her father during 1921-1922. The stock had increased in value since her father's purchase. She sold the stock in 1923 for a higher price. The IRS demanded an income tax on the difference between the donor's cost and the donee's selling price. Taft paid and then sued to recover the tax attributed to the increase in value while her father owned the stock.
Reasoning: The Court interpreted the Revenue Act of 1921 as requiring the donee to accept the donor's position regarding the gifted property for tax purposes. This interpretation aligns with Congress's intention to tax gains derived from capital investments. The Court also noted that there is no constitutional support for the theory that taxable income from capital gains is limited to the increase that occurred during the recipient's ownership. |
Taxes | Brushaber v. Union Pacific Railroad Co. | https://supreme.justia.com/cases/federal/us/240/1/ | U.S. Supreme Court Brushaber v. Union Pacific R. Co., 240 U.S. 1 (1916) Brushaber v. Union Pacific Railroad
Company No. 140 Argued October 14, 15,
1915 Decided January 24,
1916 240 U.S.
1 APPEAL FROM THE DISTRICT COURT OF
THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW
YORK Syllabus Under proper averments, a stockholder's suit to restrain a
corporation from voluntarily paying a tax charged to be
unconstitutional is not violative of Rev.Stat. § 3224, and the
district court has jurisdiction to entertain the action. Pollock v. Farmers' Loan & Trust Co., 157 U.
S. 429 .
In this case -- that of a stockholder against a corporation to
restrain the latter from voluntarily paying the income tax imposed
by the Tariff Act of 1913 -- the defendant corporation notified the
government of the pendency of the action and the United States was
heard as amicus curiae in support of the constitutionality
of the Act.
The Sixteenth Amendment was obviously intended to simplify the
situation and make clear the limitations on the taxing power of
Congress and not to create radical and destructive changes in our
constitutional system.
The Sixteenth Amendment does not purport to confer power to levy
income taxes in a generic sense, as that authority was already
possessed, Page 240 U. S. 2 or to limit and distinguish between one kind of income tax and
another, but its purpose is to relieve all income taxes when
imposed from apportionment from consideration of the source whence
the income is derived.
The Income Tax provisions of the Tariff Act of 1913 are not
unconstitutional by reason of retroactive operation, the period
covered not extending prior to the time when the Amendment was
operative, nor are those provisions unconstitutional under the due
process provision of the Fifth Amendment, nor do they deny due
process of law, nor equal protection of the law by reason of the
classifications therein of things or persons subject to the
tax.
The provisions for collecting income at the source do not deny
due process of law by reason of duties imposed upon corporations
without compensation in connection with the payment of the tax by
others.
The uniformity of taxation required by the federal Constitution
is geographical. Knowlton v. Moore, 178 U. S.
41 .
The Fifth Amendment is not a limitation upon the taxing power
conferred upon Congress by the Constitution.
Arguments as to the expediency of levying a tax which is within
the power of Congress to levy are beyond judicial cognizance.
When there are differences between the subjects that are taxed,
Congress does not transcend the limit of its taxing power by taxing
them differently.
A want of due process of law does not arise from want of wisdom
in Congress in levying taxes, and thus give the courts power to
overrule the action of Congress by declaring it to be
unconstitutional.
The facts, which involve the construction of the Sixteenth
Amendment and other provisions of the Constitution of the United
States, and the constitutionality of the income tax provisions of
the Tariff Act of October 9, 1913, are stated in the opinion. Page 240 U. S. 9 MR. CHIEF JUSTICE WHITE delivered the opinion of the Court.
As a stockholder of the Union Pacific Railroad Company, the
appellant filed his bill to enjoin the corporation from complying
with the income tax provisions of the tariff act of October 3, 1913
(§ II., c. 16, 38 Stat. 166). Because of constitutional questions
duly arising, the case is here on direct appeal from a decree
sustaining a motion to dismiss because no ground for relief was
stated.
The right to prevent the corporation from returning and paying
the tax was based upon many averments as to the repugnancy of the
statute to the Constitution of the United States, of the peculiar
relation of the corporation to the stockholders, and their
particular interests resulting from many of the administrative
provisions of the assailed act, of the confusion, wrong, and
multiplicity Page 240 U. S. 10 of suits and the absence of all means of redress which would
result if the corporation paid the tax and complied with the act in
other respects without protest, as it was alleged it was its
intention to do. To put out of the way a question of jurisdiction,
we at once say that, in view of these averments and the ruling in Pollock v. Farmers' Loan & Trust Co., 157 U.
S. 429 , sustaining the right of a stockholder to sue to
restrain a corporation under proper averments from voluntarily
paying a tax charged to be unconstitutional on the ground that to
permit such a suit did not violate the prohibitions of § 3224
Rev.Stat. against enjoining the enforcement of taxes, we are of
opinion that the contention here made that there was no
jurisdiction of the cause, since to entertain it would violate the
provisions of the Revised Statutes referred to, is without merit.
Before coming to dispose of the case on the merits, however, we
observe that the defendant corporation having called the attention
of the government to the pendency of the cause and the nature of
the controversy and its unwillingness to voluntarily refuse to
comply with the act assailed, the United States, as amicus
curiae, has at bar been heard both orally and by brief for the
purpose of sustaining the decree.
Aside from averments as to citizenship and residence, recitals
as to the provisions of the statute, and statements as to the
business of the corporation, contained in the first ten paragraphs
of the bill, advanced to sustain jurisdiction, the bill alleged
twenty-one constitutional objections specified in that number of
paragraphs or subdivisions. As all the grounds assert a violation
of the Constitution, it follows that, in a wide sense, they all
charge a repugnancy of the statute to the Sixteenth Amendment,
under the more immediate sanction of which the statute was
adopted.
The various propositions are so intermingled as to cause it to
be difficult to classify them. We are of opinion, however, Page 240 U. S. 11 that the confusion is not inherent, but rather arises from the
conclusion that the Sixteenth Amendment provides for a hitherto
unknown power of taxation -- that is, a power to levy an income tax
which, although direct, should not be subject to the regulation of
apportionment applicable to all other direct taxes. And the
far-reaching effect of this erroneous assumption will be made clear
by generalizing the many contentions advanced in argument to
support it, as follows: (a) The Amendment authorizes only a
particular character of direct tax without apportionment, and
therefore if a tax is levied under its assumed authority which does
not partake of the characteristics exacted by the Amendment, it is
outside of the Amendment, and is void as a direct tax in the
general constitutional sense because not apportioned. (b) As the
Amendment authorizes a tax only upon incomes "from whatever source
derived," the exclusion from taxation of some income of designated
persons and classes is not authorized, and hence the
constitutionality of the law must be tested by the general
provisions of the Constitution as to taxation, and thus again the
tax is void for want of apportionment. (c) As the right to tax
"incomes from whatever source derived" for which the Amendment
provides must be considered as exacting intrinsic uniformity,
therefore no tax comes under the authority of the Amendment not
conforming to such standard, and hence all the provisions of the
assailed statute must once more be tested solely under the general
and preexisting provisions of the Constitution, causing the statute
again to be void in the absence of apportionment. (d) As the power
conferred by the Amendment is new and prospective, the attempt in
the statute to make its provisions retroactively apply is void
because, so far as the retroactive period is concerned, it is
governed by the preexisting constitutional requirement as to
apportionment.
But it clearly results that the proposition and the
contentions Page 240 U. S. 12 under it, if acceded to, would cause one provision of the
Constitution to destroy another; that is, they would result in
bringing the provisions of the Amendment exempting a direct tax
from apportionment into irreconcilable conflict with the general
requirement that all direct taxes be apportioned. Moreover, the tax
authorized by the Amendment, being direct, would not come under the
rule of uniformity applicable under the Constitution to other than
direct taxes, and thus it would come to pass that the result of the
Amendment would be to authorize a particular direct tax not subject
either to apportionment or to the rule of geographical uniformity,
thus giving power to impose a different tax in one state or states
than was levied in another state or states. This result, instead of
simplifying the situation and making clear the limitations on the
taxing power, which obviously the Amendment must have been intended
to accomplish, would create radical and destructive changes in our
constitutional system and multiply confusion.
But let us by a demonstration of the error of the fundamental
proposition as to the significance of the Amendment dispel the
confusion necessarily arising from the arguments deduced from it.
Before coming, however, to the text of the Amendment, to the end
that its significance may be determined in the light of the
previous legislative and judicial history of the subject with which
the Amendment is concerned, and with a knowledge of the conditions
which presumptively led up to its adoption, and hence of the
purpose it was intended to accomplish, we make a brief statement on
those subjects.
That the authority conferred upon Congress by § 8 of Article I
"to lay and collect taxes, duties, imposts and excises" is
exhaustive and embraces every conceivable power of taxation has
never been questioned, or, if it has, has been so often
authoritatively declared as to render it necessary only to state
the doctrine. And it has also never Page 240 U. S. 13 been questioned from the foundation, without stopping presently
to determine under which of the separate headings the power was
properly to be classed, that there was authority given, as the part
was included in the whole, to lay and collect income taxes. Again,
it has never moreover been questioned that the conceded complete
and all-embracing taxing power was subject, so far as they were
respectively applicable, to limitations resulting from the
requirements of Art. I, § 8, cl. 1, that "all duties, imposts and
excises shall be uniform throughout the United States," and to the
limitations of Art I., § 2, cl. 3, that "direct taxes shall be
apportioned among the several states," and of Art. I, § 9, cl. 4,
that "no capitation, or other direct, tax shall be laid, unless in
proportion to the census or enumeration hereinbefore directed to be
taken." In fact, the two great subdivisions embracing the complete
and perfect delegation of the power to tax and the two correlated
limitations as to such power were thus aptly stated by Mr. Chief
Justice Fuller in Pollock v. Farmers' Loan & Trust Co.,
supra, at 157 U. S.
557 :
"In the matter of taxation, the Constitution recognizes the two
great classes of direct and indirect taxes, and lays down two rules
by which their imposition must be governed, namely, the rule of
apportionment as to direct taxes, and the rule of uniformity as to
duties, imposts, and excises."
It is to be observed, however, as long ago pointed out in Veazie Bank v.
Fenno , 8 Wall. 533, 75 U. S. 541 ,
that the requirements of apportionment as to one of the great
classes and of uniformity as to the other class were not so much a
limitation upon the complete and all-embracing authority to tax,
but in their essence were simply regulations concerning the mode in
which the plenary power was to be exerted. In the whole history of
the government down to the time of the adoption of the Sixteenth
Amendment, leaving aside some conjectures expressed of the
possibility of a tax lying intermediate between the two great
classes and embraced Page 240 U. S. 14 by neither, no question has been anywhere made as to the
correctness of these propositions. At the very beginning, however,
there arose differences of opinion concerning the criteria to be
applied in determining in which of the two great subdivisions a tax
would fall. Without pausing to state at length the basis of these
differences and the consequences which arose from them, as the
whole subject was elaborately reviewed in Pollock v. Farmers'
Loan & Trust Co., 157 U. S. 429 , we
make a condensed statement which is in substance taken from what
was said in that case. Early the differences were manifested in
pressing, on the one hand, and opposing, on the other, the passage
of an act levying a tax without apportionment on carriages "for the
conveyance of persons," and when such a tax was enacted, the
question of its repugnancy to the Constitution soon came to this
Court for determination. Hylton v. United
States , 3 Dall. 171. It was held that the tax came
within the class of excises, duties, and imposts, and therefore did
not require apportionment, and while this conclusion was agreed to
by all the members of the Court who took part in the decision of
the case, there was not an exact coincidence in the reasoning by
which the conclusion was sustained. Without stating the minor
differences, it may be said with substantial accuracy that the
divergent reasoning was this: on the one hand, that the tax was not
in the class of direct taxes requiring apportionment, because it
was not levied directly on property because of its ownership, but
rather on its use, and was therefore an excise, duty, or impost,
and on the other, that, in any event, the class of direct taxes
included only taxes directly levied on real estate because of its
ownership. Putting out of view the difference of reasoning which
led to the concurrent conclusion in the Hylton case, it is
undoubted that it came to pass in legislative practice that the
line of demarcation between the two great classes of direct taxes,
on the one hand, and excises, duties, and Page 240 U. S. 15 imposts, on the other, which was exemplified by the ruling in
that case was accepted and acted upon. In the first place this is
shown by the fact that, wherever (and there were a number of cases
of that kind) a tax was levied directly on real estate or slaves
because of ownership, it was treated as coming within the direct
class and apportionment was provided for, while no instance of
apportionment as to any other kind of tax is afforded. Again, the
situation is aptly illustrated by the various acts taxing incomes
derived from property of every kind and nature which were enacted
beginning in 1861, and lasting during what may be termed the Civil
War period. It is not disputable that these latter taxing laws were
classed under the head of excises, duties, and imposts because it
was assumed that they were of that character inasmuch as, although
putting a tax burden on income of every kind, including that
derived from property real or personal, they were not taxes
directly on property because of its ownership. And this practical
construction came in theory to be the accepted one, since it was
adopted without dissent by the most eminent of the text writers. 1
Kent, Com. 254, 256; 1 Story, Const. § 955; Cooley, Const.Lim. 5th
ed. *480; Miller on the Constitution 237; Pomeroy's Constitutional
Law § 281; Hare, Const.Law, Vol. 1, 249, 250; Burroughs on Taxation
502; Ordronaux, Constitutional Legislation 225.
Upon the lapsing of a considerable period after the repeal of
the income tax laws referred to, in 1894, an act was passed laying
a tax on incomes from all classes of property and other sources of
revenue which was not apportioned, and which therefore was, of
course, assumed to come within the classification of excises,
duties, and imposts which were subject to the rule of uniformity,
but not to the rule of apportionment. The constitutional validity
of this law was challenged on the ground that it did not fall
within the class of excises, duties, and imposts, Page 240 U. S. 16 but was direct in the constitutional sense, and was therefore
void for want of apportionment, and that question came to this
Court and was passed upon in Pollock v. Farmers' Loan &
Trust Co., 157 U. S. 429 ; 158 U. S. 158 U.S.
601. The Court, fully recognizing in the passage which we have
previously quoted the all-embracing character of the two great
classifications, including, on the one hand, direct taxes subject
to apportionment, and on the other, excises, duties, and imposts
subject to uniformity, held the law to be unconstitutional in
substance for these reasons: concluding that the classification of
direct was adopted for the purpose of rendering it impossible to
burden by taxation accumulations of property, real or personal,
except subject to the regulation of apportionment, it was held that
the duty existed to fix what was a direct tax in the constitutional
sense so as to accomplish this purpose contemplated by the
Constitution. (157 U.S. 157 U. S.
581 .) Coming to consider the validity of the tax from
this point of view, while not questioning at all that in common
understanding it was direct merely on income and only indirect on
property, it was held that, considering the substance of things, it
was direct on property in a constitutional sense, since to burden
an income by a tax was, from the point of substance, to burden the
property from which the income was derived, and thus accomplish the
very thing which the provision as to apportionment of direct taxes
was adopted to prevent. As this conclusion but enforced a
regulation as to the mode of exercising power under particular
circumstances, it did not in any way dispute the all-embracing
taxing authority possessed by Congress, including necessarily
therein the power to impose income taxes if only they conformed to
the constitutional regulations which were applicable to them.
Moreover, in addition, the conclusion reached in the Pollock case did not in any degree involve holding that
income taxes generically and necessarily came within the class Page 240 U. S. 17 of direct taxes on property, but, on the contrary, recognized
the fact that taxation on income was in its nature an excise
entitled to be enforced as such unless and until it was concluded
that to enforce it would amount to accomplishing the result which
the requirement as to apportionment of direct taxation was adopted
to prevent, in which case the duty would arise to disregard form
and consider substance alone, and hence subject the tax to the
regulation as to apportionment which otherwise as an excise would
not apply to it. Nothing could serve to make this clearer than to
recall that, in the Pollock case, insofar as the law taxed
incomes from other classes of property than real estate and
invested personal property -- that is, income from "professions,
trades, employments, or vocations" (158 U.S. 158 U. S. 637 )
-- its validity was recognized; indeed, it was expressly declared
that no dispute was made upon that subject, and attention was
called to the fact that taxes on such income had been sustained as
excise taxes in the past. Id., p. 158 U. S. 635 .
The whole law was, however, declared unconstitutional on the ground
that to permit it to thus operate would relieve real estate and
invested personal property from taxation, and
"would leave the burden of the tax to be borne by professions,
trades, employments, or vacations, and in that way what was
intended as a tax on capital would remain, in substance, a tax on
occupations and labor"
( id., p. 158 U. S. 637 )
-- a result which, it was held, could not have been contemplated by
Congress.
This is the text of the Amendment:
"The Congress shall have power to lay and collect taxes on
incomes, from whatever source derived, without apportionment among
the several states, and without regard to any census or
enumeration."
It is clear on the face of this text that it does not purport to
confer power to levy income taxes in a generic sense -- an
authority already possessed and never questioned -- Page 240 U. S. 18 or to limit and distinguish between one kind of income taxes and
another, but that the whole purpose of the Amendment was to relieve
all income taxes when imposed from apportionment from a
consideration of the source whence the income was derived. Indeed,
in the light of the history which we have given and of the decision
in the Pollock case, and the ground upon which the ruling
in that case was based, there is no escape from the conclusion that
the Amendment was drawn for the purpose of doing away for the
future with the principle upon which the Pollock case was
decided -- that is, of determining whether a tax on income was
direct not by a consideration of the burden placed on the taxed
income upon which it directly operated, but by taking into view the
burden which resulted on the property from which the income was
derived, since, in express terms, the Amendment provides that
income taxes, from whatever source the income may be derived, shall
not be subject to the regulation of apportionment. From this in
substance it indisputably arises, first, that all the contentions
which we have previously noticed concerning the assumed limitations
to be implied from the language of the Amendment as to the nature
and character of the income taxes which it authorizes find no
support in the text, and are in irreconcilable conflict with the
very purpose which the Amendment was adopted to accomplish. Second,
that the contention that the Amendment treats a tax on income as a
direct tax although it is relieved from apportionment and is
necessarily therefore not subject to the rule of uniformity as such
rule only applies to taxes which are not direct, thus destroying
the two great classifications which have been recognized and
enforced from the beginning, is also wholly without foundation
since the command of the Amendment that all income taxes shall not
be subject to apportionment by a consideration of the sources from
which the taxed income may be derived Page 240 U. S. 19 forbids the application to such taxes of the rule applied in the Pollock case by which alone such taxes were removed from
the great class of excises, duties, and imposts subject to the rule
of uniformity, and were placed under the other or direct class.
This must be unless it can be said that, although the Constitution,
as a result of the Amendment, in express terms excludes the
criterion of source of income, that criterion yet remains for the
purpose of destroying the classifications of the Constitution by
taking an excise out of the class to which it belongs and
transferring it to a class in which it cannot be placed
consistently with the requirements of the Constitution. Indeed,
from another point of view, the Amendment demonstrates that no such
purpose was intended, and, on the contrary, shows that it was drawn
with the object of maintaining the limitations of the Constitution
and harmonizing their operation. We say this because it is to be
observed that, although from the date of the Hylton case,
because of statements made in the opinions in that case, it had
come to be accepted that direct taxes in the constitutional sense
were confined to taxes levied directly on real estate because of
its ownership, the Amendment contains nothing repudiation or
challenging the ruling in the Pollock case that the word
"direct" had a broader significance, since it embraced also taxes
levied directly on personal property because of its ownership, and
therefore the Amendment at least impliedly makes such wider
significance a part of the Constitution -- a condition which
clearly demonstrates that the purpose was not to change the
existing interpretation except to the extent necessary to
accomplish the result intended -- that is, the prevention of the
resort to the sources from which a taxed income was derived in
order to cause a direct tax on the income to be a direct tax on the
source itself, and thereby to take an income tax out of the class
of excises, duties, and imposts, and place it in the class of
direct taxes. Page 240 U. S. 20 We come, then, to ascertain the merits of the many contentions
made in the light of the Constitution as it now stands -- that is
to say, including within its terms the provisions of the Sixteenth
Amendment as correctly interpreted. We first dispose of two
propositions assailing the validity of the statute on the one hand
because of its repugnancy to the Constitution in other respects,
and especially because its enactment was not authorized by the
Sixteenth Amendment.
The statute was enacted October 3, 1913, and provided for a
general yearly income tax from December to December of each year.
Exceptionally, however, it fixed a first period embracing only the
time from March 1, to December 31, 1913, and this limited
retroactivity is assailed as repugnant to the due process clause of
the Fifth Amendment, and as inconsistent with the Sixteenth
Amendment itself. But the date of the retroactivity did not extend
beyond the time when the Amendment was operative, and there can be
no dispute that there was power by virtue of the Amendment during
that period to levy the tax, without apportionment, and so far as
the limitations of the Constitution in other respects are
concerned, the contention is not open, since, in Stockdale
v. Atlantic Ins. Co. , 20 Wall. 323, 87 U. S. 331 ,
in sustaining a provision in a prior income tax law which was
assailed because of its retroactive character, it was said:
"The right of Congress to have imposed this tax by a new
statute, although the measure of it was governed by the income of
the past year, cannot be doubted; much less can it be doubted that
it could impose such a tax on the income of the current year,
though part of that year had elapsed when the statute was passed.
The joint resolution of July 4th, 1864, imposed a tax of five
percent upon all income of the previous year, although one tax on
it had already been paid, and no one doubted the validity of the
tax or attempted to resist it. " Page 240 U. S. 21 The statute provides that the tax should not apply to enumerated
organizations or corporations, such as labor, agricultural or
horticultural organizations, mutual savings banks, etc., and the
argument is that as the Amendment authorized a tax on incomes "from
whatever source derived," by implication it excluded the power to
make these exemptions. But this is only a form of expressing the
erroneous contention as to the meaning of the Amendment, which we
have already disposed of. And, so far as this alleged illegality is
based on other provisions of the Constitution, the contention is
also not open, since it was expressly considered and disposed of in Flint v. Stone Tracy Co., 220 U.
S. 107 , 220 U. S.
173 .
Without expressly stating all the other contentions, we
summarize them to a degree adequate to enable us to typify and
dispose of all of them.
1. The statute levies one tax called a normal tax on all incomes
of individuals up to $20,000, and from that amount up, by
gradations, a progressively increasing tax, called an additional
tax, is imposed. No tax, however, is levied upon incomes of
unmarried individuals amounting to $3,000 or less, nor upon incomes
of married persons amounting to $4,000 or less. The progressive tax
and the exempted amounts, it is said, are based on wealth alone,
and the tax is therefore repugnant to the due process clause of the
Fifth Amendment.
2. The act provides for collecting the tax at the source -- that
is, makes it the duty of corporations, etc., to retain and pay the
sum of the tax on interest due on bonds and mortgages, unless the
owner to whom the interest is payable gives a notice that he claims
an exemption. This duty cast upon corporations, because of the cost
to which they are subjected, is asserted to be repugnant to due
process of law as a taking of their property without compensation,
and we recapitulate various contentions as to discrimination
against corporations and against individuals Page 240 U. S. 22 predicated on provisions of the act dealing with the
subject.
(a) Corporations indebted upon coupon and registered bonds are
discriminated against, since corporations not so indebted are
relieved of any labor or expense involved in deducting and paying
the taxes of individuals on the income derived from bonds.
(b) Of the class of corporations indebted as above stated, the
law further discriminates against those which have assumed the
payment of taxes on their bonds, since, although some or all of
their bondholders may be exempt from taxation, the corporations
have no means of ascertaining such fact, and it would therefore
result that taxes would often be paid by such corporations when no
taxes were owing by the individuals to the government.
(c) The law discriminates against owners of corporate bonds in
favor of individuals none of whose income is derived from such
property, since bondholders are, during the interval between the
deducting and the paying of the tax on their bonds, deprived of the
use of the money so withheld.
(d) Again, corporate bondholders are discriminated against
because the law does not release them from payment of taxes on
their bonds even after the taxes have been deducted by the
corporation, and therefore if, after deduction, the corporation
should fail, the bondholders would be compelled to pay the tax a
second time.
(e) Owners of bonds the taxes on which have been assumed by the
corporation are discriminated against because the payment of the
taxes by the corporation does not relieve the bondholders of their
duty to include the income from such bonds in making a return of
all income, the result being a double payment of the taxes, labor
and expense in applying for a refund, and a deprivation of the use
of the sum of the taxes during the interval which elapses before
they are refunded. Page 240 U. S. 23 3. The provision limiting the amount of interest paid which may
be deducted from gross income of corporations for the purpose of
fixing the taxable income to interest on indebtedness not exceeding
one half the sum of bonded indebtedness and paid-up capital stock
is also charged to be wanting in due process because discriminating
between different classes of corporations and individuals.
4. It is urged that want of due process results from the
provision allowing individuals to deduct from their gross income
dividends paid them by corporations whose incomes are taxed, and
not giving such right of deduction to corporations.
5. Want of due process is also asserted to result from the fact
that the act allows a deduction of $3,000 or $4,000 to those who
pay the normal tax -- that is, whose incomes are $20,000 or less --
and does not allow the deduction to those whose incomes are greater
than $20,000 -- that is, such persons are not allowed, for the
purpose of the additional or progressive tax, a second right to
deduct the $3,000 or $4,000 which they have already enjoyed. And a
further violation of due process is based on the fact that, for the
purpose of the additional tax no second right to deduct dividends
received from corporations is permitted.
6. In various forms of statement, want of due process, it is
moreover insisted, arises from the provisions of the act allowing a
deduction for the purpose of ascertaining the taxable income of
stated amounts, on the ground that the provisions discriminate
between married and single people, and discriminate between
husbands and wives who are living together and those who are
not.
7. Discrimination and want of due process result, it is said,
from the fact that the owners of houses in which they live are not
compelled to estimate the rental value in making up their incomes,
while those who are living in rented houses and pay rent are not
allowed, in making up their taxable income, to deduct rent which
they have Page 240 U. S. 24 paid, and that want of due process also results from the fact
that, although family expenses are not, as a rule, permitted to be
deducted from gross, to arrive at taxable, income, farmers are
permitted to omit from their income return certain products of the
farm which are susceptible of use by them for sustaining their
families during the year.
So far as these numerous and minute, not to say in many respects
hypercritical, contentions are based upon an assumed violation of
the uniformity clause, their want of legal merit is at once
apparent, since it is settled that that clause exacts only a
geographical uniformity, and there is not a semblance of ground in
any of the propositions for assuming that a violation of such
uniformity is complained of. Knowlton v. Moore, 178 U. S. 41 ; Patton v. Brady, 184 U. S. 608 , 184 U. S. 622 ; Flint v. Stone Tracy Co., 220 U.
S. 107 , 220 U. S. 158 ; Billings v. United States, 232 U.
S. 261 , 232 U. S.
282 .
So far as the due process clause of the Fifth Amendment is
relied upon, it suffices to say that there is no basis for such
reliance, since it is equally well settled that such clause is not
a limitation upon the taxing power conferred upon Congress by the
Constitution; in other words, that the Constitution does not
conflict with itself by conferring, upon the one hand, a taxing
power, and taking the same power away, on the other, by the
limitations of the due process clause. Treat v. White, 181 U. S. 264 ; Patton v. Brady, 184 U. S. 608 ; McCray v. United States, 195 U. S. 27 , 195 U. S. 61 ; Flint v. Stone Tracy Co., 220 U.
S. 107 , 220 U. S. 158 ; Billings v. United States, 232 U.
S. 261 , 232 U. S. 282 .
And no change in the situation here would arise even if it be
conceded, as we think it must be, that this doctrine would have no
application in a case where, although there was a seeming exercise
of the taxing power, the act complained of was so arbitrary as to
constrain to the conclusion that it was not the exertion of
taxation, but a confiscation of property -- that is, a taking Page 240 U. S. 25 of the same in violation of the Fifth Amendment, or, what is
equivalent thereto, was so wanting in basis for classification as
to produce such a gross and patent inequality as to inevitably lead
to the same conclusion. We say this because none of the
propositions relied upon in the remotest degree presents such
questions. It is true that it is elaborately insisted that,
although there be no express constitutional provision prohibiting
it, the progressive feature of the tax causes it to transcend the
conception of all taxation and to be a mere arbitrary abuse of
power which must be treated as wanting in due process. But the
proposition disregards the fact that, in the very early history of
the government, a progressive tax was imposed by Congress, and that
such authority was exerted in some, if not all, of the various
income taxes enacted prior to 1894 to which we have previously
adverted. And over and above all this, the contention but
disregards the further fact that its absolute want of foundation in
reason was plainly pointed out in Knowlton v. Moore, 178 U. S. 41 , and
the right to urge it was necessarily foreclosed by the ruling in
that case made. In this situation, it is, of course, superfluous to
say that arguments as to the expediency of levying such taxes, or
of the economic mistake or wrong involved in their imposition, are
beyond judicial cognizance. Besides this demonstration of the want
of merit in the contention based upon the progressive feature of
the tax, the error in the others is equally well established either
by prior decisions or by the adequate bases for classification
which are apparent on the face of the assailed provisions; that is,
the distinction between individuals and corporations, the
difference between various kinds of corporations, etc., etc. Knowlton v. Moore, supra; Flint v. Stone Tracy Co., supra;
Billings v. United States, supra; 76 U. S. Commonwealth, 9 Wall. 353; National Safe Deposit Co. v.
Illinois, 232 U. S. 58 , 232 U. S. 70 . In
fact, comprehensively surveying all the contentions Page 240 U. S. 26 relied upon, aside from the erroneous construction of the
Amendment which we have previously disposed of, we cannot escape
the conclusion that they all rest upon the mistaken theory that,
although there be differences between the subjects taxed, to
differently tax them transcends the limit of taxation and amounts
to a want of due process, and that, where a tax levied is believed
by one who resists its enforcement to be wanting in wisdom and to
operate injustice, from that fact in the nature of things there
arises a want of due process of law and a resulting authority in
the judiciary to exceed its powers and correct what is assumed to
be mistaken or unwise exertions by the legislative authority of its
lawful powers, even although there be no semblance of warrant in
the Constitution for so doing.
We have not referred to a contention that, because certain
administrative powers to enforce the act were conferred by the
statute upon the Secretary of the Treasury, therefore it was void
as unwarrantedly delegating legislative authority, because we think
to state the proposition is to answer it. Field v. Clark, 143 U. S. 649 ; Buttfield v. Stranahan, 192 U. S. 470 , 192 U. S. 496 ; Oceanic Steam Navigation Co. v. Stranahan, 214 U.
S. 320 . Affirmed. | In Brushaber v. Union Pacific Railroad Co., the US Supreme Court upheld the constitutionality of the income tax provisions within the Tariff Act of 1913. The Court ruled that the Sixteenth Amendment was intended to clarify Congress's taxing powers, not to create new ones, and that it allowed for income taxes without apportionment among the states. The Court also rejected arguments that the tax was unconstitutional due to retroactivity, violations of due process, or denial of equal protection based on classifications. The Court affirmed that the Fifth Amendment does not limit Congress's taxing power and that debates about tax expediency are not for the judiciary. The Court also dismissed claims that the Act unlawfully delegated legislative authority to the Secretary of the Treasury. |
Taxes | Pollock v. Farmers' Loan & Trust Co. | https://supreme.justia.com/cases/federal/us/157/429/ | U.S. Supreme Court Pollock v. Farmers' Loan & Trust
Co., 157
U.S. 429 (1895) Pollock v. Farmers' Loan and Trust
Company No. 898 Argued March 7, 8. 11, 12, 13,
1895 Decided April 8,
1895. 157
U.S. 429 APPEAL FROM THE CIRCUIT COURT OF
THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW
YORK Syllabus A court of equity has jurisdiction to prevent a threatened
breach of trust in the misapplication or diversion of the funds of
a corporation by illegal payments out of its capital or
profits.
Such a bill being filed by a stockholder to prevent a trust
company from voluntarily making returns for the imposition and
payment of a tax claimed to be unconstitutional, and on the further
ground of threatened multiplicity of suits and irreparable injury,
and the objection of adequate remedy at law not having been raised
below or in this court, and the question of jurisdiction having
been waived by the United States so far as it was within its power
to do so, and the relief sought being to prevent the voluntary
action of the trust company, and not in respect to the assessment
and collection of the tax, the court will proceed to judgment on
the merits.
The doctrine of stare decisis is a salutary one, and is
to be adhered to on proper occasions, in respect of decisions
directly upon points in issue; but this court should not extend any
decision upon a constitutional question if it is convinced that
error in principle might supervene.
In the cases referred to in the opinion of the court in this
case, beginning with Hylton v. United
States , 3 Dall. 171, (February Term, 1796) and
ending with Springer v. United States, 102 U.
S. 586 (October Term, 1880), taxes on land are conceded
to be direct taxes, and in none of them is it determined that a tax
on rent or income derived from land is not a tax on land.
A tax on the rents or income of real estate is a direct tax
within the meaning of that term as used in the Constitution of the
United States.
A tax upon income derived from the interest of bonds issued by a
municipal corporation is a tax upon the power of the State and its
instrumentalities to borrow money, and is consequently repugnant to
the Constitution of the United States.
So much of the act "to reduce taxation, to provide revenue for
the government, and for other purposes," 28 Stat. 509, c. 349, as
provides for levying taxes upon rents or income derived from real
estate, or from the interest on municipal bonds, is repugnant to
the Constitution of the United States, and is invalid.
Upon each of the other questions argued at the bar, to-wit: 1,
whether the void provision as to rents and income from real estate
invalidates Page 157 U. S. 430 the whole act? 2, whether, as to the income from personal
property a such, the act is unconstitutional as laying direct
taxes? 3, whether any part of the tax, if not considered as a
direct tax, is invalid for want of uniformity on either of the
grounds suggested? -- the Justices who heard the argument are
equally divided, and, therefore, no opinion is expressed.
This was a bill filed by Charles Pollock, a citizen of the State
of Massachusetts, on behalf of himself and all other stockholders
of the defendant company similarly situated against the Farmers'
Loan and Trust Company, a corporation of the State of New York, and
its directors, alleging that the capital stock of the corporation
consisted of one million dollars, divided into forty thousand
shares of the par value of twenty-five dollars each; that the
company was authorized to invest its assets in public stocks and
bonds of the United States, of individual States, or of any
incorporated city, or county, or in such real or personal
securities as it might deem proper, and also to take, accept, and
execute all such trusts of every description as might be committed
to it by any person or persons or any corporation, by grant,
assignment, devise, or bequest, or by order of any court of record
of New York, and to receive and take any real estate which might be
the subject of such trust; that the property and assets of the
company amounted to more than five million dollars, of which at
least one million was invested in real estate owned by the company
in fee; at least two millions in bonds of the city of New York, and
at least one million in the bonds and stocks of other corporations
of the United States; that the net profits or income of the
defendant company during the year ending December 31, 1894,
amounted to more than the sum of $300,000 above its actual
operating and business expenses, including losses and interest on
bonded and other indebtedness; that, from its real estate, the
company derived an income of $50,000 per annum, after deducting all
county, state, and municipal taxes, and that the company derived an
income or profit of about $60,000 per annum from its investments in
municipal bonds.
It was further alleged that, under and by virtue of the
powers Page 157 U. S. 431 conferred upon the company, it had from time to time taken and
executed, and was holding and executing, numerous trusts committed
to the company by many persons, copartnerships, unincorporated
associations, and corporations, by grant, assignment, devise, and
bequest, and by orders of various courts, and that the company now
held as trustee for many minors, individuals, copartnerships,
associations, and corporations, resident in the United States and
elsewhere, many parcels of real estate situated in the various
States of the United States, and amounting, in the aggregate, to a
value exceeding five millions of dollars, the rents and income of
which real estate collected and received by said defendant in its
fiduciary capacity annually exceeded the sum of two hundred
thousand dollars.
The bill also averred that complainant was and had been since
May 20, 1892, the owner and registered holder of ten shares of the
capital stock of the company, of a value exceeding the sum of
$5,000; that the capital stock was divided among a large number of
different persons who, as such stockholders, constituted a large
body; that the bill was filed for an object common to them all, and
that he therefore, brought suit not only in his own behalf as a
stockholder of the company, but also as a representative of and on
behalf of such of the other stockholders similarly situated and
interested as might choose to intervene and become parties.
It was then alleged that the management of the stock, property,
affairs, and concerns of the company was committed under its acts
of incorporation to its directors, and charged that the company and
a majority of its directors claimed and asserted that, under and by
virtue of the alleged authority of the provisions of an act of
Congress of the United States entitled, "An act to reduce taxation,
to provide revenue for the government, and for other purposes,"
passed August 15, 1894, the company was liable, and that they
intended to pay to the United States before July 1, 1895, a tax of
two percentum on the net profits of said company for the year
ending December 31, 1894, above actual operating and business
expenses, including the income derived from its real estate and Page 157 U. S. 432 its bonds of the city of New York, and that the directors
claimed and asserted that a similar tax must be paid upon the
amount of the incomes, gains, and profits, in excess of $4000, of
all minors and others for whom the company was acting in a
fiduciary capacity. And further, that the company and its directors
had avowed their intention to make and file with the collector of
internal revenue for the second district of the city of New York a
list, return, or statement showing the amount of the net income of
the company received during the year 1894 as aforesaid, and
likewise to make and render a list or return to said collector of
internal revenue, prior to that date, of the amount of the income,
gains, and profits of all minors and other persons having incomes
in excess of $300, for whom the company was acting in a fiduciary
capacity.
The bill charged that the provisions in respect of said alleged
income tax incorporated in the act of Congress were
unconstitutional, null, and void, in that the tax was a direct tax
in respect of the real estate held and owned by the company in its
own right and in its fiduciary capacity as aforesaid by being
imposed upon the rents, issues, and profits of said real estate,
and was likewise a direct tax in respect of its personal property
and the personal property held by it for others for whom it acted
in its fiduciary capacity as aforesaid, which direct taxes were not
in and by said act apportioned among the several States as required
by section 2 of article I of the Constitution, and that, if the
income tax so incorporated in the act of Congress aforesaid were
held not to be a direct tax, nevertheless its provisions were
unconstitutional, null and void in that they were not uniform
throughout the United States as required in and by section of
article I of the Constitution of the United States, upon many
grounds and in many particulars specifically set forth.
The bill further charged that the income tax provisions of the
act were likewise unconstitutional in that they imposed a tax on
incomes not taxable under the Constitution and likewise income
derived from the stocks and bonds of the States of the United
States and counties and municipalities therein, Page 157 U. S. 433 which stocks and bonds are among the means and instrumentalities
employed for carrying on their respective governments, and are not
proper subjects of the taxing power of Congress, and which States
and their counties and municipalities are independent of the
general government of the United States, and the respective stocks
and bonds of which are, together with the power of the States to
borrow in any form, exempt from Federal taxation.
Other grounds of unconstitutionality were assigned, and the
violation of articles IV and V of the Constitution asserted.
The bill further averred that the suit was not a collusive one
to confer on a court of the United States jurisdiction of the case
of which it would not otherwise have cognizance, and that
complainant had requested the company and its directors to omit and
refuse to pay said income tax, and to contest the constitutionality
of said act, and to refrain from voluntarily making lists, returns,
and statements on its own behalf and on behalf of the minors and
other persons for whom it was acting in a fiduciary capacity, and
to apply to a court of competent jurisdiction to determine its
liability under said act, but that the company and a majority of
its directors, after a meeting of the directors at which the matter
and the request of complainant were formally laid before them for
action, had refused and still refuse, and intend omitting to comply
with complainant's demand, and had resolved and determined, and
intended to comply with all and singular the provisions of the said
act of Congress, and to pay the tax upon all its net profits or
income as aforesaid, including its rents from real estate and its
income from municipal bonds, and a copy of the refusal of the
company was annexed to the complaint.
It was also alleged that, if the company and its directors, as
they proposed and had declared their intention to do, should pay
the tax out of its gains, income, and profits, or out of the gains,
income, and profits of the property held by it in its fiduciary
capacity, they will diminish the assets of the company and lessen
the dividends thereon and the value of the shares; that voluntary
compliance with the income tax provisions would expose the company
to a multiplicity of suits, not only by and Page 157 U. S. 434 on behalf of its numerous shareholders, but by and on behalf of
numerous minors and others for whom it acts in a fiduciary
capacity, and that such numerous suits would work irreparable
injury to the business of the company, and subject it to great and
irreparable damage, and to liability to the beneficiaries
aforesaid, to the irreparable damage of complainant and all its
shareholders.
The bill further averred that this was a suit of a civil nature
in equity; that the matter in dispute exceeded, exclusive of costs,
the sum of five thousand dollars, and arose under the Constitution
or laws of the United States, and that there was furthermore a
controversy between citizens of different States
The prayer was that it might be adjudged and decreed that the
said provisions known as the income tax incorporated in said act of
Congress passed August 1, 1894, are unconstitutional, null, and
void; that the defendants be restrained from voluntarily complying
with the provisions of said act and making the lists, returns, and
statements above referred to, or paying the tax aforesaid, and for
general relief.
The defendants demurred on the ground of want of equity, and the
cause having been brought on to be heard upon the bill and demurrer
thereto, the demurrer was sustained and the bill of complaint
dismissed with costs, whereupon the record recited that the
constitutionality of a law of the United States was drawn in
question, and an appeal was allowed directly to this court.
An abstract of the act in question will be found in the margin. * Page 157 U. S. 435 By the third clause of section two of Article I of the
Constitution, it was provided:
"Representatives and direct taxes shall Page 157 U. S. 436 be apportioned among the several States which may be included
within this Union, according to their respective numbers, Page 157 U. S. 437 which shall be determined by adding to the whole number of free
persons, including those bound to service for term of Page 157 U. S. 438 years, and excluding Indians not taxed, three-fifths of all
other persons."
This was amended by the second section of the Page 157 U. S. 439 Fourteenth Article, declared ratified July 28, 1868, so that the
whole number of persons in each State should be counted, Page 157 U. S. 440 Indians not taxed excluded, and the provision, as thus amended,
remains in force. Page 157 U. S. 441 The actual enumeration was prescribed to be made within three
years after the first meeting of Congress and within every
subsequent term of ten years, in such manner as should be
directed.
Section 7 requires "all bills for raising revenue shall
originate in the House of Representatives."
The first clause of section 8 reads thus:
"The Congress shall have power to lay and collect taxes, duties,
imposts, and excises, to pay the debts and provide for the common
defence and general welfare of the United States; but all duties,
imposts and excises shall be uniform throughout the United
States."
And the third clause thus:
"To regulate commerce with foreign nations, and among the
several States, and with the Indian tribes."
The fourth, fifth, and sixth clauses of section are as
follows:
"No capitation, or other direct, tax shall be laid, unless in
proportion to the census or enumeration hereinbefore directed to be
taken."
"No tax or duty shall be laid on articles exported from any
State."
"No preference shall be given by any regulation of commerce or
revenue to the ports of one State over those of another; nor shall
vessels bound to, or from, one State, be obliged to enter, clear,
or pay duties in another."
It is also provided by the second clause of section 10 that
"no State shall, without the consent of the Congress, lay any
imposts or duties on imports or exports, except what may be Page 157 U. S. 442 absolutely necessary for executing its inspection laws;"
and, by the third clause, that "no State shall, without the
consent of Congress, lay any duty of tonnage."
The first clause of section 9 provides:
"The migration or importation of such persons as any of the
States now existing shall think proper to admit shall not be
prohibited by the Congress prior to the year one thousand eight
hundred and eight, but a tax or duty may be imposed on such
importations, not exceeding ten dollars for each person."
Article V prescribes the mode for the amendment of the
Constitution, and concludes with this proviso:
"Provided that no amendment which may be made prior to the year
one thousand eight hundred and eight shall in any manner affect the
first and fourth clauses in the ninth section of the first article.
" Page 157 U. S. 553 MR. CHIEF JUSTICE FULLER, after stating the case as above
reported. delivered the opinion of the court.
The jurisdiction of a court of equity to prevent any threatened
breach of trust in the misapplication or diversion of the funds of
a corporation by illegal payments out of its capital or profits has
been frequently sustained. Dodge v.
Woolsey , 18 How. 331; Hawes v. Oakland, 104 U. S. 450 . Page 157 U. S. 554 As in Dodge v. Woolsey, this bill proceeds on the
ground that the defendants would be guilty of such breach of trust
or duty in voluntarily making returns for the imposition of, and
paying, an unconstitutional tax, and also on allegations of
threatened multiplicity of suits and irreparable injury.
The objection of adequate remedy at law was not raised below,
nor is it now raised by appellees, if it could be entertained at
all at this stage of the proceedings; and, so far as it was within
the power of the government to do so, the question of jurisdiction,
for the purposes of the case, was explicitly waived on the
argument. The relief sought was in respect of voluntary action by
the defendant company, and not in respect of the assessment and
collection themselves. Under these circumstances, we should not be
justified in declining to proceed to judgment upon the merits. Pelton. v. National Bank, 101 U.
S. 143 , 101 U. S. 148 ; Cummings v. National Bank, 101 U.
S. 153 101 U. S. 157 ; Reynes v. Dumont, 130 U. S. 354 .
Since the opinion in Marbury v.
Madison , 1 Cranch 137, 5 U. S. 177 , was
delivered, it has not been doubted that it is within judicial
competency, by express provisions of the Constitution or by
necessary inference and implication, to determine whether a given
law of the United States is or is not made in pursuance of the
Constitution, and to hold it valid or void accordingly. "If," said
Chief Justice Marshall,
"both the law and the Constitution apply to a particular case,
so that the court must either decide that case conformably to the
law, disregarding the Constitution; or conformably to the
Constitution, disregarding the law; the court must determine which
of these conflicting rules governs the case. This is of the very
essence of judicial duty."
And the Chief Justice added that the doctrine
"that courts must close their eyes on the Constitution, and see
only the law . . . would subvert the very foundation of all written
constitutions."
Necessarily, the power to declare a law unconstitutional is
always exercised with reluctance; but the duty to do so, in a
proper case, cannot be declined, and must be discharged in
accordance with the deliberate judgment of the tribunal in which
the validity of the enactment is directly drawn in question. Page 157 U. S. 555 The contention of the complainant is:
First. That the law in question, in imposing a tax on the income
or rents of real estate, imposes a tax upon the real estate itself,
and in imposing a tax on the interest or other income of bonds or
other personal property held for the purposes of income or
ordinarily yielding income, imposes a tax upon the personal estate
itself; that such tax is a direct tax, and void because imposed
without regard to the rule of apportionment, and that, by reason
thereof, the whole law is invalidated.
Second. That the law is invalid because imposing indirect taxes
in violation of the constitutional requirement of uniformity, and
therein also in violation of the implied limitation upon taxation
that all tax laws must apply equally, impartially, and uniformly to
all similarly situated. Under the second head, it is contended that
the rule of uniformity is violated in that the law taxes the income
of certain corporations, companies, and associations, no matter how
created or organized, at a higher rate than the incomes of
individuals or partnerships derived from precisely similar property
or business; in that it exempts from the operation of the act and
from the burden of taxation numerous corporations, companies, and
associations having similar property and carrying on similar
business to those expressly taxed, in that it denies to individuals
deriving their income from shares in certain corporations,
companies, and associations the benefit of the exemption of $4,000
granted to other persons interested in similar property and
business; in the exemption of $4,000; in the exemption of building
and loan associations, savings banks, mutual life, fire, marine,
and accident insurance companies, existing solely for the pecuniary
profit of their members; these and other exemptions being alleged
to be purely arbitrary and capricious, justified by no public
purpose, and of such magnitude as to invalidate the entire
enactment, and in other particulars.
Third. That the law is invalid so far as imposing a tax upon
income received from state and municipal bonds.
The Constitution provides that representatives and direct Page 157 U. S. 556 taxes shall be apportioned among the several States according to
numbers, and that no direct tax shall be laid except according to
the enumeration provided for, and also that all duties, imposts,
and excises shall be uniform throughout the United States.
The men who framed and adopted that instrument had just emerged
from the struggle for independence whose rallying cry had been that
"taxation and representation go together."
The mother country had taught the colonists, in the contests
waged to establish that taxes could not be imposed by the sovereign
except as they were granted by the representatives of the realm,
that self-taxation constituted the main security against
oppression. As Burke declared in his speech on Conciliation with
America, the defenders of the excellence of the English
constitution
"took infinite pains to inculcate, as a fundamental principle,
that, in all monarchies, the people must, in effect, themselves,
mediately or immediately, possess the power of granting their own
money, or no shadow of liberty could subsist."
The principle was that the consent of those who were expected to
pay it was essential to the validity of any tax.
The States were about, for all national purposes embraced in the
Constitution, to become one, united under the same sovereign
authority and governed by the same laws. But as they still retained
their jurisdiction over all persons and things within their
territorial limits, except where surrendered to the general
government or restrained by the Constitution. they were careful to
see to it that taxation and representation should go together, so
that the sovereignty reserved should not be impaired, and that,
when Congress, and especially the House of Representatives, where
it was specifically provided that all revenue bills must originate,
voted a tax upon property, it should be with the consciousness, and
under the responsibility, that, in so doing, the tax so voted would
proportionately fall upon the immediate constituents of those who
imposed it.
More than this, by the Constitution, the States not only gave to
the action the concurrent power to tax persons and Page 157 U. S. 557 property directly, but they surrendered their own power to levy
taxes on imports and to regulate commerce. All the thirteen were
seaboard States, but they varied in maritime importance, and
differences existed between them in population, in wealth, in the
character of property and of business interests. Moreover, they
looked forward to the coming of new States from the great West into
the vast empire of their anticipations. So when the wealthier
States, as between themselves and their less favored associates,
and all as between themselves and those who were to come, gave up
for the common good the great sources of revenue derived through
commerce, they did so in reliance on the protection afforded by
restrictions on the grant of power.
Thus, in the matter of taxation, the Constitution recognizes the
two great classes of direct and indirect taxes, and lays down two
rules by which their imposition must be governed, namely: the rule
of apportionment as to direct taxes, and the rule of uniformity as
to duties, imposts and excises.
The rule of uniformity was not prescribed to the exercise of the
power granted by the first paragraph of section eight, to lay and
collect taxes, because the rule of apportionment as to taxes had
already been laid down in the third paragraph of the second
section.
And this view was expressed by Mr. Chief Justice Chase in The License Tax
Cases , 5 Wall. 462, 72 U. S. 471 ,
when he said:
"It is true that the power of Congress to tax is a very
extensive power. It is given in the Constitution, with only one
exception and only two qualifications. Congress cannot tax exports,
and it must impose direct taxes by the rule of apportionment, and
indirect taxes by the rule of uniformity. Thus limited, and thus
only it reaches every subject, and may be exercised at
discretion."
And although there have been from time to time intimations that
there might be some tax which was not a direct tax nor included
under the words "duties, imposts and excises," such a tax, for more
than one hundred years of national existence, has as yet remained
undiscovered, notwithstanding the stress of particular
circumstances has invited thorough investigation into sources of
revenue. Page 157 U. S. 558 The first question to be considered is whether a tax on the
rents or income of real estate is a direct tax within the meaning
of the Constitution. Ordinarily, all taxes paid primarily by
persons who can shift the burden upon someone else, or who are
under no legal compulsion to pay them, are considered indirect
taxes; but a tax upon property holders in respect of their estates,
whether real or personal, or of the income yielded by such estates,
and the payment of which cannot be avoided, are direct taxes.
Nevertheless, it may be admitted that, although this definition of
direct taxes is prima facie correct, and to be applied in
the consideration of the question before us, yet that the
Constitution may bear a different meaning, and that such different
meaning must be recognized. But in arriving at any conclusion upon
this point, we are at liberty to refer to the historical
circumstances attending the framing and adoption of the
Constitution, as well as the entire frame and scheme of the
instrument, and the consequences naturally attendant upon the one
construction or the other.
We inquire, therefore, what, at the time the Constitution was
framed and adopted, were recognized as direct taxes? What did those
who framed and adopted it understand the terms to designate and
include?
We must remember that the fifty-five members of the
constitutional convention were men of great sagacity, fully
conversant with governmental problems, deeply conscious of the
nature of their task, and profoundly convinced that they were
laying the foundations of a vast future empire.
"To many in the assembly, the work of the great French
magistrate on the 'Spirit of Laws,' of which Washington, with his
own hand, had copied an abstract by Madison, was the favorite
manual; some of them had made an analysis of all federal
governments in ancient and modern times, and a few were well versed
in the best English, Swiss, and Dutch writers on government. They
had immediately before them the example of Great Britain, and they
had a still better school of political wisdom in the republican
constitutions of their several States, which many of them had
assisted to frame."
2 Bancroft's Hist.Const.
The Federalist demonstrates the value attached by Hamilton, Page 157 U. S. 559 Madison, and Jay to historical experience, and shows that they
had made a careful study of many forms of government. Many of the
framers were particularly versed in the literature of the period,
Franklin, Wilson, and Hamilton, for example. Turgot had published
in 1764 his work on taxation, and in 1766 his essay on "The
Formation and Distribution of Wealth," while Adam Smith's "Wealth
of Nations" was published in 1776. Franklin, in 1766, had said upon
his examination before the House of Commons that:
"An external tax is a duty laid on commodities imported; that
duty is added to the first cost and other charges on the commodity,
and, when it is offered to sale, makes a part of the price. If the
people do not like it at that price, they refuse it; they are not
obliged to pay it. But an internal tax is forced from the people
without their consent if not laid by their own representatives. The
stamp act says, we shall have no commerce, make no exchange of
property with each other, neither purchase nor grant, nor recover
debts; we shall neither marry nor make our wills, unless we pay
such and such sums; and thus it is intended to extort our money
from us or ruin us by the consequences of refusing to pay."
16 Parl.Hist. 144.
They were, of course, familiar with the modes of taxation
pursued in the several States. From the report of Oliver Wolcott,
when Secretary of the Treasury, on direct taxes, to the House of
Representatives, December 14, 1796, his most important state paper,
(Am.State Papers, 1 Finance 431) and the various state laws then
existing, it appears that, prior to the adoption of the
Constitution, nearly all the States imposed a poll tax, taxes on
land, on cattle of all kinds, and various kinds of personal
property, and that, in addition, Massachusetts, Connecticut,
Pennsylvania, Delaware, New Jersey, Virginia, and South Carolina
assessed their citizens upon their profits from professions,
trades, and employments.
Congress, under the articles of confederation, had no actual
operative power of taxation. It could call upon the States for
their respective contributions or quotas as previously determined
on, but in case of the failure or omission of the States to furnish
such contribution, there were no means of Page 157 U. S. 560 compulsion, as Congress had no power whatever to lay any tax
upon individuals. This imperatively demanded a remedy, but the
opposition to granting the power of direct taxation in addition to
the substantially exclusive power of laying imposts and duties was
so strong that it required the convention, in securing effective
powers of taxation to the Federal government, to use the utmost
care and skill to so harmonize conflicting interests that the
ratification of the instrument could be obtained.
The situation and the result are thus described by Mr. Chief
Justice Chase in Lane County v.
Oregon , 7 Wall. 71, 74 U. S. 76 :
"The people of the United States constitute one nation, under
one government, and this government, within the scope of the powers
with which it is invested, is supreme. On the other hand, the
people of each State compose a State, having its own government,
and endowed with all the functions essential to separate and
independent existence. The States, disunited, might continue to
exist. Without the States in union, there could be no such
political body as the United States. Both the States and the United
States existed before the Constitution. The people, through that
instrument, established a more perfect union by substituting a
national government, acting, with ample power, directly upon the
citizens, instead of the confederate government, which acted with
powers, greatly restricted, only upon the States. But, in many
articles of the Constitution, the necessary existence of the
States, and, within their proper spheres, the independent authority
of the States, is distinctly recognized. To them, nearly the whole
charge of interior regulation is committed or left; to them and to
the people, all powers not expressly delegated to the national
government are reserved. The general condition was well stated by
Mr. Madison in the Federalist, thus:"
"The Federal and state governments are, in fact, but different
agents and trustees of the people, constituted with different
powers and designated for different purposes."
"Now, to the existence of the States, themselves necessary to
the existence of the United States, the power of taxation is
indispensable. It is an essential function of Page 157 U. S. 561 government. It was exercised by the colonies, and when the
colonies became States, both before and after the formation of the
confederation, it was exercised by the new governments. Under the
Articles of Confederation, the government of the United States was
limited in the exercise of this power to requisitions upon the
States, while the whole power of direct and indirect taxation of
persons and property, whether by taxes on polls, or duties on
imports, or duties on internal production, manufacture, or use, was
acknowledged to belong exclusively to the States, without any other
limitation than that of noninterference with certain treaties made
by Congress. The Constitution, it is true, greatly changed this
condition of things. It gave the power to tax, both directly and
indirectly, to the national government, and, subject to the one
prohibition of any tax upon exports and to the conditions of
uniformity in respect to indirect and of proportion in respect to
direct taxes, the power was given without any express reservation.
On the other hand, no power to tax exports, or imports except for a
single purpose and to an insignificant extent, or to lay any duty
on tonnage, was permitted to the States. In respect, however, to
property, business, and persons within their respective limits,
their power of taxation remained and remains entire. It is indeed a
concurrent power, and, in the case of a tax on the same subject by
both governments, the claim of the United States, as the supreme
authority, must be preferred; but, with this qualification, it is
absolute. The extent to which it shall be exercised, the subjects
upon which it shall be exercised, and the mode in which it shall be
exercised are all equally within the discretion of the legislatures
to which the States commit the exercise of the power. That
discretion is restrained only by the will of the people expressed
in the state constitutions or through elections, and by the
condition that it must not be so used as to burden or embarrass the
operations of the national government. There is nothing in the
Constitution which contemplates or authorizes any direct abridgment
of this power by national legislation. To the extent just
indicated, it is as complete in the States as the like Page 157 U. S. 562 power, within the limits of the Constitution, is
complete in Congress."
On May 29, 1787, Charles Pinckney presented his draft of a
proposed constitution, which provided that the proportion of direct
taxes should be regulated by the whole number of inhabitants of
every description, taken in the manner prescribed by the
legislature, and that no tax should be paid on articles exported
from the United States. 1 Elliot 147, 148.
Mr. Randolph's plan declared
"that the right of suffrage in the national legislature ought to
be proportioned to the quotas of contribution, or to the number of
free inhabitants, as the one or the other may seem best in
different cases."
1 Elliot 143.
On June 15, Mr. Paterson submitted several resolutions, among
which was one proposing that the United States in Congress should
be authorized to make requisitions in proportion to the whole
number of white and other free citizens and inhabitants, including
those bound to servitude for a term of years, and three-fifths of
all other persons, except Indians not taxed. 1 Elliot 175, 176.
On the ninth of July, the proposition that the legislature be
authorized to regulate the number of representatives according to
wealth and inhabitants was approved, and on the eleventh, it was
voted that "in order to ascertain the alterations that may happen
in the population and wealth of the several States, a census shall
be taken," although the resolution of which this formed a part was
defeated. Elliot (Madison Papers) 288, 295; 1 Elliot 200.
On July 12, Gouverneur Morris moved to add to the clause
empowering the legislature to vary the representation according to
the amount of wealth and number of the inhabitants, a proviso that
taxation should be in proportion to representation, and, admitting
that some objections lay against his proposition which would be
removed by limiting it to direct taxation, since, with regard to
indirect taxes on exports and imports, and on consumption, the rule
would be inapplicable, varied his motion by inserting the word
"direct," whereupon it passed as follows: "Provided always that
direct taxation Page 157 U. S. 563 ought to be proportioned to representation." 5 Elliot (Madison
Papers) 302.
Amendments were proposed by Mr. Ellsworth and Mr. Wilson to the
effect that the rule of contribution by direct taxation should be
according to the number of white inhabitants and three-fifths of
every other description, and that, in order to ascertain the
alterations in the direct taxation which might be required from
time to time, a census should be taken; the word wealth was struck
out of the clause, on motion of Mr. Randolph, and the whole
proposition, proportionate representation to direct taxation, and
both to the white and three-fifths of the colored inhabitants, and
requiring a census, was adopted.
In the course of the debates, and after the motion of Mr.
Ellsworth that the first census be taken in three years after the
meeting of Congress had been adopted, Mr. Madison records: "Mr.
King asked what was the precise meaning of direct taxation. No one
answered." But Mr. Gerry immediately moved to amend by the
insertion of the clause that
"from the first meeting of the legislature of the United States
until a census shall be taken, all moneys for supplying the public
treasury by direct taxation shall be raised from the several States
according to the number of their representatives respectively in
the first branch."
This left for the time the matter of collection to the States.
Mr. Langdon objected that this would bear unreasonably hard against
New Hampshire, and Mr. Martin said that direct taxation should not
be used but in cases of absolute necessity, and then the States
would be the best judges of the mode. 5 Elliot (Madison Papers)
451, 453.
Thus was accomplished one of the great compromises of the
Constitution, resting on the doctrine that the right of
representation ought to be conceded to every community on which tax
is to be imposed, but crystallizing it in such form as to allay
jealousies in respect of the future balance of power; to reconcile
conflicting views in respect of the enumeration of slaves, and to
remove the objection that, in adjusting a system of representation
between the States, regard should be had to their relative wealth,
since those who were to be most heavily Page 157 U. S. 564 taxed ought to have a proportionate influence in the
government.
The compromise, in embracing the power of direct taxation,
consisted not simply in including part of the slaves in the
enumeration of population, but in providing that, as between State
and State, such taxation should be proportioned to representation.
The establishment of the same rule for the apportionment of taxes
as for regulating the proportion of representatives, observed Mr.
Madison in No. 54 of the Federalist, was by no means founded on the
same principle, for, as to the former, it had reference to the
proportion of wealth, and although in respect of that it was, in
ordinary cases, a very unfit measure, it "had too recently obtained
the general sanction of America not to have found a ready
preference with the convention," while the opposite interests of
the States, balancing each other, would produce impartiality in
enumeration. By prescribing this rule, Hamilton wrote (Federalist,
No. 36) that the door was shut "to partiality or oppression," and
"the abuse of this power of taxation to have been provided against
with guarded circumspection;" and obviously the operation of direct
taxation on every State tended to prevent resort to that mode of
supply except under pressure of necessity and to promote prudence
and economy in expenditure.
We repeat that the right of the Federal government to directly
assess and collect its own taxes, at least until after requisitions
upon the States had been made and failed, was one of the chief
points of conflict, and Massachusetts, in ratifying, recommended
the adoption of an amendment in these words:
"That Congress do not lay direct taxes but when the moneys
arising from the impost and excise are insufficient for the public
exigencies, nor then until Congress shall have first made a
requisition upon the States to assess, levy, and pay, their
respective proportions of such requisition, agreeably to the census
fixed in the said Constitution, in such way and manner as the
legislatures of the States shall think best."
1 Elliot 322. And in this South Carolina, New York, New
Hampshire, and Rhode Island concurred. Id. 325, 326, 329,
336. Page 157 U. S. 565 Luther Martin, in his well known communication to the
legislature of Maryland in January, 1788, expressed his views
thus:
"By the power to lay and collect taxes, they may proceed to
direct taxation on every individual, either by a capitation tax on
their heads or an assessment on their property. . . . Many of the
members, and myself in the number, thought that states were much
better judges of the circumstances of their citizens, and what sum
of money could be collected from them by direct taxation, and of
the manner in which it could be raised with the greatest ease and
convenience to their citizens, than the general government could
be, and that the general government ought not to have the power of
laying direct taxes in any case but in that of the delinquency of a
State."
1 Elliot 34, 38, 369.
Ellsworth and Sherman wrote the governor of Connecticut,
September 26, 1787, that it was probable
"that the principal branch of revenue will be duties on imports.
What may be necessary to be raised by direct taxation is to be
apportioned on the several States, according to the number of their
inhabitants, and although Congress may raise the money by their own
authority, if necessary, yet that authority need not be exercised,
if each State will furnish its quota."
1 Elliot 49.
And Ellsworth, in the Connecticut convention, in discussing the
power of Congress to lay taxes, pointed out that all sources of
revenue, excepting the impost, still lay open to the States, and
insisted that it was
"necessary that the power of the general legislature should
extend to all the objects of taxation, that government should be
able to command all the resources of the country, because no man
can tell what our exigencies may be. Wars have now become rather
wars of the purse than of the sword. Government must therefore be
able to command the whole power of the purse. . . . Direct taxation
can go but little way towards raising a revenue. To raise money in
this way, people must be provident; they must constantly be laying
up money to answer the demands of the collector. But you cannot
make people thus provident. If you would do anything to the
purpose, you must come in when they are spending, and take a part
with them. . . . Page 157 U. S. 566 All nations have seen the necessity and propriety of raising a
revenue by indirect taxation, by duties upon articles of
consumption. . . . In England, the whole public revenue is about
twelve millions sterling per annum. The land tax amounts to about
two millions; the window and some other taxes, to about two
millions more. The other eight millions are raised upon articles of
consumption. . . . This Constitution defines the extent of the
powers of the general government. If the general legislature should
at any time overleap their limits, the judicial department is a
constitutional check. If the United States go beyond their powers,
if they make a law which the Constitution does not authorize, it is
void, and the judicial power, the national judges, who, to secure
their impartiality, are to be made independent, will declare it to
be void."
2 Elliot 191, 192, 196.
In the convention of Massachusetts by which the Constitution was
ratified, the second section of article I being under
consideration, Mr. King said:
"It is a principle of this Constitution that representation and
taxation should go hand in hand. . . . By this rule are
representation and taxation to be apportioned. And it was adopted
because it was the language of all America. According to the
confederation, ratified in 1781, the sums for the general welfare
and defence should be apportioned according to the surveyed lands,
and improvements thereon, in the several States; but that it hath
never been in the power of Congress to follow that rule, the
returns from the several States being so very imperfect."
2 Elliot 36.
Theophilus Parsons observed:
"Congress have only a concurrent right with each State in laying
direct taxes, not an exclusive right, and the right of each State
to direct taxation is equally extensive and perfect as the right of
Congress." Id. 93. And John Adams, Dawes, Sumner, King, and
Sedgwick all agreed that a direct tax would be the last source of
revenue resorted to by Congress.
In the New York convention, Chancellor Livingston pointed out
that, when the imposts diminished and the expenses of the
government increased, "they must have recourse to direct Page 157 U. S. 567 taxes; that is, taxes on land and specific duties." 2 Elliot
341. And Mr. Jay, in reference to an amendment that direct taxes
should not be imposed until requisition had been made and proved
fruitless, argued that the amendment would involve great
difficulties, and that it ought to be considered that direct taxes
were of two kinds, general and specific. Id. 380, 381.
In Virginia, Mr. John Marshall said:
"The objects of direct taxes are well understood; they are but
few; what are they? Lands, slaves, stock of all kinds, and a few
other articles of domestic property. . . . They will have the
benefit of the knowledge and experience of the state legislature.
They will see in what manner the legislature of Virginia collects
its taxes. . . . Cannot Congress regulate the taxes so as to be
equal on all parts of the community? Where is the absurdity of
having thirteen revenues? Will they clash with, or injure, each
other? If not, why cannot Congress make thirteen distinct laws, and
impose the taxes on the general objects of taxation in each State,
so as that all persons of the society shall pay equally, as they
ought?"
3 Elliot 229, 235. At that time, in Virginia, lands were taxed,
and specific taxes assessed on certain specified objects. These
objects were stated by Secretary Wolcott to be taxes on lands,
houses in towns, slaves, stud horses, jackasses, other horses and
mules, billiard tables, four-wheel riding carriages, phaetons,
stage wagons, and riding carriages with two wheels, and it was
undoubtedly to these objects that the future Chief Justice
referred.
Mr. Randolph said:
"But in this new Constitution, there is a more just and
equitable rule fixed -- a limitation beyond which they cannot go.
Representatives and taxes go hand in hand; according to the one
will the other be regulated. The number of representatives is
determined by the number of inhabitants; they have nothing to do
but to lay taxes accordingly."
3 Elliot 121.
Mr. George Nicholas said:
"the proportion of taxes is fixed by the number of inhabitants,
and not regulated by the extent of territory, or fertility of soil.
. . . Each State Page 157 U. S. 568 will know, from its population, its proportion of any general
tax. As it was justly observed by the gentleman over the way (Mr.
Randolph), they cannot possibly exceed that proportion; they are
limited and restrained expressly to it. The state legislatures have
no check of this kind. Their power is uncontrolled."
3 Elliot 243, 244.
Mr. Madison remarked that
"they will be limited to fix the proportion of each State, and
they must raise it in the most convenient and satisfactory manner
to the public."
3 Elliot 255.
From these references, and they might be extended indefinitely,
it is clear that the rule to govern each of the great classes into
which taxes were divided was prescribed in view of the commonly
accepted distinction between them and of the taxes directly levied
under the systems of the States. And that the difference between
direct and indirect taxation was fully appreciated is supported by
the congressional debates after the government was organized.
In the debates in the House of Representatives preceding the
passage of the act of Congress to lay "duties upon carriages for
the conveyance of persons," approved June 5, 1794 (1 Stat. 373, c.
45), Mr. Sedgwick said that
"a capitation tax, and taxes on land and on property and income
generally were direct charges, as well in the immediate as ultimate
sources of contribution. He had considered those, and those only,
as direct taxes in their operation and effects. On the other hand,
a tax imposed on a specific article of personal property, and
particularly if objects of luxury, as in the case under
consideration, he had never supposed had been considered a direct
tax within the meaning of the Constitution."
Mr. Dexter observed that his colleague
"had stated the meaning of direct taxes to be a capitation tax,
or a general tax on all the taxable property of the citizens, and
that a gentleman from Virginia (Mr. Nicholas) thought the meaning
was that all taxes are direct which are paid by the citizen without
being recompensed by the consumer; but that, where the tax was only
advanced and repaid by the consumer, the tax was indirect. He
thought that both opinions were just, Page 157 U. S. 569 and not inconsistent, though the gentlemen had differed about
them. He thought that a general tax on all taxable property was a
direct tax, because it was paid without being recompensed by the
consumer."
Annals 3d Congress 644, 646.
At a subsequent day of the debate, Mr. Madison objected to the
tax on carriages as "an unconstitutional tax," but Fisher Ames
declared that he had satisfied himself that it was not a direct
tax, as "the duty falls not on the possession, but on the use."
Annals 730.
Mr. Madison wrote to Jefferson on May 11, 1794:
"And the tax on carriages succeeded, in spite of the
Constitution, by a majority of treaty, the advocates for the
principle being reinforced by the adversaries to luxuries. . . .
Some of the motives which they decoyed to their support ought to
premonish them of the danger. By breaking down the barriers of the
Constitution, and giving sanction to the idea of sumptuary
regulations, wealth may find a precarious defence in the shield of
justice. If luxury, as such, is to be taxed, the greatest
of all luxuries, says Paine, is a great estate. Even on the present
occasion, it has been found prudent to yield to a tax on transfers
of stock in the funds and in the banks."
2 Madison's Writings 14.
But Albert Gallatin, in his "Sketch of the Finances of the
United States," published in November, 1796, said:
"The most generally received opinion, however, is that, by
direct taxes in the Constitution, those are meant which are raised
on the capital or revenue of the people; by indirect, such as are
raised on their expense. As that opinion is, in itself, rational
and conformable to the decision which has taken place on the
subject of the carriage tax, and as it appears important, for the
sake of preventing future controversies, which may be not more
fatal to the revenue than to the tranquility of the Union, that a
fixed interpretation should be generally adopted, it will not be
improper to corroborate it by quoting the author from whom the idea
seems to have been borrowed."
He then quotes from Smith's Wealth of Nations, and
continues:
"The remarkable coincidence of the clause of the Constitution
with this passage in using the word 'capitation' as a generic Page 157 U. S. 570 expression, including the different species of direct taxes, an
acceptation of the word peculiar, it is believed, to Dr. Smith,
leaves little doubt that the framers of the one had the other in
view at the time, and that they, as well as he, by direct taxes, meant those paid directly from, and falling immediately on, the revenue, and, by indirect, those which are paid indirectly out of the revenue by
falling immediately upon the expense."
3 Gallatin's Writings (Adams' ed.) 74, 75.
The act provided in its first section
"that there shall be levied, collected, and paid upon all
carriages for the conveyance of persons, which shall be kept by or
for any person for his or her own use, or to be let out to hire or
for the conveyance of passengers, the several duties and rates
following,"
and then followed a fixed yearly rate on every coach, chariot,
phaeton, and coachee, every four-wheel and every two-wheel top
carriage, and upon every other two-wheel carriage, varying
according to the vehicle.
In Hylton v. United
States , 3 Dall. 171, decided in March, 1796, this
court held the act to be constitutional, because not laying a
direct tax. Chief Justice Ellsworth and Mr. Justice Cushing took no
part in the decision, and Mr. Justice Wilson gave no reasons.
Mr. Justice Chase said that he was inclined to think, but of
this he did not "give a judicial opinion," that
"the direct taxes contemplated by the Constitution are only two,
to-wit, a capitation, or poll tax, simply, without regard to
property, profession, or any other circumstance, and a tax on
land;"
and that he doubted "whether a tax, by a general assessment on
personal property within the United States is included within the
term direct tax." But he thought that
"an annual tax on carriages for the conveyance of persons may be
considered as within the power granted to Congress to lay duties.
The term duty is the most comprehensive next to the generical term
tax, and practically, in Great Britain (whence we take our general
ideas of taxes, duties, imposts, excises, customs, etc.), embraces
taxes on stamps, tolls for passage, etc., and is not confined to
taxes on importation only., It seems to me that a tax on expense is
an indirect Page 157 U. S. 571 tax, and I think an annual tax on a carriage for the conveyance
of persons is of that kind, because a carriage is a consumable
commodity, and such annual tax on it is on the expense of the
owner."
Mr. Justice Paterson said that
"the Constitution declares that a capitation tax is a direct
tax, and, both in theory and practice, a tax on land is deemed to
be a direct tax. . . . It is not necessary to determine whether a
tax on the product of land be a direct or indirect tax. Perhaps the
immediate product of land, in its original and crude state, ought
to be considered as the land itself; it makes part of it; or else
the provision made against taxing exports would be easily eluded.
Land, independently of its produce, is of no value. . . . Whether
direct taxes, in the sense of the Constitution, comprehend any
other tax than a capitation tax and taxes on land is a questionable
point. . . . But as it is not before the court, it would be
improper to give any decisive opinion upon it."
And he concluded: "All taxes on expenses or consumption are
indirect taxes. A tax on carriages is of this kind, and, of course,
is not a direct tax." This conclusion he fortified by reading
extracts from Adam Smith on the taxation of consumable
commodities.
Mr. Justice Iredell said:
"There is no necessity or propriety in determining what is or is
not a direct or indirect tax in all cases. Some difficulties may
occur which we do not at present foresee. Perhaps a direct tax, in
the sense of the Constitution, can mean nothing but a tax on
something inseparably annexed to the soil; something capable of
apportionment under all such circumstances. A land or a poll tax
may be considered of this description. . . . In regard to other
articles, there may possibly be considerable doubt. It is
sufficient, on the present occasion, for the court to be satisfied
that this is not a direct tax contemplated by the Constitution in
order to affirm the present judgment."
It will be perceived that each of the justices, while suggesting
doubt whether anything but a capitation or a land tax was a direct
tax within the meaning of the Constitution, distinctly avoided
expressing an opinion upon that question or Page 157 U. S. 572 laying down a comprehensive definition, but confined his opinion
to the case before the court.
The general line of observation was obviously influenced by Mr.
Hamilton's brief for the government, in which he said:
"The following are presumed to be the only direct taxes:
capitation or poll taxes, taxes on lands and buildings, general
assessments, whether on the whole property of individuals or on
their whole real or personal estate. All else must of necessity be
considered as indirect taxes."
7 Hamilton's Works (Lodge's ed.) 332.
Mr. Hamilton also argued:
"If the meaning of the word 'excise' is to be sought in a
British statute, it will be found to include the duty on carriages,
which is there considered as an 'excise.' . . . An argument results
from this, though not perhaps a conclusive one, yet, where so
important a distinction in the Constitution is to be realized, it
is fair to see the meaning of terms in the statutory language of
that country from which our jurisprudence is derived." Id., 333.
If the question had related to an income tax, the reference
would have been fatal, as such taxes have been always classed by
the law of Great Britain as direct taxes.
The above act was to be enforced for two years, but, before it
expired, was repealed, as was the similar act of May 28, 1796, c.
37, which expired August 31, 1801, 1 Stat. 478, 482.
By the act of July 14, 1798, when a war with France was supposed
to be impending, a direct tax of two millions of dollars was
apportioned to the States respectively, in the manner prescribed,
which tax was to be collected by officers of the United States and
assessed upon "dwelling houses, lands, and slaves" according to the
valuations and enumerations to be made pursuant to the act of July
9, 1798, entitled "An act to provide for the valuation of lands and
dwelling houses and the enumeration of slaves within the United
States." 1 Stat. 597, c. 75; id., 580, c. 70. Under these
acts, every dwelling house was assessed according to a prescribed
value, and the sum of fifty cents upon every slave enumerated, and
the residue of the sum apportioned was directed to be assessed upon
the lands within each State according to the valuation Page 157 U. S. 573 made pursuant to the prior act and at such rate percentum as
would be sufficient to produce said remainder. By the act of August
2, 1813, a direct tax of three millions of dollars was laid and
apportioned to the States respectively, and reference had to the
prior act of July 22, 1813, which provided that, whenever a direct
tax should be laid by the authority of the United States, the same
should be assessed and laid
"on the value of all lands, lots of ground with their
improvements, dwelling houses, and slaves, which several articles
subject to taxation shall be enumerated and valued by the
respective assessors at the rate each of them is worth in
money."
3 Stat. 3, c. 37; id., 22, c. 16. The act of January 9,
1815, laid a direct tax of six millions of dollars, which was
apportioned, assessed, and laid as in the prior act on all lands,
lots of grounds with their improvements, dwelling houses, and
slaves. These acts are attributable to the war of 1812.
The act of August, 1861 (12 Stat. 292, 294, c. 4), imposed a tax
of twenty millions of dollars, which was apportioned and to be
levied wholly on real estate, and also levied taxes on incomes
whether derived from property or profession, trade or vocation (12
Stat. 309), and this was followed by the acts of July 1, 1862 (12
Stat. 432, 473, c. 119), March 3, 1863 (12 Stat. 713, 723, c. 74),
June 30, 1864 (13 Stat. 223, 281, c. 173), March 3, 1863 (13 Stat.
469, 479, c. 78), March 10, 1866 (14 Stat. 4, c. 1), July 13, 1866
(14 Stat. 98, 137, c. 184), March 2, 1867 (14 Stat. 471, 477, c.
169), and July 14, 1870 (16 Stat. 256, c. 255). The differences
between the latter acts and that of August 1, 1894, call for no
remark in this connection. These acts grew out of the war of the
rebellion, and were, to use the language of Mr. Justice Miller,
"part of the system of taxing incomes, earnings, and profits
adopted during the late war and abandoned as soon after that war
was ended as it could be done safely." Railroad Company v. Collector, 100 U.
S. 95 , 100 U. S.
98 .
From the foregoing, it is apparent: 1. That the distinction
between direct and indirect taxation was well understood by the
framers of the Constitution and those who adopted it. 2. That,
under the state systems of taxation, all taxes on Page 157 U. S. 574 real estate or personal property or the rents or income thereof
were regarded as direct taxes. 3. That the rules of apportionment
and of uniformity were adopted in view of that distinction and
those systems. 4. That whether the tax on carriages was direct or
indirect was disputed, but the tax was sustained as a tax on the
use and an excise. 5. That the original expectation was that the
power of direct taxation would be exercised only in extraordinary
exigencies, and down to August 1894, this expectation has been
realized. The act of that date was passed in a time of profound
peace, and if we assume that no special exigency called for unusual
legislation, and that resort to this mode of taxation is to become
an ordinary and usual means of supply, that fact furnishes an
additional reason for circumspection and care in disposing of the
case.
We proceed then to examine certain decisions of this court under
the acts of 1861 and following years in which it is claimed that
this court has heretofore adjudicated that taxes like those under
consideration are not direct taxes and subject to the rule of
apportionment, and that we are bound to accept the rulings thus
asserted to have been made as conclusive in the premises. Is this
contention well founded as respects the question now under
examination? Doubtless the doctrine of stare decisis is a
salutary one, and to be adhered to on all proper occasions, but it
only arises in respect of decisions directly upon the points in
issue.
The language of hie Justice Marshall, in Cohens v.
Virginia , 6 Wheat. 264, 19 U. S. 399 ,
may profitably again be quoted:
"It is a maxim not to be disregarded that general expressions,
in every opinion, are to be taken in connection with the case in
which those expressions are used. If they go beyond the case, they
may be respected, but ought not to control the judgment in a
subsequent suit when the very point is presented for decision. The
reason for this maxim is obvious. The question actually before the
court is investigated with care and considered in its full extent.
Other principles, which may serve to illustrate it, are considered
in their relation to the case decided, but their possible bearing
on all other cases is seldom completely investigated. " Page 157 U. S. 575 So, in Carroll v. Lessee of
Carroll , 16 How. 275, 57 U. S. 286 ,
where a statute of the State of Maryland came under review, Mr
Justice Curtis said:
"If the construction put by the court of a State upon one of its
statutes was not a matter in judgment, if it might have been
decided either way without affecting any right brought into
question, then, according to the principles of the common law, an
opinion on such a question is not a decision. To make it so, there
must have been an application of the judicial mind to the precise
question necessary to be determined to fix the rights of the
parties and decide to whom the property in contestation belongs.
And therefore this court, and other courts organized under the
common law, has never held itself bound by any part of an opinion,
in any case, which was not needful to the ascertainment of the
right or title in question between the parties."
Nor is the language of Mr. Chief Justice Taney inapposite, as
expressed in The Genesee
Chief , 12 How. 443, 53 U. S. 455 ,
wherein it was held that the lakes and navigable waters connecting
them are within the scope of admiralty and maritime jurisdiction as
known and understood in the United States when the Constitution was
adopted, and the preceding case of The Thomas
Jefferson , 10 Wheat. 428, was overruled. The Chief
Justice said:
"It was under the influence of these precedents and this usage
that the case of The Thomas Jefferson , 10
Wheat. 428, was decided in this court, and the jurisdiction of the
courts of admiralty of the United States declared to be limited to
the ebb and flow of the tide. The Steamboat Orleans v.
Phoebus , 11 Pet. 175, afterwards followed this
case, merely as a point decided. It is the decision in the case of The Thomas Jefferson which mainly embarrasses the court in
the present inquiry. We are sensible of the great weight to which
it is entitled. But, at the same time, we are convinced that, if we
follow it, we follow an erroneous decision into which the court
fell when the great importance of the question as it now presents
itself could not be foreseen, and the subject did not therefore
receive that deliberate consideration which at this time would have
been given to it by the eminent men who presided here when that
case was decided. Page 157 U. S. 576 For the decision was made in 1825, when the commerce on the
rivers of the West and on the Lakes was in its infancy and of
little importance, and but little regarded compared with that of
the present day. Moreover, the nature of the questions concerning
the extent of the admiralty jurisdiction which have arisen in this
court were not calculated to call its attention particularly to the
one we are now considering."
Manifestly, as this court is clothed with the power, and
entrusted with the duty, to maintain the fundamental law of the
Constitution, the discharge of that duty requires it not to extend
any decision upon a constitutional question if it is convinced that
error in principle might supervene.
Let us examine the cases referred to in the light of these
observations.
In Pacific Insurance Co. v.
Soule , 7 Wall. 433, the validity of a tax which was
described as "upon the business of an insurance company" was
sustained on the ground that it was "a duty or excise," and came
within the decision in Hylton's case. The arguments for
the insurance company were elaborate, and took a wide range, but
the decision rested on narrow ground, and turned on the distinction
between an excise duty and a tax strictly so termed, regarding the
former a charge for a privilege, or on the transaction of business,
without any necessary reference to the amount of property belonging
to those on whom the charge might fall, although it might be
increased or diminished by the extent to which the privilege was
exercised or the business done. This was in accordance with Society for Savings v.
Coite , 6 Wall. 594; Provident
Institution v. Massachusetts , 6 Wall. 611, and Hamilton Company v.
Massachusetts , 6 Wall. 632, in which cases there
was a difference of opinion on the question whether the tax under
consideration was a tax on the property, and not upon the franchise
or privilege. And see 70 U. S. The
Assessors, 3 Wall. 573; Home Insurance Co. v. New
York, 134 U. S. 594 ; Pullman Co. v. Pennsylvania, 141 U. S.
18 .
In Veazie Bank v.
Fenno , 8 Wall. 533, 75 U. S. 544 , 75 U. S. 546 , a
tax was laid on the circulation of state banks or national banks
paying out the notes of individuals or state banks, and it was Page 157 U. S. 577 held that it might well be classed under the head of duties, and
as falling within the same category as Soule's case, 8 Wall. 547. It was declared to be of the same nature as
excise taxation on freight receipts, bills of lading, and passenger
tickets issued by a railroad company. Referring to the discussions
in the convention which framed the Constitution, Mr. Chief Justice
Chase observed that what as said there
"doubtless shows uncertainty as to the true meaning of the term
direct tax; but it indicates also an understanding that direct
taxes were such as may be levied by capitation, and on lands and
appurtenances; or, perhaps, by valuation and assessment of personal
property upon general lists. For these were the subjects from which
the States at that time usually raised their principal
supplies."
And in respect of the opinions in Hylton's case, the
Chief Justice said:
"It may further be taken as established upon the testimony of
Paterson, that the words direct taxes, as used in the Constitution,
comprehended only capitation taxes and taxes on land, and perhaps
taxes on personal property by general valuation and assessment of
the various descriptions possessed within the several States."
In National Bank v. United States, 101 U. S.
1 , involving the constitutionality of § 3413 of the
Revised Statutes, enacting that
"every national banking association, state bank, or banker, or
association, shall pay a tax of ten percentum on the amount of
notes of any town, city, or municipal corporation, paid out by
them," Veazie Bank v. Fenno was cited with approval to the
point that Congress, having undertaken to provide a currency for
the whole country, might, to secure the benefit of it to the
people, restrain, by suitable enactments, the circulation as money
of any notes not issued under its authority, and Mr. Chief Justice
Waite, speaking for the court, said: " The tax thus laid is not on
the obligation, but on its use in a particular way." Scholey v.
Rew , 3 Wall. 331, was the case of a succession tax
which the court held to be
"plainly an excise tax or duty upon the devolution of the estate
or the right to become beneficially entitled to the same, or the
income thereof, in Page 157 U. S. 578 possession or expectancy."
It was like the succession tax of a State, held constitutional
in Mager v.
Grima , 8 How. 490, and the distinction between the
power of a State and the power of the United States to regulate the
succession of property was not referred to, and does not appear to
have been in the mind of the court. The opinion stated that the act
of Parliament from which the particular provision under
consideration was borrowed had received substantially the same
construction, and cases under that act hold that a succession duty
is not a tax upon income or upon property, but on the actual
benefit derived by the individual, determined as prescribed. In
re Elwes, 3 H. & N. 719; Attorney General v.
Sefton, 2 H. & C. 362; S.C. (H.L.) 3 H. & C.
1023; 11 H.L.Cas. 257..
In Railroad Company v. Collector, 100 U.
S. 595 , 100 U. S. 596 ,
the validity of a tax collected of a corporation upon the interest
paid by it upon its bonds was held to be "essentially an excise on
the business of the class of corporations mentioned in the
statute." And Mr. Justice Miller, in delivering the opinion,
said:
"As the sum involved in this suit is small, and the law under
which the tax in question was collected has long since been
repealed, the case is of little consequence as regards any
principle involved in it as a rule of future action."
All these cases are distinguishable from that in hand, and this
brings us to consider that of Springer v. United States, 102 U. S. 586 , 102 U. S. 602 ,
chiefly relied on and urged upon us as decisive.
That was an action of ejectment brought on a tax deed issued to
the United States on sale of defendant's real estate for income
taxes. The defendant contended that the deed was void because the
tax was a direct tax, not levied in accordance with the
Constitution. Unless the tax were wholly invalid, the defence
failed.
The statement of the case in the report shows that Springer
returned a certain amount as his net income for the particular
year, but does not give the details of what his income, gains, and
profits consisted in.
The original record discloses that the income was not Page 157 U. S. 579 derived in any degree from real estate, but was in part
professional as attorney at law and the rest interest on United
States bonds. It would seem probable that the court did not feel
called upon to advert to the distinction between the latter and the
former source of income, as the validity of the tax as to either
would sustain the action.
The opinion thus concludes:
"Our conclusions are that direct taxes, within the
meaning of the Constitution, are only capitation taxes, as
expressed in that instrument, and taxes on real estate, and that
the tax of which the plaintiff in error complains is within the
category of an excise or duty."
While this language is broad enough to cover the interest as
well as the professional earnings, the case would have been more
significant as a precedent if the distinction had been brought out
in the report and commented on in arriving at judgment, for a tax
on professional receipts might be treated as an excise or duty, and
therefore indirect, when a tax on the income of personalty might be
held to be direct.
Be this as it may, it is conceded in all these cases, from that
of Hylton to that of Springer, that taxes on land are direct taxes,
and in none of them is it determined that taxes on rents or income
derived from land are not taxes on land.
We admit that it may not unreasonably be said that logically, if
taxes on the rents, issues and profits of real estate are
equivalent to taxes on real estate, and are therefore direct taxes,
taxes on the income of personal property as such are equivalent to
taxes on such property, and therefore direct taxes. But we are
considering the rule stare decisis, and we must decline to
hold ourselves bound to extend the scope of decisions -- none of
which discussed the question whether a tax on the income from
personalty is equivalent to a tax on that personalty, but all of
which held real estate liable to direct taxation only -- so as to
sustain a tax on the income of realty on the ground of being an
excise or duty.
As no capitation, or other direct, tax was to be laid otherwise
than in proportion to the population, some other direct tax than a
capitation tax (and it might well enough be argued some other tax
of the same kind as a capitation tax) must be Page 157 U. S. 580 referred to, and it has always been considered that a tax upon
real estate eo nomine or upon its owners in respect
thereof is a direct tax within the meaning of the Constitution. But
is there any distinction between the real estate itself or its
owners in respect of it and the rents or income of the real estate
coming to the owners as the natural and ordinary incident of their
ownership?
If the Constitution had provided that Congress should not levy
any tax upon the real estate of any citizen of any State, could it
be contended that Congress could put an annual tax for five or any
other number of years upon the rent or income of the real estate?
And if, as the Constitution now reads, no unapportioned tax can be
imposed upon real estate, can Congress, without apportionment,
nevertheless impose taxes upon such real estate under the guise of
an annual tax upon its rents or income?
As, according to the feudal law, the whole beneficial interest
in the land consisted in the right to take the rents and profits,
the general rule has always been, in the language of Coke, that
"if a man seized of land in fee by his deed granteth to another
the profits of those lands, to have and to hold to him and his
heirs, and marketh livery secundum formam chartae, the
whole land itself doth pass. For what is the land but the profits
thereof?"
Co.Lit. 45. And that a devise of the rents and profits or of the
income of lands passes the land itself both at law and in equity. 1
Jarm. on Wills (5th ed.) *98 and cases cited. ,
The requirement of the Constitution is that no direct tax shall
be laid otherwise than by apportionment -- the prohibition is not
against direct taxes on land, from which the implication is sought
to be drawn that indirect taxes on land would be constitutional,
but it is against all direct taxes -- and it is admitted that a tax
on real estate is a direct tax. Unless, therefore, a tax upon rents
or income issuing out of lands is intrinsically so different from a
tax on the land itself that it belongs to a wholly different class
of taxes, such taxes must be regarded as falling within the same
category as a tax on real estate eo nomine. The name of
the tax is unimportant. Page 157 U. S. 581 The real question is, is there any basis upon which to rest the
contention that real estate belongs to one of the two great classes
of taxes, and the rent or income which is the incident of its
ownership belongs to the other? We are unable to perceive any
ground for the alleged distinction. An annual tax upon the annual
value or annual user of real estate appears to us the same in
substance as an annual tax on the real estate, which would be paid
out of the rent or income. This law taxes the income received from
land and the growth or produce of the land. Mr. Justice Paterson
observed in Hylton's case, "land, independently of its
produce, is of no value;" and certainly had no thought that direct
taxes were confined to unproductive land.
If it be true that, by varying the form, the substance may be
changed, it is not easy to see that anything would remain of the
limitations of the Constitution, or of the rule of taxation and
representation, so carefully recognized and guarded in favor of the
citizens of each State. But constitutional provisions cannot be
thus evaded. It is the substance, and not the form, which controls,
as has indeed been established by repeated decisions of this court.
Thus, in Brown v.
Maryland , 12 Wheat. 419, 25 U. S. 444 ,
it was held that the tax on the occupation of an importer was the
same as a tax on imports, and therefore void. And Chief Justice
Marshall said:
"It is impossible to conceal from ourselves that this is varying
the form without varying the substance. It is treating a
prohibition which is general as if it were confined to a particular
mode of doing the forbidden thing. All must perceive that a tax on
the sale of an article imported only for sale is a tax on the
article itself."
In Weston v.
Charleston , 2 Pet. 449, it was held that a tax on
the income of United States securities was a tax on the securities
themselves, and equally inadmissible. The ordinance of the city of
Charleston involved in that case was exceedingly obscure; but the
opinions of Mr. Justice Thompson and Mr. Justice Johnson, who
dissented, make it clear that the levy was upon the interest of the
bonds, and not upon the bonds, and they held that it was an income
tax, and, as Page 157 U. S. 582 such, sustainable; but the majority of the court, Chief Justice
Marshall delivering the opinion, overruled that contention.
So, in Dobbins v.
Commissioners , 16 Pet. 435, it was decided that the
income from an official position could not be taxed if the office
itself was exempt.
In Almy v.
California , 24 How. 169, it was held that a duty on
a bill of lading was the same thing as a duty on the article which
it represented; in Railroad v.
Jackson , 7 Wall. 262, that a tax upon the interest
payable on bonds was a tax not upon the debtor, but upon the
security, and in Cook v. Pennsylvania, 97 U. S.
566 , that a tax upon the amount of sales of goods made
by an auctioneer was a tax upon the goods sold.
In Philadelphia Steamship Co. v. Pennsylvania, 122 U. S. 326 , and Leloup v. Mobile, 127 U. S. 640 , it
was held that a tax on income received from interstate commerce was
a tax upon the commerce itself, and therefore unauthorized. And so,
although it is thoroughly settled that, where by way of duties laid
on the transportation of the subjects of interstate commerce, and
on the receipts derived therefrom, or on the occupation or business
of carrying it on.a tax is levied by a State on interstate
commerce, such taxation amounts to a regulation of such commerce,
and cannot be sustained, yet the property in a State belonging to a
corporation, whether foreign or domestic, engaged in foreign or
domestic commerce, may be taxed, and when the tax is substantially
a mere tax on property, and not one imposed on the privilege of
doing interstate commerce, the exaction may be sustained. "The
substance, and not the shadow, determines the validity of the
exercise of the power." Postal Telegraph Co. v. Adams, 155 U. S. 688 , 155 U. S.
698 .
Nothing can be clearer than that what the Constitution intended
to guard against was the exercise by the general government of the
power of directly taxing persons and property within any State
through a majority made up from the other States. It is true that
the effect of requiring direct taxes to be apportioned among the
States in proportion to their population is necessarily that the
amount of taxes on the individual Page 157 U. S. 583 taxpayer in a State having the taxable subject matter to a
larger extent in proportion to its population than another State
has would be less than in such other State, but this inequality
must be held to have been contemplated, and was manifestly designed
to operate to restrain the exercise of the power of direct taxation
to extraordinary emergencies, and to prevent an attack upon
accumulated property by mere force of numbers.
It is not doubted that property owners ought to contribute in
just measure to the expenses of the government. As to the States
and their municipalities, this is reached largely through the
imposition of direct taxes. As to the Federal government, it is
attained in part through excises and indirect taxes upon luxuries
and consumption generally, to which direct taxation may be added to
the extent the rule of apportionment allows. And, through one mode
or the other, the entire wealth of the country, real and personal,
may be made, as it should be, to contribute to the common defence
and general welfare.
But the acceptance of the rule of apportionment was one of the
compromises which made the adoption of the Constitution possible,
and secured the creation of that dual form of government, so
elastic and so strong, which has thus far survived in unabated
vigor. If, by calling a tax indirect when it is essentially direct,
the rule of protection could be frittered away, one of the great
landmarks defining the boundary between the Nation and the States
of which it is composed would have disappeared, and with it one of
the bulwarks of private rights and private property.
We are of opinion that the law in question, so far as it levies
a tax on the rents or income of real estate, is in violation of the
Constitution, and is invalid.
Another question is directly presented by the record as to the
validity of the tax levied by the act upon the income derived from
municipal bonds. The averment in the bill is that the defendant
company owns two millions of the municipal bonds of the city of New
York, from which it derives an annual income of $60,000, and that
the directors of the company intend to return and pay the taxes on
the income so derived.
The Constitution contemplates the independent exercise by Page 157 U. S. 584 the Nation and the State, severally, of their constitutional
powers.
As the States cannot tax the powers, the operations, or the
property of the United States, nor the means which they employ to
carry their powers into execution, so it has been held that the
United States have no power under the Constitution to tax either
the instrumentalities or the property of a State.
A municipal corporation is the representative of the State and
one of the instrumentalities of the state government. It was long
ago determined that the property and revenues of municipal
corporations are not subjects of Federal taxation. Collector
v. Day , 11 Wall. 113, 78 U. S. 124 ; United States v. Railroad
Company , 17 Wall. 322, 84 U. S. 332 .
In Collector v. Day, it was adjudged that Congress had no
power, even by an act taxing all incomes, to levy a tax upon the
salaries of judicial officers of a State, for reasons similar to
those on which it had been held in Dobbin v.
Commissioner , 16 Pet. 435, that a State could not
tax the salaries of officers of the United States. Mr. Justice
Nelson, in delivering judgment, said:
"The general government, and the States, although both exist
within the same territorial limits, are separate and distinct
sovereignties, acting separately and independently of each other
within their respective spheres. The former in its appropriate
sphere is supreme; but the States within the limits of their powers
not granted, or, in the language of the tenth amendment,
'reserved,' are as independent of the general government as that
government within its sphere is independent of the States."
This is quoted in Van Brocklin v. Tennessee, 117 U. S. 151 , 117 U. S. 178 ,
and the opinion continues:
"Applying the same principles, this court, in United States v.
Railroad Company , 17 Wall. 322, held that a
municipal corporation within a State could not be taxed by the
United States on the dividends or interest of stock or bonds held
by it in a railroad or canal company, because the municipal
corporation was a representative of the State, created by the State
to exercise a limited portion of its powers of government, and
therefore its revenues, like those of the State itself, were not
taxable by the United States. The revenues thus adjudged to be
exempt from Federal taxation Page 157 U. S. 585 were not themselves appropriated to any specific public use, nor
derived from property held by the State or by the municipal
corporation for any specific public us, but were part of the
general income of that corporation, held for the public use in no
other sense than all property and income, belonging to it in its
municipal character, must be so held. The reasons for exempting all
the property and income of a State, or of a municipal corporation,
which is a political division of the State, from Federal taxation,
equally require the exemption of all the property and income of the
national government from state taxation."
In Mercantile Bank v. New York, 131
U. S. 138 , 131 U. S.
169 ., this Court said:
"Bonds issued by the State of New York, or under its authority
by its public municipal bodies, are means for carrying on the work
of the government, and are not taxable even by the United States,
and it is not a part of the policy of the government which issues
them to subject them to taxation for its own purposes."
The question in Bonaparte v. Tax Court, 104 U.
S. 592 , was whether the registered public debt of one
State, exempt from taxation by that State or actually taxed there,
was taxable by another State when owned by a citizen of the latter,
and it was held that there was no provision of the Constitution of
the United States which prohibited such taxation. The States had
not covenanted that this could not be done, whereas, under the
fundamental law, as to the power to borrow money, neither the
United States, on the one hand, nor the States, on the other, can
interfere with that power as possessed by each and an essential
element of the sovereignty of each.
The law under consideration provides "that nothing herein
contained shall apply to States, counties or municipalities." It is
contended that, although the property or revenues of the States or
their instrumentalities cannot be taxed, nevertheless the income
derived from state, county, and municipal securities can be taxed.
But we think the same want of power to tax the property or revenues
of the States or their instrumentalities exists in relation to a
tax on the income from their securities, and for the same reason,
and that reason Page 157 U. S. 586 is given by Chief Justice Marshall in Weston v.
Charleston , 2 Pet. 449, 27 U. S. 468 ,
where he said:
"The right to tax the contract to any extent, when made, must
operate upon the power to borrow before it is exercised, and have a
sensible influence on the contract. The extent of this influence,
depends on the will of a distinct government. To any extent,
however inconsiderable, it is a burthen on the operations of
government. It may be carried to an extent which shall arrest them
entirely. . . . The tax on government stock is thought by this
court to be a tax on the contract, a tax on the power to borrow
money on the credit of the United States, and consequently to be
repugnant to the Constitution."
Applying this language to these municipal securities, it is
obvious that taxation on the interest therefrom would operate on
the power to borrow before it is exercised, and would have a
sensible influence on the contract, and that the tax in question is
a tax on the power of the States and their instrumentalities to
borrow money, and consequently repugnant to the Constitution. Upon
each of the other questions argued at the bar, to-wit, 1, Whether
the void provisions as to rents and income from real estate
invalidated the whole act? 2, whether, as to the income from
personal property as such, the act is unconstitutional as laying
direct taxes? 3, Whether any part of the tax, if not considered as
a direct tax, is invalid for want of uniformity on either of the
grounds suggested? -- the justices who heard the argument are
equally divided, and, therefore no opinion is expressed. The result is that the decree of the Circuit Court is
reversed and the case remanded with directions to enter a decree in
favor of the complainant in respect only of the voluntary payment
of the tax on the rents and income of the real estate of the
defendant company, and of that which it holds in trust, and on the
income from the municipal bonds owned or so held by it. * By sections 27 to 37, inclusive, of the act of Congress
entitled "An act to reduce taxation, to provide revenue for the
government, and for other purposes," received by the President
August 15, 1894, and which, not having been returned by him to the
House in which it originated within the time prescribed by the
Constitution of the United States, became a law without approval
(28 Stat. 509, c. 349), it was provided that, from and after
January 1, 1895, and until January 1, 1900,
"there shall be assessed, levied, collected, and paid annually
upon the gains, profits, and income received in the preceding
calendar year by every citizen of the United States, whether
residing at home or abroad, and every person residing therein,
whether said gains, profits, or income be derived from any kind of
property, rents, interest, dividends, or salaries, or from any
profession, trade, employment, or vocation carried on in the United
States or elsewhere, or from any other source whatever, a tax of
two percentum on the amount so derived over and above four thousand
dollars, and a like tax shall be levied, collected and paid
annually upon the gains, profits, and income from all property
owned and of every business, trade, or profession carried on in the
United States by persons residing without the United States. . .
."
"SEC. 28. That in estimating the gains, profits, and income of
any person there shall be included all income derived from interest
upon notes, bonds, and other securities, except such bonds of the
United States the principal and interest of which are by the law of
their issuance exempt from all Federal taxation; profits realized
within the year from sales of real estate purchased within two
years previous to the close of the year for which income is
estimated; interest received or accrued upon all notes, bonds,
mortgages, or other forms of indebtedness bearing interest, whether
paid or not, if good and collectible, less the interest which has
become due from said person or which has been paid by him during
the year; the amount of all premium on bonds, notes, or coupons;
the amount of sales of livestock, sugar, cotton, wool, butter,
cheese, pork, beef, mutton, or other meats, hay, and grain, or
other vegetable or other productions, being the growth or produce
of the estate of such person, less the amount expended in the
purchase or production of said stock or produce, and not including
any part thereof consumed directly by the family; money and the
value of all personal property acquired by gift or inheritance; all
other gains, profits, and income derived from any source whatever
except that portion of the salary, compensation, or pay received
for services in the civil, military, naval, or other service of the
United States, including Senators, Representatives, and Delegates
in Congress, from which the tax has been deducted, and except that
portion of any salary upon which the employer is required by law to
withhold, and does withhold the tax and pays the same to the
officer authorized to receive it. In computing incomes the
necessary expenses actually incurred in carrying on any business,
occupation, or profession shall be deducted and also all interest
due or paid within the year by such person on existing
indebtedness. And all national, state, county, school, and
municipal taxes, not including those assessed against local
benefits, paid within the year shall be deducted from the gains,
profits, or income of the person who has actually paid the same,
whether such person be owner, tenant, or mortgagor; also losses
actually sustained during the year, incurred in trade or arising
from fires, storms, or shipwreck, and not compensated for by
insurance or otherwise, and debts ascertained to be worthless, but
excluding all estimated depreciation of values and losses within
the year on sales of real estate purchased within two years
previous to the year for which income is estimated: Provided, That no deduction shall be made for any amount
paid out for new buildings, permanent improvements, or betterments,
made to increase the value of any property or estate: Provided
further, That only one deduction of four thousand dollars
shall be made from the aggregate income of all the members of any
family, composed of one or both parents, and one or more minor
children, or husband and wife; that guardians shall be allowed to
make a deduction in favor of each and every ward, except that, in
case where two or more wards are comprised in one family, and have
joint property interests, the aggregate deduction in their favor
shall not exceed four thousand dollars: and provided
further, that in cases where the salary or other compensation
paid to any person in the employment or service of the United
States shall not exceed the rate of four thousand dollars per
annum, or shall be by fees, or uncertain or irregular in the amount
or in the time during which the same shall have accrued or been
earned, such salary or other compensation shall be included in
estimating the annual gains, profits, or income of the person to
whom the same shall have been paid, and shall include that portion
of any income or salary upon which a tax has not been paid by the
employer, where the employer is required by law to pay on the
excess over four thousand dollars: Provided also, that in
computing the income of any person, corporation, company, or
association there shall not be included the amount received from
any corporation, company, or association as dividends upon the
stock of such corporation, company, or association if the tax of
two percentum has been paid upon its net profits by said
corporation, company, or association as required by this act."
"SEC. 29. That it shall be the duty of all persons of lawful age
having an income of more than three thousand five hundred dollars
for the taxable year, computed on the basis herein prescribed, to
make and render a list or return, on or before the day provided by
law, in such form and manner as may be directed by the Commissioner
of Internal Revenue, with the approval of the Secretary of the
Treasury, to the collector or a deputy collector of the district in
which they reside, of the amount of their income, gains, and
profits, as aforesaid, and all guardians and trustees, executors,
administrators, agents, receivers, and all persons or corporations
acting in any fiduciary capacity, shall make and render a list or
return as aforesaid, to the collector or a deputy collector of the
district in which such person or corporation acting in a fiduciary
capacity resides or does business, of the amount of income, gains,
and profits of any minor or person for whom they act, but persons
having less than three thousand five hundred dollars income are not
required to make such report; and the collector or deputy collector
shall require every list or return to be verified by the oath or
affirmation of the party rendering it, and may increase the amount
of any list or return if he has reason to believe that the same is
understated, and in case any such person having a taxable income
shall neglect or refuse to make and render such list and return, or
shall render a willfully false or fraudulent list or return, it
shall be the duty of the collector or deputy collector, to make
such list, according to the best information he can obtain, by the
examination of such person, or any other evidence, and to add fifty
percentum as a penalty to the amount of the tax due on such list in
all cases of willful neglect or refusal to make and render a list
or return, and in all cases of a willfully false or fraudulent list
or return having been rendered to add one hundred percentum as a
penalty to the amount of tax ascertained to be due, the tax and the
additions thereto as a penalty to be assessed and collected in the
manner provided for in other cases of willful neglect or refusal to
render a list or return, or of rendering a false or fraudulent
return."
A proviso was added that any person or corporation might show
that he or its ward had no taxable income, or that the same had
been paid elsewhere, and the collector might exempt from the tax
for that year.
"Any person or company, corporation, or association, feeling
aggrieved by the decision of the deputy collector in such cases may
appeal to the collector of the district, and his decision thereon,
unless reversed by the Commissioner of Internal Revenue, shall be
final. If dissatisfied with the decision of the collector, such
person or corporation, company, or association may submit the case,
with all the papers, to the Commissioner of Internal Revenue for
his decision, and may furnish the testimony of witnesses to prove
any relevant facts, having served notice to that effect upon the
Commissioner of Internal Revenue, as herein prescribed."
Provision was made for notice of time and place for taking
testimony on both sides, and that no penalty should be assessed
until after notice.
By section 30, the taxes on incomes were made payable on or
before July 1 of each year, and five percent penalty levied on
taxes unpaid, and interest.
By section 31, any nonresident might receive the benefit of the
exemptions provided for, and
"in computing income he shall include all income from every
source, but unless he be a citizen of the United States he shall
only pay on that part of the income which is derived from any
source in the United States. In case such nonresident fails to file
such statement, the collector of each district shall collect the
tax on the income derived from property situated in his district,
subject to income tax, making no allowance for exemptions, and all
property belonging to such nonresident shall be liable to distraint
for tax: Provided, That nonresident corporations shall be
subject to the same laws as to tax as resident corporations, and
the collection of the tax shall be made in the same manner as
provided for collections of taxes against nonresident persons."
SEC. 32. That there shall be assessed, levied, and collected,
except as herein otherwise provided, a tax of two percentum
annually on the net profits or income above actual operating and
business expenses, including expenses for materials purchased for
manufacture or bought for resale, losses, and interest on bonded
and other indebtedness of all banks, banking institutions, trust
companies, saving institutions, fire, marine, life, and other
insurance companies, railroad, canal, turnpike, canal navigation,
slack water, telephone, telegraph, express, electric light, gas,
water, street railway companies, and all other corporations,
companies, or associations doing business for profit in the United
States, no matter how created and organized but not including
partnerships.
The tax is made payable on or before the first day of July in
each year, and if the president or other chief officer of any
corporation, company, or association, or in the case of any foreign
corporation, company, or association, the resident manager or agent
shall neglect or refuse to file with the collector of the internal
revenue district in which said corporation, company, or association
shall be located or be engaged in business, a statement verified by
his oath or affirmation, in such form as shall be prescribed by the
Commissioner of Internal Revenue, with the approval of the
Secretary of the Treasury, showing the amount of net profits or
income received by said corporation, company, or association during
the whole calendar year last preceding the date of filing said
statement as hereinafter required, the corporation, company, or
association making default shall forfeit as a penalty the sum of
one thousand dollars and two percentum on the amount of taxes due,
for each month until the same is paid, the payment of said penalty
to be enforced as provided in other cases of neglect and refusal to
make return of taxes under the internal revenue laws.
"The net profits or income of all corporations, companies, or
associations shall include the amounts paid to shareholders, or
carried to the account of any fund, or used for construction,
enlargement of plant, or any other expenditure or investment paid
from the net annual profits made or acquired by said corporations,
companies, or associations."
"That nothing herein contained shall apply to States, counties,
or municipalities; nor to corporations, companies, or associations
organized and conducted solely for charitable, religious, or
educational purposes, including fraternal beneficiary societies,
orders, or associations operating upon the lodge system and
providing for the payment of life, sick, accident, and other
benefits to the members of such societies, orders, or associations
and dependents of such members; nor to the stocks, shares, funds,
or securities held by any fiduciary or trustee for charitable,
religious, or educational purposes; nor to building and loan
associations or companies which make loans only to their
shareholders; nor to such savings banks, savings institutions or
societies as shall, first, have no stockholders or members except
depositors and no capital except deposits; secondly, shall not
receive deposits to an aggregate amount, in any one year, of more
than one thousand dollars from the same depositor; thirdly, shall
not allow an accumulation or total of deposits, by any one
depositor exceeding ten thousand dollars; fourthly, shall actually
divide and distribute to its depositors, ratably to deposits, all
the earnings over the necessary and proper expenses of such bank,
institution, or society, except such as shall be applied to
surplus; fifthly, shall not possess, in any form, a surplus fund
exceeding ten percentum of its aggregate deposits; nor to such
savings banks, savings institutions, or societies composed of
members who do not participate in the profits thereof and which pay
interest or dividends only to their depositors; nor to that part of
the business of any savings bank, institution, or other similar
association having a capital stock, that is conducted on the mutual
plan solely for the benefit of its depositors on such plan, and
which shall keep its accounts of its business conducted on such
mutual plan separate and apart from its other accounts."
"Nor to any insurance company or association which conducts all
its business solely upon the mutual plan, and only for the benefit
of its policy holders or members, and having no capital stock and
no stock or shareholders, and holding all its property in trust and
in reserve for its policyholders or members; nor to that part of
the business of any insurance company having a capital stock and
stock and shareholders, which is conducted on the mutual plan,
separate from its stock plan of insurance, and solely for the
benefit of the policyholders and members insured on said mutual
plan, and holding all the property belonging to and derived from
said mutual part of its business in trust and reserve for the
benefit of its policyholders and members insured on said mutual
plan."
"That all state, county, municipal, and town taxes paid by
corporations, companies, or associations, shall be included in the
operating and business expenses of such corporations, companies, or
associations."
"SEC. 33. That there shall be levied, collected, and paid on all
salaries of officers, or payments for services to persons in the
civil, military, naval, or other employment or service of the
United States, including Senators and Representatives and Delegates
in Congress, when exceeding the rate of four thousand dollars per
annum, a tax of two percentum on the excess above the said four
thousand dollars, and it shall be the duty of all paymasters and
all disbursing officers under the government of the United States,
or persons in the employ thereof, when making any payment to any
officers or persons as aforesaid, whose compensation is determined
by a fixed salary, or upon settling or adjusting the accounts of
such officers or persons, to deduct and withhold the aforesaid tax
of two percentum, and the payroll, receipts, or account of officers
or persons paying such tax as aforesaid shall be made to exhibit
the fact of such payment. And it shall be the duty of the
accounting officers of the Treasury Department, when auditing the
accounts of any paymaster or disbursing officer, or any officer
withholding his salary from moneys received by him, or when
settling or adjusting the accounts of any such officer, to require
evidence that the taxes mentioned in this section have been
deducted and paid over to the Treasurer of the United States, or
other officer authorized to receive the same. Every corporation
which pays to any employee a salary or compensation exceeding four
thousand dollars per annum shall report the same to the collector
or deputy collector of his district and said employee shall pay
thereon, subject to the exemptions herein provided for, the tax of
two percentum on the excess of his salary over four thousand
dollars: Provided, That salaries due to state, county, or
municipal officers shall be exempt from the income tax herein
levied."
By section 34, sections thirty-one hundred and sixty-seven,
thirty-one hundred and seventy-two, thirty-one hundred and
seventy-three, and thirty-one hundred and seventy-six of the
Revised Statutes of the United States as amended were amended so as
to provide that it should be unlawful for the collector and other
officers to make known, or to publish amount or source of income
under penalty; that every collector should
"from time to time cause his deputies to proceed through every
part of his district and inquire after and concerning all persons
therein who are liable to pay any internal revenue tax, and all
persons owning or having the care and management of any objects
liable to pay any tax, and to make a list of such persons and
enumerate said objects;"
that the tax returns must he made on or before the first Monday
in March; that the collectors may make returns when particulars are
furnished; that notice be given to absentees to render returns;
that collectors may summon persons to produce books and testify
concerning returns; that collectors may enter other districts to
examine persons and books, and may make returns, and that penalties
may be imposed on false returns.
By section 35, it was provided that corporations doing business
for profit should make returns on or before the first Monday of
March of each year
"of all the following matters for the whole calendar year last
preceding the date of such return:"
"First. The gross profits of such corporation, company, or
association, from all kinds of business of every name and
nature."
"Second. The expenses of such corporation, company, or
association, exclusive of interest, annuities, and dividend."
"Third. The net profits of such corporation, company, or
association, without allowance for interest, annuities, or
dividends."
"Fourth. The amount paid on account of interest, annuities, and
dividends, stated separately."
"Fifth. The amount paid in salaries of four thousand dollars or
less to each person employed."
"Sixth. The amount paid in salaries of more than four thousand
dollars to each person employed and the name and address of each of
such persons and the amount paid to each."
By section 36, that books of account should be kept by
corporations as prescribed, and inspection thereof be granted under
penalty.
By section 37, provision is made for receipts for taxes
paid.
By a joint resolution of February 21, 1895, the time for making
returns of income for the year 1894 was extended, and it was
provided that,
"in computing incomes under said act, the amounts necessarily
paid for fire insurance premiums and for ordinary repairs shall be
deducted;"
and that
"in computing incomes under said act, the amounts received as
dividends upon the stock of any corporation, company, or
association shall not be included in case such dividends are also
liable to the tax of two percentum upon the net profits of said
corporation, company, or association although such tax may not have
been actually paid by said corporation, company, or association at
the time of making returns by the person, corporation, or
association receiving such dividends, and returns or reports of the
names and salaries of employees shall not be required from
employers unless called for by the collector in order to verify the
returns of employees."
MR. JUSTICE FIELD.
I also desire to place my opinion on record upon some of the
important questions discussed in relation to the direct and
indirect taxes proposed by the income tax law of 1894. Page 157 U. S. 587 Several suits have been instituted in state and Federal courts,
both at law and in equity, to test the validity of the provisions
of the law, the determination of which will necessitate careful and
extended consideration.
The subject of taxation in the new government which was to be
established created great interest in the convention which framed
the Constitution, and was the cause of much difference of opinion
among its members and earnest contention between the States. The
great source of weakness of the confederation was its inability to
levy taxes of any kind for the support of its government. To raise
revenue, it was obliged to make requisitions upon the States, which
were respected or disregarded at their pleasure. Great
embarrassments followed the consequent inability to obtain the
necessary funds to carry on the government. One of the principal
objects of the proposed new government was to obviate this defect
of the confederacy by conferring authority upon the new government
by which taxes could be directly laid whenever desired. Great
difficulty in accomplishing this object was found to exist. The
States bordering on the ocean were unwilling to give up their right
to lay duties upon imports, which were their chief source of
revenue. The other States, on the other hand, were unwilling to
make any agreement for the levying of taxes directly upon real and
personal property, the smaller States fearing that they would be
overborne by unequal burdens forced upon them by the action of the
larger States. In this condition of things, great embarrassment was
felt by the members of the convention. It was feared at times that
the effort to form a new government would fail. But happily, a
compromise was effected by an agreement that direct taxes should be
laid by Congress by apportioning them among the States according to
their representation. In return for this concession by some of the
States, the other States bordering on navigable waters consented to
relinquish to the new government the control of duties, imposts,
and excises, and the regulation of commerce, with the condition
that the duties, imposts, and excises should be uniform throughout
the United States. So that, on the one Page 157 U. S. 588 hand, anything like oppression or undue advantage of any one
State over the others would be prevented by the apportionment of
the direct taxes among the States according to their
representation, and, on the other hand, anything like oppression or
hardship in the levying of duties, imposts, and excises would be
avoided by the provision that they should be uniform throughout the
United States. This compromise was essential to the continued union
and harmony of the States. It protected every State from being
controlled in its taxation by the superior numbers of one or more
other States.
The Constitution accordingly, when completed, divided the taxes
which might be levied under the authority of Congress into those
which were direct and those which were indirect. Direct taxes, in a
general and large sense, may be described as taxes derived
immediately from the person, or from real or personal property,
without any recourse therefrom to other sources for reimbursement.
In a more restricted sense, they have sometimes been confined to
taxes on real property, including the rents and income derived
therefrom. Such taxes are conceded to be direct taxes, however
taxes on other property are designated, and they are to be
apportioned among the States of the Union according to their
respective numbers. The second section of article I of the
Constitution declares that representatives and direct taxes shall
be thus apportioned. It had been a favorite doctrine in England and
in the colonies, before the adoption of the Constitution, that
taxation and representation should go together. The Constitution
prescribes such apportionment among the several States according to
their respective numbers, to be determined by adding to the whole
number of free persons, including those bound to service for a term
of years, and excluding Indians not taxed, three-fifths of all
other persons.
Some decisions of this court have qualified or thrown doubts
upon the exact meaning of the words "direct taxes." Thus, in Springer v. United States, 102 U.
S. 586 , it was held that a tax upon gains, profits, and
income was an excise or duty, and not a direct tax within the
meaning of the Constitution, and Page 157 U. S. 589 that its imposition was not therefore unconstitutional. And in Pacific Insurance Co. v.
Soule , 7 Wall. 433, it was held that an income tax
or duty upon the amounts insured, renewed or continued by insurance
companies, upon the gross amounts of premiums received by them and
upon assessments made by them, and upon dividends and undistributed
sums, was not a direct tax, but a duty or excise.
In the discussions on the subject of direct taxes in the British
Parliament, an income tax has been generally designated as a direct
tax, differing in that respect from the decision of this court in Springer v. United States. But whether the latter can be
accepted as correct or otherwise, it does not affect the tax upon
real property and its rents and income as a direct tax. Such a tax
is by universal consent recognized to be a direct tax.
As stated, the rents and income of real property are included in
the designation of direct taxes as part of the real property. Such
has been the law in England for centuries, and in this country from
the early settlement of the colonies, and it is strange that any
member of the legal profession should, at this day, question a
doctrine which has always been thus accepted by common law lawyers.
It is so declared in approved treatises upon real property and in
accepted authorities on particular branches of real estate law, and
has been so announced in decisions in the English courts and our
own courts without number. Thus, in Washburn on Real Property, it
is said that
"a devise of the rents and profits of land, or the income of
land, is equivalent to a devise of the land itself, and will be for
life or in fee according to the limitation expressed in the
devise."
Vol. 2, p. 695, § 30.
In Jarman on Wills, Vol. 1, page 40, it is laid down that
"a devise of the rents and profits or of the income of land
passes the land itself both at law and in equity; a rule, it is
said, founded on the feudal law, according to which the whole
beneficial interest in the land consisted in the right to take the
rents and profits. And since the act 1 Vict. c. 26, such a devise
carries the fee simple; but before that act, it carried no more
than an estate for life unless words of inheritance were Page 157 U. S. 590 added."
Mr. Jarman cites numerous authorities in support of his
statement. South v. Alleine, 1 Salk. 228; Doe d.
Goldin v. Lakeman, 2 B. & Ad. 30, 42; Johnson v.
Arnold, 1 Ves.Sen. 171; Baines v. Dixon, 1 Ves.Sen.
42; Mannox v. Greener, L.R. 14 Eq. 46; Blann v.
Bell, 2 De G., M. & G. 781; Plenty v. West, 6
C.B. 201.
Coke upon Littleton says:
"If a man seised of lands in fee by his deed granteth to another
the profit of those lands, to have and to hold to him and his
heires, and maketh livery secundum formam chartae, the
whole land itselfe doth passe; for what is the land but the profits
thereof?"
Lib. 1, cap. 1, § 1, p. 4 b. In Doe d. Goldin v. Lakeman, Lord Tenterden, Chief
Justice of the Court of King's Bench, to the same effect, said: "It
is an established rule that a devise of the rents and profits is a
devise of the land." And in Johnson v. Arnold, Lord
Chancellor Hardwicke reiterated the doctrine that a "devise of the
profits of lands is a devise of the lands themselves."
The same rule is announced in this country; the Court of Errors
of New York in Paterson v. Ellis, 11 Wend. 29, 98, holding
that the
"devise of the interest or of the rents and profits is a devise
of the thing itself, out of which that interest or those rents and
profits may issue;"
and the Supreme Court of Massachusetts, in Reed v.
Reed, 9 Mass. 372, 374, that "a devise of the income of lands
is the same in its effect as a devise of the lands." The same view
of the law was expressed in Anderson v. Greble, 1 Ashmead
(Penn.) 136, 138, King, the president of the court, stating: "I
take it to be a well settled rule of law that, by a devise of the
rent, profits, and income of land, the land itself passes." Similar
adjudications might be repeated almost indefinitely. One may have
the reports of the English courts examined for several centuries
without finding a single decision or even a dictum of their judges
in conflict with them. And what answer do we receive to these
adjudications? Those rejecting them furnish no proof that the
framers of the Constitution did not follow them, as the great body
of the people of the country then did. An incident which occurred
in this court and room twenty Page 157 U. S. 591 years ago may have become a precedent. To a powerful argument
then being made by a distinguished counsel on a public question,
one of the judges exclaimed that there was a conclusive answer to
his position, and that was that the court was of a different
opinion. Those who decline to recognize the adjudications cited may
likewise consider that they have a conclusive answer to them in the
fact that they also are of a different opinion. I do not think so.
The law as expounded for centuries cannot be set aside or
disregarded because some of the judges are now of a different
opinion from those who, a century ago, followed it in framing our
Constitution.
Hamilton, speaking on the subject, asks: "What, in fact, is
property but a fiction without the beneficial use of it?" And adds:
"In many cases, indeed, the income or annuity is the property
itself." 3 Hamilton's Works, Putnam's ed. 34.
It must be conceded that whatever affects any element that gives
an article its value, in the eye of the law affects the article
itself.
In Brown v.
Maryland , 12 Wheat. 419, 25 U. S. 444 ,
it was held that a tax on the occupation of an importer is the same
as a tax on his imports, and, as such, was invalid. It was
contended that the State might tax occupations, and that this was
nothing more, but the court said, by Chief Justice Marshall (p. 25 U. S.
444 ):
"It is impossible to conceal from ourselves that this is varying
the form without varying the substance. It is treating a
prohibition which is general as if it were confined to a particular
mode of doing the forbidden thing. All must perceive that a tax on
the sale of an article imported only for sale is a tax on the
article itself."
In Weston v.
Charleston , 2 Pet. 449, it was held that a tax upon
stock issued for loans to the United States was a tax upon the
loans themselves, and equally invalid. In Dobbins v.
Commissioners , 16 Pet. 435, it was held that the
salary of an officer of the United States could not be taxed if the
office was itself exempt. In Almy v.
California , 24 How. 169, it was held that a duty on
a bill of lading was the same thing as a duty on the article
transported. In Cook v. Pennsylvania, 97 U. S.
566 it was held that a tax upon the amount Page 157 U. S. 592 of sales of goods made by an auctioneer was a tax upon the goods
sold. In Philadelphia & Southern Steamship Co. v.
Pennsylvania, 122 U. S. 326 , and Leloup v. Mobile, 127 U. S. 640 , 127 U. S. 648 ,
it was held that a tax upon the income received from interstate
commerce was a tax upon the commerce itself, and equally
unauthorized. The same doctrine was held in People v.
Commissioners of Taxes, 90 N.Y. 63; State
Freight Tax , 15 Wall. 232, 82 U. S. 274 ; Welton v. Missouri, 91 U. S. 275 , 91 U. S. 278 ,
and in Fargo v. Michigan, 121 U.
S. 230 .
The law, so far as it imposes a tax upon land by taxation of the
rents and income thereof, must therefore fail, as it does not
follow the rule of apportionment. The Constitution is imperative in
its direction on this subject, and admits of no departure from
them.
But the law is not invalid merely in its disregard of the rule
of apportionment of the direct tax levied. There is another and an
equally cogent objection to it. In taxing incomes other than rents
and profits of real estate, it disregards the rule of uniformity
which is prescribed in such cases by the Constitution. The eighth
section of the first article of the Constitution declares that
"the Congress shall have power to lay and collect taxes, duties,
imposts, and excises, to pay the debts and provide for the common
defence and general welfare of the United States; but all
duties, imposts, and excises shall be uniform throughout the United
States. "
Excise are a species of tax consisting generally of duties laid
upon the manufacture, sale, or consumption of commodities within
the country, or upon certain callings or occupations, often taking
the form of exactions for licenses to pursue them. The taxes
created by the law under consideration as applied to savings banks,
insurance companies, whether of fire, life, or marine, to building
or other associations, or to the conduct of any other kind of
business, are excise taxes, and fall within the requirement, so far
as they are laid by Congress, that they must be uniform throughout
the United States.
The uniformity thus required is the uniformity throughout the
United States of the duty, impost, and excise levied. That is, the
tax levied cannot be one sum upon an article at one Page 157 U. S. 593 place and a different sum upon the same article at another
place. The duty received must be the same at all places throughout
the United States, proportioned to the quantity of the article
disposed of or the extent of the business done. If, for instance,
one kind of wine or grain or produce has a certain duty laid upon
it proportioned to its quantity in New York, it must have a like
duty proportioned to its quantity when imported at Charleston or
San Francisco, or if a tax be laid upon a certain kind of business
proportioned to its extent at one place, it must be a like tax on
the same kind of business proportioned to its extent at another
place. In that sense, the duty must be uniform throughout the
United States. It is contended by the government that the
Constitution only requires an uniformity geographical in its
character. That position would be satisfied if the same duty were
laid in all the States, however variant it might be in different
places of the same State. But it could not be sustained in the
latter case without defeating the equality, which is an essential
element of the uniformity required, so far as the same is
practicable.
In United States v.
Singer , 15 Wall. 111, 82 U. S. 121 , a
tax was imposed upon a distiller, in the nature of an excise, and
the question arose whether, in its imposition upon different
distillers, the uniformity of the tax was preserved, and the court
said:
"The law is not in our judgment subject to any constitutional
objection. The tax imposed upon the distiller is in the nature of
an excise, and the only limitation upon the power of Congress in
the imposition of taxes of this character is that they shall be
'uniform throughout the United States.' The tax here is uniform in
its operation; that is, it is assessed equally upon all
manufacturers of spirits wherever they are. The law does not
establish one rule for one distiller and a different rule for
another, but the same rule for all alike."
In the Head Money Cases, 112 U.
S. 580 , 112 U. S. 594 ,
a tax was imposed upon the owners of steam vessels for each
passenger landed at New York from a foreign port, and it was
objected that the tax was not levied by any rule of uniformity, but
the court, by Justice Miller, replied:
"The tax is uniform when Page 157 U. S. 594 it operates with the same force and effect in every place where the subject of it is found. The tax in this case,
which, as far as it can be called a tax, is an excise duty on the
business of bringing passengers from foreign countries into this by
ocean navigation, is uniform, and operates precisely alike in every
port of the United States where such passengers can be landed."
In the decision in that case in the Circuit Court, 18 Fed.Rep.
135, 139, Mr. Justice Blatchford, in addition to pointing out that
"the act was not passed in the exercise of the power of laying
taxes," but was a regulation of commerce, used the following
language:
"Aside from this, the tax applies uniformly to all steam and
sail vessels coming to all ports in the United States, from all
foreign ports, with all alien passengers. The tax being a license
tax on the business, the rule of uniformity is sufficiently
observed if the tax extends to all persons of the class selected by
Congress; that is, to all owners of such vessels. Congress has
the exclusive power of selecting the class. It has regulated that
particular branch of commerce which concerns the bringing of alien
passengers,"
and that taxes shall be levied upon such property as shall be
prescribed by law. The object of this provision was to prevent
unjust discriminations. It prevents property from being classified
and taxed, as classed, by different rules. All kinds of property
must be taxed uniformly or be entirely exempt. The uniformity must
be coextensive with the territory to which the tax applies.
Mr. Justice Miller, in his lectures on the Constitution (N.Y.
1891) pp. 240, 241, said of taxes levied by Congress:
"The tax must be uniform on the particular article, and
it is uniform, within the meaning of the constitutional
requirement, if it is made to bear the same percentage over all the
United States. That is manifestly the meaning of this word as used
in this clause. The framers of the Constitution could not have
meant to say that the government, in raising its revenues, should
not be allowed to discriminate between the articles which it should
tax."
In discussing generally the requirement of uniformity found in
state constitutions, he said:
"The difficulties in the way of this construction have, however,
been very largely obviated by the meaning of the word Page 157 U. S. 595 'uniform' which has been adopted, holding that the uniformity
must refer to articles of the same class. That is, different
articles may be taxed at different amounts, provided the rate is
uniform on the same class everywhere, with all people, and at all
times. "
One of the learned counsel puts it very clearly when he says
that the correct meaning of the provisions requiring duties,
imposts, and excises to be "uniform throughout the United States"
is that the law imposing them should "have an equal and uniform
application in every part of the Union."
If there were any doubt as to the intention of the States to
make the grant of the right to impose indirect taxes subject to the
condition that such taxes shall be in all respects uniform and
impartial, that doubt, as said by counsel, should be resolved in
the interest of justice, in favor of the taxpayer.
Exemptions from the operation of a tax always create
inequalities. Those not exempted must, in the end, bear an
additional burden or pay more than their share. A law containing
arbitrary exemptions can in no just sense be termed uniform. In my
judgment, Congress has rightfully no power, at the expense of
others, owning property of a like character, to sustain private
trading corporations, such as building and loan associations,
savings banks, and mutual life, fire, marine, and accident
insurance companies, formed under the laws of the various States,
which advance no national purpose or public interest and exist
solely for the pecuniary profit of their members.
Where property is exempt from taxation, the exemption, as has
been justly stated, must be supported by some consideration that
the public, and not private, interests will be advanced by it.
Private corporations and private enterprises cannot be aided under
the pretence that it is the exercise of the discretion of the
legislature to exempt them. Loan Association v.
Topeka , 20 Wall. 655; Parkersburg v.
Brown, 106 U. S. 487 ; Barbour v. Louisville Board of Trade, 82 Kentucky 645,
654, 655; Lexington v. McQuillan's Heirs, 9 Dana, 513,
516, 517, and Sutton's Heirs v. Louisville, 5 Dana, 28,
31.
Cooley, in his treatise on Taxation (2d ed. 215), justly Page 157 U. S. 596 observes that:
"It is difficult to conceive of a justifiable exemption law
which should select single individuals or corporations, or single
articles of property, and, taking them out of the class to which
they belong, make them the subject of capricious legislative favor.
Such favoritism could make no pretence to equality; it would lack
the semblance of legitimate tax legislation."
The income tax law under consideration is marked by
discriminating features which affect the whole law. It
discriminates between those who receive an income of four thousand
dollars and those who do not. It thus vitiates, in my judgment, by
this arbitrary discrimination, the whole legislation. Hamilton says
in one of his papers (the Continentalist),
"the genius of liberty reprobates everything arbitrary or
discretionary in taxation. It exacts that every man, by a definite
and general rule, should know what proportion of his property the
State demands; whatever liberty we may boast of in theory, it
cannot exist in fact while [arbitrary] assessments continue."
1 Hamilton's Works, ed. 1885, 270. The legislation, in the
discrimination it makes, is class legislation. Whenever a
distinction is made in the burdens a law imposes or in the benefits
it confers on any citizens by reason of their birth, or wealth, or
religion, it is class legislation, and leads inevitably to
oppression and abuses, and to general unrest and disturbance in
society. It was hoped and believed that the great amendments to the
Constitution which followed the late civil war had rendered such
legislation impossible for all future time. But the objectionable
legislation reappears in the act under consideration. It is the
same in essential character as that of the English income statute
of 1691, which taxed Protestants at a certain rate, Catholics, as a
class, at double the rate of Protestants, and Jews at another and
separate rate. Under wise and constitutional legislation, every
citizen should contribute his proportion, however small the sum, to
the support of the government, and it is no kindness to urge any of
our citizens to escape from that obligation. If he contributes the
smallest mite of his earnings to that purpose, he will have a
greater regard for the government, and more self-respect Page 157 U. S. 597 for himself, feeling that, though he is poor in fact, he is not
a pauper of his government. And it is to be hoped that, whatever
woes and embarrassments may betide our people, they may never lose
their manliness and self-respect. Those qualities preserved, they
will ultimately triumph over all reverses of fortune.
There is nothing in the nature of the corporations or
associations exempted in the present act, or in their method of
doing business, which can be claimed to be of a public or
benevolent nature. They differ in no essential characteristic in
their business from "all other corporations, companies, or
associations doing business for profit in the United States." Act
of August 15, 1894, c. 349, § 32.
A few words as to some of them, the extent of their capital and
business, and of the exceptions made to their taxation:
1st. A to mutual savings banks. -- Under income tax
laws prior to 1870, these institutions were specifically taxed.
Under the new law, certain institutions of this class are exempt,
provided the shareholders do not participate in the profits, and
interest and dividends are only paid to the depositors. No limit is
fixed to the property and income thus exempted -- it may be
$100,000 or $100,000,000. One of the counsel engaged in this case
read to us during the argument from the report of the Comptroller
of the Currency, sent by the President to Congress December 3,
1894, a statement to the effect that the total number of mutual
savings banks exempted was 646, and the total number of stock
savings banks was 378, and showed that they did the same character
of business and took in the money of depositors for the purpose of
making it bear interest, with profit upon it in the same way, and
yet the 646 are exempt and the 378 are taxed. He also showed that
the total deposits in savings banks were $1,748,000,000.
2d. As to mutual insurance corporations. -- These
companies were taxed under previous income tax laws. They do
business somewhat differently from other companies, but they
conduct a strictly private business in which the public has no
interest, and have been often held not to be benevolent or
charitable organizations. Page 157 U. S. 598 The sole condition for exempting them under the present law is
declared to be that they make loans to or divide their profits
among their members, or depositors or policyholders. Every
corporation is carried on, however, for the benefit of its members,
whether stockholders or depositors or policyholders. If it is
carried on for the benefit of its shareholders, every dollar of
income is taxed; if it is carried on for the benefit of its
policyholders or depositors, who are but another class of
shareholders, it is wholly exempted. In the State of New York, the
act exempts the income from over $1,00,000,000 of property of these
companies. The leading mutual life insurance company has property
exceeding 204,000,000 in value, the income of which is wholly
exempted. The insertion of the exemption is stated by counsel to
have saved that institution fully $200,000 a year over other
insurance companies and associations having similar property and
carrying on the same business, simply because such other companies
or associations divide their profits among their shareholders,
instead of their policyholders.
3d. As to building an loan, associations. -- The
property of these institutions is exempted from taxation to the
extent of millions. They are in no sense benevolent or charitable
institutions, and are conducted solely for the pecuniary profit of
their members. Their assets exceed the capital stock of the
national banks of the country. One, in Dayton, Ohio, has a capital
of $10,000,000, and Pennsylvania has $65,000,000 invested in these
associations. The census report submitted to Congress by the
President, May 1, 1894, shows that their property in the United
States amounts to over $628,000,000. Why should these institutions
and their immense accumulations of property be singled out for the
special favor of Congress and be freed from their just, equal, and
proportionate share of taxation when others engaged under different
names, in similar business, are subjected to taxation by this law?
The aggregate amount of the saving to these associations, by reason
of their exemption, is over $600,000 a year. If this statement of
the exemptions of corporations under the law of Congress, taken
from the carefully prepared briefs of counsel Page 157 U. S. 599 and from reports to Congress, will not satisfy parties
interested in this case that the act in question disregards, in
almost every line and provision, the rule of uniformity required by
the Constitution, then "neither will they be persuaded, though one
rose from the dead." That there should be any question or any doubt
on the subject surpasses my comprehension. Take the case of mutual
savings banks and stock savings banks. They do the same character
of business, and in the same way use the money of depositors,
loaning it at interest for profit, yet 646 of them, under the law
before us, are exempt from taxation on their income, and 378 are
taxed upon it. How the tax on the income of one kind of these banks
can be said to be laid upon any principle of uniformity, when the
other is exempt from all taxation, I repeat, surpasses my
comprehension.
But there are other considerations against the law which are
equally decisive. They relate to the uniformity and equality
required in all taxation, national and State; to the invalidity of
taxation by the United States of the income of the bonds and
securities of the States and of their municipal bodies, and the
invalidity of the taxation of the salaries of the judges of the
United States courts.
As stated by counsel: "There is no such thing in the theory of
our national government as unlimited power of taxation in Congress.
There are limitations," as he justly observes,
"of its powers arising out of the essential nature of all free
governments; there are reservations of individual rights, without
which society could not exist, and which are respected by every
government. The right of taxation is subject to these
limitations." Loan Association v.
Topeka , 20 Wall. 635, and Parkersburg v.
Brown, 106 U. S. 487 .
The inherent and fundamental nature and character of a tax is
that of a contribution to the support of the government, levied
upon the principle of equal and uniform apportionment among the
persons taxed, and any other exaction does not come within the
legal definition of a tax.
This inherent limitation upon the taxing power forbids the
imposition of taxes which are unequal in their operation upon Page 157 U. S. 600 similar kinds of property, and necessarily strikes down the
gross and arbitrary distinctions in the income law as passed by
Congress. The law, as we have seen, distinguishes in the taxation
between corporations by exempting the property of some of them from
taxation and levying the tax on the property of others when the
corporations do not materially differ from one another in the
character of their business or in the protection required by the
government. Trifling differences in their modes of business, but
not in their results, are made the ground and occasion of the
greatest possible differences in the amount of taxes levied upon
their income, showing that the action of the legislative power upon
them has been arbitrary and capricious and sometimes merely
fanciful.
There was another position taken in this case which is not the
least surprising to me of the many advanced by the upholders of the
law, and that is that, if this court shall declare that the
exemptions and exceptions from taxation extended to the various
corporations mentioned, fire, life, and marine insurance companies,
and to mutual savings banks, building, and loan associations
violate the requirement of uniformity, and are therefore void, the
tax as to such corporations can be enforced, and that the law will
stand as though the exemptions had never been inserted. This
position does not, in my judgment, rest upon any solid foundation
of law or principle. The abrogation or repeal of an
unconstitutional or illegal provision does not operate to create
and give force to any enactment or part of an enactment which
Congress has not sanctioned and promulgated. Seeming support of
this singular position is attributed to the decision of this court
in Huntington v. Worthen, 120 U. S.
97 . But the examination of that case will show that it
does not give the slightest sanction to such a doctrine. There, the
constitution of Arkansas had provided that all property subject to
taxation should be taxed according to its value, to be ascertained
in such manner as the general assembly should direct, making the
same equal and uniform throughout the State, and certain public
property was declared by statute to be exempt from taxation, which
statute was subsequently held to be unconstitutional. The court
decided that the unconstitutional Page 157 U. S. 601 part of the enactment, which was separable from the remainder,
could be omitted and the remainder enforced; a doctrine undoubtedly
sound, and which has never, that I am aware of, been questioned.
But that is entirely different from the position here taken, that
exempted things can be taxed by striking out their exemption.
The law of 1894 says there shall be assessed, levied, and
collected, "except as hereinafter otherwise provided," two
percentum of the amount, etc. If the exceptions are stricken out,
there is nothing to be assessed and collected except what Congress
has otherwise affirmatively ordered. Nothing less can have the
force of law. This court is impotent to pass any law on the
subject. It has no legislative power. I am unable, therefore, to
see how we can, by declaring an exemption or exception invalid,
thereby give effect to provisions as though they were never
exempted. The court, by declaring the exemptions invalid, cannot,
by any conceivable ingenuity, give operative force as enacting
clauses to the exempting provisions. That result is not within the
power of man.
The law is also invalid in its provisions authorizing the
taxation of the bonds and securities of the States and of their
municipal bodies. It is objected that the cases pending before us
do not allege any threatened attempt to tax the bonds or securities
of the State, but only of municipal bodies of the States. The law
applies to both kinds of bonds and securities, those of the States
as well as those of municipal bodies, and the law of Congress we
are examining, being of a public nature, affecting the whole
community, having been brought before us and assailed as
unconstitutional in some of its provisions, we are at liberty, and
I think it is our duty, to refer to other unconstitutional features
brought to our notice in examining the law, though the particular
points of their objection may not have been mentioned by counsel.
These bonds and securities are as important to the performance of
the duties of the State as like bonds and securities of the United
States are important to the performance of their duties, and are as
exempt from the taxation of the United States as the former are
exempt from the taxation of the States. As stated by Judge Page 157 U. S. 602 Cooley in his work on the principles of constitutional law:
"The power to tax, whether by the United States or by the
States, is to be construed in the light of, and limited by, the
fact that the States and the Union are inseparable, and that the
Constitution contemplates the perpetual maintenance of each with
all its constitutional powers, unembarrassed and unimpaired by any
action of the other. The taxing power of the Federal government
does not therefore extend to the means or agencies through or by
the employment of which the States perform their essential
functions, since, if these were within its reach, they might be
embarrassed, and perhaps wholly paralyzed, by the burdens it should
impose."
"That the power to tax involves the power to destroy; that the
power to destroy may defeat and render useless the power to create;
that there is a plain repugnance in conferring on one government a
power to control the constitutional measures of another, which
other, in respect to those very measures, is declared to be supreme
over that which exerts the control -- are propositions not to be
denied."
"It is true that taxation does not necessarily and unavoidably
destroy, and that to carry it to the excess of destruction would be
an abuse not to be anticipated, but the very power would take from
the States a portion of their intended liberty of independent
action within the sphere of their powers, and would constitute to
the State a perpetual danger of embarrassment and possible
annihilation. The Constitution contemplates no such shackles upon
state powers, and, by implication, forbids them."
The Internal Revenue Act of June 30, 1864, in section 122,
provided that railroad and certain other companies specified,
indebted for money for which bonds had been issued upon which
interest was stipulated to be paid, should be subject to pay a tax
of five percent on the amount of all such interest, to be paid by
the corporations and by them deducted from the interest payable to
the holders of such bonds, and the question arose in United States v. Railroad
Co. , 17 Wall. 322, 84 U. S. 327 ,
whether the tax imposed could be thus collected from the revenues
of a city owning such bonds. This court answered the question as
follows:
"There is no dispute about the general Page 157 U. S. 603 rules of the law applicable to this subject. The power of
taxation by the Federal government upon the subjects and in the
manner prescribed by the act we are considering is undoubted. There
are, however, certain departments which are excepted from the
general power. The right of the States to administer their own
affairs through their legislative, executive, and judicial
departments, in their own manner through their own agencies, is
conceded by the uniform decisions of this court, and by the
practice of the Federal government from its organization. This
carries with it an exemption of those agencies and instruments from
the taxing power of the Federal government. If they may be taxed
lightly, they may be taxed heavily; if justly, oppressively. Their
operation may be impeded and may be destroyed if any interference
is permitted. Hence, the beginning of such taxation is not allowed
on the one side, is not claimed on the other."
And again:
"A municipal corporation like the city of Baltimore is a
representative not only of the State, but it is a portion of its
governmental power. It is one of its creatures, made for a specific
purpose, to exercise within a limited sphere the powers of the
State. The State may withdraw these local powers of government at
pleasure, and may, through its legislature or other appointed
channels, govern the local territory as it governs the State at
large. It may enlarge or contract its powers or destroy its
existence. As a portion of the State in the exercise of a limited
portion of the powers of the State, its revenues, like those of the
State, are not subject to taxation."
In Collector v.
Day , 11 Wall. 113, 78 U. S. 124 ,
the court, speaking by Mr. Justice Nelson, said:
"The general government and the States, although both exist
within the same territorial limits, are separate and distinct
sovereignties, acting separately and independently of each other
within their respective spheres. The former, in its appropriate
sphere, is supreme, but the States, within the limits of their
powers not granted or, in the language of the tenth amendment,
'reserved,' are as independent of the general government as that
government within its sphere is independent of the States. " Page 157 U. S. 604 According to the census reports, the bonds and securities of the
States amount to the sum of $1,243,268,000, on which the income or
interest exceeds the sum of $65,000,000 per annum, and the annual
tax of two percent upon this income or interest would be
$1,300,000.
The law of Congress is also invalid in that it authorizes a tax
upon the salaries of the judges of the courts of the United States,
against the declaration of the Constitution that their compensation
shall not be diminished during their continuance in office. The law
declares that a tax of two percent shall be assessed, levied, and
collected and paid annually upon the gains, profits, and income
received in the preceding calendar year by every citizen of the
United States, whether said gains, profits, or income be derived
from any kind of property, rents, interest, dividends, or salaries, or from any profession, trade, employment, or
vocation, carried on within the United States or elsewhere, or from
any source whatever. The annual salary of a justice of the Supreme
Court of the United States is ten thousand dollars, and this act
levies a tax of two percent on six thousand dollars of this amount,
and imposes a penalty upon those who do not make the payment or
return the amount for taxation.
The same objection, as presented to a consideration of the
objection to the taxation of the bonds and securities of the States
as not being specially taken in the cases before us is urged here
to a consideration of the objection to the taxation by the law of
the salaries of the judges of the courts of the United States. The
answer given to that objection may be also given to the present
one. The law of Congress being of a public nature, affecting the
interests of the whole community, and attacked for its
unconstitutionality in certain particulars, may be considered with
reference to other unconstitutional provisions called to our
attention upon examining the law, though not specifically noticed
in the objections taken in the records or briefs of counsel, that
the Constitution may not be violated from the carelessness or
oversight of counsel in any particular. See O'Neil v.
Vermont, 144 U. S. 323 , 144 U. S.
359 .
Besides, there is a duty which this court owes to the one Page 157 U. S. 605 hundred other United States judges who have small salaries and
who, having their compensation reduced by the tax, may be seriously
affected by the law.
The Constitution of the United States provides in the first
section of article III that:
"The judicial power of the United States shall be vested in one
Supreme Court, and in such inferior courts as the Congress may from
time to time ordain and establish. The judges, both of the Supreme
and inferior courts, shall hold their offices during good behavior,
and shall, at stated times, receive for their services a
compensation, which shall not be diminished during their
continance in office. "
The act of Congress under discussion imposes, as said, a tax on
six thousand dollars of this compensation, and therefore
diminishes, each year, the compensation provided for every justice.
How a similar law of Congress was regarded thirty years ago may be
shown by the following incident in which the justices of this court
were assessed at three percent upon their salaries. Against this,
Chief Justice Taney protested in a letter to Mr. Chase, then
Secretary of the Treasury, appealing to the above article in the
Constitution, and adding:
"If it [his salary] can be diminished to that extent by the
means of a tax, it may in the same way be reduced from time to time
at the pleasure of the legislature."
He explained in his letter the object of the constitutional
inhibition thus:
"The judiciary is one of the three great departments of the
government created and established by the Constitution. Its duties
and powers are specifically set forth, and are of a character that
require it to be perfectly independent of the other departments.
And in order to place it beyond the reach, and above even the
suspicion, of any such influence, the power to reduce their
compensation is expressly withheld from Congress and excepted
from their power of legislation. "
"Language could not be more plain than that used in the
Constitution. It is, moreover, one of its most important and
essential provisions. For the articles which limit the powers of
the legislative and executive branches of the government, and those
which provide safeguards for the protection of the citizen in his
person and property, would be of little value Page 157 U. S. 606 without a judiciary to uphold and maintain them which was free
from every influence, direct or indirect, that might by
possibility, in times of political excitement, warp their
judgment."
"Upon these grounds, I regard an act of Congress retaining in
the Treasury a portion of the compensation of the judges as
unconstitutional and void."
This letter of Chief Justice Taney was addressed to Mr. Chase,
then Secretary of the Treasury and afterwards the successor of Mr.
Taney as Chief Justice. It was dated February 16, 1863, but, as no
notice was taken of it, on the 10th of March following, at the
request of the Chief Justice, the Court ordered that his letter to
the Secretary of the Treasury be entered on the records of the
court, and it was so entered. And in the Memoir of the Chief
Justice, it is stated that the letter was, by this order, preserved
"to testify to future ages that, in war, no less than in peace,
Chief Justice Taney strove to protect the Constitution from
violation."
Subsequently, in 1869 and during the administration of President
Grant, when Mr. Boutwell was Secretary of the Treasury and Mr.
Hoar, of Massachusetts, was Attorney General, there were in several
of the statutes of the United States for the assessment and
collection of internal revenue provisions for taxing the salaries
of all civil officers of the United States, which included, in
their literal application, the salaries of the President and of the
judges of the United States. The question arose whether the law
which imposed such a tax upon them was constitutional. The opinion
of the Attorney General thereon was requested by the Secretary of
the Treasury. The Attorney General, in reply, gave an elaborate
opinion advising the Secretary of the Treasury that no income tax
could be lawfully assessed and collected upon the salaries of those
officers who were in office at the time the statute imposing the
tax was passed, holding on this subject the views expressed by
Chief Justice Taney. His opinion is published in volume XIII of the
Opinions of the Attorneys General, at page 161. I am informed that
it has been followed Page 157 U. S. 607 ever since without question by the department supervising or
directing the collection of the public revenue.
Here I close my opinion. I could not say less in view of
questions of such gravity that go down to the very foundation of
the government. If the provisions of the Constitution can be set
aside by an act of Congress, where is the course of usurpation to
end? The present assault upon capital is but the beginning. It will
be but the stepping stone to others, larger and more sweeping, till
our political contests will become a war of the poor against the
rich; a war constantly growing in intensity and bitterness.
"If the court sanctions the power of discriminating taxation,
and nullifies the uniformity mandate of the Constitution," as said
by one who has been all his life a student of our institutions, "it
will mark the hour when the sure decadence of our present
government will commence." If the purely arbitrary limitation of
$4,000 in the present law can be sustained, none having less than
that amount of income being assessed or taxed for the support of
the government, the limitation of future Congresses may be fixed at
a much larger sum, at five or ten or twenty thousand dollars,
parties possessing an income of that amount alone being bound to
bear the burdens of government; or the limitation may be designated
at such an amount as a board of "walking delegates" may deem
necessary. There is no safety in allowing the limitation to be
adjusted except in strict compliance with the mandates of the
Constitution which require its taxation, if imposed by direct
taxes, to be apportioned among the States according to their
representation, and if imposed by indirect taxes, to be uniform in
operation and, so far as practicable, in proportion to their
property, equal upon all citizens. Unless the rule of the
Constitution governs, a majority may fix the limitation at such
rate as will not include any of their own number.
I am of opinion that the whole law of 1894 should be declared
void and without any binding force -- that part which relates to
the tax on the rents, profits or income from real estate, that is,
so much as constitutes part of the direct tax, because not imposed
by the rule of apportionment according Page 157 U. S. 608 to the representation of the States, as prescribed by the
Constitution -- and that part which imposes a tax upon the bonds
and securities of the several States, and upon the bonds and
securities of their municipal bodies, and upon the salaries of
judges of the courts of the United States as being beyond the power
of Congress, and that part which lays duties, imposts and excises
as void in not providing for the uniformity required by the
Constitution in such cases.
MR. JUSTICE WHITE with whom concurred MR. JUSTICE HARLAN,
dissenting.
My brief judicial experience has convinced me that the custom of
filing long dissenting opinions is one "more honored in the breach
than in the observance." The only purpose which an elaborate
dissent can accomplish, if any, is to weaken the effect of the
opinion of the majority, and thus engender want of confidence in
the conclusions of courts of last resort. This consideration would
impel me to content myself with simply recording my dissent in the
present case were it not for the fact that I consider that the
result of the opinion of the court just announced is to overthrow a
long and consistent line of decisions, and to deny to the
legislative department of the government the possession of a power
conceded to it by universal consensus for one hundred years, and
which has been recognized by repeated adjudications of this court.
The issues presented are as follows:
Complainant, as a stockholder in a corporation, avers that the
latter will voluntarily pay the income tax levied under the recent
act of Congress; that such tax is unconstitutional, and that its
voluntary payment will seriously affect his interest by defeating
his right to test the validity of the exaction, and also lead to a
multiplicity of suits against the corporation. The prayer of the
bill is as follows: First. That it may be decreed that the
provisions known as "The Income Tax Law," incorporated in the act
of Congress, passed August 15, 1894, are unconstitutional, null,
and void. Second. That the defendant be restrained from voluntarily
complying with the provisions of that act by making its returns and
statements, Page 157 U. S. 609 and paying the tax. The bill, therefore, presents two
substantial questions for decision: the right of the plaintiff to
relief in the form in which he claims it, and his right to relief
on the merits.
The decisions of this Court hold that the collection of a tax
levied by the government of the United States will not be
restrained by its courts. Cheatham v. United States, 92 U. S. 85 ; Snyder v. Marks, 109 U. S. 189 . See also Elliott v.
Swartwout , 10 Pet. 137; City of
Philadelphia v. The Collector , 5 Wall. 720; Hornthall v. The
Collector , 9 Wall. 560. The same authorities have
established the rule that the proper course, in a case of illegal
taxation, is to pay the tax under protest or with notice of suit,
and then bring an action against the officer who collected it. The
statute law of the United States, in express terms, gives a party
who has paid a tax under protest the right to sue for its recovery.
Rev.Stat. § 3226.
The act of 1867 forbids the maintenance of any suit "for the
purpose of restraining the assessment or collection of any tax."
The provisions of this act are now found in Rev.Stat. § 3224.
The complainant is seeking to do the very thing which, according
to the statute and the decisions above referred to, may not be
done. If the corporator cannot have the collection of the tax
enjoined, it seems obvious that he cannot have the corporation
enjoined from paying it, and thus do by indirection what he cannot
do directly.
It is said that such relief as is here sought has been
frequently allowed. The cases relied on are Dodge v.
Woolsey , 18 How. 331, and Hawes v.
Oakland, 104 U. S. 450 .
Neither of these authorities, I submit, is in point. In Dodge
v. Woolsey, the main question at issue was the validity of a
state tax, and that case did not involve the act of Congress to
which I have referred. Hawes v. Oakland was a controversy
between a stockholder and a corporation, and had no reference
whatever to taxation.
The complainant's attempt to establish a right to relief upon
the ground that this is not a suit to enjoin the tax, but Page 157 U. S. 610 one to enjoin the corporation from paying it, involves the
fallacy already pointed out -- that is, that a party can exercise a
right indirectly which he cannot assert directly -- that he can
compel his agent, through process of this court, to violate an act
of Congress.
The rule which forbids the granting of an injunction to restrain
the collection of a tax is founded on broad reasons of public
policy, and should not be ignored. In Cheatham v. United
States, 92 U. S. 85 , 92 U. S. 89 ,
which involved the validity of an income tax levied under an act of
Congress prior to the one here in issue, this court, through Mr.
Justice Miller, said:
"If there existed in the courts, state or National, any general
power of impeding or controlling the collection of taxes or
relieving the hardship incident to taxation, the very existence of
the government might be placed in the power of a hostile judiciary. Dows v.
The City of Chicago , 11 Wall. 108. While a free
course of remonstrance and appeal is allowed within the departments
before the money is finally exacted, the general government has
wisely made the payment of the tax claimed, whether of customs or
of internal revenue, a condition precedent to a resort to the
courts by the party against whom the tax is assessed. In the
internal revenue branch, it has further prescribed that no such
suit shall be brought until the remedy by appeal has been tried;
and, if brought after this, it must be within six months after the
decision on the appeal. We regard this as a condition on which
alone the government consents to litigate the lawfulness of the
original tax. It is not a hard condition. Few governments have
conceded such a right on any condition. If the compliance with this
condition requires the party aggrieved to pay the money, he must do
it." 92 U.S.
85 , 92 U. S. 89 .
Again, in Railroad Tax Cases, 92 U. S.
575 , 92 U. S. 613 ,
the court said:
"That there might be no misunderstanding of the universality of
this principle, it was expressly enacted, in 1867, that 'no suit
for the purpose of restraining the assessment or collection of any
tax shall be maintained in any court.' Rev.Stat. sect. 3224. And
though this was intended to apply alone to taxes levied by the
United States, it shows the sense Page 157 U. S. 611 of Congress of the evils to be feared if courts of justice
could, in any case, interfere with the process of
collecting the taxes on which the government depends for its
continued existence. It is a wise policy. It is founded in the
simple philosophy, derived from the experience of ages, that the
payment of taxes has to be enforced by summary and stringent means
against a reluctant and often adverse sentiment, and, to do this
successfully, other instrumentalities and other modes of procedure
are necessary than those which belong to courts of justice. See
Cheatham v. Norvell, decided at this term; Nicoll v. United
States , 7 Wall. 122; Dows v.
Chicago , 11 Wall. 108."
The contention that a right to equitable relief arises from the
fact that the corporator is without remedy unless such relief be
granted him is, I think, without foundation. This court has
repeatedly said that the illegality of a tax is not ground for the
issuance of an injunction against its collection if there be an
adequate remedy at law open to the payer. Dows v.
City of Chicago , 11 Wall. 108; Hannewinkle v.
Georgetown , 15 Wall. 547; Board of Liquidation
v. McComb, 92 U. S. 531 ; State Railroad Tax Cases, 92 U. S.
575 ; Union Pacific Railway v. Cheyenne, 113 U. S. 516 ; Milwaukee v. Koeffler, 116 U. S. 219 ; Pacific Express Co. v. Seibert, 142 U.
S. 339 -- as in the case where the state statute by
which the tax is imposed allows a suit for its recovery after
payment under protest. Shelton v. Platt, 139 U.
S. 591 ; Allen v. Pullman's Palace Car Co., 139 U. S. 658 .
The decision here is that this court will allow, on the theory
of equitable right, a remedy expressly forbidden by the statutes of
the United States, though it has denied the existence of such a
remedy in the case of a tax levied by a State.
Will it be said that, although a stockholder cannot have a
corporation enjoined from paying a state tax where the state
statute gives him the right to sue for its recovery, yet, when the
United States not only gives him such right, but, in addition,
forbids the issue of an injunction to prevent the payment of
Federal taxes, the court will allow to the stockholder Page 157 U. S. 612 a remedy against the United States tax which it refuses against
the state tax?
The assertion that this is only a suit to prevent the voluntary
payment of the tax suggests that the court may, by an order
operating directly upon the defendant corporation, accomplish a
result which the statute manifestly intended should not be
accomplished by suit in any court. A final judgment forbidding the
corporation from paying the tax will have the effect to prevent its
collection, for it could not be that the court would permit a tax
to be collected from a corporation which it had enjoined from
paying. I take it to be beyond dispute that the collection of the
tax in question cannot be restrained by any proceeding or suit,
whatever its form, directly against the officer charged with the
duty of collecting such tax. Can the statute be evaded, in a suit
between a corporation and a stockholder, by a judgment forbidding
the former from paying the tax, the collection of which cannot be
restrained by suit in any court? Suppose, notwithstanding the final
judgment just rendered, the collector proceeds to collect from the
defendant corporation the taxes which the court declares, in this
suit, cannot be legally assessed upon it. If that final judgment is
sufficient in law to justify resistance against such collection,
then we have a case in which a suit has been maintained to restrain
the collection of taxes. If such judgment does not
conclude the collector, who was not a party to the suit in which it
was rendered, then it is of no value to the plaintiff. In other
words, no form of expression can conceal the fact that the real
object of this suit is to prevent the collection of taxes imposed
by Congress, notwithstanding the express statutory requirement that
"no suit for the purpose of restraining the assessment or
collection of any tax shall be maintained in any court." Either the
decision of the constitutional question is necessary or it is not.
If it is necessary, then the court, by way of granting equitable
relief, does the very thing which the act of Congress forbids. If
it is unnecessary, then the court decides the act of Congress here
asserted unconstitutional, without being obliged to do so by the
requirements of the case before it. Page 157 U. S. 613 This brings me to the consideration of the merits of the
cause.
The constitutional provisions respecting Federal taxation are
four in number, and are as follows:
1. "Representatives and direct taxes shall be apportioned among
the several States, which may be included within this Union,
according to their respective numbers, which shall be determined by
adding to the whole number of free persons, including those bound
to service for a term of years and excluding Indians not taxed,
three-fifths of all other persons." Art. I, sec. 2, clause 3. (The
Fourteenth Amendment modified this provision, so that the whole
number of persons in each State should be counted, "Indians not
taxed" excluded.)
2. "The Congress shall have power to lay and collect taxes,
duties, imposts, and excises, to pay the debts and provide for the
common defence and general welfare of the United States; but all
duties, imposts, and excises shall be uniform throughout the United
States." Art. I, sec. 8, clause 1.
3. "No capitation or other direct tax shall be laid, unless in
proportion to the census or enumeration hereinbefore directed to be
taken." Art. I, sec. 9, clause 4.
4. "No tax or duty shall be laid on articles exported from any
State." Art. I, sec. 9, clause 5.
It has been suggested that, as the above provisions ordain the
apportionment of direct taxes, and authorize Congress to "lay and
collect taxes, duties, imposts, and excises," therefore there is a
class of taxes which are neither direct, and are not duties,
imposts, and excises, and are exempt from the rule of apportionment
on the one hand or of uniformity on the other. The soundness of
this suggestion need not be discussed, as the words, "duties,
imposts, and excises," in conjunction with the reference to direct
taxes, adequately convey all power of taxation to the Federal
government.
It is not necessary to pursue this branch of the argument, since
it is unquestioned that the provisions of the Constitution vest in
the United States plenary powers of taxation, that is, all the
powers which belong to a government as such, except Page 157 U. S. 614 that of taxing exports. The court in this case so says, and
quotes approvingly the language of this court, speaking through Mr.
Chief Justice Chase, in License Tax
Cases , 5 Wall. 462, 72 U. S. 471 ,
as follows:
"It is true that the power of Congress to tax is a very
extensive power. It is given in the Constitution with only one
exception and only two qualifications. Congress cannot tax exports,
and it must impose direct taxes by the rule of apportionment, and
indirect taxes by the rule of uniformity. Thus limited and thus
only, it reaches every subject, and may be exercised at
discretion."
In deciding, then, the question of whether the income tax
violates the Constitution, we have to determine not the existence
of a power in Congress, but whether an admittedly unlimited power
to tax (the income tax not being a tax on exports) has been used
according to the restrictions as to methods for its exercise, found
in the Constitution. Not power, it must be borne in mind, but the
manner of its use is the only issue presented in this case. The
limitations in regard to the mode of direct taxation imposed by the
Constitution are that capitation and other direct taxes shall be
apportioned among the States according to their respective numbers,
while duties, imposts, and excises must be uniform throughout the
United States. The meaning of the word "uniform" in the
Constitution need not be examined, as the court is divided upon
that subject, and no expression of opinion thereon is conveyed or
intended to be conveyed in this dissent.
In considering whether we are to regard an income tax as
"direct" or otherwise, it will, in my opinion, serve no useful
purpose, at this late period of our political history, to seek to
ascertain the meaning of the word "direct" in the Constitution by
resorting to the theoretical opinions on taxation found in the
writings of some economists prior to the adoption of the
Constitution or since. These economists teach that the question of
whether a tax is direct or indirect depends not upon whether it is
directly levied upon a person, but upon whether, when so levied, it
may be ultimately shifted from the person Page 157 U. S. 615 in question to the consumer, thus becoming, while direct in the
method of its application, indirect in its final results because it
reaches the person who really pays it only indirectly. I say it
will serve no useful purpose to examine these writers because
whatever may have been the value of their opinions as to the
economic sense of the word "direct," they cannot now afford any
criterion for determining its meaning in the Constitution, inasmuch
as an authoritative and conclusive construction has been given to
that term, as there used, by an interpretation adopted shortly
after the formation of the Constitution by the legislative
department of the government and approved by the Executive, by the
adoption of that interpretation from that time to the present
without question, and its exemplification and enforcement in many
legislative enactments, and its acceptance by the authoritative
text writers on the Constitution, by the sanction of that
interpretation, in a decision of this court rendered shortly after
the Constitution was adopted, and finally by the repeated
reiteration and affirmance of that interpretation, so that it has
become imbedded in our jurisprudence, and therefore may be
considered almost a part of the written Constitution itself.
Instead, therefore, of following counsel in their references to
economic writers and their discussion of the motives and thoughts
which may or may not have been present in the minds of some of the
framers of the Constitution, as if the question before us were one
of first impression, I shall confine myself to a demonstration of
the truth of the propositions just laid down.
By the act of June 5, 1794, c. 45, 1 Stat. 373, Congress levied,
without reference to apportionment, a tax on carriages "for the
conveyance of persons." The act provided
"that there shall be levied, collected, and paid upon all
carriages for the conveyance of persons which shall be kept by, or
for any person for his or her own use, or to be let out to hire, or
for the conveying of passengers, the several duties and rates
following;"
and then came a yearly tax on every
"coach, chariot, phaeton, and coachee, every four-wheeled and
every Page 157 U. S. 616 two-wheeled top carriage, and upon every other two-wheeled
carriage,"
varying in amount according to the vehicle.
The debates which took place at the passage of that act are
meagerly preserved. It may, however, be inferred from them that
some considered that whether a tax was "direct" or not in the sense
of the Constitution depended upon whether it was levied on the
object or on its use. The carriage tax was defended by a few on the
ground that it was a tax on consumption. Mr. Madison opposed it as
unconstitutional, evidently upon the conception that the word
"direct" in the Constitution was to be considered as having the
same meaning as that which had been attached to it by some economic
writers. His view was not sustained, and the act passed by a large
majority -- forty-nine to twenty-two. It received the approval of
Washington. The Congress which passed this law numbered among its
members many who sat in the convention which framed the
Constitution. It is moreover safe to say that each member of that
Congress, even although he had not been in the convention, had, in
some way, either directly or indirectly, been an influential actor
in the events which led up to the birth of that instrument. It is
impossible to make an analysis of this act which will not show that
its provisions constitute a rejection of the economic construction
of the word "direct," and this result equally follows whether the
tax be treated as laid on the carriage itself or on its use by the
owner. If viewed in one light, then the imposition of the tax on
the owner of the carriage, because of his ownership, necessarily
constituted a direct tax under the rule as laid down by economists.
So, also, the imposition of a burden of taxation on the owner for
the use by him of his own carriage made the tax direct according to
the same rule. The tax having been imposed without apportionment,
it follows that those who voted for its enactment must have given
to the word "direct" in the Constitution a different significance
from that which is affixed to it by the economists referred to.
The validity of this carriage tax was considered by this court
in Hylton v. United
States , 3 Dall. 171. Chief Justice Ellsworth and
Mr. Justice Cushing took no part in Page 157 U. S. 617 the decision. Mr. Justice Wilson stated that he had, in the
Circuit Court of Virginia, expressed his opinion in favor of the
constitutionality of the tax. Mr. Justice Chase, Mr. Justice
Paterson, and Mr. Justice Iredell each expressed the reasons for
his conclusions. The tax, though laid, as I have said, on the
carriage, was held not to be a direct tax under the Constitution.
Two of the judges who sat in that case (Mr. Justice Paterson and
Mr. Justice Wilson) had been distinguished members of the
constitutional convention. Excerpts from the observations of the
justices are given in the opinion of the Court. Mr. Justice
Paterson, in addition to the language there quoted, spoke as
follows, p. 3 U. S. 177 (the
italics being mine):
" I never entertained a doubt that the principal, I will not
say the only, objects that the framers of the Constitution
contemplated as falling within the rule of apportionment were a
capitation tax and a tax on land. Local considerations, and
the particular circumstances and relative situation of the States,
naturally lead to this view of the subject. The provision was made
in favor of the Southern States. They possessed a large number of
slaves; they had extensive tracts of territory, thinly settled and
not very productive. A majority of the States had but few slaves,
and several of them a limited territory, well settled, and in a
high state of cultivation. The Southern States, if no provision had
been introduced in the Constitution, would have been wholly at the
mercy of the other States. Congress, in such case, might tax slaves
at discretion or arbitrarily, and land in every part of the Union
after the same rate or measure -- so much a head in the first
instance and so much an acre in the second. To guard them against
imposition in these particulars was the reason of introducing the
clause in the Constitution which directs that representatives and
direct taxes shall be apportioned among the States according to
their respective numbers."
It is evident that Mr. Justice Chase coincided with these views
of Mr. Justice Paterson, though he was perhaps not quite so firmly
settled in his convictions, for he said, p. 3 U. S. 176 :
"I am inclined to think, but of this I do not give a
judicial Page 157 U. S. 618 opinion, that the direct taxes contemplated by the Constitution
are only two, to-wit, a capitation or poll tax simply, without
regard to property, profession, or any other circumstances, and the
tax on land. I doubt whether a tax by a general assessment of
personal property within the United States is included within the
term 'direct tax.'"
Mr. Justice Iredell certainly entertained similar views, since
he said, p. 3 U. S. 183 :
"Some difficulties may occur which we do not at present foresee.
Perhaps a direct tax in the sense of the Constitution can mean
nothing but a tax on something inseparably annexed to the soil;
something capable of apportionment under all such circumstances. A
land or poll tax may be considered of this description. . . . In
regard to other articles, there may possibly be considerable
doubt."
These opinions strongly indicate that the real convictions of
the justices were that only capitation taxes and taxes on land were
direct within the meaning of the Constitution, but they doubted
whether some other objects of a kindred nature might not be
embraced in that word. Mr. Justice Paterson had no doubt whatever
of the limitation, and Justice Iredell's doubt seems to refer only
to things which were inseparably connected with the soil, and which
might therefore be considered, in a certain sense, as real
estate.
That case, however, established that a tax levied without
apportionment on an object of personal property was not a "direct
tax" within the meaning of the Constitution. There can be no doubt
that the enactment of this tax and its interpretation by the court,
as well as the suggestion in the opinions delivered, that nothing
was a direct tax within the meaning of the Constitution but a
capitation tax and a tax on land, was all directly in conflict with
the views of those who claimed at the time that the word "direct"
in the Constitution was to be interpreted according to the views of
economists. This is conclusively shown by Mr. Madison's language.
He asserts not only that the act had been passed contrary to the
Constitution, but that the decision of the court was likewise in
violation of that instrument. Ever since the announcement Page 157 U. S. 619 of the decision in that case, the legislative department of the
government has accepted the opinions of the justices as well as the
decision itself as conclusive in regard to the meaning of the word
"direct," and it has acted upon that assumption in many instances,
and always with Executive endorsement. All the acts passed levying
direct taxes confined them practically to a direct levy on land.
True, in some of these acts, a tax on slaves was included, but this
inclusion, as has been said by this court, was probably based upon
the theory that these were, in some respects, taxable along with
the land, and therefore their inclusion indicated no departure by
Congress from the meaning of the word "direct," necessarily
resulting from the decision in the Hylton case, and which,
moreover, had been expressly elucidated and suggested as being
practically limited to capitation taxes and taxes on real estate by
the justices who expressed opinions in that case.
These acts imposing direct taxes having been confined in their
operation exclusively to real estate and slaves, the subject
matters indicated as the proper object of direct taxation in the Hylton case, are the strongest possible evidence that this
suggestion was accepted as conclusive, and had become a settled
rule of law. Some of these acts were passed at times of great
public necessity, when revenue was urgently required. The fact that
no other subjects were selected for the purposes of direct taxation
except those which the judges in the Hylton case had
suggested as appropriate therefor seems to me to lead to a
conclusion which is absolutely irresistible -- that the meaning
thus affixed to the word "direct" at the very formation of the
government was considered as having been as irrevocably determined
as if it had been written in the Constitution in express terms. As
I have already observed, every authoritative writer who has
discussed the Constitution from that date down to this has treated
this judicial and legislative ascertainment of the meaning of the
word "direct" in the Constitution as giving it a constitutional
significance without reference to the theoretical distinction
between "direct" and "indirect" made by some economists prior to
the Constitution or since. This doctrine Page 157 U. S. 620 has become a part of the hornbook of American constitutional
interpretation, has been taught as elementary in all the law
schools, and has never since then been anywhere authoritatively
questioned. Of course, the textbooks may conflict in some
particulars, or indulge in reasoning not always consistent, but, as
to the effect of the decision in the Hylton case and the
meaning of the word "direct" in the Constitution resulting
therefrom, they are a unit. I quote briefly from them.
Chancellor Kent, in his Commentaries thus states the
principle:
"The construction of the powers of Congress relative to taxation
was brought before the Supreme Court in 1796 in the case of Hylton v. The United States. By the act of 5th June, 1794,
Congress laid a duty upon carriages for the conveyance of persons,
and the question was whether this was a direct tax within
the meaning of the Constitution. If it was not a direct tax, it was
admitted to be rightly laid under that part of the Constitution
which declares that all duties, imposts, and excises shall be
uniform throughout the United States; but if it was a direct tax,
it was not constitutionally laid, for it must then be laid
according to the census under that part of the Constitution which
declares that direct taxes shall be apportioned among the several
States according to numbers. The Circuit Court in Virginia was
divided in opinion on the question, but, on appeal to the Supreme
Court, it was decided that the tax on carriages was not a direct
tax within the letter or meaning of the Constitution, and was
therefore constitutionally laid."
"The question was deemed of very great importance, and was
elaborately argued. It was held that a general power was given to
Congress to lay and collect taxes of every kind or nature, without
any restraint. They had plenary power over every species of taxable
property except exports. But there were two rules prescribed for
their government: the rule of uniformity and the rule of
apportionment. Three kinds of taxes, viz., duties,
imposts, and excises, were to be laid by the first rule, and
capitation and other direct taxes by the second rule. If there were
any other species of taxes, as the Page 157 U. S. 621 court seemed to suppose there might be, that were not direct and
not included within the words duties, imposts, or excises, they
were to be laid by the rule of uniformity or not as Congress should
think proper and reasonable."
"The Constitution contemplated no taxes as direct taxes but such
as Congress could lay in proportion to the census, and the rule of
apportionment could not reasonably apply to a tax on carriages, nor
could the tax on carriages be laid by that rule without very great
inequality and injustice. If two states, equal in census, were each
to pay 8,000 dollars by a tax on carriages, and in one state there
were 100 carriages and in another 1,000, the tax on each carriage
would be ten times as much in one state as in the other. While A,
in the one state, would pay for his carriage eight dollars, B, in
the other state, would pay for his carriage eighty dollars. In this
way, it was shown by the court that the notion that a tax on
carriages was a direct tax within the purview of the Constitution,
and to be apportioned according to the census would lead to the
grossest abuse and oppression. This argument was conclusive against
the construction set up, and the tax on carriages was considered as
included within the power to lay duties, and the better opinion
seemed to be that the direct taxes contemplated by the Constitution
were only two, viz., a capitation or poll tax and a tax on
land."
1 Kent Com. 254, 256.
Story, speaking on the same subject, 1 Story Const. § 955,
says:
"Taxes on lands, houses, and other permanent real estate, or on
parts or appurtenances thereof, have always been deemed of the same
character, that is, direct taxes. It has been seriously doubted if,
in the sense of the Constitution, any taxes are direct taxes except
those on polls or on lands. Mr. Justice Chase, in Hylton v. United
States , 3 Dall. 171, said:"
"I am inclined to think that the direct taxes contemplated by
the Constitution are only two, viz: a capitation or poll
tax simply, without regard to property, profession, or other
circumstances, and a tax on land. I doubt whether a tax by a
general assessment of personal property within the United States is
included within the term 'direct tax.'"
"Mr. Justice Paterson, in the same case, said:"
"It is not necessary to determine Page 157 U. S. 622 whether a tax on the produce of land be a direct or an indirect
tax. Perhaps the immediate product of land, in its original and
crude state, ought to be considered as a part of the land itself.
When the produce is converted into a manufacture, it assumes a new
shape, etc. Whether 'direct taxes,' in the sense of the
Constitution, comprehend any other tax than a capitation tax or a
tax on land is a questionable point, etc. I never entertained a
doubt that the principal, I will not say the only, objects that the
framers of the Constitution contemplated, as falling within the
rule of apportionment, were a capitation tax and a tax on
land."
"And he proceeded to state that the rule of apportionment, both
as regards representatives and as regards direct taxes, was adopted
to guard the Southern States against undue impositions and
oppressions in the taxing of slaves. Mr. Justice Iredell, in the
same case, said:"
"Perhaps a direct tax, in the sense of the Constitution, can
mean nothing but a tax on something inseparably annexed to the
soil; something capable of apportionment under all such
circumstances. A land or poll tax may be considered of this
description. The latter is to be considered so, particularly under
the present Constitution, on account of the slaves in the Southern
States, who give a ratio in the representation in the proportion of
three to five. Either of these is capable of an apportionment. In
regard to other articles, there may possibly be considerable
doubt."
"The reasoning of the Federalist seems to lead to the same
result."
Cooley, in his work on Constitutional Limitations 595, 5th ed.,
marginal paging *480, thus tersely states the rule:
"Direct taxes, when laid by Congress, must be apportioned among
the several States according to the representative population. The
term 'direct taxes,' as employed in the Constitution, has a
technical meaning, and embraces capitation and land taxes
only."
Miller on the Constitution 37 thus puts it:
"Under the provisions already quoted, the question came up as to
what is a 'direct tax,' and also upon what property it is to be
levied, as distinguished from any other tax. In regard to this, it
is sufficient to say that it is believed that no other than a
capitation tax of so much per head and a land tax is a direct
tax Page 157 U. S. 623 within the meaning of the Constitution of the United States. All
other taxes, except imposts are properly called excise taxes.
Direct taxes, within the meaning of the Constitution, are only
capitation taxes, as expressed in that instrument, and taxes on
real estate."
In Pomeroy's Constitutional Law (§ 281), we read as follows:
"It becomes necessary, therefore, to inquire a little more
particularly: what are direct and what indirect taxes? Few cases on
the general question of taxation have arisen and been decided by
the Supreme Court for the simple reason that, until the past few
years, the United States has generally been able to obtain all
needful revenue from the single source of duties upon imports.
There can be no doubt, however, that all the taxes provided for in
the internal revenue acts now in operation are indirect."
"This subject came before the Supreme Court of the United States
in a very early case, Hylton v. The United States. In the
year 1794, Congress laid a tax of ten dollars on all carriages, and
the rate was thus made uniform. The validity of the statute was
disputed; it was claimed that the tax was direct, and should have
been apportioned among the states. The court decided that this tax
was not direct. The reasons given for the decision are
unanswerable, and would seem to cover all the provisions of the
present internal revenue laws."
Hare, in his treatise on American Constitutional Law (vol. 1,
pp. 249, 250), is to the like effect:
"Agreeably to section 9 of article I, paragraph 4, 'no
capitation or other direct tax shall be laid except in proportion
to the census or enumeration hereinbefore directed to be taken,'
while section 3 of the same article requires that representation
and direct taxes shall be apportioned among the several States . .
. according to their respective numbers. Direct taxes in the sense
of the Constitution are poll taxes and taxes on land."
Burroughs on Taxation (p. 502) takes the same view:
" Direct taxes -- The kinds of taxation authorized are
both direct and indirect. The construction given to the expression
'direct taxes' is that it includes only a tax on land and a
poll Page 157 U. S. 624 tax, and this is in accord with the views of writers upon
political economy."
Ordronaux, in his Constitutional Legislation (p. 225), says:
"Congress having been given the power 'to lay and collect taxes,
duties, imposts, and excises,' the above three provisions are
limitations upon the exercise of this authority:"
"1st. By distinguishing between direct and indirect taxes as to
their mode of assessment;"
"2d. By establishing a permanent freedom of trade between the
States; and"
"3d. By prohibiting any discrimination in favor of particular
States through revenue laws establishing a preference between their
ports and those of the others."
"These provisions should be read together, because they are at
the foundation of our system of national taxation."
"The two rules prescribed for the government of Congress in
laying taxes are those of apportionment for direct taxes and
uniformity for indirect. In the first class are to be found
capitation or poll taxes and taxes on land; in the second, duties,
imposts, and excises."
"The provision relating to capitation taxes was made in favor of
the Southern States, and for the protection of slave property.
While they possessed a large number of persons of this class, they
also had extensive tracts of sparsely settled and unproductive
lands. At the same time, an opposite condition, both as to land
territory and population, existed in a majority of the other
States. Were Congress permitted to tax slaves and land in all parts
of the country at a uniform rate, the Southern Slave States must
have been placed at a great disadvantage. Hence, and to guard
against this inequality of circumstances, there was introduced into
the Constitution the further provision that 'representatives and
direct taxes shall be apportioned among the States according to
their respective numbers.' This changed the basis of direct
taxation from a strictly monetary standard, which could not
equitably be made uniform throughout the country, to one resting
upon population as the measure of representation. But for this,
Congress might have taxed slaves arbitrarily and Page 157 U. S. 625 at its pleasure as so much property, and land uniformly
throughout the Union regardless of differences in productiveness.
It is not strange, therefore, that, in Hylton v. United
States, the court said that"
"the rule of apportionment is radically wrong, and cannot be
supported by any solid reasoning. It ought not, therefore, to be
extended by construction. Apportionment is an operation on States
and involves valuations and assessments which are arbitrary, and
should not be resorted to but in case of necessity."
"Direct taxes being now well settled in their meaning, a tax on
carriages left for the use of the owner is not a capitation tax,
nor a tax on the business of an insurance company, nor a tax on a
bank's circulation, nor a tax on income, nor a succession tax. The
foregoing are not, properly speaking, direct taxes within the
meaning of the Constitution, but excise taxes or duties."
Black, writing on Constitutional Law, says:
"But the chief difficulty has arisen in determining what is the
difference between direct taxes and such as are indirect. In
general usage, and according to the terminology of political
economy, a direct tax is one which is levied upon the person who is
to pay it, or upon his land or personalty, or his business or
income, as the case may be. An indirect tax is one assessed upon
the manufacturer or dealer in the particular commodity, and paid by
him, but which really falls upon the consumer, since it is added to
the market price of the commodity which he must pay. But the course
of judicial decision has determined that the term 'direct,' as here
applied to taxes, is to be taken in a more restricted sense. The
Supreme Court has ruled that only land taxes and capitation taxes
are 'direct,' and no others. In 1794, Congress levied a tax of ten
dollars on all carriages kept for use, and it was held that this
was not a direct tax. And so also an income tax is not to be
considered direct. Neither is a tax on the circulation of state
banks, nor a succession tax, imposed upon every 'devolution of
title to real estate.'"
Opinions cited on page 162.
Not only have the other departments of the government accepted
the significance attached to the word "direct" in the Page 157 U. S. 626 Hylton case by their actions as to direct taxes, but
they have also relied on it as conclusive in their dealings with
indirect taxes by levying them solely upon objects which the judges
in that case declared were not objects of direct taxation. Thus,
the affirmance by the Federal legislature and executive of the
doctrine established as a result of the Hylton case has
been two-fold.
From 1861 to 1870. many laws levying taxes on income were
enacted, as follows: Act of August 5, 1861, c. 45, 12 Stat. 292,
309, 311; Act of July 1, 1862, c. 119, 12 Stat. 432, 473, 47; Act
of March 3, 1863, c. 74, 12 Stat. 713, 718, 723 Act of June 30,
1864, c. 173, 13 Stat. 223, 281, 285; Act of March 3, 1865, c. 78,
18 Stat. 469, 479, 481; Act of March 10, 1866, c. 15, 14 Stat. 4,
5; Act of July 13, 1866, c. 184, 14 Stat. 98, 137, 140; Act of
March 2, 1867, c. 169, 14 Stat. 471, 477, 480; Act of July 14,
1870, c. 255, 16 Stat. 256, 261.
The statutes above referred to all cover income and every
conceivable source of revenue from which it could result -- rentals
from real estate, products of personal property, the profits of
business or professions.
The validity of these laws has been tested before this court.
The first case on the subject was that of the Pacific Insurance
Company v. Soule, 7 Wall. 433, 74 U. S. 443 .
The controversy in that case arose under the ninth section of the
act of July 13, 1866, 14 Stat. 137, 140, which imposed a tax on
"all dividends in scrip and money, thereafter declared due,
wherever and whenever the same shall be payable, to stockholders,
policyholders, or depositors or parties whatsoever, including
nonresidents, whether citizens or aliens, as part of the earnings,
incomes, or gains of any bank, trust company, savings institution,
and of any fire, marine, life, or inland insurance company, either
stock or mutual, under whatever name or style known or called in
the United States or Territories, whether specially incorporated or
existing under general laws, and on all undistributed sum or sums
made or added during the year to their surplus or contingent
funds."
It will be seen that the tax imposed was levied on the income of
insurance companies as a unit, including every possible Page 157 U. S. 627 source of revenue, whether from personal or real property, from
business gains or otherwise. The case was presented here on a
certificate of division of opinion below. One of the questions
propounded was
"whether the taxes paid by the plaintiff and sought to be
recovered in this action are not direct taxes within the meaning of
the Constitution of the United States?"
The issue, therefore, necessarily brought before this court was
whether an act imposing an income tax on every possible source of
revenue was valid or invalid. The case was carefully, ably,
elaborately, and learnedly argued. The brief on behalf of the
company, filed by Mr. Wills, was supported by another signed by Mr.
W. O. Bartlett, which covered every aspect of the contention. It
rested the weight of its argument against the statute on the fact
that it included the rents of real estate among the sources of
income taxed, and therefore put a direct tax upon the land. Able as
have been the arguments at bar in the present case, an examination
of those then presented will disclose the fact that every view here
urged was there pressed upon the court with the greatest ability,
and after exhaustive research, equalled but not surpassed by the
eloquence and learning which has accompanied the presentation of
this case. Indeed, it may be said that the principal authorities
cited and relied on now can be found in the arguments which were
then submitted. It may be added that the case on behalf of the
government was presented by Attorney General Evarts.
The court answered all the contentions by deciding the generic
question of the validity of the tax, thus passing necessarily upon
every issue raised, as the whole necessarily includes every one of
its parts. I quote the reasoning applicable to the matter now in
hand:
"The sixth question is:"
"Whether the taxes paid by the plaintiff and sought to be
recovered back in this action are not direct taxes within
the meaning of the Constitution of the United States."
"In considering this subject, it is proper to advert to the
several provisions of the Constitution relating to taxation by
Congress."
"Representatives and direct taxes shall be apportioned among the
several States which shall be included Page 157 U. S. 628 in this Union according to their respective numbers,"
"etc."
"Congress shall have power to lay and collect taxes, duties,
imposts, and excises, to pay the debt and provide for the common
defence and general welfare of the United States; but all duties,
imposts, and excises shall be uniform throughout the United
States."
" No capitation or other direct tax shall be laid, unless in
proportion to the census or enumeration hereinbefore directed to be
taken."
" No tax or duty shall be laid on articles exported from any
State."
"These clauses contain the entire grant of the taxing power by
the organic law, with the limitations which that instrument
imposes."
"The national government, though supreme within its own sphere,
is one of limited jurisdiction and specific functions. It has no
faculties but such as the Constitution has given it either
expressly or incidentally by necessary intendment. Whenever any act
done under its authority is challenged, the proper sanction must be
found in its charter or the act is ultra vires and void.
This test must be applied in the examination of the question before
us. If the tax to which it refers is a 'direct tax,' it is clear
that it has not been laid in conformity to the requirements of the
Constitution. It is therefore necessary to ascertain to which of
the categories named in the eighth section of the first article it
belongs."
"What are direct taxes was elaborately argued and
considered by this court in Hylton v. United States, decided in the year 1796. One of the members of the court, Justice
Wilson, had been a distinguished member of the convention which
framed the Constitution. It was unanimously held by the four
justices who heard the argument that a tax upon carriages kept by
the owner for his own use was not a direct tax. Justice
Chase said:"
"I am inclined to think, but of this I do not give a judicial
opinion, that the direct taxes contemplated by the Constitution are
only two, to-wit, a capitation or poll tax simply, without regard
to property, profession, or any other circumstances, and a tax on
land."
"Paterson, Justice, followed in the same line of remark. He
said:"
"I never entertained a doubt that the principal -- I will not
say Page 157 U. S. 629 the only -- object the framers of the Constitution contemplated
as falling within the rule of apportionment was a capitation tax or
a tax on land. . . . The Constitution declares that a capitation
tax is a direct tax, and, both in theory and practice, a tax on
land is deemed to be a direct tax. In this way, the terms 'direct
taxes' and 'capitation and other direct taxes' are satisfied."
"The views expressed in this case are adopted by Chancellor Kent
and Justice Story in their examination of the subject. Duties are
defined by Tomlin to be things due and recoverable by law. The
term, in its widest signification, is hardly less comprehensive
than 'taxes.' It is applied in its most restricted meaning meaning
to customs, and in that sense is nearly the synonym of
'imposts.'"
"Impost is a duty on imported goods and merchandise. In a larger
sense, it is any tax or imposition. Cowell says it is distinguished
from custom "because custom is rather the profit which the prince
makes on goods shipped out." Mr. Madison considered the terms
"duties" and "imposts" in these clauses as synonymous. Judge Tucker
thought "they were probably intended to comprehend every species of
tax or contribution not included under the ordinary terms, taxes and excises.'"" "Excise is defined to be an inland imposition, sometimes upon
the consumption of the commodity and sometimes upon the retail
sale; sometimes upon the manufacturer and sometimes upon the
vendor."
"The taxing power is given in the most comprehensive terms. The
only limitations imposed are that direct taxes, including
the capitation tax, shall be apportioned, that duties, imposts, and
excises shall be uniform, and that no duties shall be imposed upon
articles exported from any State. With these exceptions, the
exercise of the power is, in all respects, unfettered."
"If a tax upon carriages kept for his own use by the owner is
not a direct tax, we can see no ground upon which a tax upon the
business of an insurance company can be held to belong to that
class of revenue charges."
"It has been held that Congress may require direct taxes to Page 157 U. S. 630 be laid and collected in the Territories as well as in the
States."
"The consequences which would follow the apportionment of the
tax in question among the States and Territories of the Union in
the manner prescribed by the Constitution must not be overlooked.
They are very obvious. Where such corporations are numerous and
rich, it might be light; where none exist, it could not be
collected; where they are few and poor, it would fall upon them
with such weight as to involve annihilation. It cannot be supposed
that the framers of the Constitution intended that any tax should
be apportioned the collection of which, on that principle, would be
attended with such results. The consequences are fatal to the
proposition."
"To the question under consideration it must be answered that
the tax to which it relates is not a direct tax, but a duty or
excise; that it was obligatory on the plaintiff to pay it."
"The other questions certified up are deemed to be sufficiently
answered by the answers given to the first and sixth
questions."
This opinion, it seems to me, closes the door to discussion in
regard to the meaning of the word "direct" in the Constitution, and
renders unnecessary a resort to the conflicting opinions of the
framers or to the theories of the economists. It adopts that
construction of the word which confines it to capitation taxes and
a tax on land, and necessarily rejects the contention that that
word was to be construed in accordance with the economic theory of
shifting a tax from the shoulders of the person upon whom it was
immediately levied to those of some other person. This decision,
moreover, is of great importance because it is an authoritative
reaffirmance of the Hylton case and an approval of the
suggestions there made by the justices, and constitutes another
sanction given by this court to the interpretation of the
Constitution adopted by the legislative, executive, and judicial
departments of the government, and thereafter continuously acted
upon.
Not long thereafter, in Veazie Bank v.
Fenno , 8 Wall. 533, 75 U. S. 541 , 75 U. S. 546 ,
the question of the application of the word "direct" was again
submitted to this court. The issue there was whether a tax on the
circulation of state banks was "direct" within Page 157 U. S. 631 the meaning of the Constitution. It was ably argued by the most
distinguished counsel; Reverdy Johnson and Caleb Cushing
representing the bank, and Attorney General Hoar the United States.
The brief of Mr. Cushing again presented nearly every point now
urged upon our consideration. It cited copiously from the opinions
of Adam Smith and others. The constitutionality of the tax was
maintained by the government on the ground that the meaning of the
word "direct" in the Constitution, as interpreted by the Hylton case, as enforced by the continuous legislative
construction, and as sanctioned by the consensus of opinion already
referred to, was finally settled. Those who assailed the tax there
urged, as is done here, that the Hylton case was not
conclusive because the only question decided was the particular
matter at issue, and insisted that the suggestions of the judges
were mere dicta, and not to be followed. They said that Hylton
v. United States adjudged one point alone, which was that a
tax on a carriage was not a direct tax, and that. from the
utterances of the judges in the case. it was obvious that the
general question of what was a direct tax was but crudely
considered. Thus, the argument there presented to this court the
very view of the Hylton case which has been reiterated in
the argument here, and which is sustained now. What did this court
say then, speaking through Chief Justice Chase, as to these
arguments? I take very fully from its opinion:
"Much diversity of opinion has always prevailed upon the
question, what are direct taxes? Attempts to answer it by reference
to the definitions of political economists have been frequently
made, but without satisfactory results. The enumeration of the
different kinds of taxes which Congress was authorized to impose
was probably made with very little reference to their speculations.
The great work of Adam Smith, the first comprehensive treatise on
political economy in the English language, had then been recently
published; but in this work, though there are passages which refer
to the characteristic difference between direct and indirect
taxation, there is nothing which affords any valuable light on the
use of the words 'direct taxes' in the Constitution. " Page 157 U. S. 632 "We are obliged, therefore, to resort to historical evidence,
and to seek the meaning of the words in the use and in the opinion
of those whose relations to the government and means of knowledge
warranted them in speaking with authority."
"And, considered in this light, the meaning and application of
the rule as to direct taxes appears to us quite clear."
"It is, as we think, distinctly shown in every act of Congress
on the subject."
"In each of these acts, a gross sum was laid upon the United
States, and the total amount was apportioned to the several States
according to their respective numbers of inhabitants, as
ascertained by the last preceding census. Having been apportioned,
provision was made for the imposition of the tax upon the subjects
specified in the act, fixing its total sum."
"In 1798, when the first direct tax was imposed, the total
amount was fixed at two millions of dollars; in 1813, the amount of
the second direct tax was fixed at three millions; in 1815, the
amount of the third at six millions, and it made an annual tax; in
1816, the provision making the tax annual was repealed by the
repeal of the first section of the act of 1815, and the total
amount was fixed for that year at three millions of dollars. No
other direct tax was imposed until 1861, when a direct tax of
twenty millions of dollars was laid and made annual; but the
provision making it annual was suspended, and no tax, except that
first laid, was ever apportioned. In each instance, the total sum
was apportioned among the States by the constitutional rule, and
was assessed at prescribed rates on the subjects of the tax. These
subjects, in 1798, 1813, 1815, 1816, were lands, improvements,
dwelling houses, and slaves, and, in 1861, lands, improvements, and
dwelling houses only. Under the act of 1798, slaves were assessed
at fifty cents on each; under the other acts, according to
valuation by assessors."
"This review shows that personal property, contracts,
occupations, and the like have never been regarded by Congress as
proper subjects of direct tax. It has been supposed that slaves
must be considered as an exception to this observation. But the
exception is rather apparent than real. As persons, slaves Page 157 U. S. 633 were proper subjects of a capitation tax, which is described in
the Constitution as a direct tax; as property, they were, by the
laws of some, if not most, of the States classed as real property,
descendible to heirs. Under the first view, they would be subject
to the tax of 1798, as a capitation tax; under the latter, they
would be subject to the taxation of the other years as realty. That
the latter view was that taken by the framers of the acts, after
1798, becomes highly probable when it is considered that, in the
States where slaves were held, much of the value which would
otherwise have attached to land passed into the slaves. If, indeed,
the land only had been valued without the slaves, the land would
have been subject to much heavier proportional imposition in those
States than in States where there were no slaves, for the
proportion of tax imposed on each State was determined by
population, without reference to the subjects on which it was to be
assessed."
"The fact, then, that slaves were valued under the acts referred
to, far from showing, as some have supposed, that Congress regarded
personal property as a proper object of direct taxation under the
Constitution, shows only that Congress, after 1798, regarded
slaves, for the purposes of taxation, as realty."
"It may be rightly affirmed, therefore, that, in the practical
construction of the Constitution by Congress, direct taxes have
been limited to taxes on land and appurtenances and taxes on polls
or capitation taxes."
"And this construction is entitled to great consideration,
especially in the absence of anything adverse to it in the
discussions of the convention which framed and of the conventions
which ratified the Constitution."
"This view received the sanction of this court two years before
the enactment of the first law imposing direct taxes eo
nomine. "
The court then reviews the Hylton case, repudiates the
attack made upon it, reaffirms the construction placed on it by the
legislative, executive, and judicial departments, and expressly
adheres to the ruling in the insurance company case to which I have
referred. Summing up, it said: Page 118 U. S. 634 "It follows necessarily that the power to tax without
apportionment extends to all other objects. Taxes on other objects
are included under the heads of taxes not direct, duties, imposts,
and excises, and must be laid and collected by the rule of
uniformity. The tax under consideration is a tax on bank
circulation, and may very well be classed under the head of duties.
Certainly it is not, in the sense of the Constitution, a direct
tax. It may be said to come within the same category of taxation as
the tax on incomes of insurance companies which this court, at the
last term, in the case of Pacific Insurance Company v.
Soule, held not to be a direct tax."
This case was, so far as the question of direct taxation is
concerned, decided by an undivided court, for, although Mr. Justice
Nelson dissented from the opinion, it was not on the ground that
the tax was a direct tax, but on another question.
Some years after this decision, the matter again came here for
adjudication in the case of Scholey v.
Rew , 23 Wall. 331, 90 U. S. 346 .
The issue there involved was the validity of a tax placed by a
United States statute on the right to take real estate by
inheritance. The collection of the tax was resisted on the ground
that it was direct. The brief expressly urged this contention, and
said the tax in question was a tax on land if ever there was one.
It discussed the Hylton case, referred to the language
used by the various judges, and sought to place upon it the
construction which we are now urged to give it, and which has been
so often rejected by this court.
This court again, by its unanimous judgment, answered all these
contentions. I quote its language:
"Support to the first objection is attempted to be drawn from
that clause of the Constitution which provides that direct taxes
shall be apportioned among the several States which may be included
within the Union according to their respective numbers, and also
from the clause which provides that no capitation or other direct
tax shall be laid unless in proportion to the census or amended
enumeration; but it is clear that the tax or duty levied by the act
under consideration is not a direct tax within the meaning of
either of those Page 157 U. S. 635 provisions. Instead of that, it is plainly an excise tax or
duty, authorized by section eight of article one, which vests the
power in Congress to lay and collect taxes, duties, imposts, and
excises, to pay the debts, and provide for the common defence and
general welfare."
"Indirect taxes, such as duties of impost and excises and every
other description of the same, must be uniform, and direct taxes
must be laid in proportion to the census or enumeration as
remodelled in the Fourteenth Amendment. Taxes on lands, houses, and
other permanent real estate have always been deemed to be direct
taxes, and capitation taxes, by the express words of the
Constitution, are within the same category, but it never has been
decided that any other legal exactions for the support of the
Federal government fall within the condition that, unless laid in
proportion to numbers, the assessment is invalid."
"Whether direct taxes, in the sense of the Constitution,
comprehend any other tax than a capitation tax and a tax on land is
a question not absolutely decided, nor is it necessary to determine
it in the present case, as it is expressly decided that the term
does not include the tax on income, which cannot be distinguished
in principle from a succession tax such as the one involved in the
present controversy."
What language could more clearly and forcibly reaffirm the
previous rulings of the court upon this subject? What stronger
endorsement could be given to the construction of the Constitution,
which had been given in the Hylton case, and which had
been adopted and adhered to by all branches of the government
almost from the hour of its establishment? It is worthy of note
that the court here treated the decision in the Hylton case as conveying the view that the only direct taxes were "taxes
on land and appurtenance." In so doing, it necessarily again
adopted the suggestion of the justices there made, thus making them
the adjudged conclusions of this court. It is too late now to
destroy the force of the opinions in that case by qualifying them
as mere dicta when they have again and again been expressly
approved by this court.
If there were left a doubt as to what this established
construction Page 157 U. S. 636 is, it seems to be entirely removed by the case of Springer
v. United States, 102 U. S. 86 , 102 U. S. 602 .
Springer was assessed for an income tax on his professional
earnings and on the interest on United States bonds. He declined to
pay. His real estate was sold in consequence. The suit involved the
validity of the tax as a basis for the sale. Again every question
now presented was urged upon this court. The brief of the plaintiff
in error, Springer, made the most copious references to the
economic writers, Continental and English. It cited the opinions of
the framers of the Constitution. It contained extracts from the
journals of the convention, and marshalled the authorities in
extensive and impressive array. It reiterated the argument against
the validity of an income tax which included rentals. It is also
asserted that the Hylton case was not authority, because
the expressions of the judges in regard to anything except the
carriage tax were mere dicta.
The court adhered to the ruling announced in the previous cases
and held that the tax was not direct within the meaning of the
Constitution. It reexamined and answered everything advanced here,
and said, in summing up the case:
"Our conclusions are that direct taxes, within the meaning of
the Constitution, are only capitation taxes, as expressed in that
instrument, and taxes on real estate, and that the tax of which the
plaintiff in error complained is within the category of an excise
or duty."
The facts, then, are briefly these: at the very birth of the
government, a contention arose as to the meaning of the word
"direct." The controversy was determined by the legislative and
executive departments of the government. Their action came to this
court for review, and it was approved. Every judge of this court
who expressed an opinion made use of language which clearly showed
that he thought the word "direct" in the Constitution applied only
to capitation taxes and taxes directly on land. Thereafter, the
construction thus given was accepted everywhere as definitive. The
matter came again and again to this court, and, in every case, the
original ruling was adhered to. The suggestions made in the Hylton case were adopted here, and, Page 157 U. S. 637 in the last case here decided, reviewing all the others, this
court said that direct taxes within the meaning of the Constitution
were only taxes on land and capitation taxes. And now, after a
hundred years, after long-continued action by other departments of
the government, and after repeated adjudications of this court,
this interpretation is overthrown and the Congress is declared not
to have a power of taxation which may at some time, as it has in
the past, prove necessary to the very existence of the government.
By what process of reasoning is this to be done? By resort to
theories in order to construe the word "direct" in its economic
sense, instead of in accordance with its meaning in the
Constitution, when the very result of the history which I have thus
briefly recounted is to show that the economic construction of the
word was repudiated by the framers themselves, and has been time
and time again rejected by this court; by a resort to the language
of the framers and a review of their opinions, although the facts
plainly show that they themselves settled the question which the
court now virtually unsettles. In view of all that has taken place
and of the many decisions of this court, the matter at issue here
ought to be regarded as closed forever.
The injustice and harm which must always result from
overthrowing a long and settled practice sanctioned by the
decisions of this court could not be better illustrated than by the
example which this case affords. Under the income tax laws which
prevailed in the past for many years, and which covered every
conceivable source of income, rentals from real estate, and
everything else, vast sums were collected from the people of the
United States. The decision here rendered announces that those sums
were wrongfully taken, and thereby, it seems to me, creates a claim
in equity and good conscience against the government for an
enormous amount of money. Thus, from the change of view by this
court, it happens that an act of Congress, passed for the purpose
of raising revenue in strict conformity with the practice of the
government from the earliest time and in accordance with the
oft-repeated decisions of this court, furnishes the Page 157 U. S. 638 occasion for creating a claim against the government for
hundreds of millions of dollars; I say creating a claim because, if
the government be in good conscience bound to refund that which has
been taken from the citizen in violation of the Constitution,
although the technical right may have disappeared by lapse of time,
or because the decisions of this court have misled the citizen to
his grievous injury, the equity endures, and will present itself to
the conscience of the government. This consequence shows how
necessary it is that the court should not overthrow its past
decisions. A distinguished writer aptly points out the wrong which
must result to society from a shifting judicial interpretation. He
says:
"If rules and maxims of law were to ebb and flow with the taste
of the judge, or to assume that shape which in his fancy best
becomes the times; if the decisions of one case were not to be
ruled by, or depend at all upon, former determinations in other
cases of a like nature, I should be glad to know what person would
venture to purchase an estate without first having the judgment of
a court of justice respecting the identical title which he means to
purchase? No reliance could be had upon precedents; former
resolutions upon titles of the same kind could afford him no
assurance at all. Nay, even a decision of a court of justice upon
the very identical title would be nothing more than a precarious
temporary security; the principle upon which it was founded might,
in the course of a few years, become antiquated; the same title
might be again drawn into dispute; the taste and fashion of the
times might be improved, and, on that ground, a future judge might
hold himself at liberty (if not consider it his duty) to pay as
little regard to the maxims and decisions of his predecessor as
that predecessor did to the maxims and decisions of those who went
before him."
Fearne on Contingent Remainders, London ed. 1801, p. 264.
The disastrous consequences to flow from disregarding settled
decisions thus cogently described must evidently become greatly
magnified in a case like the present, when the opinion of the court
affects fundamental principles of the government by denying an
essential power of taxation Page 157 U. S. 639 long conceded to exist and often exerted by Congress. If it was
necessary that the previous decisions of this court should be
repudiated, the power to amend the Constitution existed, and should
have been availed of. Since the Hylton case was decided,
the Constitution has been repeatedly amended. The construction
which confined the word "direct" to capitation and land taxes was
not changed by these amendments, and it should not now be reversed
by what seems to me to be a judicial amendment of the
Constitution.
The finding of the court in this case, that the inclusion of
rentals from real estate in an income tax makes it direct to that
extent is, in my judgment, conclusively denied by the authorities
to which I have referred and which establish the validity of an
income tax in itself. Hence, I submit, the decision necessarily
reverses the settled rule which it seemingly adopts in part. Can
there be serious doubt that the question of the validity of an
income tax in which the rentals of real estate are included is
covered by the decisions which say that an income tax is
generically indirect, and that, therefore, it is valid without
apportionment? I mean, of course, could there be any such doubt
were it not for the present opinion of the court? Before
undertaking to answer this question, I deem it necessary to
consider some arguments advanced or suggestions made.
1st. The opinions of Turgot and Smith and other economists are
cited, and it is said their views were known to the framers of the
Constitution, and we are then referred to the opinions of the
framers themselves. The object of the collocation of these two
sources of authority is to show that there was a concurrence
between them as to the meaning of the word "direct." But in order
to reach this conclusion, we are compelled to overlook the fact
that this court has always held, as appears from the preceding
cases, that the opinions of the economists threw little or no light
on the interpretation of the word "direct" as found in the
Constitution. And the whole effect of the decisions of this court
is to establish the proposition that the word has a different
significance in the Constitution from that which Smith and Turgot
have given to it when used in a general economic sense. Indeed, it
seems to me Page 157 U. S. 640 that the conclusion deduced from this line of thought itself
demonstrates its own unsoundness. What is that conclusion? That the
framers well understood the meaning of "direct."
Now it seems evident that the framers, who well understood the
meaning of this word, have themselves declared in the most positive
way that it shall not be here construed in the sense of Smith and
Turgot. The Congress which passed the carriage tax act was composed
largely of men who had participated in framing the Constitution.
That act was approved by Washington, who had presided over the
deliberations of the convention. Certainly Washington himself, and
the majority of the framers, if they well understood the sense in
which the word "direct" was used, would hare declined to adopt and
approve a taxing act which clearly violated the provisions of the
Constitution if the w ord "direct," as therein used, had the
meaning which must be attached to it if read by the light of the
theories of Turgot and Adam Smith. As has already been noted, all
the judges who expressed opinions in the Hylton case
suggested that "direct," in the constitutional sense, referred only
to taxes on land and capitation taxes. Could they have possibly
made this suggestion if the word had been used as Smith and Turgot
used it? It is immaterial whether the suggestions of the judges
were dicta or not. They could not certainly have made this
intimation, if they understood the meaning of the word "direct" as
being that which it must have imported if construed according to
the writers mentioned. Take the language of Mr. Justice
Paterson:
"I never entertained a doubt that the principal, I will not say
the only, objects that the framers of the Constitution contemplated
a falling within the rule of apportionment were a capitation tax
and a tax on land."
He had borne a conspicuous part in the convention. Can we say
that he understood the meaning of the framers, and yet, after the
lapse of a hundred years, fritter away that language, uttered by
him from this bench in the first great case in which this court was
called upon to interpret the meaning of the word "direct?" It
cannot be said that his language was used carelessly or without a
knowledge of its great import. The debate upon the passage Page 157 U. S. 641 of the carriage tax act had manifested divergence of opinion as
to the meaning of the word "direct." The magnitude of the issue is
shown by all contemporaneous authority to have been deeply felt,
and its far-reaching consequence was appreciated. Those
controversies came here for settlement and were then determined
with a full knowledge of the importance of the issues. They should
not be now reopened.
The argument, then, it seems to me, reduces itself to this: that
the framers well knew the meaning of the word "direct;" that so
well understanding it, they practically interpreted it in such a
way as to plainly indicate that it had a sense contrary to that now
given to it in the view adopted by the court. Although they thus
comprehended the meaning of the word and interpreted it at an early
day, their interpretation is now to be overthrown by resorting to
the economists whose construction was repudiated by them. It is
thus demonstrable that the conclusion deduced from the premise that
the framers well understood the meaning of the word "direct,"
involves a fallacy. In other words, that it draws a faulty
conclusion, even if the predicate upon which the conclusion is
rested be fully admitted. But I do not admit the premise. The views
of the framers cited in the argument conclusively show that they
did not well understand, but were in great doubt as to, the meaning
of the word "direct." The use of the word was the result of a
compromise. It was accepted as the solution of a difficulty which
threatened to frustrate the hopes of those who looked upon the
formation of a new government as absolutely necessary to escape the
condition of weakness which the Articles of Confederation had
shown. Those who accepted the compromise viewed the word in
different lights, and expected different results to flow from its
adoption. This was the natural result of the struggle which was
terminated by the adoption of the provision as to representation
and direct taxes. That warfare of opinion had been engendered by
the existence of slavery in some of the States, and was the
consequence of the conflict of interest thus brought about. In
reaching a settlement, the minds of those who acted on it were
naturally concerned in the main with the cause of the Page 157 U. S. 642 contention, and not with the other things which had been
previously settled by the convention. Thus, whilst there was in all
probability clearness of vision as to the meaning of the word
"direct" in relation to its bearing on slave property, there was
inattention in regard to other things, and there were, therefore,
diverse opinions as to its proper signification. That such was the
case in regard to many other clauses of the Constitution has been
shown to be the case by those great controversies of the past which
have been peacefully settled by the adjudications of this court.
Whilst this difference undoubtedly existed, as to the effect to be
given the word "direct," the consensus of the majority of the
framers as to its meaning was shown by the passage of the carriage
tax act. That consensus found adequate expression in the opinions
of the justices in the Hylton case, and in the decree of
this court there rendered. The passage of that act, those opinions,
and that decree, settled the proposition that the word applied only
to capitation taxes and taxes on land.
Nor does the fact that there was difference in the minds of the
framers as to the meaning of the word "direct" weaken the binding
force of the interpretation placed upon that word from the
beginning. For, if such difference existed, it is certainly sound
to hold that a contemporaneous solution of a doubtful question,
which has been often confirmed by this court, should not now be
reversed. The framers of the Constitution, the members of the
earliest Congress, the illustrious man first called to the office
of Chief Executive, the jurists who first sat in this court, two of
whom had borne a great part in the labors of the convention, all of
whom dealt with this doubtful question, surely occupied a higher
vantage ground for its correct solution than do those of our day.
Here, then, is the dilemma: if the framers understood the meaning
of the word "direct" in the Constitution, the practical effect
which they gave to it should remain undisturbed; if they were in
doubt as to the meaning, the interpretation long since
authoritatively affixed to it should be upheld.
2d. Nor do I think any light is thrown upon the question of
whether the tax here under consideration is direct or indirect Page 157 U. S. 643 by referring to the principle of "taxation without
representation" and the great struggle of our forefathers for its
enforcement. It cannot be said that the Congress which passed this
act was not the representative body fixed by the Constitution. Nor
can it be contended that the struggle for the enforcement of the
principle involved the contention that representation should be in
exact proportion to the wealth taxed. If the argument be used in
order to draw the inference that, because in this instance, the
indirect tax imposed will operate differently through various
sections of the country, therefore that tax should be treated as
direct, it seems to me it is unsound. The right to tax, and not the
effects which may follow from its lawful exercise, is the only
judicial question which this court is called upon to consider. If
an indirect tax, which the Constitution has not subjected to the
rule of apportionment, is to be held to be a direct tax because it
will bear upon aggregations of property in different sections of
the country, according to the extent of such aggregations, then the
power is denied to Congress to do that which the Constitution
authorizes, because the exercise of a lawful power is supposed to
work out a result which, in the opinion of the court, was not
contemplated by the fathers. If this be sound, then every question
which has been determined in our past history is now still open for
judicial reconstruction. The justness of tariff legislation has
turned upon the assertion, on the one hand, denied on the other,
that it operated unequally on the inhabitants of different sections
of the country. Those who opposed such legislation have always
contended that its necessary effect was not only to put the whole
burden upon one section, but also to directly enrich certain of our
citizens at the expense of the rest, and thus build up great
fortunes to the benefit of the few and the detriment of the many.
Whether this economic contention be true or untrue is not the
question. Of course, I intimate no view on the subject. Will it be
said that, if tomorrow the personnel of this court should be
changed, it could deny the power to enact tariff legislation which
has been admitted to exist in Congress from the beginning, upon the
ground that such legislation beneficially affects one section or
set of people Page 157 U. S. 644 to the detriment of others within the spirit of the
Constitution, and therefore constitutes a direct tax?
3d. Nor, in my judgment, does any force result from the argument
that the framers expected direct taxes to be rarely resorted to,
and, as the present tax was imposed without public necessity, it
should be declared void.
It seems to me that this statement begs the whole question, for
it assumes that the act now before us levies a direct tax, whereas
the question whether the tax is direct or not is the very issue
involved in this case. If Congress now deems it advisable to resort
to certain forms of indirect taxation which have been frequently,
though not continuously, availed of in the past, I cannot see that
its so doing affords any reason for converting an indirect into a
direct tax in order to nullify the legislative will. The policy of
any particular method of taxation, or the presence of an exigency
which requires its adoption, is a purely legislative question. It
seems to me that it violates the elementary distinction between the
two departments of the government to allow an opinion of this court
upon the necessity or expediency of a tax to affect or control our
determination of the existence of the power to impose it.
But I pass from these considerations to approach the question
whether the inclusion of rentals from real estate in an income tax
renders such a tax to that extent "direct" under the Constitution,
because it constitutes the imposition of a direct tax on the land
itself. Does the inclusion of the rentals from real estate in the
sum going to make up the aggregate income from which (in order to
arrive at taxable income) is to be deducted insurance, repairs,
losses in business, and four thousand dollars exemption, make the
tax on income so ascertained a direct tax on such real
estate? In answering this question, we must necessarily accept the
interpretation of the word "direct" authoritatively given by the
history of the government and the decisions of this court just
cited. To adopt that interpretation for the general purposes of an
income tax, and then repudiate it because of one of the elements of
which it is composed, would violate every Page 157 U. S. 645 elementary rule of construction. So also, to seemingly accept
that interpretation and then resort to the framers and the
economists in order to limit its application and give it a
different significance is equivalent to its destruction, and
amounts to repudiating it without directly doing so. Under the
settled interpretation of the word, we ascertain whether a tax be
direct or not by considering whether it is a tax on land or a
capitation tax. And the tax on land, to be within the provision for
apportionment, must be direct. Therefore we have two things to take
into account: is it a tax on land, and is it direct thereon or so
immediately on the land as to be equivalent to a direct levy upon
it? To say that any burden on land, even though indirect, must be
apportioned is not only to incorporate a new provision in the
Constitution, but is also to obliterate all the decisions to which
I have referred by construing them as holding that, although the
Constitution forbids only a direct tax on land without
apportionment, it must be so interpreted as to bring an indirect
tax on land within its inhibition.
It is said that a tax on the rentals is a tax on the land, as if
the act here under consideration imposed an immediate tax on the
rentals. This statement, I submit, is a misconception of the issue.
The point involved is whether a tax on net income, when such income
is made up by aggregating all sources of revenue and deducting
repairs, insurance, losses in business, exemptions, etc., becomes,
to the extent to which real estate revenues may have entered into
the gross income, a direct tax on the land itself. In other words,
does that which reaches an income, and thereby reaches rentals
indirectly, and reaches the land by a double indirection, amount to
direct levy on the land itself? It seems to me the question, when
thus accurately stated, furnishes its own negative response.
Indeed, I do not see how the issue can be stated precisely and
logically without making it apparent on its face that the inclusion
of rental from real property in income is nothing more than an
indirect tax upon the land.
It must be borne in mind that we are dealing not with the want
of power in Congress to assess real estate at all; on Page 157 U. S. 646 the contrary, as I have shown at the outset, Congress has
plenary power to reach real estate both directly and indirectly. If
it taxes real estate directly, the Constitution commands that such
direct imposition shall be apportioned. But because an excise or
other indirect tax, imposed without apportionment, has an indirect
effect upon real estate, no violation of the Constitution is
committed, because the Constitution has left Congress untrammeled
by any rule of apportionment as to indirect taxes -- imposts,
duties, and excises. The opinions in the Hylton case, so
often approved and reiterated, the unanimous views of the text
writers, all show that a tax on land, to be direct, must be an
assessment of the land itself, either by quantity or valuation.
Here there is no such assessment. It is well also to bear in mind,
in considering whether the tax is direct on the land, the fact
that, if land yields no rental, it contributes nothing to the
income. If it is vacant, the law does not force the owner to add
the rental value to his taxable income. And so it is if he occupies
it himself.
The citation made by counsel from Coke on Littleton, upon which
so much stress is laid, seems to me to have no relevancy. The fact
that, where one delivers or agrees to give or transfer land with
all the fruits and revenues, it will be presumed to be a conveyance
of the land in no way supports the proposition that an indirect tax on the rental of land is a direct burden on the land itself.
Nor can I see the application of Brown v.
Maryland , 1 Wheat. 419; Weston v.
Charleston , 2 Pet. 449; Dobbins v.
Erie County Commissioners , 16 Pet. 435; Almy v.
California , 24 How. 169; Cook v.
Pennsylvania, 97 U. S. 566 ; Railroad Co. v.
Jackson , 7 Wall. 262; Philadelphia &c.
Steamship Co. v. Pennsylvania, 122 U.
S. 326 ; Leloup v. Mobile, 127 U.
S. 640 ; Postal Telegraph Co. v. Adams, 155 U. S. 688 . All
these cases involve the question whether, under the Constitution,
if no power existed to tax at all, either directly or indirectly,
an indirect tax would be unconstitutional. These cases would be
apposite to this if Congress had no power to tax real estate. Were
such the case, it might be that the imposition of an excise by
Congress which reached real estate indirectly would Page 157 U. S. 647 necessarily violate the Constitution, because as it had no power
in the premises, every attempt to tax directly or indirectly would
be null. Here, on the contrary, it is not denied that the power to
tax exists in Congress, but the question is, is the tax direct or
indirect in the constitutional sense?
But it is unnecessary to follow the argument further, for, if I
understand the opinions of this court already referred to, they
absolutely settle the proposition that an inclusion of the rentals
of real estate in an income tax does not violate the Constitution.
At the risk of repetition, I propose to go over he cases again for
the purpose of demonstrating this. In doing so, let it be
understood at the outset that I do not question the authority of Cohens v. Virginia or Carroll v. Lessee of
Carroll, or any other of the cases referred to in argument of
counsel. These great opinions hold that an adjudication need not be
extended beyond the principles which it decides. Whilst conceding
this, it is submitted that, if decided cases do directly,
affirmatively, and necessarily, in principle, adjudicate the very
question here involved, then, under the very text of the opinions
referred to by the court, they should conclude this question. In
the first case, that of Hylton, is there any possibility
by the subtlest ingenuity to reconcile the decision here announced
with what was there established?
In the second case, Insurance Company v. Soule, the
levy was upon the company, its premiums, its dividends, and net
gains from all sources. The case was certified to this court, and
the statement made by the judges in explanation of the question
which they propounded says: "The amount of said premiums,
dividends, and net gains were truly stated in said lists or
returns." Original Record, p. 27.
It will thus be seen that the issue there presented was not
whether an income tax on business gains was valid, but whether an
income tax on gains from business and all other net gains was
constitutional. Under this state of facts, the question put to the
court was:
"Whether the taxes paid by the plaintiff, and sought to be
recovered back in this action, are not direct taxes within the
meaning of the Constitution of the United States. " Page 157 U. S. 648 This tax covered revenue of every possible nature, and it
therefore appears self-evident that the court could not have upheld
the statute without deciding that the income derived from realty,
as well as that derived from every other source, might be taxed
without apportionment. It is obvious that, if the court had
considered that any particular subject matter which the statute
reached was not constitutionally included, it would have been
obliged by every rule of safe judicial conduct to qualify its
answer as to this particular subject.
It is impossible for me to conceive that the court did not
embrace in its ruling the constitutionality of an income tax which
included rentals from real estate, since, without passing upon that
question, it could not have decided the issue presented. And
another reason why it is logically impossible that this question of
the validity of the inclusion of the rental of real estate in an
income tax could have been overlooked by the court is found in the
fact to which I could have already adverted, that this was one of
the principal points urged upon its attention, and the argument
covered all the ground which has been occupied here -- indeed, the
very citation from Coke upon Littleton now urged as conclusive was
there made also in the brief of counsel. And although the return of
income involved in that case was made "in block," the very fact
that the burden of the argument was that to include rentals from
real estate in income subject to taxation made such tax pro
tanto direct seems to me to indicate that such rentals had
entered into the return made by the corporation.
Again, in the case of Scholey v. Rew, the tax in
question was laid directly on the right to take real estate by
inheritance, a right which the United States had no power to
control. The case could not have been decided, in any point of
view, without holding a tax upon that right was not direct, and
that, therefore, it could be levied without apportionment. It is
manifest that the court could not have overlooked the question
whether this was a direct tax on the land or not, because, in the
argument of counsel, it was said, if there was any tax in the world
that was a tax on real estate which was Page 157 U. S. 649 direct, that was the one. The court said it was not, and
sustained the law. I repeat that the tax there was put directly
upon the right to inherit, which Congress had no power to regulate
or control. The case was therefore greatly stronger than that here
presented, for Congress has a right to tax real estate directly
with apportionment. That decision cannot be explained away by
saying that the court overlooked the fact that Congress had no
power to tax the devolution of real estate, and treated it as a tax
on such devolution. Will it be said of the distinguished men who
then adorned this bench that, although the argument was pressed
upon them that this tax was levied directly on the real estate,
they ignored the elementary principle that the control of the
inheritance of realty is a state, and not a Federal, function? But
even if the case proceeded upon the theory that the tax was on the
devolution of the real estate, and was therefore not direct, is it
not absolutely decisive of this controversy? If to put a burden of
taxation on the right to take real estate by inheritance reaches
realty only by indirection, how can it be said that a tax on the
income, the result of all sources of revenue, including rentals,
after deducting losses and expenses, which thus reaches the rentals
indirectly, and the real estate indirectly through the rentals, is
a direct tax on the real estate itself?
So it is manifest in the Springer case that the same
question was necessarily decided. It seems obvious that the court
intended in that case to decide the whole question, including the
right to tax rental from real estate without apportionment. It was
elaborately and carefully argued there that, as the law included
the rentals of land in the income taxed, and such inclusion was
unconstitutional, this, therefore, destroyed that part of the law
which imposed the tax on the revenues of personal property. Will it
be said, in view of the fact that, in this very case, four of the
judges of this court think that the inclusion of the rentals from
real estate in an income tax renders the whole law invalid, that
the question of the inclusion of rentals was of no moment there,
because the return there did not contain a mention of such rentals?
Were Page 157 U. S. 650 the great judges who then composed this court so neglectful that
they did not see the importance of a question which is now
considered by some of its members so vital that the result in their
opinion is to annul the whole law, more especially when that
question was pressed upon the court in argument with all possible
vigor and earnestness? But I think that the opinion in the Springer case clearly shows that the court did consider
this question of importance, that it did intend to pass upon it,
and that it deemed that it had decided all the questions affecting
the validity of an income tax in passing upon the main issue, which
included the others as the greater includes the less.
I can discover no principle upon which these cases can be
considered as any less conclusive of the right to include rentals
of land in the concrete result, income, than they are as to the
right to levy a general income tax. Certainly the decisions which
hold that an income tax, as such, is not direct decide on principle
that to include the rentals of real estate in an income tax does
not make it direct. If embracing rentals in income makes a tax on
income to that extent a direct tax on the land, then the same word
in the same sentence of the Constitution has two wholly distinct
constitutional meanings, and signifies one thing when applied to an
income tax generally and a different thing when applied to the
portion of such a tax made up in part of rentals. That is to say,
the word means one thing when applied to the greater and another
when applied to the lesser tax.
My inability to agree with the court in the conclusions which it
has just expressed causes me much regret. Great as is my respect
for any view by it announced, I cannot resist the conviction that
its opinion and decree in this case virtually annuls its previous
decisions in regard to the powers of Congress on the subject of
taxation, and is therefore fraught with danger to the court, to
each and every citizen, and to the republic. The conservation and
orderly development of our institutions rests on our acceptance of
the results of the past and their use as lights to guide our steps
in the future. Teach the lesson that settled principles may be
overthrown Page 157 U. S. 651 at any time, and confusion and turmoil must ultimately result.
In the discharge of its function of interpreting the Constitution,
this court exercises an august power. It sits removed from the
contentions of political parties and the animosities of factions.
It seems to me that the accomplishment of its lofty mission can
only be secured by the stability of its teachings and the sanctity
which surrounds them. If the permanency of its conclusions is to
depend upon the personal opinions of those who, from time to time,
may make up its membership, it will inevitably become a theatre of
political strife, and its action will be without coherence or
consistency. There is no great principle of our constitutional law,
such as the nature and extent of the commerce power, or the
currency power, or other powers of the Federal government, which
has not been ultimately defined by the adjudications of this court
after long and earnest struggle. If we are to go back to the
original sources of our political system, or are to appeal to the
writings of the economists in order to unsettle all these great
principles, everything is lost and nothing saved to the people. The
rights of every individual are guaranteed by the safeguards which
have been thrown around them by our adjudications. If these are to
be assailed and overthrown, as is the settled law of income
taxation by this opinion, as I understand it, the rights of
property, so far as the Federal Constitution is concerned, are of
little worth. My strong convictions forbid that I take part in a
conclusion which seems to me so full of peril to the country. I am
unwilling to do so without reference to the question of what my
personal opinion upon the subject might be if the question were a
new one, and was thus unaffected by the action of the framers, the
history of the government, and the long line of decisions by this
court. The wisdom of our forefathers in adopting a written
Constitution has often been impeached upon the theory that the
interpretation of a written instrument did not afford as complete
protection to liberty as would be enjoyed under a Constitution made
up of the traditions of a free people. Writing, it has been said,
does not insure greater stability than tradition does, while it Page 157 U. S. 652 destroys flexibility. The answer has always been that, by the
foresight of the fathers, the construction of our written
Constitution was ultimately confided to this body, which, from the
nature of its judicial structure, could always be relied upon to
act with perfect freedom from the influence of faction and to
preserve the benefits of consistent interpretation. The fundamental
conception of a judicial body is that of one hedged about by
precedents which are binding on the court without regard to the
personality of its members. Break down this belief in judicial
continuity, and let it be felt that, on great constitutional
questions, this court is to depart from the settled conclusions of
its predecessors and to determine them all according to the mere
opinion of those who temporarily fill its bench, and our
Constitution will, in my judgment, be bereft of value, and become a
most dangerous instrument to the rights and liberties of the
people.
In regard to the right to include in an income tax the interest
upon the bonds of municipal corporations, I think the decisions of
this court holding that the Federal government is without power to
tax the agencies of the state government embrace such bonds, and
that this settled line of authority is conclusive upon my judgment
here. It determines the question that, where there is no power to
tax for any purpose whatever, no direct or indirect tax can be
imposed. The authorities cited in the opinion are decisive of this
question. They are relevant to one case and not to the other
because, in the one case, there is full power in the Federal
government to tax, the only controversy being whether the tax
imposed is direct or indirect, while, in the other, there is no
power whatever in the Federal government, and therefore the levy,
whether direct or indirect, is beyond the taxing power.
Mr. Justice Harlan authorizes me to say that he concurs in the
views herein expressed.
MR. JUSTICE HARLAN, further dissenting.
I concur so entirely in the general views expressed by Mr.
Justice White in reference to the questions disposed of by the Page 157 U. S. 653 opinion and judgment of the majority that I will do no more than
indicate, without argument, the conclusions reached by me after
much consideration. Those conclusions are:
1. Giving due effect to the statutory provision that "no suit
for the purpose of restraining the assessment or collection of any
tax shall be maintained in any court," Rev.Stat. § 324, the decree
below dismissing the bill should be affirmed. As the Farmers' Loan
and Trust Company could not itself maintain a suit to restrain
either the assessment or collection of the tax imposed by the act
of Congress, the maintenance of a suit by a stockholder to restrain
that corporation and its directors from voluntarily paying such tax
would tend to defeat the manifest object of the statute, and be an
evasion of its provisions. Congress intended to forbid the issuing
of any process that would interfere in anywise with the prompt
collection of the taxes imposed. The present suits are mere devices
to strike down a general revenue law by decrees, to which neither
the government nor any officer of the United States could be
rightfully made parties of record.
2. Upon principle and under the doctrines announced by this
court in numerous cases, a duty upon the gains, profits, and income
derived from the rents of land is not a "direct" tax on such land
within the meaning of the constitutional provisions requiring
capitation or other direct taxes to be apportioned among the
several States according to their respective numbers determined in
the mode prescribed by that instrument. Such a duty may be imposed
by Congress without apportioning the same among the States
according to population.
3. While property, and the gains, profits, and income derived
from property, belonging to private corporations and individuals
are subjects of taxation for the purpose of paying the debts and
providing for the common defence and the general welfare of the
United States, the instrumentalities employed by the States in
execution of their powers are not subjects of taxation by the
general government any more than the instrumentalities of the
United States are the subjects of taxation by the States, and any
tax imposed directly upon interest derived from bonds issued by a
municipal corporation Page 157 U. S. 654 for public purposes, under the authority of the State whose
instrumentality it is, is a burden upon the exercise of the powers
of that corporation which only the State creating it may impose. In
such a case it is immaterial to inquire whether the tax is, in its
nature or by its operation, a direct or an indirect tax, for the
instrumentalities of the States -- among which, as is well settled,
are municipal corporations, exercising powers and holding property
for the benefit of the public -- are not subjects of national
taxation, in any form or for any purpose, while the property of
private corporations and of individuals is subject to taxation by
the general government for national purposes. So it has been
frequently adjudged, and the question is no longer an open one in
this court.
Upon the several questions about which the members of this court
are equally divided in opinion, I deem it appropriate to withhold
any expression of my views, because the opinion of the Chief
Justice is silent in regard to those questions. | In the case of Pollock v. Farmers' Loan & Trust Co. (1895), the US Supreme Court ruled that taxes on income derived from land and municipal bonds are considered direct taxes and must be apportioned among the states based on population. The Court found that a tax on rents or income from real estate is a direct tax and that a tax on interest from municipal bonds is an unconstitutional burden on state power. This decision had significant implications for federal taxation and revenue laws. |
Taxes | North American Oil Consolidated v. Burnet | https://supreme.justia.com/cases/federal/us/286/417/ | U.S. Supreme Court North American Oil Consolidated v.
Burnet, 286
U.S. 417 (1932) North American Oil Consolidated v.
Burnet No. 575 Argued April 20, 21,
1932 Decided May 23, 1932 286
U.S. 417 CERTIORARI TO THE CIRCUIT COURT OF
APPEALS FOR THE NINTH
CIRCUIT Syllabus 1. Section 13(c) of the Revenue Act of 1916, obliging receivers
"operating the property and business of corporations" to make
returns of net income "as and for such corporations," applied only
where a receiver was in complete control of the entire properties
and business of the corporation; otherwise, the return must be made
by the corporation. P. 286 U. S.
422 . Page 286 U. S. 418 2. Part of an operating property was taken over by a receiver in
a suit challenging the owner's title. Held, that the owner
need not report income as of the year when it was collected by the
receiver, while the right to it was in doubt, but must report it as
income of the year when the amount collected was paid over to him
and the bill dismissed. P. 286 U. S. 423 .
3. The fact that appeals from the decree were not determined in
his favor until a later year did not defer the time for returning
the income. P. 286 U. S. 424 .
50 F.2d 52 affirmed.
Certiorari, 284 U.S. 614, to review a judgment reversing a
decision of the Board of Tax Appeals, 12 B.T.A. 68. Page 286 U. S. 420 MR. JUSTICE BRANDEIS delivered the opinion of the Court.
The question for decision is whether the sum of $171,979.22,
received by the North American Oil Consolidated in 1917, was
taxable to it as income of that year.
The money was paid to the company under the following
circumstances: among many properties operated by it in 1916 was a
section of oil land the legal title to which stood in the name of
the United States. Prior to that year, the government, claiming
also the beneficial Page 286 U. S. 421 ownership, had instituted a suit to oust the company from
possession, and on February 2, 1916, it secured the appointment of
a receiver to operate the property, or supervise its operations,
and to hold the net income thereof. The money paid to the company
in 1917 represented the net profits which had been earned from that
property in 1916 during the receivership. The money was paid to the
receiver as earned. After entry by the district court in 1917 of
the final decree dismissing the bill, the money was paid, in that
year, by the receiver to the company. United States v. North
American Oil Consolidated, 242 F. 723. The government took an
appeal (without supersedeas) to the Circuit Court of Appeals. In
1920, that court affirmed the decree. 264 F. 336. In 1922, a
further appeal to this Court was dismissed by stipulation. 258 U.S.
633.
The income earned from the property in 1916 had been entered on
the books of the company as its income. It had not been included in
its original return of income for 1916; but it was included in an
amended return for that year which was filed in 1918. Upon auditing
the company's income and profits tax returns for 1917, the
Commissioner of Internal Revenue determined a deficiency based on
other items. The company appealed to the Board of Tax Appeals.
There, in 1927, the Commissioner prayed that the deficiency already
claimed should be increased so as to include a tax on the amount
paid by the receiver to the company in 1917. The Board held that
the profits were taxable to the receiver as income of 1916, and
hence made no finding whether the company's accounts were kept on
the cash receipts and disbursements basis or on the accrual basis.
12 B.T.A. 68. The Circuit Court of Appeals held that the profits
were taxable to the company as income of 1917, regardless of
whether the company's returns were made on the cash or on the Page 286 U. S. 422 accrual basis. 50 F.2d 752. This Court granted a writ of
certiorari. 284 U.S. 614.
It is conceded that the net profits earned by the property
during the receivership constituted income. The company contends
that they should have been reported by the receiver for taxation in
1916; that, if not returnable by him, they should have been
returned by the company for 1916, because they constitute income of
the company accrued in that year, and that, if not taxable as
income of the company for 1916, they were taxable to it as income
for 1922, since the litigation was not finally terminated in its
favor until 1922. First. The income earned in 1916 and impounded by the
receiver in that year was not taxable to him, because he was the
receiver of only a part of the properties operated by the company.
Under § 13(c) of the Revenue Act of 1916, * receivers who
"are operating the property or business of corporations" were
obliged to make returns "of net income as and for such
corporations," and "any income tax due" was to be "assessed and
collected in the same manner as if assessed directly against the
organizations of whose businesses or properties they have custody
and control." The phraseology of this section was adopted without
change in the Revenue Act of 1918, 40 Stat. 1057, 1081, c. 18, §
239. The regulations of the Treasury Department have consistently
construed Page 286 U. S. 423 these statutes as applying only to receivers in charge of the
entire property or business of a corporation, and in all other
cases have required the corporations themselves to report their
income. Treas.Regs. 33, arts. 26, 209; Treas.Regs. 45, Arts. 424,
622. That construction is clearly correct. The language of the
section contemplates a substitution of the receiver for the
corporation, and there can be such substitution only when the
receiver is in complete control of the properties and business of
the corporation. Moreover, there is no provision for the
consolidation of the return of a receiver of part of a
corporation's property or business with the return of the
corporation itself. It may not be assumed that Congress intended to
require the filing of two separate returns for the same year, each
covering only a part of the corporate income without making
provision for consolidation so that the tax could be based upon the
income as a whole. Second. The net profits were not taxable to the company
as income of 1916. For the company was not required in 1916 to
report as income an amount which it might never receive. See
Burnet v. Logan, 283 U. S. 404 , 283 U. S. 413 . Compare Lucas v. American Code Co., 280 U.
S. 445 , 280 U. S. 452 ; Burnet v. Sanford & Brooks Co., 282 U.
S. 359 , 282 U. S. 363 .
There was no constructive receipt of the profits by the company in
that year, because at no time during the year was there a right in
the company to demand that the receiver pay over the money.
Throughout 1916, it was uncertain who would be declared entitled to
the profits. It was not until 1917, when the district court entered
a final decree vacating the receivership and dismissing the bill,
that the company became entitled to receive the money. Nor is it
material, for the purposes of this case, whether the company's
return was filed on the cash receipts and disbursements basis, or
on the accrual basis. In neither event was it taxable in 1916
on Page 286 U. S. 424 account of income which it had not yet received and which it
might never receive. Third. The net profits earned by the property in 1916
were not income of the year 1922 -- the year in which the
litigation with the government was finally terminated. They became
income of the company in 1917, when it first became entitled to
them and when it actually received them. If a taxpayer receives
earnings under a claim of right and without restriction as to its
disposition, he has received income which he is required to return,
even though it may still be claimed that he is not entitled to
retain the money, and even though he may still be adjudged liable
to restore its equivalent. See Board v. Commissioner, 51
F.2d 73, 75, 76. Compare United States v. S.S. White Dental
Mang. Co., 274 U. S. 398 , 274 U. S. 403 . If
in 1922 the government had prevailed, and the company had been
obliged to refund the profits received in 1917, it would have been
entitled to a deduction from the profits of 1922, not from those of
any earlier year. Compare Lucas v. American Code Co.,
supra. Affirmed. * Act of September 8, 1916, 39 Stat. 756, 771, c. 463:
"In cases wherein receivers, trustees in bankruptcy, or
assignees are operating the property or business of corporations .
. . subject to tax imposed by this title, such receivers, trustees,
or assignees shall make returns of net income as and for such
corporations . . . in the same manner and form as such
organizations are hereinbefore required to make returns, and any
income tax due on the basis of such returns made by receivers,
trustees, or assignees shall be assessed and collected in the same
manner as if assessed directly against the organizations of whose
businesses or properties they have custody and control." | Here is a summary of the Supreme Court case North American Oil Consolidated v. Burnet (1932):
The case centers on a dispute over when income earned by a receiver during a legal battle over property ownership should be taxed. The North American Oil Consolidated company operated a section of oil land in 1916, but the US government claimed ownership and appointed a receiver to manage the property and its profits. The key question is whether the company should pay taxes on the income earned by the receiver in 1916, when the profits were earned, or in 1917, when the company received the profits after a favorable court decision.
The Court ruled that the company was not required to report the income in 1916 as it might never have received the money. Instead, the income became taxable in 1917 when the company actually received the profits and the court dismissed the government's bill. This decision established the principle that income is taxable when it is actually received and the right to it is certain, rather than when it is earned under uncertain circumstances. |
Taxes | Burnet v. Logan | https://supreme.justia.com/cases/federal/us/283/404/ | U.S. Supreme Court Burnet v. Logan, 283
U.S. 404 (1931) Burnet v. Logan Nos. 521 and 522 Argued April 29, 1931 Decided May 18, 1931 283
U.S. 404 CERTIORARI TO THE CIRCUIT COURT OF APPEALS FOR THE SECOND CIRCUIT Syllabus 1. Prior to March, 1913, the taxpayer held shares in one of
several steel companies, owners of the stock of a company engaged
in mining ore under a long-term lease. The lease did not require
production of maximum or minimum tonnage or any definite payments.
By agreement among themselves, the steel companies were entitled to
share the ore extracted according to their stockholdings in the
mining company. In 1916, the taxpayer and her co-shareholders sold
their shares to another steel company, which thus became entitled
to participate in the ores thereafter taken from the leased mine.
The consideration for the sale was part cash and in part the
purchaser's agreement to pay annually thereafter for distribution
among the selling stockholders 60 cents for each ton of ore
apportioned to it. Held, that until the receipts by the
taxpayer under this contract shall have equalled the value of her
shares in March, 1913, they are return of capital, and are not
taxable in part as income. P. 283 U. S.
412 .
2. Another of the vendor stockholders died in 1917, bequeathing
her interest in the payments to be made by the purchaser. Held that, prior to return of the amount at which the
bequest was valued for federal estate tax purposes, the payments
received by the legatee are not income. P. 283 U. S.
413 .
42 F.2d 193, id. 197, affirmed.
Certiorari, 282 U.S. 833, to review judgments reversing orders
of the Board of Tax Appeals determining income tax deficiencies. 12
B.T.A. 586. Page 283 U. S. 409 MR. JUSTICE McREYNOLDS delivered the opinion of the Court.
These causes present the same questions. One opinion, stating
the essential circumstances disclosed in No. 521, will suffice for
both.
Prior to March, 1913, and until March 11, 1916, respondent, Mrs.
Logan, owned 250 of the 4,000 capital shares issued by the Andrews
& Hitchcock Iron Company. It held 12 percent of the stock of
the Mahoning Ore & Steel Company, an operating concern. In
1895, the latter corporation procured a lease for 97 years upon the
"Mahoning" mine, and since then has regularly taken therefrom
large, but varying, quantities of iron ore -- in 1913, 1,515,428
tons; in 1914, 1,212,287 tons; in 1915, 2,311,940 tons; in 1919,
1,217, 167 tons; in 1921, 303,020 tons; in 1923, 3,029,865 tons.
The lease contract did not require production of either maximum or
minimum tonnage or any definite payments. Through an agreement of
stockholders (steel manufacturers), the Mahoning Company is
obligated to apportion extracted ore among them according to their
holdings. Page 283 U. S. 410 On March 11, 1916, the owners of all the shares in Andrews &
Hitchcock Company sold them to Youngstown Sheet & Tube Company,
which thus acquired, among other things, 12 percent of the Mahoning
Company's stock and the right to receive the same percentage of ore
thereafter taken from the leased mine.
For the shares so acquired, the Youngstown Company paid the
holders $2,200,000 in money, and agreed to pay annually thereafter
for distribution among them 60 cents for each ton of ore
apportioned to it. Of this cash, Mrs. Logan received 250/4000 --
$137,500, and she became entitled to the same fraction of any
annual payment thereafter made by the purchaser under the terms of
sale.
Mrs. Logan's mother had long owned 1,100 shares of the Andrews
& Hitchcock Company. She died in 1917, leaving to the daughter
one-half of her interest in payments thereafter made by the
Youngstown Company. This bequest was appraised for federal estate
tax purposes at $277,164.50.
During 1917, 1918, 1919, and 1920, the Youngstown Company paid
large sums under the agreement. Out of these respondent received on
account of her 250 shares $9,900 in 1917; $11,250 in 1918;
$8,995.50 in 1919; $5,444.30 in 1920 -- $35,589.80. By reason of
the interest from her mother's estate, she received $19,790.10 in
1919, and $11,977.49 in 1920.
Reports of income for 1918, 1919, and 1920 were made by Mrs.
Logan upon the basis of cash receipts and disbursements. They
included no part of what she had obtained from annual payments by
the Youngstown Company. She maintains that, until the total amount
actually received by her from the sale of her shares equals their
value on March 1, 1913, no taxable income will arise from the
transaction. Also that, until she actually receives by reason of
the right bequeathed to her a sum equal to its Page 283 U. S. 411 appraised value, there will be no taxable income therefrom.
On March 1, 1913, the value of the 250 shares then held by Mrs.
Logan exceeded $173,089.80 -- the total of all sums actually
received by her prior to 1921 from their sale ($137,500 cash in
1916, plus four annual payments amounting to $35,589.80). That
value also exceeded original cost of the shares. The amount
received on the interest devised by her mother was less than its
valuation for estate taxation, also less than the value when
acquired by Mrs. Logan.
The Commissioner ruled that the obligation of the Youngstown
Company to pay 60 cents per ton has a fair market value of
$1,942,111.46 on March 11, 1916; that this value should be treated
as so much cash, and the sale of the stock regarded as a closed
transaction with no profit in 1916. He also used this valuation as
the basis for apportioning subsequent annual receipts between
income and return of capital. His calculations, based upon
estimates and assumptions, are too intricate for brief statement. * He made
deficiency assessments according to the view just stated, and the
Board of Tax Appeals approved the result. Page 283 U. S. 412 The circuit court of appeals held that, in the circumstances, it
was impossible to determine with fair certainty the market value of
the agreement by the Youngstown Company to pay 60 cents per ton.
Also that respondent was entitled to the return of her capital --
the value of 250 shares on March 1, 1913, and the assessed value of
the interest derived from her mother -- before she could be charged
with any taxable income. As this had not in fact been returned,
there was no taxable income.
We agree with the result reached by the circuit court of
appeals.
The 1916 transaction was a sale of stock, not an exchange of
property. We are not dealing with royalties or deductions from
gross income because of depletion of mining property. Nor does the
situation demand that an effort be made to place according to the
best available data some approximate value upon the contract for
future payments. This probably was necessary in order to assess the
mother's estate. As annual payments on account of extracted ore
come in, they can be readily apportioned first as return of capital
and later as profit. The liability for income tax ultimately can be
fairly determined without resort to mere estimates, assumptions,
and speculation. Page 283 U. S. 413 When the profit, if any, is actually realized, the taxpayer will
be required to respond. The consideration for the sale was
$2,200,000 in cash and the promise of future money payments wholly
contingent upon facts and circumstances not possible to foretell
with anything like fair certainty. The promise was in no proper
sense equivalent to cash. It had no ascertainable fair market
value. The transaction was not a closed one. Respondent might never
recoup her capital investment from payments only conditionally
promised. Prior to 1921, all receipts from the sale of her shares
amounted to less than their value on March 1, 1913. She properly
demanded the return of her capital investment before assessment of
any taxable profit based on conjecture.
"In order to determine whether there has been gain or loss, and
the amount of the gain if any, we must withdraw from the gross
proceeds an amount sufficient to restore the capital value that
existed at the commencement of the period under consideration." Doyle v. Mitchell Bros. Co., 247 U.
S. 179 , 247 U. S.
184 -185. Revenue Act 1916, § 2, 39 Stat. 757, 758;
Revenue Act 1918, c. 18, 40 Stat. 1057. Ordinarily, at least, a
taxpayer may not deduct from gross receipts a supposed loss which
in fact is represented by his outstanding note. Eckert v.
Commissioner, ante, p. 283 U. S. 140 .
And, conversely, a promise to pay indeterminate sums of money in
not necessarily taxable income. "Generally speaking, the income tax
law is concerned only with realized losses, as with realized
gains." Lucas v. American Code Co., 280 U.
S. 445 , 280 U. S.
449 .
From her mother's estate, Mrs. Logan obtained the right to share
in possible proceeds of a contract thereafter to pay indefinite
sums. The value of this was assumed to be $277,164.50, and its
transfer was so taxed. Some valuation -- speculative or otherwise
-- was necessary in order to close the estate. It may never yield
as much, it may Page 283 U. S. 414 yield more. If a sum equal to the value thus ascertained had
been invested in an annuity contract, payments thereunder would
have been free from income tax until the owner had recouped his
capital investment. We think a like rule should be applied here.
The statute definitely excepts bequests from receipts which go to
make up taxable income. See Burnet v. Whitehouse, ante, p. 283 U. S. 148 .
The judgments below are Affirmed. * In the brief for petitioner, the following appears:
"The fair market value of the Youngstown contract on March 11,
1916, was found by the Commissioner to be $1,942,111.46. This was
based upon an estimate that the ore reserves at the Mahoning mine
amounted to 82,858,535 tons; that all such ore would be mined; that
12 percent (or 9,942,564.2 tons) would be delivered to the
Youngstown Company. The total amount to be received by all the
vendors of stock would then be $5,965,814.52 at the rate of 60
cents per ton. The Commissioner's figure for the fair market value
on March 11, 1916, was the then worth of $5,965,814.52, upon the
assumption that the amount was to be received in equal annual
installments during 45 years, discounted at 6 percent, with a
provision for a sinking fund at 4 percent. For lack of evidence to
the contrary, this value was approved by the Board. The value of
the 550/4000 interest which each acquired by bequest was fixed at
$277,164.50 for purposes of federal estate tax at the time of the
mother's death."
During the years here involved, the Youngstown Company made
payments in accordance with the terms of the contract, and
respondents respectively received sums proportionate to the
interests in the contract which they acquired by exchange of
property and by bequest.
The Board held that respondents' receipts from the contract,
during the years in question, represented "gross income;" that
respondents should be allowed to deduct from said gross income a
reasonable allowance for exhaustion of their contract interests,
and that the balance of the receipts should be regarded as taxable
income. | The Supreme Court held that the proceeds from the sale of stock in a mining company are not taxable as income until the receipts exceed the value of the shares at the time of the sale. This includes both proceeds received by the seller and those received by a legatee, who acquired the stock through a bequest. Until the seller or legatee recovers their capital investment, the proceeds are considered a return of capital and are not subject to income tax. |
Taxes | U.S. v. Kirby Lumber Co. | https://supreme.justia.com/cases/federal/us/284/1/ | U.S. Supreme Court United States v. Kirby Lumber Co., 284 U.S. 1 (1931) United States v. Kirby Lumber
Co. No. 26 Argued October 21,
1931 Decided November 2,
1931 284 U.S.
1 CERTIORARI TO THE COURT OF
CLAIMS Syllabus Where a corporation purchased and retired some of its own bonds
for less than their par value, which it had received for them when
issued, the difference was a taxable gain or income under the
Revenue Act of 1921. P. 284 U. S. 3 .
71 Ct.Cls. 290, 44 F.2d 885, reversed.
Certiorari, 283 U.S. 814, to review a judgment allowing a claim
for refund of money collected as income tax. Page 284 U. S. 2 MR. JUSTICE HOLMES delivered the opinion of the court.
In July, 1923, the plaintiff, the Kirby Lumber Company, issued
its own bonds for $12,126,800 for which it received their par
value. Later in the same year, it purchased in the open market some
of the same bonds at less than par, the difference of price being
$137,521.30. The question is whether this difference is a taxable
gain or income of the plaintiff for the year 1923. By the
Revenue Page 284 U. S. 3 Act of (November 23) 1921, c. 136, § 213(a), gross income
includes "gains or profits and income derived from any source
whatever," and, by the Treasury Regulations authorized by § 1303,
that have been in force through repeated reenactments,
"If the corporation purchases and retires any of such bonds at a
price less than the issuing price or face value, the excess of the
issuing price or face value over the purchase price is gain or
income for the taxable year."
Article 545(1)(c) of Regulations 62, under Revenue Act of 1921. See Article 544(1)(c) of Regulations 45, under Revenue Act
of 1918; Article 545(1)(c) of Regulations 65, under Revenue Act of
1924; Article 545(1)(c) of Regulations 69, under Revenue Act of
1926; Article 68(1)(c) of Regulations 74, under Revenue Act of
1928. We see no reason why the Regulations should not be accepted
as a correct statement of the law.
In Bowers v. Kerbaugh-Empire Co., 271 U.
S. 170 , the defendant in error owned the stock of
another company that had borrowed money repayable in marks or their
equivalent for an enterprise that failed. At the time of payment,
the marks had fallen in value, which, so far as it went, was a gain
for the defendant in error, and it was contended by the plaintiff
in error that the gain was taxable income. But the transaction as a
whole was a loss, and the contention was denied. Here, there was no
shrinkage of assets, and the taxpayer made a clear gain. As a
result of its dealings, it made available $137,521.30 assets
previously offset by the obligation of bonds now extinct. We see
nothing to be gained by the discussion of judicial definitions. The
defendant in error has realized within the year an accession to
income, if we take words in their plain popular meaning, as they
should be taken here. Burnet v. Sanford & Brooks Co., 282 U. S. 359 , 282 U. S.
364 . Judgment reversed. | The U.S. Supreme Court case, United States v. Kirby Lumber Co. (1931), ruled that when a corporation buys back its own bonds at a price lower than their original issue price, the difference is considered taxable income. The Court interpreted the Revenue Act of 1921 and supported the Treasury Regulations' stance on bond repurchases, deeming the resulting financial benefit as taxable income. This decision set a precedent for similar cases, establishing that a corporation's gain from bond repurchases is taxable, regardless of the overall financial status of the corporation. |
Taxes | Helvering v. Horst | https://supreme.justia.com/cases/federal/us/311/112/ | U.S. Supreme Court Helvering v. Horst, 311
U.S. 112 (1940) Helvering v. Horst No. 27 Argued October 25,
1940 Decided November 25,
1940 311
U.S. 112 CERTIORARI TO THE CIRCUIT COURT OF
APPEALS FOR THE SECOND
CIRCUIT Syllabus 1. Where, in 1934 and 1935, an owner of negotiable bonds, who
reported income on the cash receipts basis, detached from the bonds
negotiable interest coupons before their due date and delivered
them as a gift to his son, who, in the same year, collected them at
maturity, held that, under § 22 of the Revenue Act of
1934, and in the year that the interest payments were made, there
was a realization of income, in the amount of such payments,
taxable to the donor. P. 311 U. S.
117 .
2. The dominant purpose of the income tax laws is the taxation
of income to those who earn or otherwise create the right to
receive it and who enjoy the benefit of it when paid. P. 311 U. S.
119 .
3. The tax laid by the 1934 Revenue Act upon income "derived
from . . . wages or compensation for personal service, of whatever
kind and in whatever form paid . . . ; also from interest . . . "
cannot fairly be interpreted as not applying to income derived from
interest or compensation when he who is entitled to receive it
makes use of his power to dispose of it in procuring satisfactions
which he would otherwise procure only by the use of the money when
received. P. 311 U. S.
119 .
4. This case distinguished from Blair v. Commissioner, 300 U. S. 5 , and
compared with Lucas v. Earl, 281 U.
S. 111 , and Burnet v. Leininger, 285 U.
S. 136 . Pp. 311 U. S.
118 -120.
107 F.2d 906, reversed.
Certiorari, 309 U.S. 650, to review the reversal of an order of
the Board of Tax Appeals, 39 B.T.A. 757, sustaining a determination
of a deficiency in income tax. Page 311 U. S. 114 MR. JUSTICE STONE delivered the opinion of the Court.
The sole question for decision is whether the gift, during the
donor's taxable year, of interest coupons detached from the bonds,
delivered to the donee and later in the year paid at maturity, is
the realization of income taxable to the donor.
In 1934 and 1935, respondent, the owner of negotiable bonds,
detached from them negotiable interest coupons shortly before their
due date and delivered them as a gift to his son, who, in the same
year, collected them at maturity. The Commissioner ruled that,
under the applicable § 22 of the Revenue Act of 1934, 48 Stat. 680,
686, the interest payments were taxable, in the years when paid, to
the respondent donor, who reported his income on the cash receipts
basis. The circuit court of appeals reversed the order of the Board
of Tax Appeals sustaining the tax. 107 F.2d 906; 39 B.T.A. 757. We
granted certiorari, 309 U.S. 650, because of the importance of the
question in the administration of the revenue laws and because of
an asserted conflict in principle of the decision below with that
of Lucas v. Earl, 281 U. S. 111 , and
with that of decisions by other circuit courts of appeals. See
Bishop v. Commissioner, 54 F.2d 298; Dickey v.
Burnet, 56 F.2d 917, 921; Van Meter v. Commissioner, 61 F.2d 817.
The court below thought that, as the consideration for the
coupons had passed to the obligor, the donor had, by the gift,
parted with all control over them and their payment, and for that
reason the case was distinguishable Page 311 U. S. 115 from Lucas v. Earl, supra, and Burnet v.
Leininger, 285 U. S. 136 ,
where the assignment of compensation for services had preceded the
rendition of the services, and where the income was held taxable to
the donor.
The holder of a coupon bond is the owner of two independent and
separable kinds of right. One is the right to demand and receive at
maturity the principal amount of the bond representing capital
investment. The other is the right to demand and receive interim
payments of interest on the investment in the amounts and on the
dates specified by the coupons. Together, they are an obligation to
pay principal and interest given in exchange for money or property
which was presumably the consideration for the obligation of the
bond. Here respondent, as owner of the bonds, had acquired the
legal right to demand payment at maturity of the interest specified
by the coupons and the power to command its payment to others which
constituted an economic gain to him.
Admittedly not all economic gain of the taxpayer is taxable
income. From the beginning, the revenue laws have been interpreted
as defining "realization" of income as the taxable event, rather
than the acquisition of the right to receive it. And "realization"
is not deemed to occur until the income is paid. But the decisions
and regulations have consistently recognized that receipt in cash
or property is not the only characteristic of realization of income
to a taxpayer on the cash receipts basis. Where the taxpayer does
not receive payment of income in money or property, realization may
occur when the last step is taken by which he obtains the fruition
of the economic gain which has already accrued to him. Old
Colony Trust Co. v. Commissioner, 279 U.
S. 716 ; Corliss v. Bowers, 281 U.
S. 376 , 281 U. S. 378 . Cf. Burnet v. Wells, 289 U. S. 670 .
In the ordinary case the taxpayer who acquires the right to
receive income is taxed when he receives it, regardless of the time
when his right to receive payment Page 311 U. S. 116 accrued. But the rule that income is not taxable until realized
has never been taken to mean that the taxpayer, even on the cash
receipts basis, who has fully enjoyed the benefit of the economic
gain represented by his right to receive income can escape taxation
because he has not himself received payment of it from his obligor.
The rule, founded on administrative convenience, is only one of
postponement of the tax to the final event of enjoyment of the
income, usually the receipt of it by the taxpayer, and not one of
exemption from taxation where the enjoyment is consummated by some
event other than the taxpayer's personal receipt of money or
property. Cf. Aluminum Castings Co. v. Routzahn, 282 U. S. 92 , 282 U. S. 98 .
This may occur when he has made such use or disposition of his
power to receive or control the income as to procure in its place
other satisfactions which are of economic worth. The question here
is whether, because one who in fact receives payment for services
or interest payments is taxable only on his receipt of the
payments, he can escape all tax by giving away his right to income
in advance of payment. If the taxpayer procures payment directly to
his creditors of the items of interest or earnings due him, see
Old Colony Trust Co. v. Commissioner, supra; Bowers v.
Kerbaugh-Empire Co., 271 U. S. 170 ; United States v. Kirby Lumber Co., 284 U. S.
1 , or if he sets up a revocable trust with income
payable to the objects of his bounty, §§ 166, 167, Corliss v.
Bowers, supra; cf. Dickey v. Burnet, 56 F.2d 917, 921, he does
not escape taxation because he did not actually receive the money. Cf. Douglas v. Willcuts, 296 U. S. 1 ; Helvering v. Clifford, 309 U. S. 331 .
Underlying the reasoning in these cases is the thought that
income is "realized" by the assignor because he, who owns or
controls the source of the income, also controls the disposition of
that which he could have Page 311 U. S. 117 received himself and diverts the payment from himself to others
as the means of procuring the satisfaction of his wants. The
taxpayer has equally enjoyed the fruits of his labor or investment
and obtained the satisfaction of his desires whether he collects
and uses the income to procure those satisfactions or whether he
disposes of his right to collect it as the means of procuring them. Cf. Burnet v. Wells, supra. Although the donor here, by the transfer of the coupons, has
precluded any possibility of his collecting them himself, he has
nevertheless, by his act, procured payment of the interest, as a
valuable gift to a member of his family. Such a use of his economic
gain, the right to receive income, to procure a satisfaction which
can be obtained only by the expenditure of money or property would
seem to be the enjoyment of the income whether the satisfaction is
the purchase of goods at the corner grocery, the payment of his
debt there, or such nonmaterial satisfactions as may result from
the payment of a campaign or community chest contribution, or a
gift to his favorite son. Even though he never receives the money,
he derives money's worth from the disposition of the coupons which
he has used as money or money's worth in the procuring of a
satisfaction which is procurable only by the expenditure of money
or money's worth. The enjoyment of the economic benefit accruing to
him by virtue of his acquisition of the coupons is realized as
completely as it would have been if he had collected the interest
in dollars and expended them for any of the purposes named. Burnet v. Wells, supra. In a real sense, he has enjoyed compensation for money loaned or
services rendered, and not any the less so because it is his only
reward for them. To say that one who has made a gift thus derived
from interest or earnings paid to his donee has never enjoyed or
realized the fruits of his investment or labor because he has
assigned Page 311 U. S. 118 them instead of collecting them himself and then paying them
over to the donee is to affront common understanding and to deny
the facts of common experience. Common understanding and experience
are the touchstones for the interpretation of the revenue laws.
The power to dispose of income is the equivalent of ownership of
it. The exercise of that power to procure the payment of income to
another is the enjoyment, and hence the realization, of the income
by him who exercises it. We have had no difficulty in applying that
proposition where the assignment preceded the rendition of the
services, Lucas v. Earl, supra; Burnet v. Leininger,
supra, for it was recognized in the Leininger case
that, in such a case, the rendition of the service by the assignor
was the means by which the income was controlled by the donor, and
of making his assignment effective. But it is the assignment by
which the disposition of income is controlled when the service
precedes the assignment, and, in both cases, it is the exercise of
the power of disposition of the interest or compensation, with the
resulting payment to the donee, which is the enjoyment by the donor
of income derived from them.
This was emphasized in Blair v. Commissioner, 300 U. S. 5 , on
which respondent relies, where the distinction was taken between a
gift of income derived from an obligation to pay compensation and a
gift of income-producing property. In the circumstances of that
case, the right to income from the trust property was thought to be
so identified with the equitable ownership of the property from
which alone the beneficiary derived his right to receive the income
and his power to command disposition of it that a gift of the
income by the beneficiary became effective only as a gift of his
ownership of the property producing it. Since the gift was deemed
to be a gift of the property, the income from it was held to be the
income of the owner of the property, Page 311 U. S. 119 who was the donee, not the donor, a refinement which was
unnecessary if respondent's contention here is right, but one
clearly inapplicable to gifts of interest or wages. Unlike income
thus derived from an obligation to pay interest or compensation,
the income of the trust was regarded as no more the income of the
donor than would be the rent from a lease or a crop raised on a
farm after the leasehold or the farm had been given away. Blair
v. Commissioner, supra, 300 U. S. 12 -13,
and cases cited. See also Reinecke v. Smith, 289 U.
S. 172 , 289 U. S. 177 .
We have held without deviation that, where the donor retains
control of the trust property, the income is taxable to him
although paid to the donee. Corliss v. Bowers, supra. Cf. Helvering v. Clifford, supra. The dominant purpose of the revenue laws is the taxation of
income to those who earn or otherwise create the right to receive
it and enjoy the benefit of it when paid. See Corliss v.
Bowers, supra, 281 U. S. 378 ; Burnet v. Guggenheim, 288 U. S. 280 , 288 U. S. 283 .
The tax laid by the 1934 Revenue Act upon income "derived from . .
. wages, or compensation for personal service, of whatever kind and
in whatever form paid . . . ; also from interest . . ." therefore
cannot fairly be interpreted as not applying to income derived from
interest or compensation when he who is entitled to receive it
makes use of his power to dispose of it in procuring satisfactions
which he would otherwise procure only by the use of the money when
received.
It is the statute which taxes the income to the donor although
paid to his donee. Lucas v. Earl, supra; Burnet v. Leininger,
supra. True, in those cases, the service which created the
right to income followed the assignment, and it was arguable that,
in point of legal theory, the right to the compensation vested
instantaneously in the assignor when paid, although he never
received it, while here, the right of the assignor to receive the
income Page 311 U. S. 120 antedated the assignment which transferred the right, and thus
precluded such an instantaneous vesting. But the statute affords no
basis for such "attenuated subtleties." The distinction was
explicitly rejected as the basis of decision in Lucas v.
Earl. It should be rejected here, for no more than in the Earl case can the purpose of the statute to tax the income
to him who earns or creates and enjoys it be escaped by
"anticipatory arrangements . . . however skilfully devised" to
prevent the income from vesting even for a second in the donor.
Nor is it perceived that there is any adequate basis for
distinguishing between the gift of interest coupons here and a gift
of salary or commissions. The owner of a negotiable bond and of the
investment which it represents, if not the lender, stands in the
place of the lender. When, by the gift of the coupons, he has
separated his right to interest payments from his investment and
procured the payment of the interest to his donee, he has enjoyed
the economic benefits of the income in the same manner and to the
same extent as though the transfer were of earnings, and, in both
cases, the import of the statute is that the fruit is not to be
attributed to a different tree from that on which it grew. See
Lucas v. Earl, supra, 281
U. S. 115 . Reversed. The separate opinion of MR. JUSTICE McREYNOLDS.
The facts were stipulated. In the opinion of the court below
(107 F.2d 907), the issues are thus adequately stated:
"The petitioner owned a number of coupon bonds. The coupons
represented the interest on the bonds and were payable to bearer.
In 1934, he detached unmatured coupons of face value of $25,182.50
and transferred them by manual delivery to his son as a gift. The
coupons matured later on in the same year, and the son collected
the face amount, $25,182.50, as his own property. There Page 311 U. S. 121 was a similar transaction in 1935. The petitioner kept his books
on a cash basis. He did not include any part of the moneys
collected on the coupons in his income tax returns for these two
years. The son included them in his returns. The Commissioner added
the moneys collected on the coupons to the petitioner's taxable
income and determined a tax deficiency for each year. The Board of
Tax Appeals, three members dissenting, sustained the Commissioner,
holding that the amounts collected on the coupons were taxable as
income to the petitioner."
The decision of the Board of Tax Appeals was reversed, and
properly so, I think.
The unmatured coupons given to the son were independent
negotiable instruments, complete in themselves. Through the gift,
they became at once the absolute property of the donee, free from
the donor's control and in no way dependent upon ownership of the
bonds. No question of actual fraud or purpose to defraud the
revenue is presented.
Neither Lucas v. Earl, 281 U.
S. 111 , nor Burnet v. Leininger, 285 U.
S. 136 , supports petitioner's view. Blair v.
Commissioner, 300 U. S. 5 , 300 U. S. 11 -12,
shows that neither involved an unrestricted completed transfer of
property. Helvering v. Clifford, 309 U.
S. 331 , 309 U. S.
335 -336, decided after the opinion below, is much relied
upon by petitioner, but involved facts very different from those
now before us. There, no separate thing was absolutely transferred
and put beyond possible control by the transferor. The court
affirmed that Clifford, both conveyor and trustee,
"retained the substance of full enjoyment of all the rights
which previously he had in the property. . . . In substance, his
control over the corpus was in all essential respects the same
after the trust was created, as before. . . . With that control in
his hands, he would keep direct Page 311 U. S. 122 command over all that he needed to remain in substantially the
same financial situation as before."
The general principles approved in Blair v.
Commissioner, 300 U. S. 5 , are
applicable and controlling. The challenged judgment should be
affirmed.
THE CHIEF JUSTICE and MR. JUSTICE ROBERTS concur in this
opinion. | The Supreme Court held that the interest payments on the bonds were taxable income to the donor in the year they were paid, even though he had gifted the coupons to his son before they matured. The Court reasoned that the donor, as the owner of the bonds, was the one who earned or created the right to receive the interest income and thus should be taxed on it. This decision reinforced the principle that income tax laws aim to tax income to those who earn or create the right to receive it. |
Taxes | Spring City Foundry Co. v. Commissioner | https://supreme.justia.com/cases/federal/us/292/182/ | U.S. Supreme Court Spring City Foundry Co. v.
Commissioner, 292
U.S. 182 (1934) Spring City Foundry Co. v.
Commissioner Nos. 727 and 728 Argued April 3, 1934 Decided April 30,
1934 292
U.S. 182 CERTIORARI TO THE CIRCUIT COURT OF
APPEALS FOR THE SEVENTH
CIRCUIT Syllabus 1. Where accounts and income tax returns are on the accrual
basis, a debt owing the taxpayer for goods sold in the tax year is
returnable as gross income of that year even though ascertained in
that year to be partly worthless. Art. 35 of Regs. 45, under
Revenue Act of 1918, construed. P. 292 U. S.
184 .
2. Section 234(a)(5) of the Revenue Act of 1918 authorized the
deduction of a debt ascertained to be worthless and charged off
within the taxable year; it did not authorize the deduction of the
whole or a part of a debt which was not then ascertained to be
worthless, but was recoverable in part, the amount that was
recoverable being still uncertain. P. 292 U. S.
185 .
3. Section 234(a)(4) of the Revenue Act of 1918, providing for
deduction of "losses sustained during the taxable year," and
subdivision (5) of the same section providing for deduction of
debts ascertained to be worthless within the taxable year, are
mutually exclusive, and a debt excluded from deduction under (5)
cannot be deducted as a loss under (4). P. 292 U. S.
189 .
4. If a statute is ambiguous, administrative construction
followed since its enactment is of great weight. P. 292 U. S.
189 .
67 F.2d 385, 387, affirmed.
Certiorari, 291 U.S. 656, to review judgments reversing an order
of the Board of Tax Appeals, 25 B.T.A. 822, allowing deduction of
part of a debt in an income tax assessment for the year 1920. Both
the taxpayer and the Commissioner appealed to the court below. Page 292 U. S. 183 MR. CHIEF JUSTICE HUGHES delivered the opinion of the Court.
Petitioners for writs of certiorari were granted,
"limited to the question whether a debt ascertained to be
partially worthless in 1920 was deductible in that year under
either § 234(a)(4) or § 234(a)(5) [of the Revenue Act of 1918, 40
Stat. 1077] and to the question whether the debt was returnable as
taxable income in that year to the extent that it was then
ascertained to be worthless."
Petitioner kept its books during the year 1920 and filed its
income tax return for that year on the accrual basis. From March,
1920, to September, 1920, petitioner sold goods to the Cotta
Transmission Company for which the latter became indebted in the
amount of $39,983.27, represented by open account and unsecured
notes. In the latter part of 1920, the Cotta Company found itself
in financial straits. Efforts at settlement having failed, a
petition in bankruptcy was filed against the Company on December
23, 1920, and a receiver was appointed. In the spring of 1922, the
receiver paid to creditors, including petitioner, a dividend of 15
percent, and, in 1923, a second and final dividend of 12 1/2
percent
Petitioner charged off on its books the entire debt on December
28, 1920, and claimed this amount as a deduction in its income tax
return for that year. It included as income in its returns for 1922
and 1923 the dividends received in those years. The Commissioner
disallowed the amount claimed as a deduction in 1920, but allowed
a Page 292 U. S. 184 deduction in 1923 of $28,715.76, the difference between the full
amount of the debt and the two dividends.
On review of the deficiency assessed by the Commissioner for
1920, the Board of Tax Appeals found that the debt was not entirely
worthless at the time it was charged off. An offer had been made in
November, 1920, to purchase the assets of the debtor at 33 1/3
percent of the creditors' claims and the offer had been declined.
The Board concluded that, in view of all the circumstances,
including the probable expense of the receivership, the debt could
be regarded as uncollectible at the time of the charge-off, to the
extent of $28,715.76, and allowed a deduction for 1920 of that
amount. 25 B.T.A. 822. This ruling, contested by both the
Commissioner and the taxpayer, was reversed by the Circuit Court of
Appeals upon the ground that "there was in 1920 no authority for a
debt deduction unless the debt were worthless." 67 F.2d 385, 387.
In view of the conflict of decisions upon this point, [ Footnote 1 ] this Court granted writs of
certiorari limited as above stated.
1. Petitioner first contends that the debt, to the extent that
it was ascertained in 1920 to be worthless, was not returnable as
gross income in that year -- that is, apart from any question of
deductions, it was not to be regarded as taxable income at all. We
see no merit in this contention. Keeping accounts and making
returns on the accrual basis, as distinguished from the cash basis,
import that it is the right to receive, and not the actual receipt,
that determines the inclusion of the amount in gross income. When
the right to receive an amount becomes Page 292 U. S. 185 fixed, the right accrues. When a merchandizing concern makes
sales, its inventory is reduced, and a claim for the purchase price
arises. Article 35 of Regulations 45 under the Revenue Act of 1918
provided:
"In the case of a manufacturing, merchandising, or mining
business, 'gross income' means the total sales, less the cost of
goods sold, plus any income from investments and from incidental or
outside operations or sources. [ Footnote 2 ]"
On an accrual basis, the "total sales" to which the regulation
refers are manifestly the accounts receivable arising from the
sales, and these accounts receivable, less the cost of the goods
sold, figure in the statement of gross income. If such accounts
receivable become uncollectible, in whole or part, the question is
one of the deduction which may be taken according to the applicable
statute. See United States v. Anderson, 269 U.
S. 422 , 269 U. S.
440 -441; American National Co. v. United
States, 274 U. S. 99 , 274 U. S.
102 -103; Brown v. Helvering, 291 U.
S. 193 , 291 U. S. 199 ; Rouss v. Bowers, 30 F.2d 628, 629. That is the question
here. It is not altered by the fact that the claim of loss relates
to an item of gross income which had accrued in the same year.
2. Section 234(a)(5) of the Revenue Act of 1918 provided for the
deduction of worthless debts, in computing net income, as follows:
"Debts ascertained to be worthless and charged off within the
taxable year." Under this provision, the taxpayer could not
establish a right to the deduction simply by charging off the debt.
It must be ascertained to be worthless within the taxable year. In
this instance, in 1920, the debt was in suspense by reason of the
bankruptcy of the debtor, but it was not a total loss. What
eventually might be recovered upon it was uncertain, but recovery
to some extent was reasonably to be Page 292 U. S. 186 expected. The receiver continued the business, and substantial
amounts were subsequently realized for the creditors. In this view,
the Board of Tax Appeals decided that the petitioner did not
sustain a loss in 1920 "equal to the total amount of the debt," and
hence that the entire debt was not deductible in that year.
The question, then, is whether petitioner was entitled to a
deduction in 1920 for the portion of the debt which ultimately, on
the winding up in bankruptcy, proved to be uncollectible. Such a
deduction of a part of the debt, the Government contends and the
Circuit Court of Appeals held, the Act of 1918 did not authorize.
The Government points to the literal meaning of the words of the
statute, to the established administrative construction, and to the
action of the Congress in recognition of that construction.
"Worthless," says the Government, means destitute of worth, of no
value or use. This was the interpretation of the statute by the
Treasury Department. Article 151 of Regulations 45 (made applicable
to corporations by Article 561) provided that "An account merely
written down" is not deductible. [ Footnote 3 ] To the same effect was the corresponding
provision of the regulations under the Revenue Act of 1916.
[ Footnote 4 ] Page 292 U. S. 187 The right to charge off and deduct a portion of a debt where,
during the taxable year, the debt was found to be recoverable only
in part, was granted by the Revenue Act of 1921. By that Act, §
234(a)(5), 42 Stat. 254, was changed so as to read:
"Debts ascertained to be worthless and charged off within the
taxable year (or in the discretion of the Commissioner, a
reasonable addition to a reserve for bad debts), and, when
satisfied that a debt is recoverable only in part, the Commissioner
may allow such debt to be charged off in part."
We think that the fair import of this provision, as contrasted
with the earlier one, is that the Congress, recognizing the
significance of the existing provision and its appropriate
construction by the Treasury Department, deliberately intended a
change in the law. Shwab v. Doyle, 258 U.
S. 529 , 258 U. S. 536 ; Russell v. United States, 278 U.
S. 181 , 278 U. S. 188 .
This intent is shown clearly by the statement in the report of
the Committee on Ways and Means of the House of Representatives in
relation to the new provision. The Committee said explicitly:
"Under the present law, worthless debts are deductible in full or
not at all." [ Footnote 5 ] While
the change was struck out by the Finance Committee of the Senate,
the provision was restored on the floor of the Senate, and became a
law as proposed by the House. [ Footnote 6 ] Regulations 62, issued by the Treasury
Department Page 292 U. S. 188 under the Act of 1921, made a corresponding change in Article
151. The Treasury Department consistently adhered to the former
rule in dealing with deductions sought under the Act of 1918.
[ Footnote 7 ]
In numerous decisions the Board of Tax Appeals has taken the
same view of the provision of the Act of 1918. [ Footnote 8 ] See e.g., Appeal of Steel
Cotton Mill Co., 1 B.T.A. 299, 302; Western Casket Co. v.
Commissioner, 12 B.T.A. 792, 797; Toccoa Furniture Co. v.
Commissioner, 12 B.T.A. 804, 805. The contrary result in the
instant case was reached in deference to the opinion expressed by
the Circuit Court of Appeals of the Second Circuit in Sherman
& Bryan, Inc. v. Commissioner, 35 F.2d 713, 716, and by
the Court of Appeals of the District of Columbia in Davidson
Grocery Co. v. Lucas, 59 App.D.C. 176, 37 F.2d 806, 808 --
views which are opposed to those of the Circuit Courts of Appeals
of the Eighth Circuit in Minnehaha National Bank v.
Commissioner, 28 F.2d 763, 764, and of the Fifth Circuit in Collin County National Bank v. Commissioner, 48 F.2d 207,
208.
We are of opinion that § 234(a)(5) of the Revenue Act of 1918
authorized only the deduction of a debt ascertained to be worthless
and charged off within the taxable year; that it Page 292 U. S. 189 did not authorize the deduction of a debt which was not then
ascertained to be worthless but was recoverable in part, the amount
that was not recoverable being still uncertain. Here, in 1923, on
the winding up, the debt that then remained unpaid, after deducting
the dividends received, was ascertained to be worthless and the
Commissioner allowed deduction accordingly in that year.
3. Petitioner also claims the right of deduction under §
234(a)(4) of the Revenue Act of 1918 providing for the deduction of
"losses sustained during the taxable year and not compensated for
by insurance or otherwise." We agree with the decision below that
this subdivision and the following subdivision (5) relating to
debts are mutually exclusive. We so assumed, without deciding the
point, in Lewellyn v. Electric Reduction Co., 275 U.
S. 243 , 275 U. S. 246 .
The making of the specific provision as to debts indicates that
these were to be considered as a special class, and that losses on
debts were not to be regarded as falling under the preceding
general provision. What was excluded from deduction under
subdivision (5) cannot be regarded as allowed under subdivision
(4). If subdivision (4) could be considered as ambiguous in this
respect, the administrative construction which has been followed
from the enactment of the statute -- that subdivision (4) did not
refer to debts -- would be entitled to great weight. We see no
reason for disturbing that construction.
Petitioner insists that "good business practice" forbade the
inclusion in the taxpayer's assets of the account receivable in
question, or at least the part of it which was subsequently found
to be uncollectible. But that is not the question here. Questions
relating to allowable deductions under the income tax act are quite
distinct from matters which pertain to an appropriate showing
upon Page 292 U. S. 190 which credit is sought. It would have been proper for the
taxpayer to carry the debt in question in a suspense account
awaiting the ultimate determination of the amount that could be
realized upon it, and thus to indicate the status of the debt in
financial statements of the taxpayer's condition. But that proper
practice, in order to advise those from whom credit might be sought
of uncertainties in the realization of assets, does not affect the
construction of the statute, or make the debt deductible in 1920,
when the entire debt was not worthless, when the amount which would
prove uncollectible was not yet ascertained, rather than in 1923,
when that amount was ascertained and its deduction allowed.
We conclude that the ruling of the Circuit Court of Appeals was
correct. Judgment affirmed. [ Footnote 1 ] See Sherman & Bryan, Inc. v. Commissioner, 35 F.2d
713, 716; Davidson Grocery Co. v. Lucas, 59 App.D.C. 176,
37 F.2d 806; Murchison National Bank v. Grissom, 50 F.2d
1056. Compare Minnehaha National Bank v. Commissioner, 28
F.2d 763; Collin County National Bank v. Commissioner, 48
F.2d 207, 208.
[ Footnote 2 ]
This provision has been carried forward in the regulations under
the later revenue acts. See Regulations 77, Article
55.
[ Footnote 3 ]
Article 151 of Regulations 45 provided:
" Bad debts. -- An account merely written down or a debt
recognized as worthless prior to the beginning of the taxable year
is not deductible. Where all the surrounding and attendant
circumstances indicate that a debt is worthless and uncollectible
and that legal action to enforce payment would in all probability
not result in the satisfaction of execution on a judgment, a
showing of these facts will be sufficient evidence of the
worthlessness of the debt for the purpose of deduction. Bankruptcy
may or may not be an indication of the worthlessness of a debt, and
actual determination of worthlessness in such a case is sometimes
possible before, and at other times only when, a settlement in
bankruptcy shall have been had. . . ." See also Article 151 of Regulations 45 (Revised)
promulgated January 28, 1921.
[ Footnote 4 ]
Regulations 33 (Revised), Article 151.
[ Footnote 5 ]
H.Rep. No. 350, 67th Cong., 1st Sess., p. 11. The statement of
the Committee is:
"Under the present law, worthless debts are deductible in full
or not at all, but Section 214 would authorize the Commissioner to
permit a deduction for debts recoverable only in part, or, in his
discretion, to recognize a reserve for bad debts -- a method of
providing for bad debts much less subject to abuse than the method
of writing off bad debts required by the present law."
Section 214 related to deductions by individuals and contained
the same new provision as that inserted in § 234(a)(5), quoted in
the text, with respect to deductions by corporations.
[ Footnote 6 ]
S.Rep. No. 275, 67th Cong., 1st. Sess., p. 14; Cong.Rec. vol.
61, pt. 6, pp. 5814, 5939-5941, 6109, 6110; pt. 7, p. 6727.
[ Footnote 7 ]
In Treasury decision 3262, I-1, Cumulative Bulletin,
January-June, 1922, 152, 153, it was said:
"No deduction shall be allowed for the part of a debt
ascertained to be worthless and charged off prior to January 1,
1921, unless and until the debt is ascertained to be totally
worthless and is finally charged off or charged down to a nominal
amount, or the loss is determined in some other manner by a closed
and completed transaction." See also A.R.R. 7895, III-2, Cumulative Bulletin, July
December, 1924, 114, 115; A.R. 8226, III-2, Cumulative Bulletin,
116, 119-121.
[ Footnote 8 ]
The members of the Board of Tax Appeals who dissented in the
instant case pointed out that the Board had
"consistently held in at least twenty-three cases that, under
the Revenue Act of 1918, no deduction may be taken where a taxpayer
ascertains that a debt is recoverable only in part."
25 B.T.A. p. 834. | Question: Was a debt ascertained to be partially worthless in 1920 deductible in that year under either § 234(a)(4) or § 234(a)(5) of the Revenue Act of 1918?
Verdict: Yes, a debt owing to the taxpayer for goods sold in the tax year is returnable as gross income for that year, even if only partially worthless. However, Section 234(a)(5) does not authorize the deduction of a debt that is not wholly worthless and still recoverable in part. Section 234(a)(4) and Section 234(a)(5) are mutually exclusive, so a debt excluded from deduction under (5) cannot be deducted as a loss under (4). |
Taxes | Dixie Pine Products Co. v. Commissioner | https://supreme.justia.com/cases/federal/us/320/516/ | U.S. Supreme Court Dixie Pine Products Co. v.
Commissioner, 320
U.S. 516 (1944) Dixie Pine Products Co. v.
Commissioner of Internal Revenue No. 84 Argued December 14, 15,
1943 Decided January 3,
1944 320
U.S. 516 CERTIORARI TO THE CIRCUIT COURT OF
APPEALS FOR THE FIFTH
CIRCIT Syllabus 1. A taxpayer who kept his books on the accrual basis deducted
on his income tax returns for 1937 state taxes assessed against him
during the taxable year. He was contesting in the state courts his
liability for the taxes, was later adjudged exempt therefrom, and
never actually paid them. Held that, under the Revenue Act
of 1936, the deduction was properly disallowed. P. 320 U. S.
519 .
2. The Board of Tax Appeals applied the correct rule of law in
this case, and the court below properly refused to disturb its
determination. Dobson v. Commissioner, ante, p. 320 U. S. 489 . P. 320 U. S.
519 .
134 F.2d 273 affirmed.
Certiorari, post, p. 720, to review the affirmance of a
decision of the Board of Tax Appeals, 45 B.T.A. 286, which
sustained the Commissioner's determination of a tax deficiency. Page 320 U. S. 517 MR. JUSTICE ROBERTS delivered the opinion of the Court.
The question presented concerns the propriety of the
respondent's disallowance of a deduction from income which
petitioner took in its federal income tax return for 1937.
In 1936, the Mississippi taxing authorities declared that a
solvent used by petitioner in its business was gasoline within the
meaning of a state law defining gasoline and laying a tax upon its
receipt and use. Accordingly, a tax was assessed against the
petitioner with respect to the receipt and use of the solvent in
1936. Petitioner paid the tax, and, in the same year, brought suit
against the Motor Vehicle Commissioner of Mississippi alleging that
the solvent was not within the comprehension of the state law, and
that the Commissioner should be temporarily and permanently
enjoined from future collections of tax in respect of it. The
Commissioner's demurrer to the complaint was sustained but, on
appeal, the Supreme Court of Mississippi decided that, on the
pleadings, the solvent was not within the definition of gasoline
contained in the state statute. After this decision, petitioner
denied that it owed, and ceased and refused to pay, any gasoline
tax on solvent used by it.
In December, 1937, on advice of counsel, petitioner (which kept
its books and filed its federal income tax returns on the accrual
basis) made book entries accruing gasoline tax assessed by the
Motor Vehicle Commissioner in 1937. The actual accrual entries were
made sometime between January 1 and March 15, 1938, as of December
31, Page 320 U. S. 518 1937, in the amount of approximately $21,000, and petitioner
deducted this amount from income in making its 1937 federal income
tax return, although the sum had not been, and never was, paid.
In December, 1938, petitioner and the Attorney General of
Mississippi filed an agreed statement of facts in the state court
suit, and, in the same month, the trial judge entered a final
decree perpetually enjoining the Motor Vehicle Commissioner from
assessing gasoline tax on the solvent used by petitioner. This
decree was subsequently affirmed by the Supreme Court of
Mississippi. In its 1938 federal income tax return, petitioner, by
way of compensating entry, included the sum of $21,000 as income
and as a recovery, in view of the Mississippi trial court's decree
of December, 1938.
The sole question is whether the Commissioner was right in
disallowing the deduction for the tax year 1937. The Board of Tax
Appeals held that he was, [ Footnote
1 ] and the court below affirmed its decision. [ Footnote 2 ] We took the case because of a
conceded conflict in principle with decisions in other circuits.
[ Footnote 3 ]
Section 23(c) of the Revenue Act of 1936 [ Footnote 4 ] permits the deduction from gross
income of taxes "paid or accrued within the taxable year." Sections
41, 42, and 43 make provision for tax accounting on the accrual
basis, where the taxpayer keeps his books on that principle,
provided his method clearly reflects his income in any taxable
year.
The provisions of the Revenue Act of 1936 worked no significant
change over earlier Acts respecting the permissible basis of
calculating annual taxable income. The applicable principles of
accounting on the accrual basis had Page 320 U. S. 519 been adduced and applied by the Board of Tax Appeals in numerous
decisions. [ Footnote 5 ] It has
never been questioned that a taxpayer who accounts on the accrual
basis may, and should, deduct from gross income a liability which
really accrues in the taxable year. [ Footnote 6 ] It has long been held that, in order truly to
reflect the income of a given year, all the events must occur in
that year which fix the amount and the fact of the taxpayer's
liability for items of indebtedness deducted though not paid,
[ Footnote 7 ] and this cannot be
the case where the liability is contingent and is contested by the
taxpayer. [ Footnote 8 ] Here,
the taxpayer was strenuously contesting liability in the courts
and, at the same time deducting the amount of the tax, on the
theory that the state's exaction constituted a fixed and certain
liability. This it could not do. It must, in the circumstances,
await the event of the state court litigation, and might claim a
deduction only for the taxable year in which its liability for the
tax was finally adjudicated. [ Footnote 9 ]
To this effect are the decisions of the Board of Tax Appeals in
numerous cases, and the instant decision was in line with earlier
rulings as to proper tax accounting practice. Since the Board
applied the correct rule of law, its determination that the item in
question was not properly deducted on the accrual basis is entitled
to the finality indicated by Dobson v. Helvering, ante, p. 320 U. S. 489 . The
court below properly refused to disturb the Board's
determination. Affirmed. [ Footnote 1 ]
45 B.T.A. 286.
[ Footnote 2 ]
134 F.2d 273.
[ Footnote 3 ] Commissioner v. Central United Nat. Bank, 99 F.2d 568; J. A. Dougherty's Sons v. Commissioner, 121 F.2d 700; Davies' Estate v. Commissioner, 126 F.2d 294.
[ Footnote 4 ]
49 Stat. 1648, 1659.
[ Footnote 5 ] See Lucas v. American Code Co., 1 and S. 445, notes 1
and | 1 and S.
445fn3|>3.
[ Footnote 6 ] United States v. Anderson, 269 U.
S. 422 ; American National Co. v. United States, 274 U. S. 99 ; Niles-Bement-Pond Co. v. United States, 281 U.
S. 357 ; Aluminum Castings Co. v. Routzahn, 282 U. S. 92 ; cf. Continental Tie & Lumber Co. v. United States, 286 U. S. 290 .
[ Footnote 7 ] United States v. Anderson, supra, 269 U. S.
441 .
[ Footnote 8 ] Lucas v. American Code Co., supra, 280 U. S.
450 -451.
[ Footnote 9 ] Cf. Brown v. Helvering, 291 U.
S. 193 . | Dixie Pine Products Co. v. Commissioner (1944): The Supreme Court held that a taxpayer using the accrual accounting method could not deduct a state tax expense from their federal income tax return while simultaneously contesting their liability for that tax in state courts. The Court reasoned that since the taxpayer's liability for the tax was uncertain due to the ongoing litigation, all the events necessary to establish the amount and fact of the liability had not occurred, as required for proper accrual accounting. Therefore, the taxpayer could only claim a deduction for the taxable year in which their liability for the tax was finally determined. |
Taxes | Welch v. Helvering | https://supreme.justia.com/cases/federal/us/290/111/ | U.S. Supreme Court Welch v. Helvering, 290
U.S. 111 (1933) Welch v. Helvering No. 33 Argued October 19,
1933 Decided November 6,
1933 290
U.S. 111 CERTIORARI TO THE CIRCUIT COURT OF
APPEALS FOR THE EIGHTH
CIRCUIT Syllabus 1. What are "ordinary and necessary expenses" in carrying on a
business, within the meaning of provisions of Revenue Acts allowing
deductions of such expenses in computing net income, must be
determined by conduct and forms of speech prevailing in the
business world. P. 290 U. S.
113 .
2. The Court cannot say, in the absence of proof and as a matter
of judicial knowledge, that payments on the debts of a corporation,
made by its former officer after its discharge in bankruptcy and
for the purpose of strengthening his own business standing and
credit were ordinary and necessary expenses of his business. P. 290 U. S.
115 . Page 290 U. S. 112 3. A finding by the Commissioner of Internal Revenue that such
payments are not ordinary and necessary expenses of a taxpayer, and
hence not deductible under the revenue acts and regulations in
computing his net income, is presumptively correct. P. 290 U. S.
115 .
63 F.2d 976 affirmed.
Certiorari, 289 U.S. 720, to review a judgment of the Circuit
Court of Appeals which affirmed the action of the Board of Tax
Appeals, 25 B.T.A. 117, disallowing certain deductions in an income
tax return.
MR. JUSTICE CARDOZO delivered the opinion of the Court.
The question to be determined is whether payments by a taxpayer,
who is in business as a commission agent, are allowable deductions
in the computation of his income if made to the creditors of a
bankrupt corporation in an endeavor to strengthen his own standing
and credit.
In 1922, petitioner was the secretary of the E. L. Welch
Company, a Minnesota corporation, engaged in the grain business.
The company was adjudged an involuntary bankrupt, and had a
discharge from its debts. Thereafter the petitioner made a contract
with the Kellogg Company to purchase grain for it on a commission.
In order to reestablish his relations with customers whom he had
known when acting for the Welch Company and to solidify his credit
and standing, he decided to pay the debts of the Welch business so
far as he was able. In fulfillment of that resolve, he made
payments of substantial amounts during five successive years. In
1924, the commissions Page 290 U. S. 113 were $18,028.20, the payments $3,975.97; in 1925, the
commissions $31,377.07, the payments $11,968.20; in 1926, the
commissions $20,925.25, the payments $12,815.72; in 1927, the
commissions $22,119.61, the payments $7,379.72, and in 1928, the
commissions $26,177.56, the payments $11,068.25. The Commissioner
ruled that these payments were not deductible from income as
ordinary and necessary expenses, but were rather in the nature of
capital expenditures, an outlay for the development of reputation
and goodwill. The Board of Tax Appeals sustained the action of the
Commissioner (25 B.T.A. 117), and the Court of Appeals for the
Eighth Circuit affirmed. 63 F.2d 976. The case is here on
certiorari.
"In computing net income, there shall be allowed as deductions .
. . all the ordinary and necessary expenses paid or incurred during
the taxable year in carrying on any trade or business."
Revenue Act of 1924, c. 234, 43 Stat. 253, 269, § 214, 26 U.S.C.
§ 955; Revenue Act of 1926, c. 27, 44 Stat. 9, 26, § 214, 26
U.S.C.App. § 955; Revenue Act of 1928, c. 852, 45 Stat. 791, 799, §
23(a); cf. Treasury Regulations 65, Arts. 101, 292, under
the Revenue Act of 1924, and similar regulations under the acts of
1926 and 1928.
We may assume that the payments to creditors of the Welch
Company were necessary for the development of the petitioner's
business, at least in the sense that they were appropriate and
helpful. McCulloch v.
Maryland , 4 Wheat. 316. He certainly thought they
were, and we should be slow to override his judgment. But the
problem is not solved when the payments are characterized as
necessary. Many necessary payments are charges upon capital. There
is need to determine whether they are both necessary and ordinary.
Now, what is ordinary, though there must always be a strain of
constancy within it, is nonetheless a variable affected by time and
place Page 290 U. S. 114 and circumstance. "Ordinary" in this context does not mean that
the payments must be habitual or normal in the sense that the same
taxpayer will have to make them often. A lawsuit affecting the
safety of a business may happen once in a lifetime. The counsel
fees may be so heavy that repetition is unlikely. Nonetheless, the
expense is an ordinary one because we know from experience that
payments for such a purpose, whether the amount is large or small,
are the common and accepted means of defense against attack. Cf. Kornhauser v. United States, 276 U.
S. 145 . The situation is unique in the life of the
individual affected, but not in the life of the group, the
community, of which he is a part. At such times, there are norms of
conduct that help to stabilize our judgment, and make it certain
and objective. The instance is not erratic, but is brought within a
known type.
The line of demarcation is now visible between the case that is
here and the one supposed for illustration. We try to classify this
act as ordinary or the opposite, and the norms of conduct fail us.
No longer can we have recourse to any fund of business experience,
to any known business practice. Men do at times pay the debts of
others without legal obligation or the lighter obligation imposed
by the usages of trade or by neighborly amenities, but they do not
do so ordinarily, not even though the result might be to heighten
their reputation for generosity and opulence. Indeed, if language
is to be read in its natural and common meaning ( Old Colony R.
Co. v. Commissioner, 284 U. S. 552 , 284 U. S. 560 ; Woolford Realty Co. v. Rose, 286 U.
S. 319 , 286 U. S.
327 ), we should have to say that payment in such
circumstances, instead of being ordinary, is in a high degree
extraordinary. There is nothing ordinary in the stimulus evoking
it, and none in the response. Here, indeed, as so often in other
branches of the law, the decisive distinctions are those of degree,
and not of kind. Page 290 U. S. 115 One struggles in vain for any verbal formula that will supply a
ready touchstone. The standard set up by the statute is not a rule
of law; it is rather a way of life. Life in all its fullness must
supply the answer to the riddle.
The Commissioner of Internal Revenue resorted to that standard
in assessing the petitioner's income, and found that the payments
in controversy came closer to capital outlays than to ordinary and
necessary expenses in the operation of a business. His ruling has
the support of a presumption of correctness, and the petitioner has
the burden of proving it to be wrong. Wickwire v.
Reinecke, 275 U. S. 101 ; Jones v. Commissioner, 38 F.2d 550, 552. Unless we can say
from facts within our knowledge that these are ordinary and
necessary expenses according to the ways of conduct and the forms
of speech prevailing in the business world, the tax must be
confirmed. But nothing told us by this record or within the sphere
of our judicial notice permits us to give that extension to what is
ordinary and necessary. Indeed, to do so would open the door to
many bizarre analogies. One man has a family name that is clouded
by thefts committed by an ancestor. To add to this own standing he
repays the stolen money, wiping off, it may be, his income for the
year. The payments figure in his tax return as ordinary expenses.
Another man conceives the notion that he will be able to practice
his vocation with greater ease and profit if he has an opportunity
to enrich his culture. Forthwith the price of his education becomes
an expense of the business, reducing the income subject to
taxation. There is little difference between these expenses and
those in controversy here. Reputation and learning are akin to
capital assets, like the goodwill of an old partnership. Cf.
Colony Coal & Coke Corp. v. Commissioner, 52 F.2d 923. For
many, they are the only tools with which to hew a pathway Page 290 U. S. 116 to success. The money spent in acquiring them is well and wisely
spent. It is not an ordinary expense of the operation of a
business.
Many cases in the federal courts deal with phases of the problem
presented in the case at bar. To attempt to harmonize them would be
a futile task. They involve the appreciation of particular
situations at times with border-line conclusions. Typical
illustrations are cited in the margin. * The decree should be Affirmed. * Ordinary expenses: Commissioner v. People's Pittsburgh
Trust Co., 60 F.2d 187, expenses incurred in the defense of a
criminal charge growing out of the business of the taxpayer; American Rolling Mill Co. v. Commissioner, 41 F.2d 314,
contributions to a civic improvement fund by a corporation
employing half of the wage earning population of the city, the
payments being made, not for charity, but to add to the skill and
productivity of the workmen ( cf. the decisions collated in
30 Columbia Law Review 1211, 1212, and the distinctions there
drawn); Corning Glass Works v. Lucas, 59 App.D.C. 168, 37
F.2d 798, donations to a hospital by a corporation whose employees
with their dependents made up two-thirds of the population of the
city; Harris & Co. v. Lucas, 48 F.2d 187, payments of
debts discharged in bankruptcy, but subject to be revived by force
of a new promise. Cf. Lucas v. Ox Fibre Brush Co., 281 U. S. 115 ,
where additional compensation, reasonable in amount, was allowed to
the officers of a corporation for services previously rendered.
Not ordinary expenses: Hubinger v. Commissioner, 36
F.2d 724, payments by the taxpayer for the repair of fire damage,
such payments being distinguished from those for wear and tear; Lloyd v. Commissioner, 55 F.2d 842, counsel fees incurred
by the taxpayer, the president of a corporation, in prosecuting a
slander suit to protect his reputation and that of his business; One Hundred Five West Fifty-Fifth Street v. Commissioner, 42 F.2d 849, and Blackwell Oil & Gas Co. v.
Commissioner, 60 F.2d 257, gratuitous payments to stockholders
in settlement of disputes between them, or to assume the expense of
a lawsuit in which they had been made defendants; White v.
Commissioner, 61 F.2d 726, payments in settlement of a lawsuit
against a member of a partnership, the effect being to enable him
to devote his undivided efforts to the partnership business and
also to protect its credit. | In Welch v. Helvering (1933), the US Supreme Court ruled that payments made by a taxpayer to the creditors of a bankrupt corporation in an attempt to strengthen their business standing and credit are not deductible as "ordinary and necessary expenses" when calculating their income tax. The Court defined "ordinary and necessary expenses" as those generally recognized and accepted in the business world, and found that the taxpayer's payments were more akin to capital expenditures for reputation and goodwill. This decision affirmed the Commissioner of Internal Revenue's determination that such payments are not deductible under the revenue acts and regulations. |
Taxes | U.S. v. Lewis | https://supreme.justia.com/cases/federal/us/340/590/ | U.S. Supreme Court United States v. Lewis, 340
U.S. 590 (1951) United States v.
Lewis No. 347 Argued March 2, 1951 Decided March 26,
1951 340
U.S. 590 CERTIORARI TO THE COURT OF
CLAIMS Syllabus In his 1944 income tax return, respondent reported $22,000
received that year as an employee's bonus, which he claimed in good
faith and used unconditionally as his own. In subsequent
litigation, it was decided that the bonus had been computed
improperly, and, under compulsion of a judgment, respondent
returned $11,000 to his employer in 1946. He then sued in the Court
of Claims for refund of an alleged overpayment of his 1944 income
tax. Held: under the "claim of right" doctrine announced in North American Oil v. Burnet, 286 U.
S. 417 , the entire $22,000 was income in 1944, and
respondent was not entitled to recompute his 1944 tax. Pp. 340 U. S.
590 -592.
117 Ct.Cl. 336, 91 F. Supp. 1017, reversed.
The case is stated in the opinion. The judgment below is reversed, p. 340 U. S.
592 .
MR. JUSTICE BLACK delivered the opinion of the Court.
Respondent Lewis brought this action in the Court of Claims
seeking a refund of an alleged overpayment of his 1944 income tax.
The facts found by the Court of Claims are: in his 1944 income tax
return, respondent reported about $22,000 which he had received
that year as an employee's bonus. As a result of subsequent
litigation in a state court, however, it was decided that
respondent's bonus had been improperly computed; under compulsion
of the state court's judgment, he returned approximately $11,000 to
his employer. Until payment Page 340 U. S. 591 of the judgment in 1946, respondent had at all times claimed and
used the full $22,000 unconditionally as his own, in the good faith
though "mistaken" belief that he was entitled to the whole
bonus.
On the foregoing facts, the Government's position is that
respondent's 1944 tax should not be recomputed, but that respondent
should have deducted the $11,000 as a loss in his 1946 tax return. See G.C.M. 16730, XV-1 Cum.Bull. 179 (1936). The Court of
Claims, however, relying on its own case, Greenwald v. United
States, 102 Ct.Cl. 272, 57 F. Supp. 569, held that the excess
bonus received "under a mistake of fact" was not income in 1944,
and ordered a refund based on a recalculation of that year's tax.
117 Ct.Cl. 336, 91 F. Supp. 1017, 1022. We granted certiorari, 340
U.S. 903, because this holding conflicted with many decisions of
the courts of appeals, see, e.g., Haberkorn v. United
States, 173 F.2d 587, and with principles announced in North American Oil Consolidated v. Burnet, 286 U.
S. 417 .
In the North American Oil case, we said:
"If a taxpayer receives earnings under a claim of right and
without restriction as to its disposition, he has received income
which he is required to return, even though it may still be claimed
that he is not entitled to retain the money, and even though he may
still be adjudged liable to restore its equivalent."
286 U.S. at 286 U. S. 424 .
Nothing in this language permits an exception merely because a
taxpayer is "mistaken" as to the validity of his claim. Nor has the
"claim of right" doctrine been impaired, as the Court of Claims
stated, by Freuler v. Helvering, 291 U. S.
35 , or Commissioner v. Wilcox, 327 U.
S. 404 . The Freuler case involved an entirely
different section of the Internal Revenue Code, and its holding is
inapplicable here. 291 U.S. at 291 U. S. 43 .
And in Commissioner v. Wilcox, supra, we held that
receipts from embezzlement did not constitute income,
distinguishing North American Oil on the ground Page 340 U. S. 592 that an embezzler asserts no " bona fide legal or
equitable claim." 327 U.S. at 327 U. S.
408 .
Income taxes must be paid on income received (or accrued) during
an annual accounting period. Cf. I.R.C. §§ 41, 42, and
see Burnet v. Sanford & Brooks Co., 282 U.
S. 359 , 282 U. S. 363 .
The "claim of right" interpretation of the tax laws has long been
used to give finality to that period, and is now deeply rooted in
the federal tax system. See cases collected in 2 Mertens,
Law of Federal Income Taxation, § 12.103. We see no reason why the
Court should depart from this well settled interpretation merely
because it results in an advantage or disadvantage to a taxpayer. * Reversed. * It has been suggested that it would be more "equitable" to
reopen respondent's 1944 tax return. While the suggestion might
work to the advantage of this taxpayer, it could not be adopted as
a general solution, because, in many cases, the three-year statute
of limitations would preclude recovery. I.R.C. § 322(b).
MR. JUSTICE DOUGLAS, dissenting.
The question in this case is not whether the bonus had to be
included in 1944 income for purposes of the tax. Plainly it should
have been, because the taxpayer claimed it as of right. Some years
later, however, it was judicially determined that he had no claim
to the bonus. The question is whether he may then get back the tax
which he paid on the money.
Many inequities are inherent in the income tax. We multiply them
needlessly by nice distinctions which have no place in the
practical administration of the law. If the refund were allowed,
the integrity of the taxable year would not be violated. The tax
would be paid when due, but the government would not be permitted
to maintain the unconscionable position that it can keep the tax
after it is shown that payment was made on money which was not
income to the taxpayer. | The Supreme Court held that the entire $22,000 bonus was taxable income in 1944, and the respondent could not recompute his 1944 tax after returning part of the bonus in 1946 due to the "claim of right" doctrine. |
Taxes | Hort v. Commissioner | https://supreme.justia.com/cases/federal/us/313/28/ | U.S. Supreme Court Hort v. Commissioner, 313 U.S.
28 (1941) Hort v. Commissioner No. 517 Argued March 7, 1941 Decided March 31,
1941 313 U.S.
28 CERTIORARI TO THE CIRCUIT COURT OF
APPEALS FOR THE SECOND
CIRCUIT Syllabus 1. An amount received by a lessor in consideration of the
cancellation of a lease of real estate is income taxable to him
under § 22(a) of the Revenue Act of 1932, and must be reported as
gross income in its entirety. P. 313 U. S.
30 .
2. Although the amount so received be less than the difference
between the present value of the unmatured rental payments and the
fair rental value of the property for the unexpired period of the
lease, there is no loss deductible under § 23(e) of the Act. P. 313 U. S.
32 .
3. Even though the lease be regarded as "property," the
consideration received for its cancellation is not, for the
purposes of the Revenue Act of 1932, a return of capital. P. 313 U. S.
31 .
112 F.2d 167 affirmed.
Certiorari, 311 U.S. 641, to review the affirmance of a decision
of the Board of Tax Appeals, 39 B.T.A. 922, sustaining the
determination of a deficiency in income tax.
MR. JUSTICE MURPHY delivered the opinion of the Court.
We must determine whether the amount petitioner received as
consideration for cancellation of a lease of realty in New York
City was ordinary gross income as Page 313 U. S. 29 defined in § 22(a) of the Revenue Act of 1932, 47 Stat. 169,
178, and whether, in any event, petitioner sustained a loss through
cancellation of the lease which is recognized in § 23(e) of the
same Act, 47 Stat. 169, 180.
Petitioner acquired the property, a lot and ten-story office
building, by devise from his father in 1928. At the time he became
owner, the premises were leased to a firm which had sublet the main
floor to the Irving Trust Co. In 1927, five years before the head
lease expired, the Irving Trust Co. and petitioner's father
executed a contract in which the latter agreed to lease the main
floor and basement to the former for a term of fifteen years at an
annual rental of $25,000, the term to commence at the expiration of
the head lease.
In 1933, the Irving Trust Co. found it unprofitable to maintain
a branch in petitioner's building. After some negotiations,
petitioner and the Trust Co. agreed to cancel the lease in
consideration of a payment to petitioner of $140,000. Petitioner
did not include this amount in gross income in his income tax
return for 1933. On the contrary, he reported a loss of $21,494.75
on the theory that the amount he received as consideration for the
cancellation was $21,494.75 less than the difference between the
present value of the unmatured rental payments and the fair rental
value of the main floor and basement for the unexpired term of the
lease. He did not deduct this figure, however, because he reported
other losses in excess of gross income.
The Commissioner included the entire $140,000 in gross income,
disallowed the asserted loss, made certain other adjustments not
material here, and assessed a deficiency. The Board of Tax Appeals
affirmed. 39 B.T.A. 922. The Circuit Court of Appeals affirmed per
curiam on the authority of Warren Service Corp. v.
Helvering, 110 F.2d 723. 112 F.2d 167. Because of conflict
with Commissioner v. Langwell Real Estate Corp., 47 F.2d
841, we Page 313 U. S. 30 granted certiorari limited to the question whether,
"in computing net gain or loss for income tax purposes, a
taxpayer [can] offset the value of the lease canceled against the
consideration received by him for the cancellation."
311 U.S. 641.
Petitioner apparently contends that the amount received for
cancellation of the lease was capital, rather than ordinary income,
and that it was therefore subject to §§ 101, 111-113, and 117, 47
Stat. 169, 191, 195-202, 207, which govern capital gains and
losses. Further, he argues that, even if that amount must be
reported as ordinary gross income, he sustained a loss which $23(e)
authorizes him to deduct. We cannot agree.
The amount received by petitioner for cancellation of the lease
must be included in his gross income in its entirety. Section
22(a), copied in the margin, [ Footnote 1 ] expressly defines gross income to include
"gains, profits, and income derived from . . . rent, . . . or gains
or profits and income from any source whatever." Plainly this
definition reached the rent paid prior to cancellation, just as it
would have embraced subsequent payments if the lease had never been
canceled. It would have included a prepayment of the discounted
value of unmatured rental payments whether received at the
inception of the lease or at any time thereafter. Similarly, it
would have extended to the proceeds of a suit to recover damages
had the Irving Trust Co. breached the lease instead Page 313 U. S. 31 of concluding a settlement. Compare United States v. Safety
Car Heating Co., 297 U. S. 88 ; Burnet v. Sanford & Brooks Co., 282 U.
S. 359 . That the amount petitioner received resulted
from negotiations ending in cancellation of the lease, rather than
from a suit to enforce it, cannot alter the fact that basically the
payment was merely a substitute for the rent reserved in the lease.
So far as the application of $22(a) is concerned, it is immaterial
that petitioner chose to accept an amount less than the strict
present value of the unmatured rental payments, rather than to
engage in litigation, possibly uncertain and expensive.
The consideration received for cancellation of the lease was not
a return of capital. We assume that the lease was "property,"
whatever that signifies abstractly. Presumably the bond in Helvering v. Horst, 311 U. S. 112 , and
the lease in Helvering v. Bruun, 309 U.
S. 461 , were also "property," but the interest coupon in Horst and the building in Bruun nevertheless were
held to constitute items of gross income. Simply because the lease
was "property," the amount received for its cancellation was not a
return of capital, quite apart from the fact that "property" and
"capital" are not necessarily synonymous in the Revenue Act of 1932
or in common usage. Where, as in this case, the disputed amount was
essentially a substitute for rental payments which § 22(a)
expressly characterizes as gross income, it must be regarded as
ordinary income, and it is immaterial that, for some purposes, the
contract creating the right to such payments may be treated as
"property" or "capital."
For the same reasons, that amount was not a return of capital
because petitioner acquired the lease as an incident of the realty
devised to him by his father. Theoretically, it might have been
possible in such a case to value realty and lease separately, and
to label each a capital asset. Compare Maass v. Higgins, 312 U. S. 443 ; Page 313 U. S. 32 Appeal of Farmer, 1 B.T.A. 711. But that would not have
converted into capital the amount petitioner received from the
Trust Co., since § 22(b)(3) [ Footnote 2 ] of the 1932 Act, 47 Stat. 169, 178, would have
required him to include in gross income the rent derived from the
property, and that section, like § 22(a), does not distinguish
rental payments and a payment which is clearly a substitute for
rental payments.
We conclude that petitioner must report as gross income the
entire amount received for cancellation of the lease, without
regard to the claimed disparity between that amount and the
difference between the present value of the unmatured rental
payments and the fair rental value of the property for the
unexpired period of the lease. The cancellation of the lease
involved nothing more than relinquishment of the right to future
rental payments in return for a present substitute payment and
possession of the leased premises. Undoubtedly it diminished the
amount of gross income petitioner expected to realize, but, to that
extent, he was relieved of the duty to pay income tax. Nothing in §
23(e) [ Footnote 3 ] indicates
that Page 313 U. S. 33 Congress intended to allow petitioner to reduce ordinary income
actually received and reported by the amount of income he failed to
realize. See Warren Service Corp. v. Helvering, supra; Josey v.
Commissioner, 104 F.2d 453; Tiscornia v.
Commissioner, 95 F.2d 678; Farrelly Walsh, Inc. v.
Commissioner, 13 B.T.A. 923; Georcke Co. v. Commissioner, 7 B.T.A.
860; Merckens v. Commissioner, 7 B.T.A. 32. Compare United
States v. Safety Car Heating Co., supra; Voliva v.
Commissioner, 36 F.2d 212; Appeal of Denholm & McKay Co.,
2 B.T.A. 444. We may assume that petitioner was injured insofar as
the cancellation of the lease affected the value of the realty. But
that would become a deductible loss only when its extent had been
fixed by a closed transaction. Regulations No. 77, Art. 171, p. 46; United States v. White Dental Mfg. Co., 274 U.
S. 398 .
The judgment of the Circuit Court of Appeals is affirmed.
[ Footnote 1 ]
Sec. 22(a).
"'Gross income' includes gains, profits, and income derived from
salaries, wages, or compensation for personal service, of whatever
kind and in whatever form paid, or from professions, vocations,
trades, businesses, commerce, or sales, or dealings in property,
whether real or personal, growing out of the ownership or use of or
interest in such property; also from interest, rent, dividends,
securities, or the transaction of any business carried on for gain
or profit, or gains or profits and income derived from any source
whatever."
[ Footnote 2 ]
Sec. 22(b).
"The following items shall not be included in gross income and
shall be exempt from taxation under this title:"
" * * * *" "(3) The value of property acquired by gift, bequest, devise, or
inheritance (but the income from such property shall be included in
gross income)."
[ Footnote 3 ]
Sec. 23(e).
"Subject to the limitations provided in subsection (r) of this
section, in the case of an individual, losses sustained during the
taxable year, and not compensated for by insurance or otherwise
[shall be deductible from gross income] --"
"(1) if incurred in trade or business; or"
"(2) if incurred in any transaction entered into for profit,
though not connected with the trade or business; or"
"(3) of property not connected with the trade or business, if
the loss arises from fires, storms, shipwreck, or other casualty,
or from theft. No loss shall be allowed as a deduction under this
paragraph if, at the time of the filing of the return, such loss
has been claimed as a deduction for estate tax purposes in the
estate tax return." | Here is a summary of the Supreme Court case, Hort v. Commissioner (1941):
Issue:
Whether an amount received by a lessor for the cancellation of a lease is taxable as gross income and whether the lessor can claim a deductible loss.
Holding:
- Yes, an amount received by a lessor in exchange for the cancellation of a lease is taxable as gross income under Section 22(a) of the Revenue Act of 1932.
- No, the lessor cannot claim a deductible loss under Section 23(e) of the Revenue Act of 1932, even if the amount received is less than the expected rental payments.
Facts:
- Petitioner acquired a property (a lot and office building) by inheritance in 1928.
- The property was leased to a firm, with the main floor sublet to the Irving Trust Co.
- In 1927, petitioner's father and the Irving Trust Co. agreed to a new lease for the main floor and basement for 15 years at an annual rental of $25,000, starting in 1932.
- In 1933, the Irving Trust Co. wanted to cancel the lease and negotiated a cancellation payment of $140,000 to the petitioner.
- Petitioner did not include this amount in gross income and instead reported a loss, arguing that the cancellation payment was less than the expected rental payments.
Reasoning:
- The amount received by the petitioner for the cancellation of the lease is taxable as gross income under Section 22(a) of the Revenue Act of 1932, which defines gross income broadly.
- The cancellation payment is not a return of capital, and the lease cannot be regarded as "property" for the purposes of the Revenue Act.
- While the cancellation of the lease may have diminished the petitioner's expected gross income, it did not result in a deductible loss under Section 23(e) because there was no closed transaction fixing the extent of the loss. |
Taxes | Blair v. Commissioner | https://supreme.justia.com/cases/federal/us/300/5/ | U.S. Supreme Court Blair v. Commissioner, 300 U.S. 5 (1937) Blair v. Commissioner of Internal
Revenue No. 247 Argued January 5,
1937 Decided February 1,
1937 300 U.S.
5 CERTIORARI TO THE CIRCUIT COURT OF
APPEALS FOR THE SEVENTH
CIRCUIT Syllabus 1. A judgment of the Circuit Court of Appeals holding a
beneficiary named in a trust taxable upon trust income
notwithstanding assignments previously made by him, and basing this
conclusion upon the ground that, under the local law, the trust was
a spendthrift trust giving the beneficiary no power to assign, held inapplicable as res judicata in favor of the
Government in proceedings to collect taxes from the same person,
for subsequent years, the situation having been changed meanwhile
by a decision of the state court construing the trust and upholding
the assignments. Tait v. Western Maryland Ry. Co., 289 U. S. 620 ,
distinguished. P. 300 U. S. 8 .
2. Whether a testamentary trust is a spendthrift trust barring
the voluntary alienation of his interest by the beneficiary
depends Page 300 U. S. 6 upon the law of the State in which the donor resided and in
which the trust was created and the property situated. P. 300 U. S. 9 .
3. A decision by the intermediate appellate court of Illinois
upholding the right of the life beneficiary of a trust to assign
parts of his interest, in suit brought by the trustees for
instructions and impleading the beneficiary and his assignees, held conclusive of the validity of the assignments. P. 300 U. S. 10 .
4. In the general application of the Revenue Acts, income tax
liability is attached to ownership. P. 300 U. S. 11 .
5. Provisions of the Revenue Acts (1921, § 219(a)(d); 1924 and
1926, § 219(a)(b); 1928, § 162(a)(b)) imposing upon the beneficiary
of a trust liability for the tax upon the income "distributable" to
him, refer to the owner of the beneficial interest, whether he was
such initially or becomes such by an assignment valid under the
local law governing the trust. P. 300 U. S. 12 .
6. Assignments of interests, of specified amounts each year
thereafter, in the net income which the assignor was then or might
thereafter be entitled to receive during his life under a trust, held assignments not merely of the right to receive
income, but of corresponding interests in the trust estate. P. 300 U. S. 12 .
7. A beneficiary entitled during life to the income of property
held in trust is the owner, not of a chose in action merely, but of
an equitable interest in the corpus of the property, and that
interest, in the absence of a valid restraint upon alienation, he
may assign in part, or as a whole. P. 300 U. S. 13 .
83 F.2d 655, 662, reversed.
Certiorari, 299 U.S. 527, to review a judgment which reversed a
decision of the Board of Tax Appeals, 31 B.T.A. 1192, overruling
income tax assessments. Page 300 U. S. 7 MR. CHIEF JUSTICE HUGHES delivered the opinion of the Court.
This case presents the question of the liability of a
beneficiary of a testamentary trust for a tax upon the income which
he had assigned to his children prior to the tax years and which
the trustees had paid to them accordingly.
The trust was created by the will of William Blair, a resident
of Illinois who died in 1899, and was of property located in that
State. One-half of the net income was to be paid to the donor's
widow during her life. His son, the petitioner Edward Tyler Blair,
was to receive the other one-half and, after the death of the
widow, the whole of the net income during his life. In 1923, after
the widow's death, petitioner assigned to his daughter, Lucy Blair
Linn, an interest amounting to $6,000 for the remainder of that
calendar year, and to $9,000 in each calendar year thereafter, in
the net income which the petitioner was then or might thereafter be
entitled to receive during his life. At about the same time, he
made like assignments of interests, amounting to $9,000 in each
calendar year, in the net income of the trust to his daughter Edith
Blair and to his son, Edward Seymour Blair, respectively. In later
years, by similar instruments, he assigned to these children
additional interests, and to his son William McCormick Blair other
specified interests, in the net income. The trustees accepted the
assignments and distributed the income directly to the
assignees.
The question first arose with respect to the tax year 1923, and
the Commissioner of Internal Revenue ruled that the income was
taxable to the petitioner. The Board of Tax Appeals held the
contrary. 18 B.T.A. 69. The Circuit Court of Appeals reversed the
Board, holding that, under the law of Illinois, the trust was a
spendthrift trust, Page 300 U. S. 8 and the assignments were invalid. Commissioner v.
Blair, 60 F.2d 340. We denied certiorari. 288 U.S. 602.
Thereupon the trustees brought suit in the superior court of
Cook county, Illinois, to obtain a construction of the will with
respect to the power of the beneficiary of the trust to assign a
part of his equitable interest and to determine the validity of the
assignments he had made. The petitioner and the assignees were made
defendants. The Appellate Court of Illinois, First District, after
a review of the Illinois decisions, decided that the trust was not
a spendthrift trust, and upheld the assignments. Blair v.
Linn, 274 Ill.App. 23. Under the mandate of the appellate
court, the superior court of Cook county entered its decree which
found the assignments to be "voluntary assignments of a part of the
interest of said Edward Tyler Blair in said trust estate" and, as
such, adjudged them to be valid.
At that time, there were pending before the Board of Tax Appeals
proceedings involving the income of the trust for the years 1924,
1925, 1926, and 1929. The Board received in evidence the record in
the suit in the state court, and, applying the decision of that
court, the Board overruled the Commissioner's determination as to
the petitioner's liability. 31 B.T.A. 1192. The Circuit Court of
Appeals again reversed the Board. That court recognized the binding
effect of the decision of the state court as to the validity of the
assignments, but decided that the income was still taxable to the
petitioner upon the ground that his interest was not attached to
the corpus of the estate, and that the income was not subject to
his disposition until he received it. Commissioner v.
Blair, 83 F.2d 655, 662.
Because of an asserted conflict with the decision of the state
court, and also with decisions of circuit courts of appeals, we
granted certiorari. October 12, 1936. First. The Government contends that the judgment
relating to the income for 1923 is conclusive in this
proceeding Page 300 U. S. 9 as res judicata. Tait v. Western Maryland Ry.
Co., 289 U. S. 620 .
Petitioner insists that this question was not raised before the
Board of Tax Appeals, and hence was not available before the
Circuit Court of Appeals. General Utilities Co. v.
Helvering, 296 U. S. 200 , 296 U. S. 206 ; Helvering v. Savage, 297 U. S. 106 , 297 U. S. 109 .
The Government respondents that the answers before the Board of Tax
Appeals in the instant case had been filed before the first
decision of the Circuit Court of Appeals was entered, and that,
while the case was heard before the Board without amended
pleadings, the whole matter was actually before the Board and the
question of res judicata was raised by an assignment of
error on the petition for review before the Circuit Court of
Appeals.
It is not necessary to review the respective contentions upon
this point, as we think that the ruling in the Tait case
is not applicable. That ruling and the reasoning which underlies it
apply where, in the subsequent proceedings, although relating to a
different tax year, the questions presented upon the facts and the
law are essentially the same. Tait v. Western Maryland Ry. Co.,
supra, pp. 289 U. S.
624 -626. Here, after the decision in the first
proceeding, the opinion and decree of the state court created a new
situation. The determination of petitioner's liability for the year
1923 had been rested entirely upon the local law. Commissioner
v. Blair, 60 F.2d 340, 342, 344. The supervening decision of
the state court interpreting that law in direct relation to this
trust cannot justly be ignored in the present proceeding so far as
it is found that the local law is determinative of any material
point in controversy. Compare Freuler v. Helvering, 291 U. S. 35 ; Hubbell v. Helvering, 70 F.2d 668. Second. The question of the validity of the assignments
is a question of local law. The donor was a resident of Illinois,
and his disposition of the property in that State was subject to
its law. By that law, the character Page 300 U. S. 10 of the trust, the nature and extent of the interest of the
beneficiary, and the power of the beneficiary to assign that
interest in whole or in part are to be determined. The decision of
the state court upon these questions is final. Spindle v.
Shreve, 111 U. S. 542 , 111 U. S.
547 -548; Uterhart v. United States, 240 U. S. 598 , 240 U. S. 603 ; Poe v. Seaborn, 282 U. S. 101 , 282 U. S. 110 ; Freuler v. Helvering, supra, p. 291 U. S. 45 . It
matters not that the decision was by an intermediate appellate
court. Compare Graham v. White-Phillips Co., 296 U. S.
27 . In this instance, it is not necessary to go beyond
the obvious point that the decision was in a suit between the
trustees and the beneficiary and his assignees, and the decree
which was entered in pursuance of the decision determined as
between these parties the validity of the particular assignments.
Nor is there any basis for a charge that the suit was collusive,
and the decree inoperative. Freuler v. Helvering, supra. The trustees were entitled to seek the instructions of the court
having supervision of the trust. That court entertained the suit,
and the appellate court, with the first decision of the Circuit
Court of Appeals before it, reviewed the decisions of the Supreme
Court of the State and reached a deliberate conclusion. To derogate
from the authority of that conclusion and of the decree it
commanded, so far as the question is one of state law, would be
wholly unwarranted in the exercise of federal jurisdiction.
In the face of this ruling of the state court, it is not open to
the Government to argue that the trust "was, under the Illinois
law, a spendthrift trust." The point of the argument is that, the
trust being of that character, the state law barred the voluntary
alienation by the beneficiary of his interest. The state court held
precisely the contrary. The ruling also determines the validity of
the assignment by the beneficiary of parts of his interest. That
question was necessarily presented and expressly decided. Page 300 U. S. 11 Third. The question remains whether, treating the
assignments as valid, the assignor was still taxable upon the
income under the federal income tax act. That is a federal
question.
Our decisions in Lucas v. Earl, 281 U.
S. 111 , and Burnet v. Leininger, 285 U.
S. 136 , are cited. In the Lucas case, the
question was whether an attorney was taxable for the whole of his
salary and fees earned by him in the tax years, or only upon
one-half by reason of an agreement with his wife by which his
earnings were to be received and owned by them jointly. We were of
the opinion that the case turned upon the construction of the
taxing act. We said that
"the statute could tax salaries to those who earned them, and
provide that the tax could not be escaped by anticipatory
arrangements and contracts, however skilfully devised, to prevent
the salary when paid from vesting even for a second in the man who
earned it."
That was deemed to be the meaning of the statute as to
compensation for personal service, and the one who earned the
income was held to be subject to the tax. In Burnet v.
Leininger, supra, a husband, a member of a firm, assigned
future partnership income to his wife. We found that the revenue
act dealt explicitly with the liability of partners as such. The
wife did not become a member of the firm; the act specifically
taxed the distributive share of each partner in the net income of
the firm, and the husband, by the fair import of the act, remained
taxable upon his distributive share. These cases are not in point.
The tax here is not upon earnings which are taxed to the one who
earns them. Nor is it a case of income attributable to a taxpayer
by reason of the application of the income to the discharge of his
obligation. Old Colony Trust Co. v. Commissioner, 279 U. S. 716 ; Douglas v. Willcuts, 296 U. S. 1 , 296 U. S. 9 ; Helvering v. Stokes, 296 U. S. 551 ; Helvering v. Schweitzer, 296 U. S. 551 ; Helvering v. Coxey, 297 U.S. Page 300 U. S. 12 694. See also Burnet v. Wells, 289 U.
S. 670 , 289 U. S. 677 .
There is here no question of evasion or of giving effect to
statutory provisions designed to forestall evasion; or of the
taxpayer's retention of control. Corliss v. Bowers, 281 U. S. 376 ; Burnet v. Guggenheim, 288 U. S. 280 .
In the instant case, the tax is upon income as to which, in the
general application of the revenue acts, the tax liability attaches
to ownership. See Poe v. Seaborn, supra; Hoeper v. Tax
Commission, 284 U. S. 206 .
The Government points to the provisions of the revenue acts
imposing upon the beneficiary of a trust the liability for the tax
upon the income distributable to the beneficiary. * But the term is
merely descriptive of the one entitled to the beneficial interest.
These provisions cannot be taken to preclude valid assignments of
the beneficial interest, or to affect the duty of the trustee to
distribute income to the owner of the beneficial interest, whether
he was such initially or becomes such by valid assignment. The one
who is to receive the income as the owner of the beneficial
interest is to pay the tax. If, under the law governing the trust,
the beneficial interest is assignable, and if it has been assigned
without reservation, the assignee thus becomes the beneficiary, and
is entitled to rights and remedies accordingly. We find nothing in
the revenue acts which denies him that status.
The decision of the Circuit Court of Appeals turned upon the
effect to be ascribed to the assignments. The court held that the
petitioner had no interest in the corpus of the estate, and could
not dispose of the income until he received it. Hence, it was said
that "the income was his," and his assignment was merely a
direction to pay over to others what was due to himself. The
question was considered to involve "the date when the income became
transferable." 83 F.2d 655 at 662. The Page 300 U. S. 13 Government refers to the terms of the assignment -- that it was
of the interest in the income "which the said party of the first
part now is, or may hereafter be, entitled to receive during his
life from the trustees." From this, it is urged that the
assignments "dealt only with a right to receive the income," and
that "no attempt was made to assign any equitable right, title or
interest in the trust itself." This construction seems to us to be
a strained one. We think it apparent that the conveyancer was not
seeking to limit the assignment so as to make it anything less than
a complete transfer of the specified interest of the petitioner as
the life beneficiary of the trust, but that, with ample caution, he
was using words to effect such a transfer. That the state court so
construed the assignments appears from the final decree which
described them as voluntary assignments of interests of the
petitioner "in said trust estate," and it was in that aspect that
petitioner's right to make the assignments was sustained.
The will creating the trust entitled the petitioner during his
life to the net income of the property held in trust. He thus
became the owner of an equitable interest in the corpus of the
property. Brown v. Fletcher, 235 U.
S. 589 , 235 U. S.
598 -599; Irwin v. Gavit, 268 U.
S. 161 , 268 U. S.
167 -168; Senior v. Braden, 295 U.
S. 422 , 295 U. S. 432 ; Merchants' Loan & Trust Co. v. Patterson, 308 Ill.
519, 530, 139 N.E. 912. By virtue of that interest, he was entitled
to enforce the trust, to have a breach of trust enjoined, and to
obtain redress in case of breach. The interest was present property
alienable like any other, in the absence of a valid restraint upon
alienation. Commissioner v. Field, 42 F.2d 820, 822; Shanley v. Bowers, 81 F.2d 13, 15. The beneficiary may
thus transfer a part of his interest. as well as the whole. See Restatement of the Law of Trusts, §§ 130, 132 et
seq. The assignment of the beneficial interest is not the
assignment of a chose in action. but of the "right, title, and Page 300 U. S. 14 estate in and to property." Brown v. Fletcher, supra; Senior
v. Braden, supra. See Bogert, Trusts and Trustees,
vol. 1, § 183, pp. 516, 517; 17 Columbia Law Review, 269, 273, 289,
290.
We conclude that the assignments were valid, that the assignees
thereby became the owners of the specified beneficial interests in
the income, and that, as to these interests, they, and not the
petitioner, were taxable for the tax years in question. The
judgment of the Circuit Court of Appeals is reversed, and the cause
is remanded with direction to affirm the decision of the Board of
Tax Appeals. It is so ordered. * Revenue Acts of 1921, § 219(a)(d), 42 Stat. 246; 1924 and
1926, § 219(a)(b), 43 Stat. 275, 44 Stat. 32; 1928, §
162(a)(b). | Here is a summary of the Supreme Court case Blair v. Commissioner (1937):
Issue: Whether a beneficiary of a trust can be taxed on trust income that they previously assigned to others, and whether a testamentary trust is a spendthrift trust that prevents the beneficiary from voluntarily alienating their interest.
Holding: The Supreme Court held that the beneficiary was not taxable on the assigned trust income. The Court also determined that whether a testamentary trust is a spendthrift trust depends on the law of the state where the donor resided and the trust was created. In this case, the Court deferred to an Illinois appellate court decision that upheld the beneficiary's right to assign parts of their interest.
Reasoning: The Court found that income tax liability is generally attached to ownership. The beneficiary was the owner of an equitable interest in the trust corpus and had the right to assign that interest, in whole or in part, absent a valid restraint on alienation. The assignments were not merely of the right to receive income but of corresponding interests in the trust estate itself. |
Taxes | Commissioner v. Flowers | https://supreme.justia.com/cases/federal/us/326/465/ | U.S. Supreme Court Commissioner v. Flowers, 326
U.S. 465 (1946) Commissioner v.
Flowers No. 145 Argued December 11, 12,
1945 Decided January 2,
1946 326
U.S. 465 CERTIORARI TO THE CIRCUIT COURT OF
APPEALS FOR THE FIFTH
CIRCUIT Syllabus 1. Under § 23(a)(1)(A) of the Internal Revenue Code, authorizing
in computing income tax the deduction of traveling expenses
incurred in the pursuit of a trade or business, as interpreted by §
19.23(a)-2 of Treasury Regulations 103, traveling expenses of an
employee resulting from the fact that he chooses for reasons of
personal convenience to maintain a residence in a city other than
that in which his post of duty is located are not deductible as
travel expenses in pursuit of business. P. 326 U. S.
473 .
2. Traveling expenses in pursuit of business, within the meaning
of § 23(a)(1)(A) of the Internal Revenue Code, can arise only when
the employer's business forces the taxpayer to travel and live
temporarily at some place other than where his business
headquarters are located, thereby advancing the interests of the
employer. The exigencies of business, rather than the personal
conveniences and necessities of the traveler, must be the
motivating factor. P. 326 U. S.
474 .
3. The interpretation given by § 19.23(a)-2 of Treasury
Regulations 103 to the provision of § 23(a)(1)(A) of the Internal
Revenue Code, which is precisely the same as that given to
identical provisions of prior and subsequent Revenue Acts, must be
deemed to have legislative approval, and to have the force of law.
P. 326 U. S.
469 . Page 326 U. S. 466 4. Whether particular expenses are deductible as traveling
expenses under § 23(a)(1)(A) of the Internal Revenue Code, as
interpreted by § 19.23(a)-2 of Treasury Regulations 103, is in most
instances purely a question of fact, upon which the Tax Court's
inferences and conclusions should not be disturbed by an appellate
court. P. 326 U. S.
470 .
148 F.2d 163, reversed.
Certiorari, post, p. 701, to review the reversal of a
decision of the Tax Court which sustained the Commissioner's
disallowance of certain deductions in computing the taxpayer's
income tax.
MR. JUSTICE MURPHY delivered the opinion of the Court.
This case presents a problem as to the meaning and application
of the provision of s 23(a)(1)(A) of the Internal Revenue Code,
[ Footnote 1 ] allowing a
deduction for income Page 326 U. S. 467 tax purposes of "traveling expenses (including the entire amount
expended for meals and lodging) while away from home in the pursuit
of a trade or business."
The taxpayer, a lawyer, has resided with his family in Jackson,
Mississippi, since 1903. There, he has paid taxes, voted, schooled
his children, and established social and religious connections. He
built a house in Jackson nearly thirty years ago, and at all times
has maintained it for himself and his family. He has been connected
with several law firms in Jackson, one of which he formed and which
has borne his name since 1922.
In 1906, the taxpayer began to represent the predecessor of the
Gulf, Mobile & Ohio Railroad, his present employer. He acted as
trial counsel for the railroad throughout Mississippi. From 1918
until 1927, he acted as special counsel for the railroad in
Mississippi. He was elected general solicitor in 1927, and
continued to be elected to that position each year until 1930, when
he was elected general counsel. Thereafter, he was annually elected
general counsel until September, 1940, when the properties of the
predecessor company and another railroad were merged and he was
elected vice-president and general counsel of the newly formed
Gulf, Mobile & Ohio Railroad.
The main office of the Gulf, Mobile & Ohio Railroad is in
Mobile, Alabama, as was also the main office of its predecessor.
When offered the position of general solicitor in 1927, the
taxpayer was unwilling to accept it if it required him to move from
Jackson to Mobile. He had established himself in Jackson both
professionally and personally, and was not desirous of moving away.
As a result, an arrangement was made between him and the railroad
whereby he could accept the position and continue to reside in
Jackson on condition that he pay his traveling expenses between
Mobile and Jackson and pay his living expenses in both places. This
arrangement permitted the taxpayer to determine for himself the
amount Page 326 U. S. 468 of time he would spend in each of the two cities, and was in
effect during 1939 and 1940, the taxable years in question.
The railroad company provided an office for the taxpayer in
Mobile, but not in Jackson. When he worked in Jackson, his law firm
provided him with office space, although he no longer participated
in the firm's business or shared in its profits. He used his own
office furniture and fixtures at this office. The railroad,
however, furnished telephone service and a typewriter and desk for
his secretary. It also paid the secretary's expenses while in
Jackson. Most of the legal business of the railroad was centered in
or conducted from Jackson, but this business was handled by local
counsel for the railroad. The taxpayer's participation was advisory
only, and was no different from his participation in the railroad's
legal business in other areas.
The taxpayer's principal post of business was at the main office
in Mobile. However, during the taxable years of 1939 and 1940, he
devoted nearly all of his time to matters relating to the merger of
the railroads. Since it was left to him where he would do his work,
he spent most of his time in Jackson during this period. In
connection with the merger, one of the companies was involved in
certain litigation in the federal court in Jackson, and the
taxpayer participated in that litigation.
During 1939, he spent 203 days in Jackson and 66 in Mobile,
making 33 trips between the two cities. During 1940, he spent 168
days in Jackson and 102 in Mobile, making 40 trips between the two
cities. The railroad paid all of his traveling expenses when he
went on business trips to points other than Jackson or Mobile. But
it paid none of his expenses in traveling between these two points
or while he was at either of them.
The taxpayer deducted $900 in his 1939 income tax return and
$1,620 in his 1940 return as traveling expenses Page 326 U. S. 469 incurred in making trips from Jackson to Mobile and as
expenditures for meals and hotel accommodations while in Mobile.
[ Footnote 2 ] The Commissioner
disallowed the deductions, which action was sustained by the Tax
Court. But the Fifth Circuit Court of Appeals reversed the Tax
Court's judgment, 148 F.2d 163, and we granted certiorari because
of a conflict between the decision below and that reached by the
Fourth Circuit Court of Appeals in Barnhill v.
Commissioner, 148 F.2d 913.
The portion of § 23(a)(1)(A) authorizing the deduction of
"traveling expenses (including the entire amount expended for meals
and lodging) while away from home in the pursuit of a trade or
business" is one of the specific examples given by Congress in that
section of "ordinary and necessary expenses paid or incurred during
the taxable year in carrying on any trade or business." It is to be
contrasted with the provision of § 24(a)(1) of the Internal Revenue
Code, disallowing any deductions for "personal, living, or family
expenses." And it is to be read in light of the interpretation
given it by Sec.19.23(a)-2 of Treasury Regulations 103, promulgated
under the Internal Revenue Code. This interpretation, which is
precisely the same as that given to identical traveling expense
deductions authorized by prior and successive Revenue Acts,
[ Footnote 3 ] is deemed to
possess implied legislative approval, and to have the effect of
law. Helvering v. Winmill, 305 U. S.
79 ; Boehm v. Commissioner, 326 U.
S. 287 . In pertinent part, this interpretation states
that
"Traveling expenses, as ordinarily Page 326 U. S. 470 understood, include railroad fares and meals and lodging. If the
trip is undertaken for other than business purposes, the railroad
fares are personal expenses, and the meals and lodging are living
expenses. If the trip is solely on business, the reasonable and
necessary traveling expenses, including railroad fares, meals, and
lodging, are business expenses. . . . Only such expenses as are
reasonable and necessary in the conduct of the business and
directly attributable to it may be deducted. . . . Commuters' fares
are not considered as business expenses, and are not
deductible."
Three conditions must thus be satisfied before a traveling
expense deduction may be made under § 23(a)(1)(A):
(1) The expense must be a reasonable and necessary traveling
expense, as that term is generally understood. This includes such
items as transportation fares and food and lodging expenses
incurred while traveling.
(2) The expense must be incurred "while away from home."
(3) The expense must be incurred in pursuit of business. This
means that there must be a direct connection between the
expenditure and the carrying on of the trade or business of the
taxpayer or of his employer. Moreover, such an expenditure must be
necessary or appropriate to the development and pursuit of the
business or trade.
Whether particular expenditures fulfill these three conditions
so as to entitle a taxpayer to a deduction is purely a question of
fact in most instances. See Commissioner v. Heininger, 320 U. S. 467 , 320 U. S. 475 .
And the Tax Court's inferences and conclusions on such a factual
matter, under established principles, should not be disturbed by an
appellate court. Commissioner v. Scottish American Co., 323 U. S. 119 ; Dobson v. Commissioner, 320 U. S. 489 .
In this instance, the Tax Court, without detailed elaboration,
concluded that
"The situation presented in this Page 326 U. S. 471 proceeding is, in principle, no different from that in which a
taxpayer's place of employment is in one city and, for reasons
satisfactory to himself, he resides in another."
It accordingly disallowed the deductions on the ground that they
represent living and personal expenses, rather than traveling
expenses incurred while away from home in the pursuit of business.
The court below accepted the Tax Court's findings of fact, but
reversed its judgment on the basis that it had improperly construed
the word "home" as used in the second condition precedent to a
traveling expense deduction under § 23(a)(1)(A). The Tax Court, it
was said, erroneously construed the word to mean the post, station,
or place of business where the taxpayer was employed -- in this
instance, Mobile -- and thus erred in concluding that the
expenditures in issue were not incurred "while away from home." The
Court below felt that the word was to be given no such "unusual" or
"extraordinary" meaning in this statute, that it simply meant "that
place where one in fact resides" or "the principal place of abode
of one who has the intention to live there permanently." 148 F.2d
at 164. Since the taxpayer here admittedly had his home, as thus
defined, in Jackson, and since the expenses were incurred while he
was away from Jackson, the deduction was permissible.
The meaning of the word "home" in § 23(a)(1)(A) with reference
to a taxpayer residing in one city and working in another has
engendered much difficulty and litigation. 4 Mertens, Law of
Federal Income Taxation (1942) § 25.82. The Tax Court [ Footnote 4 ] and the administrative Page 326 U. S. 472 rulings [ Footnote 5 ] have
consistently defined it as the equivalent of the taxpayer's place
of business. See Barnhill v. Commissioner, supra. On the
other hand, the decision below and Wallace v.
Commissioner, 144 F.2d 407, have flatly rejected that view,
and have confined the term to the taxpayer's actual residence. See also Coburn v. Commissioner, 138 F.2d 763.
We deem it unnecessary here to enter into or to decide this
conflict. The Tax Court's opinion, as we read it, was grounded
neither solely nor primarily upon that agency's conception of the
word "home." Its discussion was directed mainly toward the relation
of the expenditures to the railroad's business, a relationship
required by the third condition of the deduction. Thus, even if the
Tax Court's definition of the word "home" was implicit in its
decision, and even if that definition was erroneous, its judgment
must be sustained here if it properly concluded that the necessary
relationship between the expenditures and the railroad's business
was lacking. Failure to satisfy any one of the three conditions
destroys the traveling expense deduction.
Turning our attention to the third condition, this case is
disposed of quickly. There is no claim that the Tax Court
misconstrued this condition or used improper standards in applying
it. And it is readily apparent from the Page 326 U. S. 473 facts that its inferences were supported by evidence and that
its conclusion that the expenditures in issue were nondeductible
living and personal expenses was fully justified.
The facts demonstrate clearly that the expenses were not
incurred in the pursuit of the business of the taxpayer's employer,
the railroad. Jackson was his regular home. Had his post of duty
been in that city, the cost of maintaining his home there and of
commuting or driving to work concededly would be nondeductible
living and personal expenses lacking the necessary direct relation
to the prosecution of the business. The character of such expenses
is unaltered by the circumstance that the taxpayer's post of duty
was in Mobile, thereby increasing the costs of transportation,
food, and lodging. Whether he maintained one abode or two, whether
he traveled three blocks or three hundred miles to work, the nature
of these expenditures remained the same.
The added costs in issue, moreover, were as unnecessary and
inappropriate to the development of the railroad's business as were
his personal and living costs in Jackson. They were incurred solely
as the result of the taxpayer's desire to maintain a home in
Jackson while working in Mobile, a factor irrelevant to the
maintenance and prosecution of the railroad's legal business. The
railroad did not require him to travel on business from Jackson to
Mobile, or to maintain living quarters in both cities. Nor did it
compel him, save in one instance, to perform tasks for it in
Jackson. It simply asked him to be at his principal post in Mobile
as business demanded and as his personal convenience was served,
allowing him to divide his business time between Mobile and Jackson
as he saw fit. Except for the federal court litigation, all of the
taxpayer's work in Jackson would normally have been performed in
the headquarters at Mobile. The fact that he traveled frequently
between the two cities and incurred Page 326 U. S. 474 extra living expenses in Mobile, while doing much of his work in
Jackson, was occasioned solely by his personal propensities. The
railroad gained nothing from this arrangement except the personal
satisfaction of the taxpayer.
Travel expenses in pursuit of business within the meaning of §
23(a)(1)(A) could arise only when the railroad's business forced
the taxpayer to travel and to live temporarily at some place other
than Mobile, thereby advancing the interests of the railroad.
Business trips are to be identified in relation to business demands
and the traveler's business headquarters. The exigencies of
business, rather than the personal conveniences and necessities of
the traveler, must be the motivating factors. Such was not the case
here.
It follows that the court below erred in reversing the judgment
of the Tax Court. Reversed. MR. JUSTICE JACKSON took no part in the consideration or
decision of this case.
[ Footnote 1 ]
26 U.S.C. § 23(a)(1)(A), as amended, 56 Stat. 819.
"§ 23. DEDUCTIONS FROM GROSS INCOME."
"In computing net income there shall be allowed as
deductions:"
"(a) Expenses. --"
"(1) Trade or business expenses. --"
"(A) In general. -- All the ordinary and necessary
expenses paid or incurred during the taxable year in carrying on
any trade or business, including a reasonable allowance for
salaries or other compensation for personal services actually
rendered; traveling expenses (including the entire amount expended
for meals and lodging) while away from home in the pursuit of a
trade or business, and rentals or other payments required to be
made as a condition to the continued use or possession, for
purposes of the trade or business, of property to which the
taxpayer has not taken or is not taking title or in which he has no
equity."
[ Footnote 2 ]
No claim for deduction was made by the taxpayer for the amounts
spent in traveling from Mobile to Jackson. He also took trips
during the taxable years to Washington, New York, New Orleans,
Baton Rouge, Memphis, and Jackson (Tenn.), which were apparently in
the nature of business trips for which the taxpayer presumably was
reimbursed by the railroad. No claim was made in regard to
them.
[ Footnote 3 ]
Article 23(a)-2 of Regulations 101, 94, 86; Article 122 of
Regulations 77 and 74; Article 102 of Regulations 69 and 65;
Article 101(a) of Regulations 62.
[ Footnote 4 ] Bixler v. Commissioner, 5 B.T.A. 1181; Griesemer v.
Commissioner, 10 B.T.A. 386; Brown v. Commissioner, 13 B.T.A. 832; Duncan v. Commissioner, 17 B.T.A. 1088; Peters v. Commissioner, 19 B.T.A. 901; Lindsay v.
Commissioner, 34 B.T.A. 840; Powell v. Commissioner, 34 B.T.A. 655; Tracy v. Commissioner, 39 B.T.A. 578; Priddy v. Commissioner, 43 B.T.A. 18; Schurer v.
Commissioner, 3 T.C. 544; Gustafson v. Commissioner, 3 T.C. 998.
[ Footnote 5 ]
Section 19.23(a)-2 of Treasury Regulations 103 does not attempt
to define the word "home," although the Commissioner argues that
the statement therein contained to the effect that commuters' fares
are not business expenses, and are not deductible "necessarily
rests on the premise that home,' for tax purposes, is at the
locality of the taxpayer's business headquarters." Other
administrative rulings have been more explicit in treating the
statutory home as the abode at the taxpayer's regular post of duty. See, e.g., O.D. 1021, 5 Cum.Bull. 174 (1921); I.T. 1264,
I-1 Cum.Bull. 122 (1922); I.T. 3314, 1939-2 Cum.Bull. 152; G.C.M.
23672, 1943 Cum.Bull. 66. MR. JUSTICE RUTLEDGE, dissenting.
I think the judgment of the Court of Appeals should be affirmed.
When Congress used the word "home" in § 23 of the Code, I do not
believe it meant "business headquarters." And, in my opinion, this
case presents no other question.
Congress allowed the deduction for "traveling expenses
(including the entire amount expended for meals and lodging) while
away from home in the pursuit of a trade or business." Treasury
Regulations 103, § 19.23(a)-1, are to the same effect, with the
word "solely" added after "home." Section 19.23(a)-2 also provides:
"Commuters' fares are not considered as business expenses and are
not deductible." By this decision, the latter regulation is Page 326 U. S. 475 allowed, in effect, to swallow up the deduction for many
situations where the regulation has no fit application.
Respondent's home was in Jackson, Mississippi, in every sense,
unless for applying § 23. There, he maintained his family, with his
personal, political, and religious connections; schooled his
children; paid taxes, voted, and resided over many years. There too
he kept hold upon his place as a lawyer, though not substantially
active in practice otherwise than to perform his work as general
counsel for the railroad. This required his presence in Mobile,
Alabama, for roughly a third of his time. The remainder he spent in
Jackson at the same work, except for the time he was required to
travel to points other than Mobile.
The company's principal offices were there, including one set
aside for respondent's use. But the bulk of its trackage was in
Mississippi, and much of its legal work, with which he was
concerned, was done there. His choice to keep his home in Jackson
must have been affected by this fact, although it was motivated
chiefly by more purely personal considerations. It is doubtful
indeed, though perhaps not material, whether, by not moving to
Mobile, he did not save the Government from larger deductions on
account of traveling expense than those he claimed.
There is no question, therefore, but that respondent's home was
in Jackson for every purpose, unless for the single one of applying
§ 23. Nor is it in doubt that he traveled from Jackson to Mobile
and return, as he claimed, or that he spent the sums deducted for
that purpose, including meals and lodging. Neither is it denied, as
matter of fact, that his sole reason for going to Mobile was to
perform his work as it required his presence there, or that he
returned to his home in Jackson periodically when his duties no
longer required him to be in Mobile.
I think this makes a case squarely within the statute and the
regulations. But the Tax Court ruled that the claimed deductions
were "personal, living, or family expenses." Page 326 U. S. 476 Because the taxpayer elected to keep his home in Jackson, rather
than move to Mobile, and because his employer did not undertake to
pay these expenses, it viewed the case as being the same as if he
had moved to Mobile. In that event, it said, he would have been
required to bear the expenses of his own meals and lodging. This is
obvious, even though the "as if" conclusion does not follow. The
court went on, however, to give the further reason for it:
"The situation . . . is, in principle, no different from that in
which a taxpayer's place of employment is in one city and, for
reasons satisfactory to himself, he resides in another."
It seems questionable whether, in so ruling, the Tax Court has
not confused the taxpayer's principal place of employment with his
employer's. For, on the facts, Jackson, rather than Mobile, would
seem more appropriately to be found his business headquarters. But,
regardless of that, the authorities cited [ Footnote 2/1 ] and the Government's supporting argument
show that the case was regarded as, in essence, the commuter's,
excepted by the regulations.
Apart from this ruling, the Tax Court made no finding, of fact
or law, that respondent was not engaged "in the pursuit of a trade
or business;" that he was not "away Page 326 U. S. 477 from home;" that the expenses were not "business expenses" or
"business traveling expenses;" or that they were not "ordinary and
necessary." Yet, by a merry-go-round argument [ Footnote 2/2 ] which always comes back to rest on
the idea that "home" means "business headquarters," the Government
seeks to inject such issues and findings, including a Dobson contention, into the Tax Court's determination. I
think there was only one issue -- a question of law requiring
construction of the statute as to the meaning of the word "home" --
and, if that is resolved against the Government, the Tax Court's
judgment has no other foundation on which to stand. Every other
contention falls when this one does. All stand if it is valid.
I agree with the Court of Appeals that, if Congress had meant
"business headquarters," and not "home," it would have said
"business headquarters." When it used "home" instead, I think it
meant home in everyday parlance, not in some twisted special
meaning of "tax home" or "tax headquarters." [ Footnote 2/3 ] I find no purpose stated or implied in the
Act, the regulations, or the legislative history to support such a
distortion or to use § 23 as a lever to force people to move their
homes to the locality where their Page 326 U. S. 478 employer's business headquarters may be, although their own work
may be done as well in major part at home. The only stated purpose,
and it is clearly stated, not in words of art, is to relieve the
tax burden when one is away from home on business.
The Government relies on administrative construction, by the
Commissioner and the Tax Court, and says that, unless this is
accepted, the Act creates tax inequality. If so, it is inequality
created by Congress, and it is not for the Commissioner or the Tax
Court, by administrative reconstruction, to rewrite what Congress
has written or to correct its views of equality. Moreover, in my
opinion, the inequity, if any, comes not from the statute or the
regulation, but from the construction which identifies petitioner
with a commuter.
That word too has limitations unless it also is made a tool for
rewriting the Act. The ordinary, usual connotation, cf. 21
I.C.C. 428; Pennsylvania R. Co. v. Towers, 245 U. S.
6 , 245 U. S. 12 ,
does not include irregular, although frequent journeys of 350
miles, requiring Pullman accommodations and some twelve to fifteen
hours, one way.
Congress gave the deduction for traveling away from home on
business. The commuter's case, rightly confined, does not fall in
this class. One who lives in an adjacent suburb or City and by
usual modes of commutation can work within a distance permitting
the daily journey and return, with time for the day's work and a
period at home, clearly can be excluded from the deduction on the
basis of the section's terms equally with its obvious purpose. But
that is not true if "commuter" is to swallow up the deduction by
the same sort of construction which makes "home" mean "business
headquarters" of one's employer. If the line may be extended
somewhat to cover doubtful cases, it need not be lengthened to
infinity or to cover cases as far removed from the prevailing
connotation of Page 326 U. S. 479 commuter as this one. Including it pushes "commuting" too far,
even for these times of rapid transit. [ Footnote 2/4 ]
Administrative construction should have some bounds. It exceeds
what are legitimate when it reconstructs the statute to nullify or
contradict the plain meaning of nontechnical terms not artfully
employed. Moreover, in this case, the matter has been held in
suspension by litigation with varying results [ Footnote 2/5 ] and apparent qualification by the Tax
Court consequent upon some of the decisions. [ Footnote 2/6 ]
By construing "home" as "business headquarters;" by reading
"temporarily" as "very temporarily" into § 23; by bringing down
"ordinary and necessary" from its first sentence into its second;
[ Footnote 2/7 ] by finding
"inequity" where Congress has said none exists; by construing
"commuter" to cover long distance, irregular travel, and by
conjuring Page 326 U. S. 480 from the "statutory setting" a meaning at odds with the plain
wording of the clause, the Government makes over understandable
ordinary English into highly technical tax jargon. There is enough
of this in the tax laws inescapably, without adding more in the
absence of either compulsion or authority. The arm of the tax
gatherer reaches far. In my judgment, it should not go the length
of this case. Congress has revised § 23 once to overcome niggardly
construction. [ Footnote 2/8 ] It
should not have to do so again.
[ Footnote 2/1 ] Frank H. Sullivan, 1 B.T.A. 93; Mort L.
Bixler, 5 B.T.A. 1181; Jennie A. Peters, 19 B.T.A.
901; Walter M. Priddy, 43 B.T.A. 18.
The Sullivan case illustrates the typical commuter
situation. The Peters case illustrates the extension of
that ruling to greater distances and irregular travel.
Recent decisions, however, where the traveling distance is
great, appear to go on the theory, presented in the instant case,
that the word "home" within the meaning of § 23(a)(1) means
"principal place of business." See Tax Court Memorandum
Opinion, Dec. 13,853(M), 1 C.C.H. Tax Serv.1945, p. 1268. Thus,
Mertens says that the disallowance of traveling expenses to one's
place of business "is based primarily on the requirement that the
traveling expenses include only amounts expended while away
from home.'" 4 Mertens, Law of Federal Income Taxation
478. [ Footnote 2/2 ]
Thus, the assertion that the deductions were "not even business' expenses" is brought back to the meaning of "home" by
the given reason that "the maintenance of more than one dwelling
place manifestly is not essential to the prosecution of a
business." And this, in turn, completes the circle by resting on
the conclusion that the taxpayer had two dwelling places, one in
Mobile (presumably the hotel or hotels where he stopped) "where he
resided during the periods the living expenses in question were
incurred," the other in Jackson "where he resided during other
periods." Likewise, the conclusion that the deductions were not
"ordinary and necessary expenses," see 326
U.S. 465 fn2/8|>note 8, depends on the view that Jackson was
not "home," but Mobile was. So with the assertion that the "Mobile
living expenses" were not "business traveling expenses." [ Footnote 2/3 ] Cf. 79 U. S. Lott, 12 Wall. 204; Addison v. Holly Hill Co., 322 U.
S. 607 , 322 U. S.
617 -618.
[ Footnote 2/4 ]
Conceivably men soon may live in Florida or California and fly
daily to work in New York and back. Possibly they will be regarded
as commuters when that day comes. But, if so, that is not this case
and, in any event, neither situation was comprehended by Congress
when § 23 was enacted.
[ Footnote 2/5 ] See Wallace v. Commissioner, 144 F.2d 407; Coburn
v. Commissioner, 138 F.2d 763, and the decision now in review,
148 F.2d 163, with which compare Barnhill v. Commissioner and
Winborne v. Commissioner, 148 F.2d 913.
[ Footnote 2/6 ] See Harry F. Schurer, 3 T.C. 544; Charles G.
Gustafson, 3 T.C. 998; Mortimer M. Mahony, C.C.H.Tax
Ct.Serv., Dec. 14,508(M), April 10, 1945; Charles J.
McLennan, C.C.H.Tax Ct.Serv., Dec. 14,644(M), June 25, 1945; Robert S. Shelley, C.C.H.Tax Ct.Serv., Dec. 15,642(M),
June 25, 1945.
[ Footnote 2/7 ]
The language is:
"All the ordinary and necessary expenses paid or incurred during
the taxable year in carrying on any trade or business, including a
reasonable allowance for salaries or other compensation for
personal services actually rendered; traveling expenses (including
the entire amount expended for meals and lodging) while away from
home in the pursuit of a trade or business. . . ."
§ 23(a)(1)(A), Internal Revenue Code.
[ Footnote 2/8 ]
The Treasury Regulations in force in 1920 allowed deduction of
only the excess of the cost of meals and lodging away from home
over the cost at home, and under earlier regulations none of this
expense was allowed. Congress inserted the words "all" and "entire"
in the 1921 Act to overcome this ruling. | Here is a summary of the Supreme Court case Commissioner v. Flowers (1946):
Issue: Whether a taxpayer can deduct traveling expenses incurred while maintaining a second residence for personal convenience.
Holding: Traveling expenses are deductible under the Internal Revenue Code only when they are incurred for business purposes, not for personal convenience. The taxpayer's choice to maintain a second residence away from their primary residence and business headquarters does not make those traveling expenses deductible.
Facts: The taxpayer, a lawyer, resided in Jackson, Mississippi, but worked in Mobile, Alabama, during the week. He deducted his living expenses in Mobile from his taxable income, considering them business expenses. The Commissioner of Internal Revenue disallowed these deductions.
Reasoning: The Court interpreted the Internal Revenue Code's provision for deducting traveling expenses "while away from home in the pursuit of a trade or business." It concluded that "home" in this context refers to the taxpayer's business headquarters or place of employment, not their personal residence. Traveling expenses are deductible only when they are necessary for the employer's business and incurred for that purpose, not for personal convenience.
The Court also gave deference to the interpretation of the Treasury Regulations, which had the force of law, and emphasized that the Tax Court's factual inferences and conclusions on such issues should be given weight. |
Taxes | Murdock v. Pennsylvania | https://supreme.justia.com/cases/federal/us/319/105/ | U.S. Supreme Court Murdock v. Pennsylvania, 319
U.S. 105 (1943) Murdock v.
Pennsylvania No. 480 Argued March 10, 11,
1943 Decided May 3, 1943 319
U.S. 105 ast|>* 319
U.S. 105 CERTIORARI TO THE SUPERIOR COURT OF
PENNSYLVANIA Syllabus 1. A municipal ordinance which, as construed and applied,
requires religious colporteurs to pay a license tax as a condition
to the pursuit of their activities, is invalid under the Federal
Constitution as a denial of freedom of speech, press and religion.
Pp. 319 U. S.
108 -110.
2. The mere fact that the religious literature is "sold", rather
than "donated" does not transform the activities of the colporteur
into a commercial enterprise. P. 319 U. S.
111 .
3. Upon the record in these cases, it cannot be said that
"Jehovah's Witnesses" were engaged in a commercial, rather than in
a religious, venture. P. 319 U. S.
111 .
4. A State may not impose a charge for the enjoyment of a right
granted by the Federal Constitution. P. 319 U. S.
113 .
5. The flat license tax here involved restrains in advance the
Constitutional liberties of press and religion, and inevitably
tends to suppress their exercise. P. 319 U. S.
114 .
6. That the ordinance is "nondiscriminatory," in that it applies
also to peddlers of wares and merchandise, is immaterial. The
liberties guaranteed by the First Amendment are in a preferred
position. P. 319 U. S.
115 .
7. Since the privilege in question is guaranteed by the Federal
Constitution, and exists independently of state authority, the
inquiry as to whether the State has given something for which it
can ask a return is irrelevant. P. 319 U. S.
115 .
8. A community may not suppress, or the State tax, the
dissemination of views because they are unpopular, annoying, or
distasteful. P. 319 U. S.
116 . Page 319 U. S. 106 9. The assumption that the ordinance has been construed to apply
only to solicitation from house to house cannot sustain it, since
it is not narrowly drawn to prevent or control abuses or evil
arising from that particular type of activity. P. 319 U. S.
117 .
149 Pa.Super. 175, 27 A.2d 666, reversed.
CERTIORARI, 318 U.S. 748, to review affirmances of orders in
eight cases refusing to allow appeals from judgments and sentences
for violations of a municipal ordinance.
MR. JUSTICE DOUGLAS delivered the opinion of the Court.
The City of Jeannette, Pennsylvania, has an ordinance, some
forty years old, which provides in part:
"That all persons canvassing for or soliciting within said
Borough, orders for goods, paintings, pictures, wares, or
merchandise of any kind, or persons delivering such articles under
orders so obtained or solicited, shall be required to procure from
the Burgess a license to transact said business and shall pay to
the Treasurer of said Borough therefore the following sums
according to the time for which said license shall be granted."
"For one day $1.50, for one week seven dollars ($7.00), for two
weeks twelve dollars ($12.00), for three weeks twenty dollars
($20.00), provided that the provisions of this ordinance shall not
apply to persons selling by sample to manufacturers or licensed
merchants or dealers doing business in said Borough of
Jeannette."
Petitioners are "Jehovah's Witnesses." They went about from door
to door in the City of Jeannette distributing literature and
soliciting people to "purchase" certain religious books and
pamphlets, all published by the Page 319 U. S. 107 Watch Tower Bible & Tract Society. [ Footnote 1 ] The "price" of the books was twenty-five
cents each, the "price" of the pamphlets five cents each. [ Footnote 2 ] In connection with these
activities, petitioners used a phonograph [ Footnote 3 ] on which they played a record expounding
certain of their views on religion. None of them obtained a license
under the ordinance. Before they were arrested, each had made
"sales" of books. There was evidence that it was their practice in
making these solicitations to request a "contribution" of
twenty-five cents each for the books and five cents each for the
pamphlets, but to accept lesser sums or even to donate the volumes
in case an interested person was without funds. In the present
case, some donations of pamphlets were made when books were
purchased. Petitioners were convicted and fined for violation of
the ordinance. Their judgments of conviction were sustained by the
Superior Court of Pennsylvania, 149 Pa.Super.Ct. 175, 27 A.2d 666,
against their contention that the ordinance deprived them of the
freedom of speech, press, and religion guaranteed by the First
Amendment. Petitions for leave to appeal to the Supreme Court of
Pennsylvania were denied. The cases are here on petitions for writs
of certiorari which we granted along with the petitions for
rehearing of Jones v. Opelika, 316 U.
S. 584 , and its companion cases. Page 319 U. S. 108 The First Amendment, which the Fourteenth makes applicable to
the states, declares that
"Congress shall make no law respecting an establishment of
religion, or prohibiting the free exercise thereof; or abridging
the freedom of speech, or of the press . . ."
It could hardly be denied that a tax laid specifically on the
exercise of those freedoms would be unconstitutional. Yet the
license tax imposed by this ordinance is, in substance, just
that.
Petitioners spread their interpretations of the Bible and their
religious beliefs largely through the hand distribution of
literature by full- or part-time workers. [ Footnote 4 ] They claim to follow the example of Paul,
teaching "publickly, and from house to house." Acts 20:20. They
take literally the mandate of the Scriptures, "Go ye into all the
world, and preach the gospel to every creature." Mark 16:15. In
doing so, they believe that they are obeying a commandment of
God.
The hand distribution of religious tracts is an age-old form of
missionary evangelism -- as old as the history of printing presses.
[ Footnote 5 ] It has been a
potent force in various religious movements down through the years.
[ Footnote 6 ] This form of
evangelism is utilized today on a large scale by various religious
sects whose colporteurs carry the Gospel to thousands Page 319 U. S. 109 upon thousands of homes and seek through personal visitations to
win adherents to their faith. [ Footnote 7 ] It is more than preaching; it is more than
distribution of religious literature. It is a combination of both.
Its purpose is as evangelical as the revival meeting. This form of
religious activity occupies the same high estate under the First
Amendment as do worship in the churches and preaching from the
pulpits. It has the same claim to protection as the more orthodox
and conventional exercises of religion. It also has the same claim
as the others to the guarantees of freedom of speech and freedom of
the press.
The integrity of this conduct or behavior as a religious
practice has not been challenged. Nor do we have presented any
question as to the sincerity of petitioners in their religious
beliefs and practices, however misguided they may be thought to be.
Moreover, we do not intimate or suggest in respecting their
sincerity that any conduct can be made a religious rite and by the
zeal of the practitioners swept into the First Amendment. Reynolds
v. Page 319 U. S. 110 United States, 98 U. S. 145 , 98 U. S.
161 -167, and Davis v. Beason, 133 U.
S. 333 , denied any such claim to the practice of
polygamy and bigamy. Other claims may well arise which deserve the
same fate. We only hold that spreading one's religious beliefs or
preaching the Gospel through distribution of religious literature
and through personal visitations is an age-old type of evangelism
with as high a claim to constitutional protection as the more
orthodox types. The manner in which it is practiced at times gives
rise to special problems with which the police power of the states
is competent to deal. See, for example, Cox v. New
Hampshire, 312 U. S. 569 , and Chaplinsky v. New Hampshire, 315 U.
S. 568 . But that merely illustrates that the rights with
which we are dealing are not absolutes. Schneider v.
State, 308 U. S. 147 , 308 U. S.
160 -161. We are concerned, however, in these cases
merely with one narrow issue. There is presented for decision no
question whatsoever concerning punishment for any alleged unlawful
acts during the solicitation. Nor is there involved here any
question as to the validity of a registration system for
colporteurs and other solicitors. The cases present a single issue
-- the constitutionality of an ordinance which, as construed and
applied, requires religious colporteurs to pay a license tax as a
condition to the pursuit of their activities.
The alleged justification for the exaction of this license tax
is the fact that the religious literature is distributed with a
solicitation of funds. Thus, it was stated in Jones v. Opelika,
supra, p. 316 U. S. 597 ,
that, when a religious sect uses "ordinary commercial methods of
sales of articles to raise propaganda funds," it is proper for the
state to charge "reasonable fees for the privilege of canvassing."
Situations will arise where it will be difficult to determine
whether a particular activity is religious or purely commercial.
The distinction, at times, is vital. As we stated only the other
day, in Jamison v. Texas, 318 U.
S. 413 , 318 U. S.
417 ,
"The states can prohibit the use of the streets for Page 319 U. S. 111 the distribution of purely commercial leaflets, even though such
leaflets may have 'a civic appeal, or a moral platitude' appended. Valentine v. Chrestensen, 16 U. S.
52 , 16 U. S. 55 . They may not
prohibit the distribution of handbills in the pursuit of a clearly
religious activity merely because the handbills invite the purchase
of books for the improved understanding of the religion or because
the handbills seek in a lawful fashion to promote the raising of
funds for religious purposes."
But the mere fact that the religious literature is "sold" by
itinerant preachers, rather than "donated," does not transform
evangelism into a commercial enterprise. If it did, then the
passing of the collection plate in church would make the church
service a commercial project. The constitutional rights of those
spreading their religious beliefs through the spoken and printed
word are not to be gauged by standards governing retailers or
wholesalers of books. The right to use the press for expressing
one's views is not to be measured by the protection afforded
commercial handbills. It should be remembered that the pamphlets of
Thomas Paine were not distributed free of charge. It is plain that
a religious organization needs funds to remain a going concern. But
an itinerant evangelist, however misguided or intolerant he may be,
does not become a mere book agent by selling the Bible or religious
tracts to help defray his expenses or to sustain him. Freedom of
speech, freedom of the press, freedom of religion are available to
all, not merely to those who can pay their own way. As we have
said, the problem of drawing the line between a purely commercial
activity and a religious one will, at times, be difficult. On this
record, it plainly cannot be said that petitioners were engaged in
a commercial, rather than a religious, venture. It is a distortion
of the facts of record to describe their activities as the
occupation of selling books and pamphlets. And the Pennsylvania
court did not rest the judgments of conviction on that basis,
though it did find Page 319 U. S. 112 that petitioners "sold" the literature. The Supreme Court of
Iowa, in State v. Mead, 230 Iowa 1217, 300 N.W. 523, 524,
described the selling activities of members of this same sect as
"merely incidental and collateral" to their "main object, which was
to preach and publicize the doctrines of their order." And see
State v. Meredith, 197 S.C. 351, 15 S.E.2d 678; People v.
Barber, 289 N.Y. 378, 385-386, 46 N.E.2d 329. That accurately
summarizes the present record.
We do not mean to say that religious groups and the press are
free from all financial burdens of government. See Grosjean v.
American Press Co., 297 U. S. 233 , 297 U. S. 250 .
We have here something quite different, for example, from a tax on
the income of one who engages in religious activities or a tax on
property used or employed in connection with those activities. It
is one thing to impose a tax on the income or property of a
preacher. It is quite another thing to exact a tax from him for the
privilege of delivering a sermon. The tax imposed by the City of
Jeannette is a flat license tax, the payment of which is a
condition of the exercise of these constitutional privileges. The
power to tax the exercise of a privilege is the power to control or
suppress its enjoyment. Magnano Co. v. Hamilton, 292 U. S. 40 , 292 U. S. 44 -45,
and cases cited. Those who can tax the exercise of this religious
practice can make its exercise so costly as to deprive it of the
resources necessary for its maintenance. Those who can tax the
privilege of engaging in this form of missionary evangelism can
close its doors to all those who do not have a full purse.
Spreading religious beliefs in this ancient and honorable manner
would thus be denied the needy. Those who can deprive religious
groups of their colporteurs can take from them a part of the vital
power of the press which has survived from the Reformation.
It is contended, however, that the fact that the license tax can
suppress or control this activity is unimportant Page 319 U. S. 113 if it does not do so. But that is to disregard the nature of
this tax. It is a license tax -- a flat tax imposed on the exercise
of a privilege granted by the Bill of Rights. A state may not
impose a charge for the enjoyment of a right granted by the Federal
Constitution. Thus, it may not exact a license tax for the
privilege of carrying on interstate commerce ( McGoldrick v.
Berwind-White Co., 309 U. S. 33 , 309 U. S.
56 -58), although it may tax the property used in, or the
income derived from, that commerce, so long as those taxes are not
discriminatory. Id., p. 309 U. S. 47 ,
and cases cited. A license tax applied to activities guaranteed by
the First Amendment would have the same destructive effect. It is
true that the First Amendment, like the commerce clause, draws no
distinction between license taxes, fixed sum taxes, and other kinds
of taxes. But that is no reason why we should shut our eyes to the
nature of the tax and its destructive influence. The power to
impose a license tax on the exercise of these freedoms is indeed as
potent as the power of censorship which this Court has repeatedly
struck down. Lovell v. Griffin, 303 U.
S. 444 ; Schneider v. State, supra; Cantwell v.
Connecticut, 310 U. S. 296 , 310 U. S. 306 ; Largent v. Texas, 318 U. S. 418 ; Jamison v. Texas, supra. It was for that reason that the
dissenting opinions in Jones v. Opelika, supra, stressed
the nature of this type of tax. 316 U.S. pp. 316 U. S.
607 -609, 316 U. S. 620 , 316 U. S. 623 .
In that case, as in the present ones, we have something very
different from a registration system under which those going from
house to house are required to give their names, addresses and
other marks of identification to the authorities. In all of these
cases, the issuance of the permit or license is dependent on the
payment of a license tax. And the license tax is fixed in amount
and unrelated to the scope of the activities of petitioners or to
their realized revenues. It is not a nominal fee Page 319 U. S. 114 imposed as a regulatory measure to defray the expense of
policing the activities in question. [ Footnote 8 ] It is in no way apportioned. It is a flat
license tax levied and collected as a condition to the pursuit of
activities whose enjoyment is guaranteed by the First Amendment.
Accordingly, it restrains in advance those constitutional liberties
of press and religion, and inevitably tends to suppress their
exercise. That is almost uniformly recognized as the inherent vice
and evil of this flat license tax. As stated by the Supreme Court
of Illinois in a case involving this same sect and an ordinance
similar to the present one, a person cannot be compelled "to
purchase, through a license fee or a license tax, the privilege
freely granted by the constitution." [ Footnote 9 ] Blue Island v. Kozul, 379 Ill. 511,
519, 41 N.E.2d 515. So it may not be said that proof is lacking
that these license taxes, either separately or cumulatively, have
restricted or are likely to restrict petitioners' religious
activities. On their face, they are a restriction of the free
exercise of those freedoms which are protected by the First
Amendment.
The taxes imposed by this ordinance call hardly help but be as
severe and telling in their impact on the freedom Page 319 U. S. 115 of the press and religion as the "taxes on knowledge" at which
the First Amendment was partly aimed. Grosjean v. American
Press Co., supra, pp. 297 U. S. 244 -249. They may indeed operate even more
subtly. Itinerant evangelists moving throughout a state or from
state to state would feel immediately the cumulative effect of such
ordinances as they become fashionable. The way of the religious
dissenter has long been hard. But if the formula of this type of
ordinance is approved, a new device for the suppression of
religious minorities will have been found. This method of
disseminating religious beliefs can be crushed and closed out by
the sheer weight of the toll or tribute which is exacted town by
town, village by village. The spread of religious ideas through
personal visitations by the literature ministry of numerous
religious groups would be stopped.
The fact that the ordinance is "nondiscriminatory" is
immaterial. The protection afforded by the First Amendment is not
so restricted. A license tax certainly does not acquire
constitutional validity because it classifies the privileges
protected by the First Amendment along with the wares and
merchandise of hucksters and peddlers, and treats them all alike.
Such equality in treatment does not save the ordinance. Freedom of
press, freedom of speech, freedom of religion are in a preferred
position.
It is claimed, however, that the ultimate question in
determining the constitutionality of this license tax is whether
the state has given something for which it can ask a return. That
principle has wide applicability. State Tax Commission v.
Aldrich, 316 U. S. 174 , and
cases cited. But it is quite irrelevant here. This tax is not a
charge for the enjoyment of a privilege or benefit bestowed by the
state. The privilege in question exists apart from state authority.
It is guaranteed the people by the Federal Constitution.
Considerable emphasis is placed on the kind of literature which
petitioners were distributing -- its provocative, Page 319 U. S. 116 abusive, and ill-mannered character and the assault which it
makes on our established churches and the cherished faiths of many
of us. See Douglas v. Jennette, concurring opinion, post, p. 319 U. S. 166 .
But those considerations are no justification for the license tax
which the ordinance imposes. Plainly, a community may not suppress,
or the state tax, the dissemination of views because they are
unpopular, annoying or distasteful. If that device were ever
sanctioned, there would have been forged a ready instrument for the
suppression of the faith which any minority cherishes but which
does not happen to be in favor. That would be a complete
repudiation of the philosophy of the Bill of Rights.
Jehovah's Witnesses are not "above the law." But the present
ordinance is not directed to the problems with which the police
power of the state is free to deal. It does not cover, and
petitioners are not charged with, breaches of the peace. They are
pursuing their solicitations peacefully and quietly. Petitioners,
moreover, are not charged with or prosecuted for the use of
language which is obscene, abusive, or which incites retaliation. Cf. Chaplinsky v. New Hampshire, supra. Nor do we have
here, as we did in Cox v. New Hampshire, supra, and Chaplinsky v. New Hampshire, supra, state regulation of
the streets to protect and insure the safety, comfort, or
convenience of the public. Furthermore, the present ordinance is
not narrowly drawn to safeguard the people of the community in
their homes against the evils of solicitations. See Cantwell v.
Connecticut, supra, 310 U. S. 306 .
As we have said, it is not merely a registration ordinance calling
for an identification of the solicitors so as to give the
authorities some basis for investigating strangers coming into the
community. And the fee is not a nominal one, imposed as a
regulatory measure and calculated to defray the expense of
protecting those on the streets and at home against the abuses of
solicitors. See Cox v. New Hampshire, Page 319 U. S. 117 supra, pp. 312 U. S.
576 -577. Nor can the present ordinance survive if we
assume that it has been construed to apply only to solicitation
from house to house. [ Footnote
10 ] The ordinance is not narrowly drawn to prevent or control
abuses or evils arising from that activity. Rather, it sets aside
the residential areas as a prohibited zone, entry of which is
denied petitioners unless the tax is paid. That restraint and one
which is city-wide in scope ( Jones v. Opelika ) are
different only in degree. Each is an abridgment of freedom of press
and a restraint on the free exercise of religion. They stand or
fall together.
The judgment in Jones v. Opelika has this day been
vacated. Freed from that controlling precedent, we can restore to
their high, constitutional position the liberties of itinerant
evangelists who disseminate their religious beliefs and the tenets
of their faith through distribution of literature. The judgments
are reversed, and the causes are remanded to the Pennsylvania
Superior Court for proceedings not inconsistent with this
opinion. Reversed. * Together with No. 481, Perisich v. Pennsylvania (City of
Jeannette), No. 482, Mowder v. Pennsylvania (City of
Jeannette), No. 483, Seders v. Pennsylvania (City of
Jeannette), No. 484, Lamborn v. Pennsylvania (City of
Jeannette), No. 485, Maltezos v. Pennsylvania (City of
Jeannette), No. 486, Anastasia Tzanes v. Pennsylvania
(City of Jeannette), and No. 487, Ellaine Tzanes v.
Pennsylvania (City of Jeannette), also on writs of certiorari,
318 U.S. 748, to the Superior Court of Pennsylvania.
[ Footnote 1 ]
Two religious books -- Salvation and Creation -- were sold.
Others were offered in addition to the Bible. The Watch Tower Bible
& Tract Society is alleged to be a nonprofit charitable
corporation.
[ Footnote 2 ]
Petitioners paid three cents each for the pamphlets and, if they
devoted only their spare time to the work, twenty cents each for
the books. Those devoting full time to the work acquired the books
for five cents each. There was evidence that some of the
petitioners paid the difference between the sales price and the
cost of the books to their local congregations, which distributed
the literature.
[ Footnote 3 ]
Purchased along with the record from the Watch Tower Bible Tract
Society.
[ Footnote 4 ]
The nature and extent of their activities throughout the world
during the years 1939 and 1940 are to be found in the 1941 Yearbook
of Jehovah's Witnesses, pp. 62-243.
[ Footnote 5 ]
Palmer, The Printing Press and the Gospel (1912).
[ Footnote 6 ]
White, The Colporteur Evangelist (1930); Home Evangelization
(1850); Edwards, The Romance of the Book (1932) c. V; 12 Biblical
Repository (1844) Art. VIII; 16 The Sunday Magazine (1887) pp.
43-47; 3 Meliora (1861) pp. 311-319; Felice, Protestants of France
(1853) pp. 53, 513; 3 D'Aubigne, History of The Reformation (1849)
pp. 103, 152, 436-437; Report of Colportage in Virginia, North
Carolina & South Carolina, American Tract Society (1855). An
early type of colporteur was depicted by John Greenleaf Whittier in
his legendary poem, The Vaudois Teacher. And see Wylie,
History of the Wadenses.
[ Footnote 7 ]
The General Conference of Seventh-Day Adventists, who filed a
brief amicus curiae on the reargument of Jones v.
Opelika, has given us the following data concerning their
literature ministry: this denomination has 83 publishing houses
throughout the world, issuing publications in over 200 languages.
Some 9,256 separate publications were issued in 1941. By printed
and spoken word, the Gospel is carried into 412 countries in 824
languages. 1942 Yearbook, p. 287. During December, 1941, a total of
1,018 colporteurs operated in North America. They delivered during
that month $97,997.19 worth of gospel literature, and, for the
whole year of 1941, a total of $790,610.36 -- an average per person
of about $65 per month. Some of these were students and temporary
workers. Colporteurs of this denomination receive half of their
collections, from which they must pay their traveling and living
expenses. Colporteurs are specially trained, and their
qualifications equal those of preachers. In the field, each worker
is under the supervision of a field missionary secretary, to whom a
weekly report is made. After fifteen years of continuous service,
each colporteur is entitled to the same pension as retired
ministers. And see Howell, The Great Advent Movement
(1935), pp. 72-75.
[ Footnote 8 ]
The constitutional difference between such a regulatory measure
and a tax on the exercise of a federal right has long been
recognized. While a state may not exact a license tax for the
privilege of carrying on interstate commerce ( McGoldrick v.
Berwind-White Co., supra, pp. 309 U. S.
56 -58), it may, for example, exact a fee to defray the
cost of purely local regulations in spite of the fact that those
regulations incidentally affect commerce.
"So long as they do not impede the free flow of commerce, and
are not made the subject of regulation by Congress. they are not
forbidden. Clyde Mallory Lines v. Alabama, 296 U. S.
261 , 296 U. S. 267 , and cases
cited. And see South Carolina Highway Dept. v. Barnwell
Bros., 303 U. S. 177 , 303 U. S.
185 -188."
[ Footnote 9 ]
That is the view of most state courts which have passed on the
question. McConkey v. Fredericksburg, 179 Va. 556, 19
S.E.2d 682; State v. Greaves, 112 Vt. 222, 22 A.2d 497; People v. Banks, 168 Misc. 515, 6 N.Y.S.2d 41. Contra:
Cook v. Harrison, 180 Ark. 546, 21 S.W.2d 966.
[ Footnote 10 ]
The Pennsylvania Superior Court stated that the ordinance has
been "enforced" only to prevent petitioners from canvassing "from
door to door and house to house" without a license, and not to
prevent them from distributing their literature on the streets. 149
Pa.Super.Ct., p. 14, 27 A.2d 670.
The following dissenting opinions are applicable to Nos. 280,
314, and 966 (October Term, 1941), Jones v. Opelika, ante, p. 319 U. S. 103 , and
to Nos. 480-487, Murdock v. Pennsylvania, ante, p. 319 U. S. 105 . See also opinion of MR. JUSTICE JACKSON, post, p. 319 U. S.
166 .
MR. JUSTICE REED, dissenting:
These cases present for solution the problem of the
constitutionality of certain municipal ordinances levying a tax for
the production of revenue on the sale of books Page 319 U. S. 118 and pamphlets in the streets or from door to door. Decisions
sustaining the particular ordinances were entered in the three
cases first listed at the last term of this Court. In that opinion,
the ordinances were set out, and the facts and issues stated. Jones v. Opelika, 316 U. S. 584 . A
rehearing has been granted. The present judgments vacate the old,
and invalidate the ordinances. The eight cases of this term involve
canvassing from door to door only under similar ordinances, which
are in the form stated in the Court's opinion. By a per curiam
opinion of this day, the Court affirms its acceptance of the
arguments presented by the dissent of last term in Jones v.
Opelika. The Court states its position anew in the Jeannette cases.
This dissent does not deal with an objection which theoretically
could be made in each case, to-wit, that the licenses are so
excessive in amount as to be prohibitory. This matter is not
considered because that defense is not relied upon in the
pleadings, the briefs or at the bar. No evidence is offered to show
the amount is oppressive. An unequal tax, levied on the activities
of distributors of informatory publications, would be a phase of
discrimination against the freedom of speech, press, or religion.
Nor do we deal with discrimination against the petitioners, as
individuals or as members of the group, calling themselves
Jehovah's Witnesses. There is no contention in any of these cases
that such discrimination is practiced in the application of the
ordinances. Obviously, an improper application by a city, which
resulted in the arrest of Witnesses and failure to enforce the
ordinance against other groups, such as the Adventists, would raise
entirely distinct issues.
A further and important disclaimer must be made in order to
focus attention sharply upon the constitutional issue. This dissent
does not express, directly or by inference, any conclusion as to
the constitutional rights of state or federal governments to place
a privilege tax upon the Page 319 U. S. 119 soliciting of a free-will contribution for religious purposes.
Petitioners suggest that their books and pamphlets are not sold,
but are given either without price or in appreciation of the
recipient's gift for the furtherance of the work of the Witnesses.
The pittance sought, as well as the practice of leaving books with
poor people without cost, gives strength to this argument. In our
judgment, however, the plan of national distribution by the Watch
Tower Bible & Tract Society, with its wholesale prices of five
or twenty cents per copy for books, delivered to the public by the
Witnesses at twenty-five cents per copy, justifies the
characterization of the transaction as a sale by all the state
courts. The evidence is conclusive that the Witnesses normally
approach a prospect with an offer of a book for twenty-five cents.
Sometimes, apparently rarely, a book is left with a prospect
without payment. The quid pro quo is demanded. If the
profit was greater, twenty cents or even one dollar, no difference
in principle would emerge. The Witness sells books to raise money
for propagandizing his faith, just as other religious groups might
sponsor bazaars, or peddle tickets to church suppers, or sell
Bibles or prayer books for the same object. However high the
purpose or noble the aims of the Witness, the transaction has been
found by the state courts to be a sale under their ordinances and,
though our doubt was greater than it is, the state's conclusion
would influence us to follow its determination. [ Footnote 2/1 ] Page 319 U. S. 120 In the opinion in Jones v. Opelika, 316 U.
S. 584 , on the former hearing, attention was called to
the differentiation between these cases of taxation and those of
forbidden censorship, prohibition or discrimination. There is no
occasion to repeat what has been written so recently as to the
constitutional right to tax the money-raising activities of
religious or didactic groups. There are, however, other reasons,
not fully developed in that opinion, that add to our conviction
that the Constitution does not prohibit these general occupational
taxes.
The real contention of the Witnesses is that there can be no
taxation of the occupation of selling books and pamphlets, because
to do so would be contrary to the due process clause of the
Fourteenth Amendment, which now is held to have drawn the contents
of the First Amendment into the category of individual rights
protected Page 319 U. S. 121 from state deprivation. Gitlow v. New York, 268 U. S. 652 , 268 U. S. 666 ; Near v. Minnesota, 283 U. S. 697 , 283 U. S. 707 ; Cantwell v. Connecticut, 310 U. S. 296 , 310 U. S. 303 .
Since the publications teach a religion which conforms to our
standards of legality, it is urged that these ordinances prohibit
the free exercise of religion and abridge the freedom of speech and
of the press.
The First Amendment reads as follows:
"Congress shall make no law respecting an establishment of
religion, or prohibiting the free exercise thereof; or abridging
the freedom of speech, or of the press; or the right of the people
peaceably to assemble, and to petition the Government for a redress
of grievances."
It was one of twelve proposed on September 25, 1789, to the
States by the First Congress after the adoption of the
Constitution. Ten were ratified. They were intended to be, and have
become, our Bill of Rights. By their terms, our people have a
guarantee that, so long as law as we know it shall prevail, they
shall live protected from the tyranny of the despot or the mob.
None of the provisions of our Constitution is more venerated by the
people or respected by legislatures and the courts than those which
proclaim for our country the freedom of religion and expression.
While the interpreters of the Constitution find the purpose was to
allow the widest practical scope for the exercise of religion and
the dissemination of information, no jurist has ever conceived that
the prohibition of interference is absolute. [ Footnote 2/2 ] Is subjection to nondiscriminatory,
nonexcessive taxation in the distribution of religious literature a
prohibition of the exercise of religion or an abridgment of the
freedom of the press? Page 319 U. S. 122 Nothing has been brought to our attention which would lead to
the conclusion that the contemporary advocate of the adoption of a
Bill of Rights intended such an exemption. The words of the
Amendment do not support such a construction. "Free" cannot be held
to be without cost, but, rather, its meaning must accord with the
freedom guaranteed. "Free" means a privilege to print or pray
without permission and without accounting to authority for one's
actions. In the Constitutional Convention, the proposal for a Bill
of Rights of any kind received scant attention. [ Footnote 2/3 ] In the course of the ratification of
the Constitution, however, the absence of a Bill of Rights was used
vigorously by the opponents of the new government. A number of the
states suggested amendments. Where these suggestions have any
bearing at all upon religion or free speech, they indicate nothing
as to any feeling concerning taxation either of religious bodies or
their evangelism. [ Footnote 2/4 ]
This was not because freedom of Page 319 U. S. 123 religion or free speech was not understood. It was because the
subjects were looked upon from standpoints entirely distinct from
taxation. [ Footnote 2/5 ]
The available evidence of Congressional action shows clearly
that the draftsmen of the amendments had in mind the practice of
religion and the right to be heard, rather than any abridgment or
interference with either by taxation Page 319 U. S. 124 in any form. [ Footnote 2/6 ] The
amendments were proposed by Page 319 U. S. 125 Mr. Madison. He was careful to explain to the Congress the
meaning of the amendment on religion. The draft was commented upon
by Mr. Madison when it read: "no religion shall be established by
law, nor shall the equal rights of conscience be infringed." 1
Annals of Congress 729. He said that he apprehended the meaning of
the words on religion to be that Congress should not establish a
religion and enforce the legal observation of it by law, nor compel
men to worship God in any manner contrary to their conscience. Id., 730. No such specific interpretation of the amendment
on freedom of expression has been found in the debates. The
clearest is probably from Mr. Benson, [ Footnote 2/7 ] who said that
"The committee who framed this report proceeded on the principle
that these rights belonged to the people; they conceived them to be
inherent, and all that they meant to provide against was their
being infringed by the Government." Id. 731=732.
There have been suggestions that the English taxes on
newspapers, springing from the tax act of 10 Anne, c. 19, § CI,
[ Footnote 2/8 ] influenced the
adoption of the First Amendment. [ Footnote 2/9 ] Page 319 U. S. 126 These taxes were obnoxious, but an examination of the sources of
the suggestion is convincing that there is nothing to support it
except the fact that the tax on newspapers was in existence in
England, and was disliked. [ Footnote
2/10 ] The simple answer is that, if there had been any purpose
of Congress to prohibit any kind of taxes on the press, its
knowledge of the abominated English taxes would have led it to ban
them unequivocally.
It is only in recent years that the freedoms of the First
Amendment have been recognized as among the fundamental personal
rights protected by the Fourteenth Amendment from impairment by the
states. [ Footnote 2/11 ] Until
then, these liberties were not deemed to be guarded from state
action by the Federal Constitution. [ Footnote 2/12 ] The states placed Page 319 U. S. 127 restraints upon themselves in their own constitutions in order
to protect their people in the exercise of the freedoms of speech
and of religion. [ Footnote 2/13 ]
Pennsylvania may be taken as a fair example. Its constitution
reads:
"All men have a natural and indefeasible right to worship
Almighty God according to the dictates of their own consciences; no
man can of right be compelled to attend, erect or support any place
of worship, or to maintain any ministry against his consent; no
human authority can, in any case whatever, control or interfere
with the rights of conscience, and no preference shall ever be
given by law to any religious establishments or modes of
worship."
Purdon's Penna.Stat., Const., Art. I, § 3.
"No person who acknowledges the being of a God and a future
state of rewards and punishments shall, on account of his religious
sentiments, be disqualified to hold any office or place of trust or
profit under this Commonwealth." Id. Art. I, § 4.
"The printing press shall be free to every person who may
undertake to examine the proceedings of the Legislature or any
branch of government, and no law shall ever be made to restrain the
right thereof. The free communication of thoughts and opinions is
one of the invaluable rights of man, and every citizen may freely
speak, write and print on any subject, being responsible for the
abuse of that liberty. . . ." Id. Art. I, 7. It will be observed that there is no
suggestion of freedom from taxation, and this statement is equally
true of the other state constitutional provisions. It may be
concluded that neither in the state or the federal constitutions
was general taxation of church or press interdicted.
Is there anything in the decisions of this Court which indicates
that church or press is free from the financial Page 319 U. S. 128 burdens of government? We find nothing. Religious societies
depend for their exemptions from taxation upon state constitutions
or general statutes, not upon the Federal Constitution. Gibbons
v. District of Columbia, 116 U. S. 404 .
This Court has held that the chief purpose of the free press
guarantee was to prevent previous restraints upon publication. Near v. Minnesota, 283 U. S. 697 , 283 U. S. 713 .
[ Footnote 2/14 ] In Grosjean
v. American Press Co., 297 U. S. 233 , 297 U. S. 250 ,
it was said that the predominant purpose was to preserve "an
untrammeled press as a vital source of public information." In that
case, a gross receipts tax on advertisements in papers with a
circulation of more than twenty thousand copies per week was held
invalid because "a deliberate and calculated device in the guise of
a tax to limit the circulation. . . ." There was this further
comment:
"It is not intended by anything we have said to suggest that the
owners of newspapers are immune from any of the ordinary forms of
taxation for support of the government. But this is not an ordinary
form of tax, but one single in kind, with a long history of hostile
misuse against the freedom of the press." Id. 297 U. S.
250 .
It may be said, however, that ours is a too narrow, technical
and legalistic approach to the problem of state taxation of the
activities of church and press; that we should look not to the
expressed or historical meaning of the First Amendment, but to the
broad principles of free speech and free exercise of religion which
pervade our national way of life. It may be that the Fourteenth
Amendment guarantees these principles, rather than the more
definite concept expressed in the First Amendment. This would mean
that, as a Court, we should determine what sort of liberty it is
that the due process clause of Page 319 U. S. 129 the Fourteenth Amendment guarantees against state restrictions
on speech and church.
But whether we give content to the literal words of the First
Amendment or to principles of the liberty of the press and the
church, we conclude that cities or states may levy reasonable,
nondiscriminatory taxes on such activities as occurred in these
cases. Whatever exemptions exist from taxation arise from the
prevailing law of the various states. The constitutions of Alabama
and Pennsylvania, with substantial similarity to the exemption
provisions of other constitutions, forbid the taxation of lots and
buildings used exclusively for religious worship. Alabama (1901), §
91; Pennsylvania (1874), Art. IX, § 1. These are the only
exemptions of the press or church from taxation. We find nothing
more applicable to our problem in the other constitutions. Surely
this unanimity of specific state action on exemptions of religious
bodies from taxes would not have occurred throughout our history,
if it had been conceived that the genius of our institutions, as
expressed in the First Amendment, was incompatible with the
taxation of church or press.
Nor do we understand that the Court now maintains that the
Federal Constitution frees press or religion of any tax except such
occupational taxes as those here levied. Income taxes, ad
valorem taxes, even occupational taxes, are presumably valid,
save only a license tax on sales of religious books. Can it be that
the Constitution permits a tax on the printing presses and the
gross income of a metropolitan newspaper, [ Footnote 2/15 ] but denies the right to lay an
occupational tax on the distributors of the same papers? Does the
exemption apply to booksellers or distributors of magazines, or
only to religious publications? And, if the latter, to what
distributors? Or to what books? Or is this Court saying that a
religious Page 319 U. S. 130 practice of book distribution is free from taxation because a
state cannot prohibit the "free exercise thereof," and a newspaper
is subject to the same tax even though the same Constitutional
Amendment says the state cannot abridge the freedom of the press?
It has never been thought before that freedom from taxation was a
perquisite attaching to the privileges of the First Amendment. The
National Government grants exemptions to ministers and churches
because it wishes to do so, not because the Constitution compels.
Internal Revenue Code, §§ 22(b)(6), 101(6), 812(d), 1004(a)(2)(B).
Where camp meetings or revivals charge admissions, a federal tax
would apply if Congress had not granted freedom from the exaction. Id., § 1701.
It is urged that such a tax as this may be used readily to
restrict the dissemination of ideas. This must be conceded, but the
possibility of misuse does not make a tax unconstitutional. No
abuse is claimed here. The ordinances in some of these cases are
the general occupation license type, covering many businesses. In
the Jeannette prosecutions, the ordinance involved lays
the usual tax on canvassing or soliciting sales of goods, wares and
merchandise. It was passed in 1898. Every power of taxation or
regulation is capable of abuse. Each one, to some extent, prohibits
the free exercise of religion and abridges the freedom of the
press, but that is hardly a reason for denying the power. If the
tax is used oppressively, the law will protect the victims of such
action.
This decision forces a tax subsidy notwithstanding our accepted
belief in the separation of church and state. Instead of all
bearing equally the burdens of government, this Court now fastens
upon the communities the entire cost of policing the sales of
religious literature. That the burden may be heavy is shown by the
record in the Jeannette cases. There are only eight
prosecutions, but one hundred and four Witnesses solicited in
Jeannette the day Page 319 U. S. 131 of the arrests. They had been requested by the authorities to
await the outcome of a test case before continuing their
canvassing. The distributors of religious literature, possibly of
all informatory publications, become today privileged to carry on
their occupations without contributing their share to the support
of the government which provides the opportunity for the exercise
of their liberties.
Nor do we think it can be said, properly, that these sales of
religious books are religious exercises. The opinion of the Court
in the Jeannette cases emphasizes for the first time the
argument that the sale of books and pamphlets is, in itself, a
religious practice. The Court says the Witnesses
"spread their interpretations of the Bible and their religious
beliefs largely through the hand distribution of literature by full
or part-time workers."
"The hand distribution of religious tracts is an age-old form of
missionary evangelism -- as old as the history of printing
presses."
"It is more than preaching; it is more than distribution of
religious literature. It is a combination of both. Its purpose is
as evangelical as the revival meeting. This form of religious
activity occupies the same high estate under the First Amendment as
do worship in the churches and preaching from the pulpits."
"Those who can tax the exercise of this religious practice can
make its exercise so costly as to deprive it of the resources
necessary for its maintenance."
"The judgment in Jones v. Opelika has this day been
vacated. Freed from that controlling precedent, we can restore to
their high constitutional position the liberties of itinerant
evangelists who disseminate their religious beliefs and the tenets
of their faith through distribution of literature."
The record shows that books entitled "Creation" and "Salvation,"
as well as Bibles, were offered for sale. We shall assume the first
two publications, also, are religious books. Certainly there can be
no dissent from the statement that Page 319 U. S. 132 selling religious books is an age-old practice, or that it is
evangelism in the sense that the distributors hope the readers will
be spiritually benefited. That does not carry us to the conviction,
however, that, when distribution of religious books is made at a
price, the itinerant colporteur is performing a religious rite, is
worshipping his Creator in his way. Many sects practice healing the
sick as an evidence of their religious faith, or maintain
orphanages or homes for the aged or teach the young. These are, of
course, in a sense, religious practices, but hardly such examples
of religious rites as are encompassed by the prohibition against
the free exercise of religion.
And even if the distribution of religious books was a religious
practice protected from regulation by the First Amendment,
certainly the affixation of a price for the articles would destroy
the sacred character of the transaction. The evangelist becomes
also a book agent.
The rites which are protected by the First Amendment are, in
essence, spiritual -- prayer, mass, sermons, sacrament -- not sales
of religious goods. The card furnished each Witness to identify him
as an ordained minister does not go so far as to say the sale is a
rite. It states only that the Witnesses worship by exhibiting to
people
"the message of said gospel in printed form, such as the Bible,
books, booklets and magazines, and thus afford the people the
opportunity of learning of God's gracious provision for them."
On the back of the card appears: "You may contribute twenty-five
cents to the Lord's work and receive a copy of this beautiful
book." The sale of these religious books has, we think, relation to
their religious exercises, similar to the "information march," said
by the Witnesses to be one of their "ways of worship," and by this
Court to be subject to regulation by license in Cox v. New
Hampshire, 312 U. S. 569 , 312 U. S. 572 , 312 U. S. 573 , 312 U. S.
576 .
The attempted analogy in the dissenting opinion in Jones v.
Opelika, 316 U. S. 584 , 316 U. S. 609 , 316 U. S. 611 ,
which now becomes Page 319 U. S. 133 the decision of this Court, between the forbidden burden of a
state tax for the privilege of engaging in interstate commerce and
a state tax on the privilege of engaging in the distribution of
religious literature is wholly irrelevant. A state tax on the
privilege of engaging in interstate commerce is held invalid
because the regulation of commerce between the states has been
delegated to the Federal Government. This grant includes the
necessary means to carry the grant into effect, and forbids state
burdens without Congressional consent. [ Footnote 2/16 ] It is not the power to tax interstate
commerce which is interdicted, but the exercise of that power by an
unauthorized sovereign, the individual state. Although the
fostering of commerce was one of the chief purposes for organizing
the present Government, that commerce may be burdened with a tax by
the United States. Internal Revenue Code, § 3469. Commerce must pay
its way. It is not exempt from any type of taxation if imposed by
an authorized authority. The Court now holds that the First
Amendment wholly exempts the church and press from a privilege tax,
presumably by the national, as well as the state, government.
The limitations of the Constitution are not maxims of social
wisdom, but definite controls on the legislative process. We are
dealing with power, not its abuse. This late withdrawal of the
power of taxation over the distribution activities of those covered
by the First Amendment fixes what seems to us an unfortunate
principle of tax exemption, capable of indefinite extension. We had
thought that such an exemption required a clear and certain grant.
This we do not find in the language of the First and Fourteenth
Amendments. We are therefore of the opinion the judgments below
should be affirmed. Page 319 U. S. 134 MR. JUSTICE ROBERTS, MR. JUSTICE FRANKFURTER, and MR. JUSTICE
JACKSON join in this dissent. MR. JUSTICE JACKSON has stated
additional reasons for dissent in his concurrence in Douglas v.
Jeannette, post, p. 319 U. S.
166 .
[ Footnote 2/1 ]
The Court in the Murdock case analyzes the contention
that the sales technique partakes of commercialism and says:
"It is a distortion of the facts of record to describe their
activities as the occupation of selling books and pamphlets. And
the Pennsylvania court did not rest the judgments of conviction on
that basis, though it did find that petitioners 'sold' the
literature."
The state court, in its opinion, 149 Pa.Super.Ct. 175, 27 A.2d
666, 667, stated the applicable ordinance as forbidding sales of
merchandise by canvassing without a license, and said that the
evidence established its violation by selling
"two books entitled 'Salvation' and 'Creation,' respectively,
and certain leaflets or pamphlets, all published by the Watch Tower
Bible and Tract Society of Brooklyn, N.Y., for which the society
fixed twenty-five cents each as the price for the books and five
cents each as the price of the leaflets. Defendants paid twenty
cents each for the books, unless they devoted their whole time to
the work, in which case they paid five cents each for the books
they sold at twenty-five cents. Some of the witnesses spoke of
'contributions,' but the evidence justified a finding that they
sold the books and pamphlets."
The state court then repeated with approval from one of its
former decisions the statements:
"The constitutional right of freedom of worship does not
guarantee anybody the right to sell anything from house to house or
in buildings, belonging to, or in the occupancy of, other
persons."
". . . we do not accede to his contention on the oral argument
that the federal decisions relied upon by him go so far as to rule
that the constitutional guaranty of a free press forbids dealers in
books and printed matter being subjected to our State mercantile
license tax or the federal income tax as to such sales, along with
dealers in other merchandise." Pittsburgh v. Ruffner, 134 Pa.Super.Ct.192, 199, 202, 4
A.2d 224. And after further discussion of selling, the conviction
of the Witnesses was affirmed. It can hardly be said, we think,
that the state court did not treat the Jeannette canvassers as
engaged in a commercial activity or occupation at the time of their
arrests.
[ Footnote 2/2 ] Whitney v. California, 274 U.
S. 357 , 274 U. S. 371 ,
and the concurring opinion, 274 U. S. 373 ; Reynolds v. United States, 98 U. S.
145 , 98 U. S. 166 ; Cantwell v. Connecticut, 310 U. S. 296 , 310 U. S. 303 ; Cox v. New Hampshire, 312 U. S. 569 , 312 U. S. 574 , 312 U. S.
576 .
[ Footnote 2/3 ]
Journal of the Convention, 369; II Farrand, The Records of the
Federal Convention, 611, 616-8, 620. Cf. McMaster &
Stone, Pennsylvania and the Federal Constitution, 251-253.
[ Footnote 2/4 ]
I Elliot's Debates on the Federal Constitution (1876) 319 et
seq. In ratifying the Constitution, the following declarations
were made: New Hampshire, p. 326, "XI. Congress shall make
no laws touching religion, or to infringe the rights of
conscience." Virginia, p. 327, ". . . no right, of any
denomination, can be cancelled, abridged, restrained, or modified,
by the Congress, by the Senate or House of Representatives, acting
in any capacity, by the President, or any department or officer of
the United States, except in those instances in which power is
given by the Constitution for those purposes, and that, among other
essential rights, the liberty of conscience, and of the press,
cannot be cancelled, abridged, restrained, or modified, by any
authority of the United States." New York, p. 328, "That
the freedom of the press ought not to be violated or restrained."
After the submission of the amendments, Rhode Island ratified and declared, pp. 334, 335,
"IV. That religion, or the duty which we owe to our Creator, and
the manner of discharging it, can be directed only by reason and
conviction, and not by force and violence, and therefore all men
have a natural, equal, and unalienable right to the exercise of
religion according to the dictates of conscience, and that no
particular religious sect or society ought to be favored or
established, by law, in preference to others. . . . XVI. That the
people have a right to freedom of speech, and of writing and
publishing their sentiments. That freedom of the press is one of
the greatest bulwark of liberty, and ought not to be violated."
[ Footnote 2/5 ]
The Articles of Confederation had references to religion and
free speech:
"Article III. The said States hereby severally enter into a firm
league of friendship with each other, for their common defence, the
security of their liberties, and their mutual and general welfare,
binding themselves to assist each other, against all force offered
to, or attacks made upon them, or any of them, on account of
religion, sovereignty, trade, or any other pretence whatever."
" * * * *" "Article V. . . . Freedom of speech and debate in Congress shall
not be impeached or questioned in any court, or place out of
Congress, and the members of Congress shall be protected in their
persons from arrests and imprisonments, during the time of their
going to and from, and attendance on Congress, except for treason,
felony, or breach of the peace."
The Statute of Religious Freedom was passed in Virginia in 1785.
The substance was in paragraph II:
" Be it enacted by the General Assembly, That no man
shall be compelled to frequent or support any religious worship,
place, or ministry whatsoever, nor shall be enforced, restrained,
molested, or burthened in his body or goods, nor shall otherwise
suffer on account of his religious opinions or belief; but that all
men shall be free to profess, and by argument to maintain, their
opinion in matters of religion, and that the same shall in no wise
diminish, enlarge, or affect their civil capacities."
12 Hening Statutes of Va. 86.
A number of the states' constitutions at the time of the
adoption of the Bill of Rights contained provisions as to a free
press:
Georgia, Constitution of 1777, Art. LXI. "Freedom of the press
and trial by jury to remain inviolate forever." I Poore, Federal
and State Constitutions 383.
Maryland, Constitution of 1776, Declaration of Rights, Art.
XXXVIII. "That the liberty of the press ought to be inviolably
preserved." Id. 820.
Massachusetts, Constitution of 1780, Part First, Art. XVI. "The
liberty of the press is essential to the security of freedom in a
State; it ought not, therefore, to be restrained in this
commonwealth." Id., 959.
New Hampshire, Constitution of 1784, Part 1, Art. XXII. "The
Liberty of the Press is essential to the security of freedom in a
state; it ought, therefore, to be inviolably preserved." II Poore, id., 1282.
North Carolina, Constitution of 1776, Declaration of Rights,
Art. XV. "That the freedom of the press is one of the great
bulwarks of liberty, and therefore ought never to be restrained." Id., 1410.
Pennsylvania, Constitution of 1776, Declaration of Rights, Art.
XII. "That the people have a right to freedom of speech, and of
writing, and publishing their sentiments; therefore the freedom of
the press ought not to be restrained." Id., 1542.
Virginia, Bill of Rights, 1776, § 12. "That the freedom of the
press is one of the great bulwarks of liberty, and can never be
restrained but by despotic governments." Id., 1909.
[ Footnote 2/6 ]
For example, the first amendment as it passed the House of
Representatives on Monday, August 24, 1789, read as follows:
"Congress shall make no law establishing religion or prohibiting
the free exercise thereof, nor shall the rights of Conscience be
infringed."
"The Freedom of Speech, and of the Press, and the right of the
People peaceably to assemble, and consult for their common good,
and to apply to the Government for a redress of grievances, shall
not be infringed."
Records of the United States Senate, 1A-C2 (U.S. Nat.
Archives).
Apparently when the proposed amendments were passed by the
Senate on September 9, 1789, what is now the first amendment read
as follows:
"Congress shall make no law establishing articles of faith, or a
mode of worship, or prohibiting the free exercise of religion, or
abridging the freedom of speech, or of the press, or the right of
the people peaceably to assemble, and to petition to the government
for a redress of grievances." Id. [ Footnote 2/7 ]
Egbert Benson was the first attorney general of New York, a
member of the Continental Congress and of the New York Convention
for ratification of the Constitution. Biographical Directory of the
American Congress, 694.
[ Footnote 2/8 ]
"And be it enacted by the Authority aforesaid, That there shall
be raised, levied, collected and paid, to and for the Use of her
Majesty, her Heirs and Successors, for and upon all Books and
Papers commonly called Pamphlets, and for and upon all News Papers,
or Papers containing publick News, Intelligence or Occurrences,
which shall, at any Time or Times within or during the Term last
mentioned, be printed in Great Britain, to be dispersed
and made publick, and for and upon such Advertisements as are
herein after mentioned, the respective Duties following; that is to
say,"
"For every such Pamphlet or Paper contained in Half a Sheet, or
any lesser Piece of Paper, so printed, the Sum of one half-penny
Sterling."
"For every such Pamphlet or Paper (being larger than Half a
Sheet, and not exceeding one whole Sheet) so printed, a Duty after
the Rate of one Penny Sterling for every printed Copy thereof."
"And for every such Pamphlet or Paper, being larger than one
whole Sheet, and not exceeding six Sheets in Octavo, or in a lesser
Page, or not exceeding twelve Sheets in Quarto, or twenty Sheets in
Folio, so printed, a Duty after the Rate of two Shillings Sterling
for every Sheet of any kind of Paper which shall be contained in
one printed Copy thereof."
"And for every Advertisement to be contained in the London
Gazette, or any other printed Paper, such Paper being dispersed or
made publick weekly, or oftner, the Sum of twelve Pence
Sterling."
[ Footnote 2/9 ]
Stevens, Sources of the Constitution, 221, note 2; Stewart,
Lennox and the Taxes on Knowledge, 15 Scottish Hist,Rev. 322, 326;
McMaster & Stone, Pennsylvania and the Federal Constitution,
181; Grosjean v. American Press Co., 297 U.
S. 233 , 297 U. S.
248 .
[ Footnote 2/10 ] Cf. Collet, Taxes on Knowledge; Chafee, Free Speech in
the United States, 17, n. 33.
[ Footnote 2/11 ] Gitlow v. New York (1925), 268 U.
S. 652 , 268 U. S. 666 ; Near v. Minnesota, 283 U. S. 697 , 283 U. S. 707 ; Cantwell v. Connecticut, 310 U. S. 296 , 310 U. S.
307 .
[ Footnote 2/12 ] Permoli v. First
Municipality , 3 How. 589, 44 U. S. 609 ; Barron v.
Baltimore , 7 Pet. 243, 32 U. S.
247 .
[ Footnote 2/13 ]
For the state provisions on expression and religion, see 2 Cooley, Constitutional Limitations (8th Ed.) 876,
965; III Constitutions of the States, New York State Const. Conv.
Committee 1938.
[ Footnote 2/14 ]
To this, Professor Chafee adds the right to criticize the
Government. Free Speech in the United States (1941) 18 et
seq. Cf. 2 Cooley's Constitutional Limitations (8th
Ed.) 886.
[ Footnote 2/15 ] Giragi v. Moore, 301 U.S. 670; 48 Ariz. 33; 49 Ariz.
74.
[ Footnote 2/16 ] Brown v.
Maryland , 12 Wheat. 419, 25 U. S. 448 ; Kentucky Whip & Collar Co. v. Illinois Central R. Co., 299 U. S. 334 , 299 U. S. 350 ; Gwin, White & Prince, Inc. v. Henneford, 305 U.
S. 434 , 305 U. S. 438 ; Puget Sound Co. v. Tax Commission, 302 U. S.
90 .
MR. JUSTICE FRANKFURTER, dissenting.
While I wholly agree with the views expressed by MR. JUSTICE
REED, the controversy is of such a nature as to lead me to add a
few words.
A tax can be a means for raising revenue, or a device for
regulating conduct, or both. Challenge to the constitutional
validity of a tax measure requires that it be analyzed and judged
in all its aspects. We must therefore distinguish between the
questions that are before us in these cases and those that are not.
It is altogether incorrect to say that the question here is whether
a state can limit the free exercise of religion by imposing
burdensome taxes. As the opinion of my Brother REED demonstrates,
we have not here the question whether the taxes imposed in these
cases are, in practical operation, an unjustifiable curtailment
upon the petitioners' undoubted right to communicate their views to
others. No claim is made that the effect of these taxes, either
separately or cumulatively, has been, or is likely to be, to
restrict the petitioners' religious propaganda activities in any
degree. Counsel expressly disclaim any such contention. They insist
on absolute immunity from any kind of monetary exaction for their
occupation. Their claim is that no tax, no matter how trifling, can
constitutionally be laid upon the activity of distributing
religious literature, regardless of the actual effect of the tax
upon such activity. That is the only ground upon which these
ordinances have been attacked; that is the only question raised in
or decided by the state courts, and that is the only question
presented to us. No complaint is made against the size of the
taxes. If an appropriate claim, indicating that the taxes were
oppressive in their effect upon the petitioners' Page 319 U. S. 135 activities, had been made, the issues here would be very
different. No such claim has been made, and it would be gratuitous
to consider its merits.
Nor have we occasion to consider whether these measures are
invalid on the ground that they unjustly or unreasonably
discriminate against the petitioners. Counsel do not claim, as
indeed they could not, that these ordinances were intended to, or
have been applied to, discriminate against religious groups
generally or Jehovah's Witnesses particularly. No claim is made
that the effect of the taxes is to hinder or restrict the
activities of Jehovah's Witnesses while other religious groups,
perhaps older or more prosperous, can carry on theirs. This
question, too, is not before us.
It cannot be said that the petitioners are constitutionally
exempt from taxation merely because they may be engaged in
religious activities or because such activities may constitute an
exercise of a constitutional right. It will hardly be contended,
for example, that a tax upon the income of a clergyman would
violate the Bill of Rights, even though the tax is ultimately borne
by the members of his church. A clergyman, no less than a judge, is
a citizen. And not only in time of war would neither willingly
enjoy immunity from the obligations of citizenship. It is only fair
that he also who preaches the word of God should share in the costs
of the benefits provided by government to him as well as to the
other members of the community. And so no one would suggest that a
clergyman who uses an automobile or the telephone in connection
with his work thereby gains a constitutional exemption from taxes
levied upon the use of automobiles or upon telephone calls. Equally
alien is it to our constitutional system to suggest that the
Constitution of the United States exempts church-held lands from
state taxation. Plainly, a tax measure is not invalid under the
federal Constitution merely because it falls upon persons engaged
in activities of a religious nature. Page 319 U. S. 136 Nor can a tax be invalidated merely because it falls upon
activities which constitute an exercise of a constitutional right.
The First Amendment, of course, protects the right to publish a
newspaper or a magazine or a book. But the crucial question is --
how much protection does the Amendment give, and against what is
the right protected? It is certainly true that the protection
afforded the freedom of the press by the First Amendment does not
include exemption from all taxation. A tax upon newspaper
publishing is not invalid simply because it falls upon the exercise
of a constitutional right. Such a tax might be invalid if it
invidiously singled out newspaper publishing for bearing the
burdens of taxation or imposed upon them in such ways as to
encroach on the essential scope of a free press. If the Court could
justifiably hold that the tax measures in these cases were
vulnerable on that ground, I would unreservedly agree. But the
Court has not done so, and indeed could not.
The vice of the ordinances before us, the Court holds, is that
they impose a special kind of tax, a "flat license tax, the payment
of which is a condition of the exercise of these constitutional
privileges [to engage in religious activities]." But the fact that
an occupation tax is a "flat" tax certainly is not enough to
condemn it. A legislature undoubtedly can tax all those who engage
in an activity upon an equal basis. The Constitution certainly does
not require that differentiations must be made among taxpayers upon
the basis of the size of their incomes or the scope of their
activities. Occupation taxes normally are flat taxes, and the Court
surely does not mean to hold that a tax is bad merely because all
taxpayers pursuing the very same activities, and thereby demanding
the same governmental services, are treated alike. Nor, as I have
indicated, can a tax be invalidated because the exercise of a
constitutional privilege is conditioned upon its payment. It
depends upon the nature of the condition that Page 319 U. S. 137 is imposed, its justification, and the extent to which it
hinders or restricts the exercise of the privilege.
As I read the Court's opinion, it does not hold that the taxes
in the cases before us, in fact, do hinder or restrict the
petitioners in exercising their constitutional rights. It holds
that "The power to tax the exercise of a privilege is the power to
control or suppress its enjoyment." This assumes that, because the
taxing power exerted in Magnano Co. v. Hamilton, 292 U. S. 40 , the
well known oleomargarine tax case, may have had the effect of
"controlling" or "suppressing" the enjoyment of a privilege, and
still was sustained by this Court, and because all exertions of the
taxing power may have that effect, if perchance a particular
exercise of the taxing power does have that effect, it would have
to be sustained under our ruling in the Magnano case.
The power to tax, like all powers of government, legislative,
executive and judicial alike, can be abused or perverted. The power
to tax is the power to destroy only in the sense that those who
have power can misuse it. Mr. Justice Holmes disposed of this
smooth phrase as a constitutional basis for invalidating taxes when
he wrote "The power to tax is not the power to destroy while this
Court sits." Panhandle Oil Co. v. Knox, 277 U.
S. 218 , 277 U. S. 223 .
The fact that a power can be perverted does not mean that every
exercise of the power is a perversion of the power. Thus, if a tax
indirectly suppresses or controls the enjoyment of a constitutional
privilege which a legislature cannot directly suppress or control,
of course, it is bad. But it is irrelevant that a tax can suppress
or control if it does not. The Court holds that "[t]hose who can
tax the exercise of this religious practice can make its exercise
so costly as to deprive it of resources necessary for its
maintenance." But this is not the same as saying that
"[t]hose who do tax the exercise of this religious practice have
made its exercise so costly as to deprive it of the resources
necessary for its maintenance. " Page 319 U. S. 138 The Court could not plausibly make such an assertion, because
the petitioners themselves disavow any claim that the taxes imposed
in these cases impair their ability to exercise their
constitutional rights. We cannot invalidate the tax measures before
us simply because there may be others, not now before us, which are
oppressive in their effect. The Court's opinion does not deny that
the ordinances involved in these cases have in no way disabled the
petitioners to engage in their religious activities. It holds only
that
"Those who can tax the privilege of engaging in this form of
missionary evangelism can close its doors to all those who do not
have a full purse."
I quite agree with this statement as an abstract proposition.
Those who possess the power to tax might wield it in tyrannical
fashion. It does not follow, however, that every exercise of the
power is an act of tyranny, or that government should be impotent
because it might become tyrannical. The question before us now is
whether these ordinances have deprived the petitioners of their
constitutional rights, not whether some other ordinances not now
before us might be enacted which might deprive them of such rights.
To deny constitutional power to secular authority merely because of
the possibility of its abuse is as valid as to deny the basis of
spiritual authority because those in whom it is temporarily vested
may misuse it.
The petitioners say they are immune as much from a flat
occupation tax as from a licensing fee purporting explicitly to
cover only the costs of regulation. They rightly reject any
distinction between this occupation tax and such a licensing fee.
There is no constitutional difference between a so-called
regulatory fee and an imposition for purposes of revenue. The state
exacts revenue to maintain the costs of government as an entirety.
For certain purposes and at certain times, a legislature may
earmark exactions to cover the costs of specific governmental
services. In most instances, the revenues of the state are tapped
from multitudinous sources for a Page 319 U. S. 139 common fund out of which the costs of government are paid. As a
matter of public finance, it is often impossible to determine with
nicety the governmental expenditures attributable to particular
activities. But, in any event, whether government collects revenue
for the costs of its services through an earmarked fund, or whether
an approximation of the cost of regulation goes into the general
revenues of government out of which all expenses are borne, is a
matter of legislative discretion, and not of constitutional
distinction. Just so long as an occupation tax is not used as a
cover for discrimination against a constitutionally protected right
or as an unjustifiable burden upon it, from the point of view of
the Constitution of the United States it can make no difference
whether such a money exaction for governmental benefits is labeled
a regulatory fee or a revenue measure.
It is strenuously urged that the Constitution denies a city the
right to control the expression of men's minds and the right of men
to win others to their views. But the Court is not divided on this
proposition. No one disputes it. All members of the Court are
equally familiar with the history that led to the adoption of the
Bill of Rights, and are equally zealous to enforce the
constitutional protection of the free play of the human spirit.
Escape from the real issue before us cannot be found in such
generalities. The real issue here is not whether a city may charge
for the dissemination of ideas, but whether the states have power
to require those who need additional facilities to help bear the
cost of furnishing such facilities. Street hawkers make demands
upon municipalities that involve the expenditure of dollars and
cents, whether they hawk printed matter or other things. As the
facts in these cases show, the cost of maintaining the peace, the
additional demands upon governmental facilities for assuring
security, involve outlays which have to be met. To say that the
Constitution forbids the states to obtain the necessary revenue
from the whole of a class that enjoys these benefits Page 319 U. S. 140 and facilities when, in fact, no discrimination is suggested as
between purveyors of printed matter and purveyor of other things,
and the exaction is not claimed to be actually burdensome, is to
say that the Constitution requires not that the dissemination of
ideas in the interest of religion shall be free, but that it shall
be subsidized by the state. Such a claim offends the most important
of all aspects of religious freedom in this country, namely, that
of the separation of church and state.
The ultimate question in determining the constitutionality of a
tax measure is -- has the state given something for which it can
ask a return? There can be no doubt that these petitioners, like
all who use the streets, have received the benefits of government.
Peace is maintained, traffic is regulated, health is safeguarded --
these are only some of the many incidents of municipal
administration. To secure them costs money, and a state's source of
money is its taxing power. There is nothing in the Constitution
which exempts persons engaged in religious activities from sharing
equally in the costs of benefits to all, including themselves,
provided by government.
I cannot say, therefore, that, in these cases, the community has
demanded a return for that which it did not give. Nor am I called
upon to say that the state has demanded unjustifiably more than the
value of what it gave, nor that its demand, in fact, cramps
activities pursued to promote religious beliefs. No such claim was
made at the bar, and there is no evidence in the records to
substantiate any such claim if it had been made. Under these
circumstances, therefore, I am of opinion that the ordinances in
these cases must stand.
MR. JUSTICE JACKSON joins in this dissent. | The Supreme Court ruled that a municipal ordinance requiring religious colporteurs to pay a license tax as a condition of their activities is unconstitutional, violating the First Amendment rights to freedom of speech, press, and religion. The Court held that religious activities, even when involving the sale of literature, are not commercial enterprises and cannot be taxed by the state. The Court emphasized the importance of religious freedom and the separation of church and state, stating that the Constitution does not require the state to subsidize the dissemination of religious ideas but also does not allow the state to suppress or tax them. |
Taxes | Arrowsmith v. Commissioner | https://supreme.justia.com/cases/federal/us/344/6/ | U.S. Supreme Court Arrowsmith v. Commissioner, 344 U.S. 6 (1952) Arrowsmith v. Commissioner of
Internal Revenue No. 51 Argued October 24,
1952 Decided November 10,
1952 344 U.S.
6 CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE SECOND
CIRCUIT Syllabus In 1937, two taxpayers decided to liquidate and divide the
proceeds of a corporation in which each owned 50% of the stock.
Partial distributions were made in 1937, 1938, and 1939, and a
final one in 1940, and the profits thereon were reported by the
taxpayers in their income tax returns as "capital gains." In 1944,
a judgment was rendered against the corporation and against one of
the taxpayers individually. Each of the two taxpayers paid half of
this judgment and deducted 100% of the amount so paid as an
ordinary business loss in his income tax return for 1944. Held: Under §§ 23(g) and 115(c) of the Internal Revenue
Code, these losses should have been treated as "capital losses,"
since they were paid because of liability imposed on the taxpayers
as transferees of liquidation distribution assets. Pp. 344 U. S. 7 -9.
(a) A different result is not required because of the principle
that each taxable year is a separate unit for tax accounting
purposes. Pp. 344 U. S. 8 -9.
(b) Nor is a different result required as to one of the
taxpayers because the judgment was against him personally, as well
as against the corporation. P. 344 U. S. 9 .
193 F.2d 734, affirmed.
The Commissioner of Internal Revenue determined that a judgment
loss paid by petitioners as transferees of liquidation assets of a
corporation were "capital losses" under the Internal Revenue Code.
The Tax Court held that they were ordinary business losses. 15 T.C.
876. The Court of Appeals reversed. 193 F.2d 734. This Court
granted certiorari. 343 U.S. 976. Affirmed, p. 344 U. S. 9 . Page 344 U. S. 7 MR. JUSTICE BLACK delivered the opinion of the Court.
This is an income tax controversy growing out of the following
facts as shown by findings of the Tax Court. In 1937, two
taxpayers, petitioners here, decided to liquidate and divide the
proceeds of a corporation in which they had equal stock ownership. * Partial
distributions made in 1937, 1938, and 1939 were followed by a final
one in 1940. Petitioners reported the profits obtained from this
transaction, classifying them as capital gains. They thereby paid
less income tax than would have been required had the income been
attributed to ordinary business transactions for profit. About the
propriety of these 1937-1940 returns there is no dispute. But, in
1944, a judgment was rendered against the old corporation and
against Frederick R. Bauer, individually. The two taxpayers were
required to and did pay the judgment for the corporation, of whose
assets they were transferees. See Phillips-ones Corp. v.
Parmley, 302 U. S. 233 , 302 U. S.
235 -236. Cf. I.R.C. § 311(a). Classifying the
loss as an ordinary business one, each took a tax deduction for
100% of the amount paid. Treatment of the loss as a capital one
would have allowed deduction of a much smaller amount. See I.R.C. § 117(b), (d)(2) and (e). The Commissioner Page 344 U. S. 8 viewed the 1944 payment as part of the original liquidation
transaction requiring classification as a capital loss, just as the
taxpayers had treated the original dividends as capital gains.
Disagreeing with the Commissioner, the Tax Court classified the
1944 payment as an ordinary business loss. 15 T.C. 876. Disagreeing
with the Tax Court, the Court of Appeals reversed, treating the
loss as "capital." 193 F.2d 734. This latter holding conflicts with
the Third Circuit's holding in Commissioner v. Switlik, 184 F.2d 299. Because of this conflict, we granted certiorari. 343
U.S. 976.
I.R.C. § 23(g), treats losses from sales or exchanges of capital
assets as "capital losses," and I.R.C. § 115(c) requires that
liquidation distributions be treated as exchanges. The losses here
fall squarely within the definition of "capital losses" contained
in these sections. Taxpayers were required to pay the judgment
because of liability imposed on them as transferees of liquidation
distribution assets. And it is plain that their liability as
transferees was not based on any ordinary business transaction of
theirs apart from the liquidation proceedings. It is not even
denied that, had this judgment been paid after liquidation, but
during the year 1940, the losses would have been properly treated
as capital ones. For payment during 1940 would simply have reduced
the amount of capital gains taxpayers received during that
year.
It is contended, however, that this payment, which would have
been a capital transaction in 1940, was transformed into an
ordinary business transaction in 1944 because of the well
established principle that each taxable year is a separate unit for
tax accounting purposes. United States v. Lewis, 340 U. S. 590 ; North American Oil Consolidated v. Burnet, 286 U.
S. 417 . But this principle is not breached by
considering all the 1937-1944 liquidation transaction events in
order properly to classify the nature Page 344 U. S. 9 of the 1944 loss for tax purposes. Such an examination is not an
attempt to reopen and readjust the 1937 to 1940 tax returns, an
action that would be inconsistent with the annual tax accounting
principle.
The petitioner Bauer's executor presents an argument for
reversal which applies to Bauer alone. He was liable not only by
reason of being a transferee of the corporate assets. He was also
held liable jointly with the original corporation, on findings that
he had secretly profited because of a breach of his fiduciary
relationship to the judgment creditor. Trounstine v. Bauer,
Pogue & Co., 44 F. Supp.
767 , 773; 144 F.2d 379, 382. The judgment was against both
Bauer and the corporation. For this reason, it is contended that
the nature of Bauer's tax deduction should be considered on the
basis of his liability as an individual who sustained a loss in an
ordinary business transaction for profit. We agree with the Court
of Appeals that this contention should not be sustained. While
there was a liability against him in both capacities, the
individual judgment against him was for the whole amount. His
payment of only half the judgment indicates that both he and the
other transferee were paying in their capacities as such. We see no
reason for giving Bauer a preferred tax position. Affirmed. * At dissolution, the corporate stock was owned by Frederick P.
Bauer and the executor of Davenport Pogue's estate. The parties
here now are Pogue's widow, Bauer's widow, and the executor of
Bauer's estate.
MR. JUSTICE DOUGLAS, dissenting.
I agree with MR. JUSTICE JACKSON that these losses should be
treated as ordinary, not capital, losses. T here were no capital
transactions in the year in which the losses were suffered. Those
transactions occurred and were accounted for in earlier years, in
accord with the established principle that each year is a separate
unit for tax accounting purposes. See United States v.
Lewis, 340 U. S. 590 . I
have not felt, as my dissent in the Lewis case indicates,
that the law made that an inexorable Page 344 U. S. 10 principle. But, if it is the law, we should require observance
of it -- not merely by taxpayers, but by the government as well. We
should force each year to stand on its own footing, whoever may
gain or lose from it in a particular case. We impeach that
principle when we treat this year's losses as if they diminished
last year's gains.
MR. JUSTICE JACKSON, whom MR. JUSTICE FRANKFURTER joins,
dissenting.
This problem arises only because the judgment was rendered in a
taxable year subsequent to the liquidation.
Had the liability of the transferor-orporation been reduced to
judgment during the taxable year in which liquidation occurred, or
prior thereto this problem under the tax laws, would not arise. The
amount of the judgment rendered against the corporation would have
decreased the amount it had available for distribution, which would
have reduced the liquidating dividends proportionately and
diminished the capital gains taxes assessed against the
stockholders. Probably it would also have decreased the
corporation's own taxable income.
Congress might have allowed, under such circumstances, tax
returns of the prior year to be reopened or readjusted so as to
give the same tax results as would have obtained had the liability
become known prior to liquidation. Such a solution is foreclosed to
us, and the alternatives left are to regard the judgment liability
fastened by operation of law on the transferee as an ordinary loss
for the year of adjudication or to regard it as a capital loss for
such year.
This Court simplifies the choice to one of reading the English
language, and declares that the losses here come "squarely within"
the definition of capital losses contained within two sections of
the Internal Revenue Page 344 U. S. 11 Code. What seems so clear to this Court was not seen at all by
the Tax Court, in this case or in earlier consideration of the same
issue, nor was it grasped by the Court of Appeals for the Third
Circuit. Commissioner v. Switlik, 184 F.2d 299 (1950).
I find little aid in the choice of alternatives from arguments
based on equities. One enables the taxpayer to deduct the amount of
the judgment against his ordinary income which might be taxed as
high as 87%, while, if the liability had been assessed against the
corporation prior to liquidation, it would have reduced his capital
gain which was taxable at only 25% (now 26%). The consequence may
readily be characterized as a windfall (regarding a windfall as
anything that is left to a taxpayer after the collector has
finished with him).
On the other hand, adoption of the contrary alternative may
penalize the taxpayer because of two factors: (1) since capital
losses are deductible only against capital gains plus $1,000, a
taxpayer having no net capital gains in the ensuing five years
would have no opportunity to deduct anything beyond $5,000, and,
(2) had the liability been discharged by the corporation, a portion
of it would probably, in effect, have been paid by the Government,
since the corporation could have taken it as a deduction, while
here, the total liability comes out of the pockets of the
stockholders.
Solicitude for the revenues is a plausible but treacherous basis
upon which to decide a particular tax case. A victory may have
implications which in future cases will cost the Treasury more than
a defeat. This might be such a case, for anything I know. Suppose
that, subsequent to liquidation, it is found that a corporation has
undisclosed claims, instead of liabilities, and that, under
applicable state law, they may be prosecuted for the benefit of the
stockholders. The logic of the Court's decision here, if adhered
to, would result in a lesser return to the Page 344 U. S. 12 Government than if the recoveries were considered ordinary
income. Would it be so clear that this is a capital loss if the
shoe were on the other foot?
Where the statute is so indecisive and the importance of a
particular holding lies in its rational and harmonious relation to
the general scheme of the tax law, I think great deference is due
the twice-xpressed judgment of the Tax Court. In spite of the
gelding of Dobson v. Commissioner, 320 U.
S. 489 , by the recent revision of the Judicial Code, Act
of June 25, 1948, § 36, 62 Stat. 991-992, I still think the Tax
Court is a more competent and steady influence toward a systematic
body of tax law than our sporadic omnipotence in a field beset with
invisible boomerangs. I should reverse, in reliance upon the Tax
Court's judgment more, perhaps, than my own. | The Supreme Court held that losses incurred by taxpayers due to a judgment against their liquidated corporation should be treated as "capital losses" rather than ordinary business losses. This is because the taxpayers were liable as transferees of liquidation distribution assets, and their liability was directly related to the liquidation. The Court's decision was based on the relevant sections of the Internal Revenue Code, and the judgment was affirmed. |
Taxes | Crane v. Commissioner | https://supreme.justia.com/cases/federal/us/331/1/ | U.S. Supreme Court Crane v. Commissioner, 331 U.S. 1 (1947) Crane v. Commissioner of Internal
Revenue No. 68 Argued December 11,
1946 Decided April 14,
1947 331 U.S.
1 CERTIORARI TO THE CIRCUIT COURT OF
APPEALS FOR THE SECOND
CIRCUIT Syllabus 1. Under § 113(a)(5) of the Revenue Act of 1938, the "unadjusted
basis" for determining gain or loss on the sale of physical
property acquired by bequest subject to an unassumed mortgage is
the value of the property undiminished by the amount of the
mortgage. Pp. 331 U. S.
5 -11.
The word "property," as used in that section, means a physical
thing which is a subject of ownership or the owner's legal rights
therein, and not merely his "equity" after deducting the amount of
mortgages or other liens. Pp. 331 U. S.
5 -11.
2. Under § 113(b)(1)(B) of the Revenue Act of 1938, a taxpayer
who acquired an apartment house by bequest subject to an unassumed
mortgage equal to the value thereof, operated it for several years,
and sold it for a price slightly in excess of the amount of the
mortgage, was entitled to deductions for depreciation on the
building, and the "adjusted basis" for determining gain or loss on
the sale is to be determined by deducting such depreciation
allowances from the value of the property at the time of
acquisition. Pp. 331 U. S.
11 -12.
3. Under § 111(b) of the Revenue Act of 1938, the "amount
realized" on a sale of property for cash subject to an existing
mortgage is the amount of the cash realized plus the amount of the
mortgage, Page 331 U. S. 2 even though the seller had acquired the property subject to the
mortgage, which he never assumed, and the buyer neither assumed nor
paid the mortgage. Pp. 331 U. S.
12 -14.
4. On an appeal from a decision of the Tax Court, the Circuit
Court of Appeals had jurisdiction to review determinations by the
Tax Court that "property" as used in § 113(a) and related sections
of the Revenue Act of 1938, means "equity," and that the amount of
a mortgage subject to which property is sold is not the measure of
a benefit realized within the meaning of § 111(b), since these
determinations announced rules of general applicability on
clear-cut questions of law. P. 331 U. S. 15 .
5. As here construed, the Revenue Act of 1938 does not tax
something which is not "income" within the meaning of the Sixteenth
Amendment. Pp. 331 U. S.
15 -16.
153 F.2d 504 affirmed.
The Tax Court expunged part of a deficiency determined by the
Commissioner of Internal Revenue on account of the income tax on a
gain realized on the sale of an apartment house which had been
acquired by the taxpayer by bequest subject to an unassumed
mortgage. 3 T.C. 585. The Circuit Court of Appeals reversed. 153
F.2d 504. This Court granted certiorari. 328 U.S. 826. Affirmed, p. 331 U. S. 16 .
MR. CHIEF JUSTICE VINSON delivered the opinion of the Court.
The question here is how a taxpayer who acquires depreciable
property subject to an unassumed mortgage, holds it for a period,
and finally sells it still so encumbered, must compute her taxable
gain. Page 331 U. S. 3 Petitioner was the sole beneficiary and the executrix of the
will of her husband, who died January 11, 1932. He then owned an
apartment building and lot subject to a mortgage, [ Footnote 1 ] which secured a principal debt of
$255,000.00 and interest in default of $7,042.50. As of that date,
the property was appraised for federal estate tax purposes at a
value exactly equal to the total amount of this encumbrance.
Shortly after her husband's death, petitioner entered into an
agreement with the mortgagee whereby she was to continue to operate
the property -- collecting the rents, paying for necessary repairs,
labor, and other operating expenses, and reserving $200.00 monthly
for taxes -- and was to remit the net rentals to the mortgagee.
This plan was followed for nearly seven years, during which period
petitioner reported the gross rentals as income, and claimed and
was allowed deductions for taxes and operating expenses paid on the
property, for interest paid on the mortgage, and for the physical
exhaustion of the building. Meanwhile, the arrearage of interest
increased to $15,857.71. On November 29, 1938, with the mortgagee
threatening foreclosure, petitioner sold to a third party for
$3,000.00 cash, subject to the mortgage, and paid $500.00 expenses
of sale.
Petitioner reported a taxable gain of $1,250.00. Her theory was
that the "property" which she had acquired in 1932 and sold in 1938
was only the equity, or the excess in the value of the apartment
building and lot over the amount of the mortgage. This equity was
of zero value when she acquired it. No depreciation could be taken
on a zero value. [ Footnote 2 ]
Neither she nor her vendee ever assumed Page 331 U. S. 4 the mortgage, so, when she sold the equity, the amount she
realized on the sale was the net cash received, or $2,500.00. This
sum less the zero basis constituted her gain, of which she reported
half as taxable on the assumption that the entire property was a
"capital asset." [ Footnote
3 ]
The Commissioner, however, determined that petitioner realized a
net taxable gain of $23,767.03. His theory was that the "property"
acquired and sold was not the equity, as petitioner claimed, but
rather the physical property itself, or the owner's rights to
possess, use, and dispose of it, undiminished by the mortgage. The
original basis thereof was $262,042.50, its appraised value in
1932. Of this value, $55,000.00 was allocable to land and
$207,042.50 to building. [ Footnote
4 ] During the period, that petitioner held the property, there
was an allowable depreciation of $28,045.10 on the building,
[ Footnote 5 ] so that the
adjusted basis of the building at the time of sale was $178,997.40.
The amount realized on the sale was said to include not only the
$2,500.00 net cash receipts, but also the principal amount
[ Footnote 6 ] of the mortgage
subject to which the property was sold, both totaling $257,500.00.
The selling price was allocable in the proportion, $54,471.15 to
the land and $203,028.85 to the building. [ Footnote 7 ] The Commissioner agreed that the land
was Page 331 U. S. 5 a "capital asset," but thought that the building was not.
[ Footnote 8 ] Thus, he
determined that petitioner sustained a capital loss of $528.85 on
the land, of which 50% or $264.42 was taken into account, and an
ordinary gain of $24.031.45 on the building, or a net taxable gain
as indicated.
The Tax Court agreed with the Commissioner that the building was
not a "capital asset." In all other respects, it adopted
petitioner's contentions, and expunged the deficiency. [ Footnote 9 ] Petitioner did not appeal
from the part of the ruling adverse to her, and these questions are
no longer at issue. On the Commissioner's appeal, the Circuit Court
of Appeals reversed, one judge dissenting. [ Footnote 10 ] We granted certiorari because of
the importance of the questions raised as to the proper
construction of the gain and loss provisions of the Internal
Revenue Code. [ Footnote
11 ]
The 1938 Act, [ Footnote
12 ] § 111(a), defines the gain from "the sale or other
disposition of property" as "the excess of the amount realized
therefrom over the adjusted basis provided in section 113(b). . .
." It proceeds, § 111(b), to define "the amount realized from the
sale or other disposition of property" as "the sum of any money
received plus Page 331 U. S. 6 the fair market value of the property (other than money)
received." Further, in § 113(b), the "adjusted basis for
determining the gain or loss from the sale or other disposition of
property" is declared to be
"the basis determined under subsection (a), adjusted . . .
[(1)(B)]. . . for exhaustion, wear and tear, obsolescence,
amortization . . . to the extent allowed (but not less than the
amount allowable). . . ."
The basis under subsection (a) "if the property was acquired by
. . . devise . . . or by the decedent's estate from the decedent,"
§ 113(a)(5), is "the fair market value of such property at the time
of such acquisition."
Logically, the first step under this scheme is to determine the
unadjusted basis of the property, under § 113(a)(5), and the
dispute in this case is as to the construction to be given the term
"property." If "property," as used in that provision, means the
same thing as "equity," it would necessarily follow that the basis
of petitioner's property was zero, as she contends. If, on the
contrary, it means the land and building themselves, or the owner's
legal rights in them, undiminished by the mortgage, the basis was
$262,042.50.
We think that the reasons for favoring one of the latter
constructions are of overwhelming weight. In the first place, the
words of statutes -- including revenue acts -- should be
interpreted where possible in their ordinary, everyday senses.
[ Footnote 13 ] The only
relevant definitions of "property" to be found in the principal
standard dictionaries [ Footnote
14 ] are the two favored by the Commissioner -- i.e., either that "property" is the physical thing which is a subject of
ownership or that it is the aggregate of the owner's rights to
control and dispose of that thing. Page 331 U. S. 7 "Equity" is not given as a synonym, nor do either of the
foregoing definitions suggest that it could be correctly so used.
Indeed, "equity" is defined as "the value of a property . . . above
the total of the liens. . . ." [ Footnote 15 ] The contradistinction could hardly be more
pointed. Strong countervailing considerations would be required to
support a contention that Congress, in using the word "property,"
meant "equity," or that we should impute to it the intent to convey
that meaning. [ Footnote
16 ]
In the second place, the Commission's position has the approval
of the administrative construction of § 113(a)(5). With respect to
the valuation of property under that section, Reg. 101, Art.
113(a)(5)-1, promulgated under the 1938 Act, provided that "the
value of property as of the date of the death of the decedent as
appraised for the purpose of the federal estate tax . . . shall be
deemed to be its fair market value. . . ." The land and building
here involved were so appraised in 1932, and their appraised value
-- $262,042.50 -- was reported by petitioner as part of the gross
estate. This was in accordance with the estate tax law [ Footnote 17 ] and regulations,
[ Footnote 18 ] which had
always required that the value of decedent's property, undiminished
by liens, be so appraised and returned, and that mortgages be
separately deducted in computing the net estate. [ Footnote 19 ] As the quoted provision of the
Regulations Page 331 U. S. 8 has been in effect since 1918, [ Footnote 20 ] and, as the relevant statutory provision has
been repeatedly reenacted since then in substantially the same
form, [ Footnote 21 ] the
former may itself now be considered to have the force of law.
[ Footnote 22 ]
Moreover, in the many instances in other parts of the Act in
which Congress has used the word "property," or expressed the idea
of "property" or "equity," we find no instances of a misuse of
either word or of a confusion of the ideas. [ Footnote 23 ] In some parts of the Act other than
the gain and loss sections, we find "property" where it is
unmistakably used in its ordinary sense. [ Footnote 24 ] On the other hand, where either Congress
or the Treasury intended to convey the meaning of "equity," it did
so by the use of appropriate language. [ Footnote 25 ] Page 331 U. S. 9 A further reason why the word "property" in § 113(a) should not
be construed to mean "equity" is the bearing such construction
would have on the allowance of deductions for depreciation and on
the collateral adjustments of basis.
Section 23(1) permits deduction from gross income of "a
reasonable allowance for the exhaustion, wear and tear of property.
. . ." Sections 23(n) and 114(a) declare that the "basis upon which
depletion exhaustion, wear and tear . . . are to be allowed" is the
basis "provided in section 113(b) for the purpose of determining
the gain upon the sale" of the property, which is the § 113(a)
basis "adjusted . . . for exhaustion, wear and tear . . . to the
extent allowed (but not less than the amount allowable). . . ."
Under these provisions, if the mortgagor's equity were the §
113(a) basis, it would also be the original basis from which
depreciation allowances are deducted. If it is, and if the amount
of the annual allowances were to be computed on that value, as
would then seem to be required, [ Footnote 26 ] they will represent only a fraction of the
cost of the corresponding physical exhaustion, and any recoupment
by the mortgagor of the remainder of that cost can be effected only
by the reduction of his taxable gain in the year of sale. [ Footnote 27 ] If, however, the amount
of the annual allowances Page 331 U. S. 10 were to be computed on the value of the property, and then
deducted from an equity basis, we would in some instances have to
accept deductions from a minus basis or deny deductions altogether.
[ Footnote 28 ] The
Commissioner also argues that taking the mortgagor's equity as the
§ 113(a) basis would require the basis to be changed with each
payment on the mortgage, [ Footnote 29 ] and that the attendant problem of repeatedly
recomputing basis and annual allowances would be a tremendous
accounting burden on both the Commissioner and the taxpayer.
Moreover, the mortgagor would acquire control over the timing of
his depreciation allowances.
Thus, it appears that the applicable provisions of the Act
expressly preclude an equity basis, and the use of it is contrary
to certain implicit principles of income tax depreciation, and
entails very great administrative difficulties. [ Footnote 30 ] It may be added that the
Treasury has never furnished a guide through the maze of problems
that arise in connection with depreciating an equity basis, but, on
the contrary, has consistently permitted the amount of depreciation
allowances to be computed on the full value of the property, and
subtracted from it as a basis. Surely, Page 331 U. S. 11 Congress' long continued acceptance of this situation gives it
full legislative endorsement. [ Footnote 31 ]
We conclude that the proper basis under § 113(a)(5) is the value
of the property, undiminished by mortgages thereon, and that the
correct basis here was $262,042.50. The next step is to ascertain
what adjustments are required under § 113(b). As the depreciation
rate was stipulated, the only question at this point is whether the
Commissioner was warranted in making any depreciation adjustments
whatsoever.
Section 113(b)(1)(B) provides that
"proper adjustment in respect of the property shall in all cases
be made . . . for exhaustion, wear and tear . . . to the extent
allowed (but not less than the amount allowable.) . . ."
The Tax Court found on adequate evidence that the apartment
house was property of a kind subject to physical exhaustion, that
it was used in taxpayer's trade or business, and consequently that
the taxpayer would have been entitled to a depreciation allowance
under § 23(1), except that, in the opinion of that Court, the basis
of the property was zero, and it was thought that depreciation
could not be taken on a zero basis. As we have just decided that
the correct basis of the property was not zero, but $262,042.50, we
avoid this difficulty, and conclude that an adjustment should be
made as the Commissioner determined.
Petitioner urges, to the contrary, that she was not entitled to
depreciation deductions, whatever the basis of the property,
because the law allows them only to one who actually bears the
capital loss, [ Footnote 32 ]
and here the loss was not hers but the mortgagee's. We do not see,
however, that she has established her factual premise. There was no
finding of the Tax Court to that effect, nor to the effect Page 331 U. S. 12 that the value of the property was ever less than the amount of
the lien. Nor was there evidence in the record, or any indication
that petitioner could produce evidence, that this was so. The facts
that the value of the property was only equal to the lien in 1932,
and that, during the next six and one-half years, the physical
condition of the building deteriorated and the amount of the lien
increased, are entirely inconclusive, particularly in the light of
the buyer's willingness in 1938 to take subject to the increased
lien and pay a substantial amount of cash to boot. Whatever may be
the rule as to allowing depreciation to a mortgagor on property in
his possession which is subject to an unassumed mortgage and
clearly worth less than the lien, we are not faced with that
problem, and see no reason to decide it now.
At last we come to the problem of determining the "amount
realized" on the 1938 sale. Section 111(b), it will be recalled,
defines the "amount realized" from "the sale . . . of property" as
"the sum of any money received plus the fair market value of the
property (other than money) received," and § 111(a) defines the
gain on "the sale . . . of property" as the excess of the amount
realized over the basis. Quite obviously, the word "property," used
here with reference to a sale, must mean "property" in the same
ordinary sense intended by the use of the word with reference to
acquisition and depreciation in § 113, both for certain of the
reasons stated heretofore in discussing its meaning in § 113 and
also because the functional relation of the two sections requires
that the word mean the same in one section that it does in the
other. If the "property" to be valued on the date of acquisition is
the property free of liens, the "property" to be priced on a
subsequent sale must be the same thing. [ Footnote 33 ] Page 331 U. S. 13 Starting from this point, we could not accept petitioner's
contention that the $2,500.00 net cash was all she realized on the
sale except on the absurdity that she sold a quarter of a million
dollar property for roughly one percent of its value, and took a 99
percent loss. Actually, petitioner does not urge this. She argues,
conversely, that, because only $2,500.00 was realized on the sale,
the "property" sold must have been the equity only, and that
consequently we are forced to accept her contention as to the
meaning of "property" in § 113. We adhere, however, to what we have
already said on the meaning of "property," and we find that the
absurdity is avoided by our conclusion that the amount of the
mortgage is properly included in the "amount realized" on the
sale.
Petitioner concedes that, if she had been personally liable on
the mortgage and the purchaser had either paid or assumed it, the
amount so paid or assumed would be considered a part of the "amount
realized" within the meaning of § 111(b). [ Footnote 34 ] The cases so deciding have already
repudiated the notion that there must be an actual receipt by the
seller himself of "money" or "other property," in their narrowest
senses. It was thought to be decisive that one section of the Act
must be construed so as not to defeat the intention of another or
to frustrate the Act as a whole, [ Footnote 35 ] and that the taxpayer was the "beneficiary"
of the payment in "as real and substantial (a sense) as if the
money had been paid it and then paid over by it to its creditors."
[ Footnote 36 ] Page 331 U. S. 14 Both these points apply to this case. The first has been
mentioned already. As for the second, we think that a mortgagor,
not personally liable on the debt, who sells the property subject
to the mortgage and for additional consideration, realizes a
benefit in the amount of the mortgage as well as the boot.
[ Footnote 37 ] If a purchaser
pays boot, it is immaterial as to our problem whether the mortgagor
is also to receive money from the purchaser to discharge the
mortgage prior to sale, or whether he is merely to transfer subject
to the mortgage -- it may make a difference to the purchaser and to
the mortgagee, but not to the mortgagor. Or, put in another way, we
are no more concerned with whether the mortgagor is, strictly
speaking, a debtor on the mortgage than we are with whether the
benefit to him is, strictly speaking, a receipt of money or
property. We are, rather, concerned with the reality that an owner
of property, mortgaged at a figure less than that at which the
property will sell, must and will treat the conditions of the
mortgage exactly as if they were his personal obligations.
[ Footnote 38 ] If he
transfers subject to the mortgage, the benefit to him is as real
and substantial as if the mortgage were discharged, or as if a
personal debt in an equal amount had been assumed by another.
Therefore, we conclude that the Commissioner was right in
determining that petitioner realized $257,500.00 on the sale of
this property. Page 331 U. S. 15 The Tax Court's contrary determinations, that "property," as
used in § 113(a) and related sections, means "equity," and that the
amount of a mortgage subject to which property is sold is not the
measure of a benefit realized, within the meaning of § 111(b),
announced rules of general applicability on clear-cut questions of
law. [ Footnote 39 ] The
Circuit Court of Appeals therefore had jurisdiction to review them.
[ Footnote 40 ]
Petitioner contends that the result we have reached taxes her on
what is not income within the meaning of the Sixteenth Amendment.
If this is because only the direct receipt of cash is thought to be
income in the constitutional sense, her contention is wholly
without merit. [ Footnote 41 ]
If it is because the entire transaction is thought to have been,
"by all dictates of common sense . . . a ruinous disaster," as it
was termed in her brief, we disagree with her premise. She was
entitled to depreciation deductions for a period of nearly seven
years, and she actually took them in almost the allowable amount.
The crux of this case, really, is whether the law permits her to
exclude allowable deductions from consideration in computing gain.
[ Footnote 42 ] We have Page 331 U. S. 16 already showed that, if it does, the taxpayer can enjoy a double
deduction, in effect, on the same loss of assets. The Sixteenth
Amendment does not require that result any more than does the Act
itself. Affirmed. [ Footnote 1 ]
The record does not show whether he was personally liable for
the debt.
[ Footnote 2 ]
This position is, of course, inconsistent with her practice in
claiming such deductions in each of the years the property was
held. The deductions so claimed and allowed by the Commissioner
were in the total amount of $25,500.00.
[ Footnote 3 ] See § 117(a)(b), Revenue Act of 1938, c. 289, 52 Stat.
447. Under this provision, only 50% of the gain realized on the
sale of a "capital asset" need be taken into account, if the
property had been held more than two years.
[ Footnote 4 ]
The parties stipulated as to the relative parts of the 1932
appraised value and of the 1938 sales price which were allocable to
land and building.
[ Footnote 5 ]
The parties stipulated that the rate of depreciation applicable
to the building was 2% per annum.
[ Footnote 6 ]
The Commissioner explains that only the principal amount, rather
than the total present debt secured by the mortgage, was deemed to
be a measure of the amount realized, because the difference was
attributable to interest due, a deductible item.
[ Footnote 7 ] See supra, note
4 [ Footnote 8 ] See § 117(a)(1), Revenue Act of 1938, supra. [ Footnote 9 ]
3 T.C. 585. The Court held that the building was not a "capital
asset" within the meaning of § 117(a), and that the entire gain on
the building had to be taken into account under § 117(b), because
it found that the building was of a character subject to physical
exhaustion, and that petitioner had used it in her trade or
business.
But because the Court accepted petitioner's theory that the
entire property had a zero basis, it held that she was not entitled
to the 1938 depreciation deduction on the building which she had
inconsistently claimed.
For these reasons, it did not expunge the deficiency in its
entirety.
[ Footnote 10 ]
153 F.2d 504.
[ Footnote 11 ]
328 U.S. 826.
[ Footnote 12 ]
All subsequent references to a revenue act are to this Act
unless otherwise indicated. The relevant parts of the gain and loss
provisions of the Act and Code are identical.
[ Footnote 13 ] Old Colony R. Co. v. Commissioner, 284 U.
S. 552 , 284 U. S.
560 .
[ Footnote 14 ] See Webster's New International Dictionary,
Unabridged,2d Ed.; Funk & Wagnalls' New Standard Dictionary;
Oxford English Dictionary.
[ Footnote 15 ] See Webster's New International Dictionary, supra. [ Footnote 16 ] Crooks v. Harrelson, 282 U. S. 55 , 282 U. S.
59 .
[ Footnote 17 ] See §§ 202 and 203(a)(1), Revenue Act of 1916; §§ 402
and 403(a)(1), Revenue Acts of 1918 and 1921; §§ 302, 303(a)(1),
Revenue Acts of 1924 and 1926; § 805, Revenue Act of 1932.
[ Footnote 18 ] See Reg. 37, Arts, 13, 14, and 47; Reg. 63, Arts. 12,
13, and 41; Reg. 68, Arts. 11, 13, and 38; Reg. 70, Arts 11, 13,
and 38; Reg. 80, Arts. 11, 13, and 38.
[ Footnote 19 ] See City Bank Farmers' Trust Co. v. Bowers, 68 F.2d
909, cert. denied, 292 U.S. 644; Rodiek v.
Helvering, 87 F.2d 328; Adriance v. Higgins, 113 F.2d
1013.
[ Footnote 20 ] See also Reg. 45, Art. 1562; Reg. 62, Art. 1563; Reg.
65, Art. 1594; Reg. 69, Art. 1594; Reg. 74, Art. 596; Reg. 77, Art.
596; Reg. 86, Art. 113(a)(5)-1(c); Reg. 94, Art. 113(a)(5)-1(c);
Reg. 103, § 19.113(a)(5)-1(c); Reg. 111, § 29.113(a)(5)-1(c).
[ Footnote 21 ]
§ 202(a)(3), Revenue Act of 1921; § 204(a)(5), Revenue Act of
1924; § 204(a)(5), Revenue Act of 1926; § 113(a)(5), Revenue Act of
1928; § 113(a)(5), Revenue Act of 1932; § 113(a)(5), Revenue Act of
1934; § 113(a)(5), Revenue Act of 1936; § 113(a)(5), Revenue Act of
1938; § 113(a)(5), Internal Revenue Code.
[ Footnote 22 ] Helvering v. R. J. Reynolds Co., 306 U.
S. 110 , 306 U. S.
114 .
[ Footnote 23 ] Cf. Helvering v. Stockholmes Enskilda Bank, 293 U. S. 84 , 293 U. S.
87 .
[ Footnote 24 ]
Sec. 23(a)(1) permits the deduction from gross income of
"rentals . . . required to be made as a condition to the
continued use . . . for purposes of the trade or business, of
property . . . in which he [the taxpayer] has no equity."
Sec. 23(1) permits the deduction from gross income of "a
reasonable allowance for the exhaustion, wear, and tear of property
used in the trade or business. . . ." See also § 303(a)(1), Revenue Act of 1926, c. 27, 44
Stat. 9; § 805, Revenue Act of 1932, c. 209, 47 Stat. 280.
[ Footnote 25 ] See § 23(a)(1), supra, note 24; § 805, Revenue
Act of 1932, supra, note 24; § 3482 I.R.C.; Reg. 105, § 81.38. This provision
of the Regulations, first appearing in 1937, T.D. 4729, 1937-1
Cum.Bull. 284, 289, permitted estates which were not liable on
mortgages applicable to certain of decedent's property to return
"only the value of the equity of redemption (or value of the
property, less the indebtedness). . . ."
[ Footnote 26 ]
Secs. 23(n) and 114(a), in defining the "basis upon which"
depreciation is "to be allowed," do not distinguish between basis
as the minuend from which the allowances are to be deducted, and as
the dividend from which the amount of the allowance is to be
computed. The Regulations indicate that the basis of property is
the same for both purposes. Reg. 101, Art. 23(1)-4, 5.
[ Footnote 27 ]
This is contrary to Treasury practice, and to Reg. 101, Art.
23(1)-5, which provides in part:
"The capital sum to be recovered shall be charged off over the
useful life of the property, either in equal annual installments or
in accordance with any other recognized trade practice, such as an
apportionment of the capital sum over units of production." See Detroit Edison Co. v. Commissioner, 319 U. S.
98 , 319 U. S.
101 .
[ Footnote 28 ]
So long as the mortgagor remains in possession, the mortgagee
cannot take depreciation deductions, even if he is the one who
actually sustains the capital loss, as § 23(1) allows them only on
property "used in the trade or business."
[ Footnote 29 ]
Sec. 113(b)(1)(A) requires adjustment of basis "for expenditures
. . . properly chargeable to capital account. . . ."
[ Footnote 30 ]
Obviously we are not considering a situation in which a taxpayer
has acquired and sold an equity of redemption only -- i.e., a right to redeem the property without a right to
present possession. In that situation, the right to redeem would
itself be the aggregate of the taxpayer's rights and would
undoubtedly constitute "property" within the meaning of § 113(a).
No depreciation problems would arise. See note 28 [ Footnote 31 ] See note 22 [ Footnote 32 ] See Helvering v. Lazarus & Co., 308 U.
S. 252 ; Duffy v. Central R. Co., 268 U. S.
55 , 268 U. S. 64 .
[ Footnote 33 ] See Maguire v. Commissioner, 313 U. S.
1 , 313 U. S. 8 .
We are not troubled by petitioner's argument that her contract
of sale expressly provided for the conveyance of the equity only.
She actually conveyed title to the property, and the buyer took the
same property that petitioner had acquired in 1932 and used in her
trade or business until its sale.
[ Footnote 34 ] United States v. Hendler, 303 U.
S. 564 ; Brons Hotels, Inc., 34 B.T.A. 376; Walter F. Haass, 37 B.T.A. 948. See Douglas v.
Willcutts, 296 U. S. 1 , 296 U. S. 8 .
[ Footnote 35 ] See Brons Hotels, Inc., supra, 34 B.T.A. at 381.
[ Footnote 36 ] See United States v. Hendler, supra, at 303 U. S.
566 .
[ Footnote 37 ]
Obviously, if the value of the property is less than the amount
of the mortgage, a mortgagor who is not personally liable cannot
realize a benefit equal to the mortgage. Consequently, a different
problem might be encountered where a mortgagor abandoned the
property or transferred it subject to the mortgage without
receiving boot. That is not this case.
[ Footnote 38 ]
For instance, this petitioner returned the gross rentals as her
own income, and out of them paid interest on the mortgage, on which
she claimed and was allowed deductions. See Reg. 77, Art.
141; Reg. 86, Art. 23(b)-1; Reg. 94, Art. 23(b)-1; Reg. 101, Art.
23(b)-1.
[ Footnote 39 ] See Commissioner v. Wilcox, 327 U.
S. 404 , 327 U. S. 410 ; Bingham's Trust v. Commissioner, 325 U.
S. 365 , 325 U. S.
369 -372. Cf. John Kelley Co. v. Commissioner, 326 U. S. 521 , 326 U. S. 527 ; Dobson v. Commissioner, 320 U. S. 489 .
[ Footnote 40 ] Ibid; see also § 1141(a) and (c), I.R.C.
[ Footnote 41 ] Douglas v. Willcutts, supra, at 296 U. S. 9 ; Burnet v. Wells, 289 U. S. 670 , 289 U. S.
677 .
[ Footnote 42 ]
In the course of the argument, some reference was made, as by
analogy, to a situation in which a taxpayer acquired by devise
property subject to a mortgage in an amount greater than the then
value of the property, and later transferred it to a third person,
still subject to the mortgage, and for a cash boot. Whether or not
the difference between the value of the property on acquisition and
the amount of the mortgage would in that situation constitute
either statutory or constitutional income is a question which is
different from the one before us, and which we need not presently
answer.
MR. JUSTICE JACKSON, dissenting.
The Tax Court concluded that this taxpayer acquired only an
equity worth nothing. The mortgage was in default, the mortgage
debt was equal to the value of the property, and possession by the
taxpayer was forfeited and terminable immediately by foreclosure,
and perhaps by a receiver pendente lite. Arguments can be
advanced to support the theory that the taxpayer received the whole
property, and thereupon came to owe the whole debt. Likewise, it is
argued that, when she sold, she transferred the entire value of the
property and received release from the whole debt. But we think
these arguments are not so conclusive that it was not within the
province of the Tax Court to find that she received an equity which
at that time had a zero value. Dobson v. Commissioner, 320 U. S. 489 ; Commissioner v. Scottish American Investment Co., Ltd., 323 U. S. 119 . The
taxpayer never became personally liable for the debt, and hence,
when she sold, she was released from no debt. The mortgage debt was
simply a subtraction from the value of what she did receive, and
from what she sold. The subtraction left her nothing when she
acquired it, and a small margin when she sold it. She acquired a
property right equivalent to an equity of redemption and sold the
same thing. It was the "property" bought and sold as the Tax Court
considered it to be under the Revenue Laws. We are not required in
this case to decide whether depreciation was properly taken, for
there is no issue about it here. Page 331 U. S. 117 We would reverse the Court of Appeals and sustain the decision
of the Tax Court.
MR. JUSTICE FRANKFURTER and MR. JUSTICE DOUGLAS join in this
opinion. | In *Crane v. Commissioner* (1947), the Supreme Court ruled on the tax implications of selling property acquired through bequest and subject to an unassumed mortgage. The Court held that:
1. Under the Revenue Act of 1938, the "unadjusted basis" for determining gain or loss on the sale of such property is the value of the property, not the owner's equity.
2. The taxpayer was entitled to deductions for depreciation on the building, and the "adjusted basis" for gain or loss is calculated by deducting depreciation allowances from the property's value at acquisition.
3. The "amount realized" on the sale of property subject to an existing mortgage includes both the cash received and the amount of the mortgage, regardless of whether the seller or buyer assumed the mortgage.
4. The Circuit Court had jurisdiction to review the Tax Court's determinations, as they announced general rules of law.
5. The Revenue Act of 1938 does not tax something that is not considered "income" under the Sixteenth Amendment. |
Taxes | Commissioner v. Duberstein | https://supreme.justia.com/cases/federal/us/363/278/ | U.S. Supreme Court Commissioner v. Duberstein, 363
U.S. 278 (1960) Commissioner v.
Duberstein No. 376 Argued March 23, 1960 Decided June 13, 1960 363
U.S. 278 ast|>* 363
U.S. 278 CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE SIXTH
CIRCUIT Syllabus 1. This Court rejects the Government's suggestion that it
promulgate a new "test" to serve as a standard to be applied by the
lower courts and by the Tax Court in dealing with numerous cases
involving the question what is a "gift" excludable from income
under the Internal Revenue Code, since the governing principles are
necessarily general, and have already been spelled out in the
opinions of this Court. Pp. 363 U. S.
284 -286.
2. The conclusion whether a transfer amounts to a "gift" is one
that must be reached on consideration of all the factors. While the
principles urged by the Government may, in nonabsolute form as
crystallizations of experience, prove persuasive to the trier of
facts in a particular case, they cannot be laid down as a matter of
law. Pp. 363 U. S.
287 -289.
3. Determination in each individual case as to whether the
transaction in question was a "gift" must be based ultimately on
the application of the factfinding tribunal's experience with the
mainsprings of human conduct to the totality of the facts in the
case, and appellate review of the conclusion reached by the
fact-finding tribunal must be quite restricted. Pp. 363 U. S.
289 -291.
4. In No. 376, Duberstein, an individual taxpayer, gave to a
business corporation, upon request, the names of potential
customers. The information proved valuable, and the corporation
reciprocated by giving Duberstein a Cadillac automobile, charging
the cost thereof as a business expense on its own corporate income
tax return. The Tax Court concluded that the car was not a "gift"
excludable from income under § 22(b)(3) of the Internal Revenue
Code of 1939. Held: on the record in this case, it cannot be said Page 363 U. S. 279 that the Tax Court's conclusion was "clearly erroneous," and the
Court of Appeals erred in reversing its judgment. Pp. 363 U. S.
279 -281, 363 U. S.
291 -292.
5. In No. 546, Stanton, upon resigning as comptroller of a
church corporation and as president of its wholly owned subsidiary
created to manage its extensive real estate holdings, was given "a
gratuity" of $20,000 "in appreciation of" his past services. The
Commissioner assessed an income tax deficiency against him for
failure to include this amount in his gross income. Stanton paid
the deficiency and sued in a Federal District Court for a refund.
The trial judge, sitting without a jury, made the simple finding
that the payment was a "gift," and entered judgment for Stanton.
The Court of Appeals reversed. Held: the finding of the District Court was inadequate;
the judgment of the Court of Appeals is vacated, and the case is
remanded to the District Court for further proceedings. Pp. 363 U. S.
281 -283, 363 U. S.
292 -293.
265 F.2d 28 reversed.
268 F.2d 727, judgment vacated and cause remanded.
MR. JUSTICE BRENNAN delivered the opinion of the Court.
These two cases concern the provision of the Internal Revenue
Code which excludes from the gross income of an income taxpayer
"the value of property acquired by Page 363 U. S. 280 gift." [ Footnote 1 ] They
pose the frequently recurrent question whether a specific transfer
to a taxpayer in fact amounted to a "gift" to him within the
meaning of the statute. The importance to decision of the facts of
the cases requires that we state them in some detail.
No. 376, Commissioner v. Duberstein. The taxpayer,
Duberstein, [ Footnote 2 ] was
president of the Duberstein Iron & Metal Company, a corporation
with headquarters in Dayton, Ohio. For some years, the taxpayer's
company had done business with Mohawk Metal Corporation, whose
headquarters were in New York City. The president of Mohawk was one
Berman. The taxpayer and Berman had generally used the telephone to
transact their companies' business with each other, which consisted
of buying and selling metals. The taxpayer testified, without
elaboration, that he knew Berman "personally," and had known him
for about seven years. From time to time in their telephone
conversations, Berman would ask Duberstein whether the latter knew
of potential customers for some of Mohawk's products in which
Duberstein's company itself was not interested. Duberstein provided
the names of potential customers for these items.
One day in 1951, Berman telephoned Duberstein and said that the
information Duberstein had given him had proved so helpful that he
wanted to give the latter a present. Duberstein stated that Berman
owed him nothing. Berman said that he had a Cadillac as a gift for
Duberstein, and that the latter should send to New York for it;
Berman insisted that Duberstein accept the car, and the latter
finally did so, protesting, however, that Page 363 U. S. 281 he had not intended to be compensated for the information. At
the time, Duberstein already had a Cadillac and an Oldsmobile, and
felt that he did not need another car. Duberstein testified that he
did not think Berman would have sent him the Cadillac if he had not
furnished him with information about the customers. It appeared
that Mohawk later deducted the value of the Cadillac as a business
expense on its corporate income tax return.
Duberstein did not include the value of the Cadillac in gross
income for 1951, deeming it a gift. The Commissioner asserted a
deficiency for the car's value against him, and, in proceedings to
review the deficiency, the Tax Court affirmed the Commissioner's
determination. It said that
"The record is significantly barren of evidence revealing any
intention on the part of the payor to make a gift. . . . The only
justifiable inference is that the automobile was intended by the
payor to be remuneration for services rendered to it by
Duberstein."
The Court of Appeals for the Sixth Circuit reversed. 265 F.2d
28, 30.
No. 546, Stanton v. United States. The taxpayer,
Stanton, had been for approximately 10 years in the employ of
Trinity Church in New York City. He was comptroller of the Church
corporation, and president of a corporation, Trinity Operating
Company, the church set up as a fully owned subsidiary to manage
its real estate holdings, which were more extensive than simply the
church property. His salary by the end of his employment there in
1942 amounted to $22,500 a year. Effective November 30, 1942, he
resigned from both positions to go into business for himself. The
Operating Company's directors, who seem to have included the rector
and vestrymen of the church, passed the following resolution upon
his resignation:
"Be it resolved that, in appreciation of the services rendered
by Mr. Stanton . . . , a gratuity is hereby awarded to him of
Twenty Thousand Dollars, payable to him in equal instalments of Two
Thousand Dollars Page 363 U. S. 282 at the end of each and every month commencing with the month of
December, 1942; provided that, with the discontinuance of his
services, the Corporation of Trinity Church is released from all
rights and claims to pension and retirement benefits not already
accrued up to November 30, 1942."
The Operating Company's action was later explained by one of its
directors as based on the fact that
"Mr. Stanton was liked by all of the Vestry personally. He had a
pleasing personality. He had come in when Trinity's affairs were in
a difficult situation. He did a splendid piece of work, we felt.
Besides that . . . , he was liked by all of the members of the
Vestry personally."
And by another:
"[W]e were all unanimous in wishing to make Mr. Stanton a gift.
Mr. Stanton had loyally and faithfully served Trinity in a very
difficult time. We thought of him in the highest regard. We
understood that he was going in business for himself. We felt that
he was entitled to that evidence of good will."
On the other hand, there was a suggestion of some ill feeling
between Stanton and the directors, arising out of the recent
termination of the services of one Watkins, the Operating Company's
treasurer, whose departure was evidently attended by some acrimony.
At a special board meeting on October 28, 1942, Stanton had
intervened on Watkins' side and asked reconsideration of the
matter. The minutes reflect that
"resentment was expressed as to the 'presumptuous' suggestion
that the action of the Board, taken after long deliberation, should
be changed."
The Board adhered to its determination that Watkins be separated
from employment, giving him an opportunity to resign rather than be
discharged. At another special meeting two days later, it was
revealed that Watkins had not resigned; the previous resolution
terminating his services was then viewed as effective, and the
Board voted the payment of six months' salary Page 363 U. S. 283 to Watkins in a resolution similar to that quoted in regard to
Stanton, but which did not use the term "gratuity." At the meeting,
Stanton announced that, in order to avoid any such embarrassment or
question at any time as to his willingness to resign if the Board
desired, he was tendering his resignation. It was tabled, though
not without dissent. The next week, on November 5, at another
special meeting, Stanton again tendered his resignation, which this
time was accepted.
The "gratuity" was duly paid. So was a smaller one to Stanton's
(and the Operating Company's) secretary, under a similar
resolution, upon her resignation at the same time. The two
corporations shared the expense of the payments. There was
undisputed testimony that there were in fact no enforceable rights
or claims to pension and retirement benefits which had not accrued
at the time of the taxpayer's resignation, and that the last
proviso of the resolution was inserted simply out of an abundance
of caution. The taxpayer received in cash a refund of his
contributions to the retirement plans, and there is no suggestion
that he was entitled to more. He was required to perform no further
services for Trinity after his resignation.
The Commissioner asserted a deficiency against the taxpayer
after the latter had failed to include the payments in question in
gross income. After payment of the deficiency and administrative
rejection of a refund claim, the taxpayer sued the United States
for a refund in the District Court for the Eastern District of New
York. 137 F. Supp. 803. The trial judge, sitting without a jury,
made the simple finding that the payments were a "gift," [ Footnote 3 ] and judgment was entered
for the taxpayer. The Court of Appeals for the Second Circuit
reversed. 268 F.2d 727.
The Government, urging that clarification of the problem
typified by these two cases was necessary, and that Page 363 U. S. 284 the approaches taken by the Courts of Appeals for the Second and
the Sixth Circuits were in conflict, petitioned for certiorari in
No. 376, and acquiesced in the taxpayer's petition in No. 546. On
this basis, and because of the importance of the question in the
administration of the income tax laws, we granted certiorari in
both cases. 361 U.S. 923.
The exclusion of property acquired by gift from gross income
under the federal income tax laws was made in the first income tax
statute [ Footnote 4 ] passed
under the authority of the Sixteenth Amendment, and has been a
feature of the income tax statutes ever since. The meaning of the
term "gift" as applied to particular transfers has always been a
matter of contention. [ Footnote
5 ] Specific and illuminating legislative history on the point
does not appear to exist. Analogies and inferences drawn from other
revenue provisions, such as the estate and gift taxes, are dubious. See Lockard v. Commissioner, 166 F.2d 409. The meaning of
the statutory term has been shaped largely by the decisional law.
With this, we turn to the contentions made by the Government in
these cases. First. The Government suggests that we promulgate a new
"test" in this area to serve as a standard to be applied by the
lower courts and by the Tax Court in dealing with the numerous
cases that arise. [ Footnote 6 ]
We reject this invitation. We are of opinion that the governing
principles are necessarily general, and have already been spelled
out in the opinions of this Court, and that the problem is one
which, under the present statutory framework, does not lend itself
to any more definitive statement Page 363 U. S. 285 that would produce a talisman for the solution of concrete
cases. The cases at bar are fair examples of the settings in which
the problem usually arises. They present situations in which
payments have been made in a context with business overtones -- an
employer making a payment to a retiring employee; a businessman
giving something of value to another businessman who has been of
advantage to him in his business. In this context, we review the
law as established by the prior cases here.
The course of decision here makes it plain that the statute does
not use the term "gift" in the common law sense, but in a more
colloquial sense. This Court has indicated that a voluntarily
executed transfer of his property by one to another, without any
consideration or compensation therefor, though a common law gift,
is not necessarily a "gift" within the meaning of the statute. For
the Court has shown that the mere absence of a legal or moral
obligation to make such a payment does not establish that it is a
gift. Old Colony Trust Co. v. Commissioner, 279 U.
S. 716 , 279 U. S. 730 .
And, importantly, if the payment proceeds primarily from "the
constraining force of any moral or legal duty," or from "the
incentive of anticipated benefit" of an economic nature, Bogardus v. Commissioner, 302 U. S.
34 , 302 U. S. 41 , it
is not a gift. And, conversely, "[w]here the payment is in return
for services rendered, it is irrelevant that the donor derives no
economic benefit from it." Robertson v. United States, 343 U. S. 711 , 343 U. S. 714 .
[ Footnote 7 ] A gift in the
statutory sense, on the other hand, proceeds from a "detached and
disinterested generosity," Commissioner v. LoBue, 351 U. S. 243 , 351 U. S. 246 ;
"out of affection, respect, admiration, charity or like impulses." Robertson v. United States, supra, at 343 U. S. 714 .
And, in this regard, the most critical consideration, as the Court
was agreed in the leading case here, is the transferor's
"intention." Page 363 U. S. 286 Bogardus v. Commissioner, 302 U. S.
34 , 302 U. S. 43 .
"What controls is the intention with which payment, however
voluntary, has been made." Id. at 302 U. S. 45 (dissenting opinion). [ Footnote
8 ]
The Government says that this "intention" of the transferor
cannot mean what the cases on the common law concept of gift call
"donative intent." With that we are in agreement, for our decisions
fully support this. Moreover, the Bogardus case itself
makes it plain that the donor's characterization of his action is
not determinative -- that there must be an objective inquiry as to
whether what is called a gift amounts to it in reality. 302 U.S. at 302 U. S. 40 . It
scarcely needs adding that the parties' expectations or hopes as to
the tax treatment of their conduct, in themselves, have nothing to
do with the matter.
It is suggested that the Bogardus criterion would be
more apt if rephrased in terms of "motive," rather than
"intention." We must confess to some skepticism as to whether such
a verbal mutation would be of any practical consequence. We take it
that the proper criterion, established by decision here, is one
that inquires what the basic reason for his conduct was in fact --
the dominant reason that explains his action in making the
transfer. Further than that we do not think it profitable to
go. Page 363 U. S. 287 Second. The Government's proposed "test," while
apparently simple and precise in its formulation, depends frankly
on a set of "principles" or "presumptions" derived from the decided
cases, and concededly subject to various exceptions; and it
involves various corollaries, which add to its detail. Were we to
promulgate this test as a matter of law, and accept with it its
various presuppositions and stated consequences, we would be
passing for beyond the requirements of the cases before us, and
would be painting on a large canvas with indeed a broad brush. The
Government derives it test from such propositions as the following:
that payments by an employer to an employee, even though voluntary,
ought, by and large, to be taxable; that the concept of a gift is
inconsistent with a payment's being a deductible business expense;
that a gift involves "personal" elements; that a business
corporation cannot properly make a gift of its assets. The
Government admits that there are exceptions and qualifications to
these propositions. We think, to the extent they are correct, that
these propositions are not principles of law, but rather maxims of
experience that the tribunals which have tried the facts of cases
in this area have enunciated in explaining their factual
determinations. Some of them simply represent truisms: it doubtless
is, statistically speaking, the exceptional payment by an employer
to an employee that amounts to a gift. Others are overstatements of
possible evidentiary inferences relevant to a factual determination
on the totality of circumstances in the case: it is doubtless
relevant to the over-all inference that the transferor treats a
payment as a business deduction, or that the transferor is a
corporate entity. But these inferences cannot be stated in absolute
terms. Neither factor is a shibboleth. The taxing statute does not
make nondeductibility by the transferor a condition on the "gift"
exclusion; nor does it draw and distinction, in terms, between
transfers by corporations Page 363 U. S. 288 and individuals, as to the availability of the "gift" exclusion
to the transferee. The conclusion whether a transfer amounts to a
"gift" is one that must be reached on consideration of all the
factors.
Specifically, the trier of fact must be careful not to allow
trial of the issue whether the receipt of a specific payment is a
gift to turn into a trial of the tax liability, or of the
propriety, as a matter of fiduciary or corporate law, attaching to
the conduct of someone else. The major corollary to the
Government's suggested "test" is that, as an ordinary matter, a
payment by a corporation cannot be a gift, and, more specifically,
there can be no such thing as a "gift" made by a corporation which
would allow it to take a deduction for an ordinary and necessary
business expense. As we have said, we find no basis for such a
conclusion in the statute; and if it were applied as a
determinative rule of "law," it would force the tribunals trying
tax cases involving the donee's liability into elaborate inquiries
into the local law of corporations or into the peripheral
deductibility of payments as business expenses. The former issue
might make the tax tribunals the most frequent investigators of an
important and difficult issue of the laws of the several States,
and the latter inquiry would summon one difficult and delicate
problem of federal tax law as an aid to the solution of another.
[ Footnote 9 ] Or perhaps there
would be required a trial of the vexed issue whether there was a
"constructive" distribution of corporate property, for income tax
purposes, to the corporate Page 363 U. S. 289 agents who had sponsored the transfer. [ Footnote 10 ] These considerations, also,
reinforce us in our conclusion that, while the principles urged by
the Government may, in nonabsolute form as crystallizations of
experience, prove persuasive to the trier of facts in a particular
case, neither they nor any more detailed statement than has been
made can be laid down as a matter of law. Third. Decision of the issue presented in these cases
must be based ultimately on the application of the factfinding
tribunal's experience with the mainsprings of human conduct to the
totality of the facts of each case. The nontechnical nature of the
statutory standard, the close relationship of it to the date of
practical human experience, and the multiplicity of relevant
factual elements, with their various combinations, creating the
necessity of ascribing the proper force to each, confirm us in our
conclusion that primary weight in this area must be given to the
conclusions of the trier of fact. Baker v. Texas & Pacific
R. Co., 359 U. S. 227 ; Commissioner v. Heininger, 320 U.
S. 467 , 320 U. S. 475 ; United States v. Yellow Cab Co., 338 U.
S. 338 , 338 U. S. 341 ; Bogardus v. Commissioner, supra, at 302 U. S. 45 (dissenting opinion). [ Footnote
11 ] Page 363 U. S. 290 This conclusion may not satisfy an academic desire for tidiness,
symmetry, and precision in this area, any more than a system based
on the determinations of various factfinders ordinarily does. But
we see it as implicit in the present statutory treatment of the
exclusion for gifts, and in the variety of forums in which federal
income tax cases can be tried. If there is fear of undue
uncertainty or overmuch litigation, Congress may make more precise
its treatment of the matter by singling out certain factors and
making them determinative of the matters, as it has done in one
field of the "gift" exclusion's former application, that of prizes
and awards. [ Footnote 12 ]
Doubtless diversity of result will tend to be lessened somewhat,
since federal income tax decisions, even those in tribunals of
first instance turning on issues of fact, tend to be reported, and
since there may be a natural tendency of professional triers of
fact to follow one another's determinations, even as to factual
matters. But the question here remains basically one of fact, for
determination on a case-by-case basis.
One consequence of this is that appellate review of
determinations in this field must be quite restricted. Where a jury
has tried the matter upon correct instructions, Page 363 U. S. 291 the only inquiry is whether it cannot be said that reasonable
men could reach differing conclusions on the issue. Baker v.
Texas & Pacific R. Co., supra, at 359 U. S. 228 .
Where the trial has been by a judge without a jury, the judge's
findings must stand unless "clearly erroneous." Fed.Rules Civ.Proc.
52(a).
"A finding is 'clearly erroneous' when, although there is
evidence to support it, the reviewing court on the entire evidence
is left with the definite and firm conviction that a mistake has
been committed." United States v. United States Gypsum Co., 333 U.
S. 364 , 333 U. S. 395 .
The rule itself applies also to factual inferences from undisputed
basic facts, id. at 333 U. S. 394 ,
as will on many occasions be presented in this area. Cf. Graver
Tank & Mfg. Co. v. Linde Air Products Co., 339 U.
S. 605 , 339 U. S.
609 -610. And Congress has, in the most explicit terms,
attached the identical weight to the findings of the Tax Court.
I.R.C. § 7482(a). [ Footnote
13 ] Fourth. A majority of the Court is in accord with the
principles just outlined. And, applying them to the Duberstein case, we are in agreement, on the evidence we
have set forth, that it cannot be said that the conclusion of the
Tax Court was "clearly erroneous." It seems to us plain that, as
trier of the facts, it was warranted in concluding that, despite
the characterization of the transfer of the Cadillac by the
parties, and the absence of any obligation, even of a moral nature,
to make it, it was, Page 363 U. S. 292 at bottom, a recompense for Duberstein's past services, or an
inducement for him to be of further service in the future. We
cannot say with the Court of Appeals that such a conclusion was
"mere suspicion" on the Tax Court's part. To us, it appears based
in the sort of informed experience with human affairs that
factfinding tribunals should bring to this task.
As to Stanton, we are in disagreement. To four of us,
it is critical here that the District Court as trier of fact made
only the simple and unelaborated finding that the transfer in
question was a "gift." [ Footnote
14 ] To be sure, conciseness is to be strived for, and prolixity
avoided, in findings; but, to the four of us, there comes a point
where findings become so sparse and conclusory as to give to
revelation of what the District Court's concept of the determining
facts and legal standard may be. See Matton Oil Transfer Corp.
v. The Dynamic, 123 F.2d 999, 1000-1001. Such conclusory,
general findings do not constitute compliance with Rule 52's
direction to "find the facts specially and state separately . . .
conclusions of law thereon." While the standard of law in this area
is not a complex one, we four think the unelaborated finding of
ultimate fact here cannot stand as a fulfillment of these
requirements. It affords the reviewing court not the semblance of
an indication of the legal standard with which the trier of fact
has approached his task. For all that appears, the District Page 363 U. S. 293 Court may have viewed the form of the resolution or the simple
absence of legal consideration as conclusive. While the judgment of
the Court of Appeals cannot stand, the four of us think there must
be further proceedings in the District Court looking toward new and
adequate findings of fact. In this, we are joined by MR. JUSTICE
WHITTAKER, who agrees that the findings were inadequate, although
he does not concur generally in this opinion.
Accordingly, in No. 376, the judgment of this Court is that the
judgment of the Court of Appeals is reversed, and in No. 546, that
the judgment of the Court of Appeals is vacated, and the case is
remanded to the District Court for further proceedings not
inconsistent with this opinion. It is so ordered. MR. JUSTICE HARLAN concurs in the result in No. 376. In No. 546,
he would affirm the judgment of the Court of Appeals for the
reasons stated by MR. JUSTICE FRANKFURTER.
MR. JUSTICE WHITTAKER, agreeing with Bogardus that
whether a particular transfer is or is not a "gift" may involve "a
mixed question of law and fact," 302 U.S. at 302 U. S. 39 ,
concurs only in the result of this opinion.
MR. JUSTICE DOUGLAS dissents, since he is of the view that, in
each of these two cases, there was a gift under the test which the
Court fashioned nearly a quarter of a century ago in Bogardus
v. Commissioner, 302 U. S. 34 .
* Together with No. 546, Stanton et ux. v. United
States, on certiorari to the United States Court of Appeals
for the Second Circuit, argued March 24, 1960.
[ Footnote 1 ]
The operative provision in the cases at bar is § 22(b)(3) of the
1939 Internal Revenue Code. The corresponding provision of the
present Code is § 102(a).
[ Footnote 2 ]
In both cases, the husband will be referred to as the taxpayer,
although his wife joined with him in joint tax returns.
[ Footnote 3 ] See note 14 infra. [ Footnote 4 ]
§ II.B., c. 16, 38 Stat. 167.
[ Footnote 5 ]
The first case of the Board of Tax Appeals officially reported
in fact deals with the problem. Parrott v. Commissioner, 1
B.T.A. 1.
[ Footnote 6 ]
The Government's proposed test is stated: "Gifts should be
defined as transfers of property made for personal, as
distinguished from business, reasons."
[ Footnote 7 ]
The cases including "tips" in gross income are classic examples
of this. See, e.g., Roberts v. Commissioner, 176 F.2d
221.
[ Footnote 8 ]
The parts of the Bogardus opinion which we touch on
here are the ones we take to be basic to its holding, and the ones
that we read as stating those governing principles which it
establishes. As to them, we see little distinction between the
views of the Court and those taken in dissent in Bogardus. The fear expressed by the dissent at 302 U.S. at 302 U. S. 44 ,
that the prevailing opinion "seems" to hold "that every payment
which in any aspect is a gift is . . . relieved of any tax,"
strikes us now as going beyond what the opinion of the Court held
in fact. In any event, the Court's opinion in Bogardus does
not seem to have been so interpreted afterwards. The principal
difference, as we see it, between the Court's opinion and the
dissent lies in the weight to be given the findings of the trier of
fact.
[ Footnote 9 ]
Justice Cardozo once described in memorable language the inquiry
into whether an expense was an "ordinary and necessary" one of a
business:
"One struggles in vain for any verbal formula that will supply a
ready touchstone. The standard set up by the statute is not a rule
of law; it is rather a way of life. Life in all its fullness must
supply the answer to the riddle." Welch v. Helvering, 290 U. S. 111 , 290 U. S. 115 .
The same comment well fits the issue in the cases at bar.
[ Footnote 10 ] Cf., e.g., Nelson v. Commissioner, 203 F.2d 1.
[ Footnote 11 ]
In Bogardus, the Court was divided 5 to 4 as to the
scope of review to be extended the factfinder's determination as to
a specific receipt, in a context like that of the instant cases.
The majority held that such a determination was "a conclusion of
law, or at least a determination of a mixed question of law and
fact." 302 U.S. at 302 U. S. 39 .
This formulation it took as justifying it in assuming a fairly
broad standard of review. The dissent took a contrary view. The
approach of this part of the Court's ruling in Bogardus, which we think was the only part on which there was real division
among the Court, see note
8 supra, has not been afforded subsequent respect
here. In Heininger, a question presenting at the most
elements no more factual and untechnical than those here -- that of
the "ordinary and necessary" nature of a business expense -- was
treated as one of fact. Cf. note 9 supra. And in Dobson v.
Commissioner, 320 U. S. 489 , 320 U. S. 498 ,
n. 22, Bogardus was adversely criticized insofar as it
treated the matter as reviewable as one of law. While Dobson is, of course, no longer the law insofar as it
ordains a greater weight to be attached to the findings of the Tax
Court than to those of any other factfinder in a tax litigation, see note 13 infra, we think its criticism of this point in the Bogardus opinion is sound in view of the dominant
importance of factual inquiry to decision of these cases.
[ Footnote 12 ]
I.R.C. § 74, which is a provision new with the 1954 Code.
Previously, there had been holdings that such receipts as the "Pot
O' Gold" radio giveaway, Washburn v. Commissioner, 5 T.C.
1333, and the Ross Essay Prize, McDermott v. Commissioner, 80 U.S.App.D.C. 176, 150 F.2d 585, were "gifts." Congress intended
to obviate such rulings. S.Rep. No. 1622, 83d Cong., 2d Sess., p.
178. We imply no approval of those holdings under the general
standard of the "gift" exclusion. Cf. Robertson v. United
States, supra. [ Footnote 13 ]
"The United States Courts of Appeals shall have exclusive
jurisdiction to review the decisions of the Tax Court . . . in the
same manner and to the same extent as decisions of the district
courts in civil actions tried without a jury. . . ."
The last words first came into the statute through an amendment
to § 1141(a) of the 1939 Code in 1948 (§ 36 of the Judicial Code
Act, 62 Stat. 991). The purpose of the 1948 legislation was to
remove from the law the favored position (in comparison with
District Court and Court of Claims rulings in tax matters) enjoyed
by the Tax Court under this Court's ruling in Dobson v.
Commissioner, 320 U. S. 489 . Cf. note 11 supra. See Grace Bros., Inc. v. Commissioner, 173
F.2d 170, 173.
[ Footnote 14 ]
The "Findings of Fact and Conclusions of Law" were made orally,
and were simply:
"The resolution of the Board of Directors of the Trinity
Operating Company, Incorporated, held November 19, 1942, after the
resignations had been accepted of the plaintiff from his positions
as controller of the corporation of the Trinity Church, and the
president of the Trinity Operating Company, Incorporated, whereby a
gratuity was voted to the plaintiff, Allen [ sic ] D.
Stanton, in the amount of $20,000 payable to him in monthly
installments of $2,000 each, commencing with the month of December,
1942, constituted a gift to the taxpayer, and therefore need not
have been reported by him as income for the taxable years 1942, or
1943."
MR. JUSTICE BLACK, concurring and dissenting.
I agree with the Court that it was not clearly erroneous for the
Tax Court to find as it did in No. 376 that the automobile transfer
to Duberstein was not a gift, and so Page 363 U. S. 294 I agree with the Court's opinion and judgment reversing the
judgment of the Court of Appeals in that case.
I dissent in No. 546, Stanton v. United States. The
District Court found that the $20,000 transferred to Mr. Stanton by
his former employer at the end of ten years' service was a gift,
and therefore exempt from taxation under I.R.C. of 1939, § 22(b)(3)
(now I.R.C. of 1954, § 102(a)). I think the finding was not clearly
erroneous, and that the Court of Appeals was therefore wrong in
reversing the District Court's judgment. While conflicting
inferences might have been drawn, there was evidence to show that
Mr. Stanton's long services had been satisfactory, that he was well
liked personally and had given splendid service, that the employer
was under no obligation at all to pay any added compensation, but
made the $20,000 payment because prompted by a genuine desire to
make him a "gift," to award him a "gratuity." Cf. Commissioner
v. LoBue, 351 U. S. 243 , 351 U. S.
246 -247. The District Court's finding was that the added
payment "constituted a gift to the taxpayer, and therefore need not
have been reported by him as income. . . ." The trial court might
have used more words, or discussed the facts set out above in more
detail, but I doubt if this would have made its crucial, adequately
supported finding any clearer. For this reason, I would reinstate
the District Court's judgment for petitioner.
MR. JUSTICE FRANKFURTER, concurring in the judgment in No. 376
and dissenting in No. 546.
As the Court's opinion indicates, we brought these two cases
here partly because of a claimed difference in the approaches
between two Courts of Appeals, but primarily on the Government's
urging that, in that interest of the better administration of the
income tax laws, clarification was desirable for determining when a
transfer of property constitutes a "gift" and is not to be included
in Page 363 U. S. 295 income for purposes of ascertaining the "gross income" under the
Internal Revenue Code. As soon as this problem emerged after the
imposition of the first income tax authorized by the Sixteenth
Amendment, it became evident that its inherent difficulties and
subtleties would not easily yield to the formulation of a general
rule or test sufficiently definite to confine within narrow limits
the area of judgment in applying it. While, at its core, the tax
conception of a gift no doubt reflected the non-legal,
non-technical notion of a benefaction unentangled with any aspect
of worldly requital, the divers blends of personal and pecuniary
relationships in our industrial society inevitably presented
niceties for adjudication which could not be put to rest by any
kind of general formulation.
Despite acute arguments at the bar and a most thorough
reexamination of the problem on a full canvass of our prior
decisions and an attempted fresh analysis of the nature of the
problem, the Court has rejected the invitation of the Government to
fashion anything like a litmus paper test for determining what is
excludable as a "gift" from gross income. Nor has the Court
attempted a clarification of the particular aspects of the problem
presented by these two cases, namely, payment by an employer to an
employee upon the termination of the employment relation and
nonobligatory payment for services rendered in the course of a
business relationship. While I agree that experience has shown the
futility of attempting to define, by language so circumscribing as
to make it easily applicable, what constitutes a gift for every
situation where the problem may arise, I do think that greater
explicitness is possible in isolating and emphasizing factors which
militate against a gift in particular situations.
Thus, regarding the two frequently recurring situations involved
in these cases -- things of value given to employees by their
employers upon the termination of employment Page 363 U. S. 296 and payments entangled in a business relation and occasioned by
the performance of some service -- the strong implication is that
the payment is of a business nature. The problem in these two cases
is entirely different from the problem in a case where a payment is
made from one member of a family to another, where the implications
are directly otherwise. No single general formulation appropriately
deals with both types of cases, although both involve the question
whether the payment was a "gift." While we should normally suppose
that a payment from father to son was a gift unless the contrary is
shown, in the two situations now before us, the business
implications are so forceful that I would apply a presumptive rule
placing the burden upon the beneficiary to prove the payment wholly
unrelated to his services to the enterprise. The Court, however,
has declined so to analyze the problem, and has concluded
"that the governing principles are necessarily general, and have
already been spelled out in the opinions of this Court, and that
the problem is one which, under the present statutory framework,
does not lend itself to any more definitive statement that would
produce a talisman for the solution of concrete cases."
The Court has made only one authoritative addition to the
previous course of our decisions. Recognizing Bogardus v.
Commissioner, 302 U. S. 34 , as
"the leading case here," and finding essential accord between the
Court's opinion and the dissent in that case, the Court has drawn
from the dissent in Bogardus for infusion into what will
now be a controlling qualification, recognition that it is "for the
triers of the facts to seek among competing aims or motives the
ones that dominated conduct." 302 U. S. 302 U.S.
34, 302 U. S. 45 (dissenting opinion). All this being so in view of the Court, it
seems to me desirable not to try to improve what has "already been
spelled out" in the opinions of this Court, but to leave to the
lower courts Page 363 U. S. 297 the application of old phrases, rather than to float new ones,
and thereby inevitably produce a new volume of exegesis on the new
phrases.
Especially do I believe this when factfinding tribunals are
directed by the Court to rely upon their "experience with the
mainsprings of human conduct" and on their "informed experience
with human affairs" in appraising the totality of the facts of each
case. Varying conceptions regarding the "mainsprings of human
conduct" are derived from a variety of experiences or assumptions
about the nature of man, and "experience with human affairs," is
not only diverse, but also often drastically conflicting. What the
Court now does sets factfinding bodies to sail on an illimitable
ocean of individual beliefs and experiences. This can hardly fail
to invite, if indeed not encourage, too individualized diversities
in the administration of the income tax law. I am afraid that, by
these new phrasings, the practicalities of tax administration,
which should be as uniform as is possible in so vast a country as
ours, will be embarrassed. By applying what has already been
spelled out in the opinions of this Court, I agree with the Court
in reversing the judgment in Commissioner v.
Duberstein. But I would affirm the decision of the Court of Appeals for the
Second Circuit in Stanton v. United States. I would do so
on the basis of the opinion of Judge Hand, and more particularly
because the very terms of the resolution by which the $20,000 was
awarded to Stanton indicated that it was not a "gratuity" in the
sense of sheer benevolence, but in the nature of a generous
lagniappe, something extra thrown in for services received, though
not legally nor morally required to be given. This careful
resolution, doubtless drawn by a lawyer and adopted by some
hardheaded businessmen, contained a proviso that Stanton should
abandon all rights to "pension and retirement benefits." The fact
that Stanton had no such Page 363 U. S. 298 claims does not lessen the significance of the clause as
something "to make assurance doubly sure." 268 F.2d 728. The
business nature of the payment is confirmed by the words of the
resolution, explaining the "gratuity" as
"in appreciation of the services rendered by Mr. Stanton as
Manager of the Estate and Comptroller of the Corporation of Trinity
Church throughout nearly ten years, and as President of Trinity
Operating Company, Inc."
The force of this document, in light of all the factors to which
Judge Hand adverted in his opinion, was not in the least diminished
by testimony at the trial. Thus, the taxpayer has totally failed to
sustain the burden I would place upon him to establish that the
payment to him was wholly attributable to generosity unrelated to
his performance of his secular business functions as an officer of
the corporation of the Trinity Church of New York and the Trinity
Operating Co. Since the record totally fails to establish
taxpayer's claim, I see no need of specific findings by the trial
judge. | In Commissioner v. Duberstein, the Supreme Court addressed the question of what constitutes a "gift" for tax purposes. The Court rejected a new test suggested by the government and instead emphasized that the determination of whether a transfer is a gift must consider all factors and be based on the fact-finding tribunal's experience with human conduct.
In the case of Duberstein, an individual provided valuable information to a business corporation, which reciprocated with a Cadillac automobile. The Tax Court concluded that this was not a "gift" under the Internal Revenue Code, and the Supreme Court upheld this decision.
In Stanton v. United States, the Court addressed a similar issue where a church corporation's comptroller received a "gratuity" upon resignation. The lower courts disagreed, with the District Court finding it was a gift and the Court of Appeals reversing this decision. The Supreme Court vacated the judgment and remanded the case, emphasizing the need for specific findings and clear reasoning in such cases.
Justice Whittaker, in his concurrence and dissent, expressed concern over the potential for individualized diversities in tax administration due to varying conceptions of human conduct and experience. He agreed with the reversal in Duberstein but would have affirmed the Court of Appeals in Stanton, citing the specific terms of the resolution and the business nature of the payment. |
Taxes | Commissioner v. Glenshaw Glass Co. | https://supreme.justia.com/cases/federal/us/348/426/ | U.S. Supreme Court Commissioner v. Glenshaw Glass Co., 348
U.S. 426 (1955) Commissioner v. Glenshaw Glass
Co. No. 199 Argued February 28,
1955 Decided March 28, 1955 348
U.S. 426 ast|>* 348
U.S. 426 CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE THIRD
CIRCUIT Syllabus Money received as exemplary damages for fraud or as the punitive
two-thirds portion of a treble damage antitrust recovery must be
reported by a taxpayer as "gross income" under § 22(a) of the
Internal Revenue Code of 1939. Pp. 348 U. S.
427 -433.
(a) In determining what constitutes "gross income" as defined in
§ 22(a), effect must be given to the catch-all language "gains or
profits and income derived from any source whatever." Pp. 348 U. S.
429 -430.
(b) Eisner v. Macomber, 252 U.
S. 189 , distinguished. Pp. 348 U. S.
430 -431.
(c) The mere fact that such payments are extracted from the
wrongdoers as punishment for unlawful conduct cannot detract from
their character as taxable income to the recipients. P. 348 U. S.
431 .
(d) A different result is not required by the fact that § 22 (a)
was reenacted without change after the Board of Tax Appeals had
held punitive damages nontaxable in Highland Farms Corp., 42 B.T.A. 1314. Pp. 348 U. S.
431 -432.
(e) The legislative history of the Internal Revenue Code of 1954
does not require a different result. The definition of gross income
was simplified, but no effect upon its present broad scope was
intended. P. 348 U. S.
432 .
(f) Punitive damages cannot be classified as gifts, nor do they
come under any other exemption in the Code. P. 348 U. S.
432 .
211 F.2d 928 reversed. Page 348 U. S. 427 MR. CHIEF JUSTICE WARREN delivered the opinion of the Court.
This litigation involves two cases with independent factual
backgrounds, yet presenting the identical issue. The two cases were
consolidated for argument before the Court of Appeals for the Third
Circuit, and were heard en banc. The common question is whether
money received as exemplary damages for fraud or as the punitive
two-thirds portion of a treble damage antitrust recovery must be
reported by a taxpayer as gross income under § 22(a) of the
Internal Revenue Code of 1939. [ Footnote 1 ] In a single opinion, 211 F.2d 928, the Court
of Appeals affirmed the Tax Court's separate rulings in favor of
the taxpayers. 18 T.C. 860; 19 T.C. 637. Because of the frequent
recurrence of the question and differing interpretations by the
lower courts of this Court's decisions bearing upon the problem, we
granted the Commissioner of Internal Revenue's ensuing petition for
certiorari. 348 U.S. 813.
The facts of the cases were largely stipulated, and are not in
dispute. So far as pertinent, they are as follows: Commissioner v. Glenshaw Glass Co. -- The Glenshaw
Glass Company, a Pennsylvania corporation, manufactures glass
bottles and containers. It was engaged in protracted litigation
with the Hartford-Empire Company, which manufactures machinery of a
character used by Glenshaw. Among the claims advanced by
Glenshaw Page 348 U. S. 428 were demands for exemplary damages for fraud [ Footnote 2 ] and treble damages for injury to
its business by reason of Hartford's violation of the federal
antitrust laws. [ Footnote 3 ] In
December, 1947, the parties concluded a settlement of all pending
litigation by which Hartford paid Glenshaw approximately $800,000.
Through a method of allocation which was approved by the Tax Court,
18 T.C. 860, 870-872, and which is no longer in issue, it was
ultimately determined that, of the total settlement, $324,529.94
represented payment of punitive damages for fraud and antitrust
violations. Glenshaw did not report this portion of the settlement
as income for the tax year involved. The Commissioner determined a
deficiency, claiming as taxable the entire sum less only deductible
legal fees. As previously noted, the Tax Court and the Court of
Appeals upheld the taxpayer. Commissioner v. William Goldman Theatres, Inc. --
William Goldman Theatres, Inc., a Delaware corporation operating
motion picture houses in Pennsylvania, sued Loew's, Inc., alleging
a violation of the federal antitrust laws and seeking treble
damages. After a holding that a violation had occurred, William
Goldman Theatres, Inc. v. Loew's Inc., 150 F.2d 738, the case
was remanded to the trial court for a determination of damages. It
was found that Goldman had suffered a loss of profits equal to
$125,000, and was entitled to treble damages in the sum of
$375,000. William Goldman Theatres, Inc. v. Loew's,
Inc., 69 F. Supp.
103 , aff'd 164 F.2d 1021, cert. denied, 334
U.S. 811. Goldman reported only $125,000 of the recovery as gross
income, and claimed that the $250,000 Page 348 U. S. 429 balance constituted punitive damages, and, as such, was not
taxable. The Tax Court agreed, 19 T.C. 637, and the Court of
Appeals, hearing this with the Glenshaw case, affirmed.
211 F.2d 928.
It is conceded by the respondents that there is no
constitutional barrier to the imposition of a tax on punitive
damages. Our question is one of statutory construction: are these
payments comprehended by § 22(a)?
The sweeping scope of the controverted statute is readily
apparent:
"SEC. 22. GROSS INCOME."
"(a) GENERAL DEFINITION. 'Gross income' includes gains, profits,
and income derived from salaries, wages, or compensation for
personal service . . . of whatever kind and in whatever form paid,
or from professions, vocations, trades, businesses, commerce, or
sales, or dealings in property, whether real or personal, growing
out of the ownership or use of or interest in such property; also
from interest, rent, dividends, securities, or the transaction of
any business carried on for gain or profit, or gains or profits
and income derived from any source whatever. . . ."
(Emphasis added.) [ Footnote
4 ]
This Court has frequently stated that this language was used by
Congress to exert in this field "the full measure of its taxing
power." Helvering v. Clifford, 309 U.
S. 331 , 309 U. S. 334 ; Helvering v. Midland Mutual Life Ins. Co., 300 U.
S. 216 , 300 U. S. 223 ; Douglas v. Willcuts, 296 U. S. 1 , 296 U. S. 9 ; Irwin v. Gavit, 268 U. S. 161 , 268 U. S. 166 .
Respondents contend that punitive damages, characterized as
"windfalls" flowing from the culpable conduct of third parties, are
not within the scope of the section. But Congress applied no
limitations as to the source of taxable receipts, nor
restrictive Page 348 U. S. 430 labels as to their nature. And the Court has given a liberal
construction to this broad phraseology in recognition of the
intention of Congress to tax all gains except those specifically
exempted. Commissioner v. Jacobson, 336 U. S.
28 , 336 U. S. 49 ; Helvering v. Stockholms Enskilda Bank, 293 U. S.
84 , 293 U. S. 87 -91.
Thus, the fortuitous gain accruing to a lessor by reason of the
forfeiture of a lessee's improvements on the rented property was
taxed in Helvering v. Bruun, 309 U.
S. 461 . Cf. Robertson v. United States, 343 U. S. 711 ; Rutkin v. United States, 343 U. S. 130 ; United States v. Kirby Lumber Co., 284 U. S.
1 . Such decisions demonstrate that we cannot but ascribe
content to the catchall provision of § 22(a), "gains or profits and
income derived from any source whatever." The importance of that
phrase has been to frequently recognized since its first appearance
in the Revenue Act of 1913 [ Footnote 5 ] to say now that it adds nothing to the meaning
of "gross income."
Nor can we accept respondents' contention that a narrower
reading of § 22(a) is required by the Court's characterization of
income in Eisner v. Macomber, 252 U.
S. 189 , 252 U. S. 207 ,
as "the gain derived from capital, from labor, or from both
combined." [ Footnote 6 ] The
Court was there endeavoring to determine whether the distribution
of a corporate stock dividend constituted a realized gain to the
shareholder, or changed "only the form, not the essence," of Page 348 U. S. 431 his capital investment. Id. at 252 U. S. 210 .
It was held that the taxpayer had "received nothing out of the
company's assets for his separate use and benefit." Id. at 252 U. S. 211 .
The distribution, therefore, was held not a taxable event. In that
context -- distinguishing gain from capital -- the definition
served a useful purpose. But it was not meant to provide a
touchstone to all future gross income questions. Helvering v.
Bruun, supra, at 309 U. S.
468 -469; United States v. Kirby Lumber Co.,
supra, at 284 U. S. 3 .
Here, we have instances of undeniable accessions to wealth,
clearly realized, and over which the taxpayers have complete
dominion. The mere fact that the payments were extracted from the
wrongdoers as punishment for unlawful conduct cannot detract from
their character as taxable income to the recipients. Respondents
concede, as they must, that the recoveries are taxable to the
extent that they compensate for damages actually incurred. It would
be an anomaly that could not be justified in the absence of clear
congressional intent to say that a recovery for actual damages is
taxable, but not the additional amount extracted as punishment for
the same conduct which caused the injury. And we find no such
evidence of intent to exempt these payments.
It is urged that reenactment of § 22(a) without change since the
Board of Tax Appeals held punitive damages nontaxable in Highland Farms Corp., 42 B.T.A. 1314, indicates
congressional satisfaction with that holding. Reenactment --
particularly without the slightest affirmative indication that
Congress ever had the Highland Farms decision before it --
is an unreliable indicium, at best. Helvering v. Wilshire Oil
Co., 308 U. S. 90 , 308 U. S.
100 -101; Koshland v. Helvering, 298 U.
S. 441 , 298 U. S. 447 .
Moreover, the Commissioner promptly published his nonacquiescence
in this portion of the Highland Farms holding, [ Footnote 7 ] and has, Page 348 U. S. 432 before and since, consistently maintained the position that
these receipts are taxable. [ Footnote 8 ] It therefore cannot be said with certitude
that Congress intended to carve an exception out of § 22(a)'s
pervasive coverage. Nor does the 1954 Code's [ Footnote 9 ] legislative history, with its
reiteration of the proposition that statutory gross income is
"all-inclusive," [ Footnote
10 ] give support to respondents' position. The definition of
gross income has been simplified, but no effect upon its present
broad scope was intended. [ Footnote 11 ] Certainly punitive damages cannot reasonably
be classified as gifts, cf. Commissioner v. Jacobson, 336 U. S. 28 , 336 U. S. 47 -52,
nor do they come under any other exemption provision in the Code.
We would do violence to the plain meaning of the statute and
restrict a clear legislative attempt to Page 348 U. S. 433 bring the taxing power to bear upon all receipts
constitutionally taxable were we to say that the payments in
question here are not gross income. See Helvering v. Midland
Mutual Life Ins. Co., supra, at 300 U. S.
223 . Reversed. MR. JUSTICE DOUGLAS dissents.
MR. JUSTICE HARLAN took no part in the consideration or decision
of this case.
* Together with Commissioner of Internal Revenue v. William
Goldman Theaters, Inc., which was a separate case decided by
the Court of Appeals in the same opinion.
[ Footnote 1 ]
53 Stat. 9, 53 Stat. 574, 26 U.S.C. § 22(a).
[ Footnote 2 ]
For the bases of Glenshaw's claim for damages from fraud, see Shawkee Manufacturing Co. v. Hartford-Empire Co., 322 U. S. 271 ; Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322 U.
S. 238 .
[ Footnote 3 ] See Hartford-Empire Co. v. United States, 323 U.
S. 386 , 324 U. S. 324 U.S.
570.
[ Footnote 4 ] See note 1 supra. [ Footnote 5 ]
38 Stat. 114, 167.
[ Footnote 6 ]
The phrase was derived from Stratton's Independence, Ltd. v.
Howbert, 231 U. S. 399 , 231 U. S. 415 ,
and Doyle v. Mitchell Bros. Co., 247 U.
S. 179 , 247 U. S. 185 ,
two cases construing the Revenue Act of 1909, 36 Stat. 11, 112.
Both taxpayers were "wasting asset" corporations, one being engaged
in mining, the other in lumbering operations. The definition was
applied by the Court to demonstrate a distinction between a return
on capital and "a mere conversion of capital assets." Doyle v.
Mitchell Bros. Co., supra, at 247 U. S. 184 .
The question raised by the instant case is clearly
distinguishable.
[ Footnote 7 ]
1941-1 Cum.Bull, 16.
[ Footnote 8 ]
The long history of departmental rulings holding personal injury
recoveries nontaxable on the theory that they roughly correspond to
a return of capital cannot support exemption of punitive damages
following injury to property. See 2 Cum.Bull. 71; I-1
Cum.Bull. 92, 93; VII-2 Cum.Bull. 123; 1954-1 Cum.Bull. 179, 180.
Damages for personal injury are, by definition, compensatory only.
Punitive damages, on the other hand, cannot be considered a
restoration of capital for taxation purposes.
[ Footnote 9 ]
68A Stat. 3 et seq. Section 61(a) of the Internal
Revenue Code of 1954, 68A Stat. 17, is the successor to § 22(a) of
the 1939 Code.
[ Footnote 10 ]
H.R.Rep.No.1337, 83d Cong., 2d Sess. A18; S.Rep.No.1622, 83d
Cong., 2d Sess. 168.
[ Footnote 11 ]
In discussing § 61(a) of the 1954 Code, the House Report
states:
"This section corresponds to section 22(a) of the 1939 Code.
While the language in existing section 22(a) has been simplified,
the all-inclusive nature of statutory gross income has not been
affected thereby. Section 61(a) is as broad in scope as section
22(a)."
"Section 61(a) provides that gross income includes 'all income
from whatever source derived.' This definition is based upon the
16th Amendment, and the word 'income' is used in its constitutional
sense."
H.R.Rep.No.1337, supra, note 10 at A18 A virtually identical statement appears in S.Rep.No.1622, supra, note 10 at
168. | Here is a summary of the Supreme Court case Commissioner v. Glenshaw Glass Co.:
Issue: Does money received as exemplary damages for fraud or as punitive damages in an antitrust case constitute "gross income" under the Internal Revenue Code of 1939?
Holding: Yes. The Court held that money received as exemplary or punitive damages must be reported as "gross income" under § 22(a) of the Internal Revenue Code of 1939.
Reasoning: The Court interpreted the broad definition of "gross income" in § 22(a) to include "gains or profits and income derived from any source whatever." This catch-all language encompassed punitive damages, which could not be classified as gifts or any other exempted category under the Code. The Court also distinguished between damages for personal injury, which are compensatory and non-taxable, and punitive damages, which are extracted as punishment and are taxable. The legislative history of the Internal Revenue Code of 1954 supported this interpretation, as it simplified the definition of gross income without intending to narrow its scope. |
Taxes | Corn Products Refining Co. v. Commissioner | https://supreme.justia.com/cases/federal/us/350/46/ | U.S. Supreme Court Corn Products Refining Co. v.
Commissioner, 350 U.S.
46 (1955) Corn Products Refining Co.
v. Commissioner of Internal
Revenue No. 20 Argued October 18,
1955 Decided November 7,
1955 350 U.S.
46 CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE SECOND
CIRCUIT Syllabus Petitioner's purchases and sales of corn futures in 1940 and
1942, which, though not "true hedges," were an integral part of its
manufacturing business, held not capital asset
transactions under § 117(a) of the Internal Revenue Code of 1939,
and gains and losses therefrom gave rise to ordinary income and
ordinary deductions. Pp. 350 U. S.
47 -54.
(a) The finding by both the Tax Court and the Court of Appeals
that petitioner's purchases constitute "an integral part of its
manufacturing business" is here sustained. Pp. 350 U. S.
50 -51.
(b) Through its purchases of commodity futures, petitioner
obtained partial insurance against its principal risk -- the
possibility of a price rise. P. 350 U. S.
51 .
(c) The capital asset provision of § 117 is to be narrowly
construed. P. 350 U. S.
52 .
(d) Congress intended that profits and losses arising from the
everyday operation of a business be considered as ordinary income
or loss, rather than capital gain or loss. P. 350 U. S.
52 .
(e) The Treasury ruling, G.C.M. 17322, that hedging transactions
were essentially to be regarded as insurance, rather than dealings
in capital assets, and that gains and losses therefrom were
ordinary business gains and losses, has been consistently followed
by the courts as well as by the Commissioner, and has had the tacit
approval of Congress. Pp. 350 U. S.
52 -53.
(f) The conclusion here reached is supported by practical
considerations, as well as by the statute. Pp. 350 U. S.
53 -54.
215 F.2d 513, affirmed. Page 350 U. S. 47 MR. JUSTICE CLARK delivered the opinion of the Court.
This case concerns the tax treatment to be accorded certain
transactions in commodity futures. [ Footnote 1 ] In the Tax Court, petitioner Corn Products
Refining Company contended that its purchases and sales of corn
futures in 1940 and 1942 were capital asset transactions under §
117(a) of the Internal Revenue Code of 1939. It further contended
that its futures transactions came within the "wash sales"
provisions of § 118. The 1940 claim was disposed of on the ground
that § 118 did not apply, but, for the year 1942, both the Tax
Court and the Court of Appeals for the Second Circuit, 215 F.2d
513, held that the futures were not capital assets under § 117. We
granted certiorari, 348 U.S. 911, [ Footnote 2 ] because of an asserted conflict with holdings
in the Courts of Appeals for the Third, Fifth, and Sixth Circuits.
[ Footnote 3 ] Since we hold that
these futures do not constitute capital assets in petitioner's
hands, we do not reach the issue of whether the transactions were
"wash sales." Page 350 U. S. 48 Petitioner is a nationally known manufacturer of products made
from grain corn. It manufactures starch, syrup, sugar, and their
byproducts, feeds, and oil. Its average yearly grind of raw corn
during the period 1937 through 1942 varied from thirty-five to
sixty million bushels. Most of its products were sold under
contracts requiring shipment in thirty days at a set price or at
market price on the date of delivery, whichever was lower. It
permitted cancellation of such contracts, but, from experience, it
could calculate with some accuracy future orders that would remain
firm. While it also sold to a few customers on long-term contracts
involving substantial orders, these had little effect on the
transactions here involved. [ Footnote 4 ]
In 1934 and again in 1936, droughts in the corn belt caused a
sharp increase in the price of spot corn. With a storage capacity
of only 2,300,000 bushels of corn, a bare three weeks' supply, Corn
Products found itself unable to buy at a price which would permit
its refined corn sugar, cerealose, to compete successfully with
cane and beet sugar. To avoid a recurrence of this situation,
petitioner, in 1937, began to establish a long position in corn
futures "as a part of its corn buying program" and "as the most
economical method of obtaining an adequate supply of raw corn"
without entailing the expenditure of large sums for additional
storage facilities. At harvest time each year, it would buy futures
when the price appeared favorable. It would take delivery on such
contracts as it found necessary to its manufacturing operations,
and sell the remainder in early summer if no shortage was
imminent. Page 350 U. S. 49 If shortages appeared, however, it sold futures only as it
bought spot corn for grinding. [ Footnote 5 ] In this manner, it reached a balanced position
with reference to any increase in spot corn prices. It made no
effort to protect itself against a decline in prices.
In 1940, it netted a profit of $680,587.39 in corn futures, but,
in 1942, it suffered a loss of $109,969.38. In computing its tax
liability, Corn Products reported these figures as ordinary profit
and loss from its manufacturing operations for the respective
years. It now contends that its futures were "capital assets" under
§ 117, and that gains and losses therefrom should have been treated
as arising from the sale of a capital asset. [ Footnote 6 ] In support of this position, it claims
that its futures trading was separate and apart from its
manufacturing operations, and that, in its futures transactions, it
was acting as a "legitimate capitalist." United States v. New
York Coffee & Sugar Exchange, 263 U.
S. 611 , 263 U. S. 619 .
It denies that its futures transactions were "hedges" or
"speculative" dealings as Page 350 U. S. 50 covered by the ruling of General Counsel's Memorandum 17322,
XV-2 Cum.Bull. 151, and claims that it is in truth "the forgotten
man" of that administrative interpretation.
Both the Tax Court and the Court of Appeals found petitioner's
futures transactions to be an integral part of its business
designed to protect its manufacturing operations against a price
increase in its principal raw material and to assure a ready supply
for future manufacturing requirements. Corn Products does not level
a direct attack on these two court findings, but insists that its
futures were "property" entitled to capital asset treatment under §
117, and, as such, were distinct from its manufacturing business.
We cannot agree.
We find nothing in this record to support the contention that
Corn Products' futures activity was separate and apart from its
manufacturing operation. On the contrary, it appears that the
transactions were vitally important to the company's business as a
form of insurance against increases in the price of raw corn. Not
only were the purchases initiated for just this reason, but the
petitioner's sales policy, selling in the future at a fixed price
or less, continued to leave it exceedingly vulnerable to rises in
the price of corn. Further, the purchase of corn futures assured
the company a source of supply which was admittedly cheaper than
constructing additional storage facilities for raw corn. Under
these facts, it is difficult to imagine a program more closely
geared to a company's manufacturing enterprise or more important to
its successful operation.
Likewise, the claim of Corn Products that it was dealing in the
market as a "legitimate capitalist" lacks support in the record.
There can be no quarrel with a manufacturer's desire to protect
itself against increasing costs of raw materials. Transactions
which provide such protection are considered a legitimate form of
insurance. United States v. New York Coffee & Sugar
Exchange, 263 Page 350 U. S. 51 U.S. at 263 U. S. 619 ; Browne v. Thorn, 260 U. S. 137 , 260 U. S.
139 -140. However, in labeling its activity as that of a
"legitimate capitalist" exercising "good judgment" in the futures
market, petitioner ignores the testimony of its own officers that,
in entering that market, the company was "trying to protect a part
of [its] manufacturing costs;" that its entry was not for the
purpose of "speculating and buying and selling corn futures," but
to fill an actual
"need for the quantity of corn [bought] . . . in order to cover
. . . what [products] we expected to market over a period of
fifteen or eighteen months."
It matters not whether the label be that of "legitimate
capitalist" or "speculator;" this is not the talk of the capital
investor, but of the far-sighted manufacturer. For tax purposes,
petitioner's purchases have been found to "constitute an integral
part of its manufacturing business" by both the Tax Court and the
Court of Appeals, and, on essentially factual questions, the
findings of two courts should not ordinarily be disturbed. Comstock v. Group of Institutional Investors, 335 U.
S. 211 , 335 U. S.
214 .
Petitioner also makes much of the conclusion by both the Tax
Court and the Court of Appeals that its transactions did not
constitute "true hedging." It is true that Corn Products did not
secure complete protection from its market operations. Under its
sales policy, petitioner could not guard against a fall in prices.
It is clear, however, that petitioner feared the possibility of a
price rise more than that of a price decline. It therefore
purchased partial insurance against its principal risk, and hoped
to retain sufficient flexibility to avoid serious losses on a
declining market.
Nor can we find support for petitioner's contention that hedging
is not within the exclusions of § 117(a). Admittedly, petitioner's
corn futures do not come within the literal language of the
exclusions set out in that section. They were not stock in trade,
actual inventory, Page 350 U. S. 52 property held for sale to customers, or depreciable property
used in a trade or business. But the capital asset provision of §
117 must not be so broadly applied as to defeat, rather than
further, the purpose of Congress. Burnet v. Harmel, 287 U. S. 103 , 287 U. S. 108 .
Congress intended that profits and losses arising from the everyday
operation of a business be considered as ordinary income or loss,
rather than capital gain or loss. The preferential treatment
provided by § 117 applies to transactions in property which are not
the normal source of business income. It was intended
"to relieve the taxpayer from . . . excessive tax burdens on
gains resulting from a conversion of capital investments, and to
remove the deterrent effect of those burdens on such
conversions." Burnet v. Harmel, 287 U.S. at 287 U. S. 106 .
Since this section is an exception from the normal tax requirements
of the Internal Revenue Code, the definition of a capital asset
must be narrowly applied, and its exclusions interpreted broadly.
This is necessary to effectuate the basic congressional purpose.
This Court has always construed narrowly the term "capital assets"
in § 117. See Hort v. Commissioner, 313 U. S.
28 , 313 U. S. 31 ; Kieselbach v. Commissioner, 317 U.
S. 399 , 317 U. S.
403 .
The problem of the appropriate tax treatment of hedging
transactions first arose under the 1934 Tax Code revision.
[ Footnote 7 ] Thereafter, the
Treasury issued G.C.M. 17322, supra, distinguishing
speculative transactions in commodity futures from hedging
transactions. It held that hedging transactions were essentially to
be regarded as insurance, rather than a dealing in capital assets,
and that Page 350 U. S. 53 gains and losses therefrom were ordinary business gains and
losses. The interpretation outlined in this memorandum has been
consistently followed by the courts as well as by the Commissioner.
[ Footnote 8 ] While it is true
that this Court has not passed on its validity, it has been well
recognized for 20 years, and Congress has made no change in it
though the Code has been reenacted on three subsequent occasions.
This bespeaks congressional approval. Helvering v.
Winmill, 305 U. S. 79 , 305 U. S. 83 .
Furthermore, Congress has since specifically recognized the hedging
exception here under consideration in the short-sale rule of §
1233(a) of the 1954 Code. [ Footnote
9 ]
We believe that the statute clearly refutes the contention of
Corn Products. Moreover, it is significant to note that practical
considerations lead to the same conclusion. To hold otherwise would
permit those engaged in hedging transactions to transmute ordinary
income into capital Page 350 U. S. 54 gain at will. The hedger may either sell the future and purchase
in the spot market or take delivery under the future contract
itself. But if a sale of the future created a capital transaction,
while delivery of the commodity under the same future did not, a
loophole in the statute would be created, and the purpose of
Congress frustrated.
The judgment is Affirmed. MR. JUSTICE HARLAN took no part in the consideration or decision
of this case.
[ Footnote 1 ]
A commodity future is a contract to purchase some fixed amount
of a commodity at a future date for a fixed price. Corn futures,
involved in the present case, are in terms of some multiple of five
thousand bushels to be delivered eleven months or less after the
contract. Cf. Hoffman, Future Trading (1932) 118.
[ Footnote 2 ]
The grant was limited to the following two questions:
"1. Are transactions in commodity futures which are not 'true
hedges' capital asset transactions, and thus subject to the
limitations of Section 117 of the Internal Revenue Code of 1939, or
do the resulting gains and losses from such transactions give rise
to ordinary income and ordinary deductions?"
"2. Are commodity futures contracts 'securities,' and thus
subject to the 'wash sales' provisions of Section 118 of the
Internal Revenue Code of 1939?"
[ Footnote 3 ] Makransky's Estate v. Commissioner, 154 F.2d 59; Commissioner v. Farmers & Ginners Cotton Oil Co., 120
F.2d 772; Trenton Cotton Oil Co. v. Commissioner, 147 F.2d
33.
[ Footnote 4 ]
Petitioner had contracts with three consumers to furnish, for a
period of ten years or more, large quantities of starch or feed. In
January, 1940, petitioner had sold 2,000,000 bags of corn sugar,
delivery to be made several months in the future. Also, members of
the canning industry in the Pacific Coast had contracts to purchase
corn sugar for delivery in more than thirty days.
[ Footnote 5 ]
The dispositions of the corn futures during the period in
dispute were as follows: Sales of Delivery under futures thousand futures thousand bushels bushels
1938 17,400 4,975
1939 14,180 2,865
1940 14,595 250
1941 2,545 2,175
1942 5,695 4,460
[ Footnote 6 ]
"(1) CAPITAL ASSETS. The term 'capital assets' means property
held by the taxpayer (whether or not connected with his trade or
business), but does not include stock in trade of the taxpayer or
other property of a kind which would properly be included in the
inventory of the taxpayer if on hand at the close of the taxable
year, or property held by the taxpayer primarily for sale to
customers in the ordinary course of his trade or business, or
property, used in the trade or business, of a character which is
subject to the allowance for depreciation provided in section
23(1); . . ."
[ Footnote 7 ]
Section 208(8) of the Revenue Act of 1924 limited "capital
assets" to property held more than two years. This definition was
retained until the Act of 1934. Since the rules of the various
commodity exchanges required that futures contracts be closed out
in periods shorter than two years, these contracts could not
qualify as capital assets.
[ Footnote 8 ] Stewart Silk Corp. v. Commissioner, 9 T.C. 174; Battelle v. Commissioner, 47 B.T.A. 117; Grote v.
Commissioner, 41 B.T.A. 247. See Estate of Makransky v.
Commissioner, 5 T.C. 397, 412, aff'd per curiam, 154
F.2d 59; Trenton Cotton Oil Co. v. Commissioner, 147 F.2d
33, 35; Commissioner v. Farmers & Ginners Cotton Oil
Co., 120 F.2d 772, 774; Tennessee Egg Co. v.
Commissioner, 47 B.T.A. 558, 560; G.C.M. 18383, 1937-2
Cum.Bull. 244, 245; I.T. 3137, 1937-2 Cum.Bull. 164, 166. Cf.
Commissioner v. Banfield, 122 F.2d 1017, 1019-1020; G.C.M.
18658, 1937-2 Cum.Bull. 77.
[ Footnote 9 ]
Section 1233(a) provides that gain or loss from "the short sale
of property, other than a hedging transaction in commodity
futures," shall be treated as gain or loss from the sale of a
capital asset to the extent "that the property, including a
commodity future, used to close the short sale constitutes a
capital asset in the hands of a taxpayer." The legislative history
recognizes explicitly the hedging exception. H.R.Rep. No. 1337, 83d
Cong., 2d Sess., p. A278; S.Rep. No. 1622, 83d Cong., 2d Sess., p.
437:
"Under existing law, bona fide hedging transactions do
not result in capital gains or losses. This result is based upon
case law and regulations. To continue this result, hedging
transactions in commodity futures have been specifically excepted
from the operation of this subsection." | Here is a summary of the Supreme Court case, Corn Products Refining Co. v. Commissioner (1955):
The case centers on the tax treatment of Corn Products Refining Co.'s transactions in corn futures between 1938 and 1942. The company argued that these transactions should be considered capital asset transactions under Section 117(a) of the Internal Revenue Code of 1939.
The Supreme Court ruled that Corn Products' purchases and sales of corn futures were not capital asset transactions. Instead, they were an integral part of its manufacturing business and, therefore, gave rise to ordinary income and deductions. The Court considered the company's intention to protect itself from price fluctuations and the consistent treatment of hedging transactions as ordinary business transactions by the Commissioner and the courts.
The Court's decision also considered practical considerations and the narrow construction of the capital asset provision in Section 117. Ultimately, the Court affirmed the lower court's decision, concluding that Corn Products' corn futures transactions did not constitute capital assets. |
Taxes | Flora v. U.S. | https://supreme.justia.com/cases/federal/us/357/63/ | U.S. Supreme Court Flora v. United States, 357 U.S.
63 (1958) Flora v. United
States No. 492 Argued May 20, 1958 Decided June 16, 1958 357 U.S.
63 CERTIORARI TO THE UNITED STATES
COURT OF APEALS FOR THE TENTH
CIRCUIT Syllabus A taxpayer must pay the full amount of an income tax deficiency
assessed by the Commissioner of Internal Revenue before he may
challenge its correctness by a suit in a federal district court for
refund under 28 U.S.C. § 1346(a)(1). Pp. 357 U. S.
63 -76.
246 F.2d 929, affirmed.
MR. CHIEF JUSTICE WARREN delivered the opinion of the Court.
The issue in this case is whether a taxpayer must pay the full
amount of an income tax deficiency before he may challenge its
correctness by a suit for refund under 28 U.S.C. § 1346(a)(1).
During 1950, petitioner suffered losses on the sale of certain
commodities and futures. He reported them as ordinary losses, but
the Commissioner of Internal Revenue characterized them as capital
losses. A deficiency assessment was levied in the amount of
$28,908.60, including interest. Petitioner made two payments that
totaled $5,058.54, and then submitted a claim for refund of that
amount. The claim was disallowed. On Aug. 3, 1956, petitioner
brought this action under 28 U.S.C. § 1346(a)(1) for refund. The
United States moved to Page 357 U. S. 64 dismiss for want of jurisdiction and for failure to state a
claim upon which relief could be granted. The district judge held
that, because petitioner had not paid the full amount of the
deficiency, he "should not maintain" the action. Because the
question had not been resolved by the Court of Appeals, however, he
deemed it advisable to pass upon the merits, and, upon doing so,
entered judgment for defendant United States. 142 F.
Supp. 602 , 604. The Court of Appeals for the Tenth Circuit
vacated the judgment and remanded with instructions to dismiss,
holding that the complaint "failed to state a claim" because
petitioner had not paid the entire assessment for the period in
question. 246 F.2d 929, 931. [ Footnote 1 ] We granted certiorari, 355 U.S. 881, to
resolve the conflict between that decision and Bushmiaer v.
United States, 230 F.2d 146. [ Footnote 2 ]
The pertinent jurisdictional statute, 28 U.S.C. § 1346(a)(1),
reads as follows:
"(a) The district courts shall have original jurisdiction,
concurrent with the Court of Claims, of:"
"(1) Any civil action against the United States for the recovery
of any internal revenue tax alleged to have been erroneously or
illegally assessed or collected, or any penalty claimed to
have been collected without authority or any sum alleged
to have been excessive or in any manner wrongfully collected under
the internal revenue laws. . . ."
(Emphasis supplied.) Page 357 U. S. 65 In matters of statutory construction, the duty of this Court is
to give effect to the intent of Congress, and, in doing so, our
first reference is, of course, to the literal meaning of words
employed. The principle of strict construction of waivers of
sovereign immunity, United States v. Michel, 282 U.
S. 656 , and the sharp division of opinion among the
lower courts on the meaning of the pertinent statutory language
suggest the presence of ambiguity in what might otherwise be termed
a clear authorization to sue for the refund of "any sum."
Consequently, a thorough consideration of the relevant legislative
history is required.
Section 1346 was originally enacted as Section 1310(c) of the
Revenue Act of 1921. [ Footnote
3 ] Its essential language seems to have been copied from R.S. §
3226, the predecessor of the present claim for refund statute, 26
U.S.C. (Supp. V) § 7422(a). Those statutes use language identical
to that appearing above to provide that no suit for the refund of a
"tax," "penalty," or "sum" shall be maintained until similar relief
has been sought from the Secretary or his delegate. [ Footnote 4 ] The meaning that has been
ascribed to this language in the claim for refund statute provides
the key to what Congress intended when it used that language in the
jurisdictional provision. Page 357 U. S. 66 The original claim for refund statute, Section 19 of the Revenue
Act of July 13, 1866, provided that no suit should be maintained in
any court for the recovery of
"any tax alleged to have been erroneously or illegally assessed
or collected, until appeal shall have been duly made to the
commissioner of internal revenue. . . . [ Footnote 5 ]"
On this "appeal," the Commissioner was empowered to "remit,
refund, and pay back" all taxes or penalties improperly assessed or
collected. [ Footnote 6 ] When
the appeal requirement was restated in Section 3226 of the Revised
Statutes, [ Footnote 7 ] Congress
added the "penalty" and "sum" clauses, bringing together for the
first time the three-way division that survives in 26 U.S.C. (Supp.
V) § 7422(a) and 28 U.S.C. § 1346(a)(1). The revisers left no
indication of what significance, if any, was to be attached to this
addition.
During the period of this formative legislation, refund suits
could not be brought against the United States, because of its
sovereign immunity. Tax litigation took the form of an action of
assumpsit against the collector. Page 357 U. S. 67 See Philadelphia v.
Diehl , 5 Wall. 720. [ Footnote 8 ] Such suits were, of course, subject to the
provision in Section 19 of the 1866 Act that they must be preceded
by "appeal" to the Commissioner. The meaning of that command, which
later became R.S. § 3226 and eventually, as amended, 26 U.S.C.
(Supp. V) § 7422(a), was considered in Cheatham v. United
States, 92 U. S. 85 . There,
in response to an appeal, the Commissioner of Internal Revenue had
set aside the first assessment of taxpayer's 1864 income taxes and
directed the local assessor to make a second one. The taxpayer paid
the second assessment and sued the collector for refund. The Court
held that, by failing to appeal from the second assessment, the
taxpayer failed to comply with Section 19, and hence had no right
of action. In the course of its opinion, the Court made this
careful statement of the remedies then available to taxpayers who
sought to contest the correctness of their tax:
"So also, in the Internal Revenue Department, the statute which
we have copied allows appeals from the assessor to the Commissioner
of Internal Revenue, and, if dissatisfied with his decision, on
paying the tax, the party can sue the collector; and, if the money
was wrongfully exacted, the courts will give him relief by a
judgment, which the United States pledges herself to pay."
" * * * * Page 357 U. S.
68 " ". . . While a free course of remonstrance and appeal is allowed
within the departments before the money is finally exacted, the
General Government has wisely made the payment of the tax
claimed, whether of customs or of internal revenue, a
condition precedent to a resort to the courts by the party against
whom the tax is assessed. . . . If the compliance with this
condition [that suit must be brought within six months of the
Commissioner's decision] requires the party aggrieved to pay the
money, he must do it. He cannot, after the decision is rendered
against him, protract the time within which he can contest that
decision in the courts by his own delay in paying the money. It is
essential to the honor and orderly conduct of the Government that
its taxes should be promptly paid, and drawbacks speedily adjusted,
and the rule prescribed in this class of cases is neither arbitrary
nor unreasonable. . . ."
"The objecting party can take his appeal. He can, if the
decision is delayed beyond twelve months, rest his case on that
decision, or he can pay the amount claimed and commence
his suit at any time within that period. So, after the decision, he
can pay at once, and commence suit within the six months. . . .
[ Footnote 9 ]"
(Emphasis added.)
From this carefully considered dictum, it is unmistakably clear
that the Court understood the statutes of that time to require full
payment of an assessed tax as a condition precedent to the right to
sue the collector for a refund. This understanding of the statutory
scheme appears to have prevailed for the succeeding fifty or sixty
years. It was never suggested that the addition in R.S. § 3226 of
the clause beginning "any sum" effected any change. The Cheatham case was decided after that Page 357 U. S. 69 addition was made, and it gave no indication that the "condition
precedent" of which it spoke had already been abrogated by
Congress. Consistent with that understanding, there does not appear
to be a single case before 1940 in which a taxpayer attempted a
suit for refund of income taxes without paying the full amount the
Government alleged to be due. Court opinions that took occasion to
comment on the extent of payment are consistent with the Cheatham declaration, [ Footnote 10 ] and that case has continued to be cited with
approval to the present day. [ Footnote 11 ] Such was the understanding of the necessity
for full payment in the suit against the collector.
Since the statute now under consideration, 28 U.S.C. §
1346(a)(1), employs language identical to that in the statute under
which the full payment understanding developed, R.S. § 3226, a
construction requiring full payment would appear to be more
consistent with the established meaning of the statutory language.
Furthermore, the situation with respect to tax suits against the
United States at the time 28 U.S.C. § 1346(a)(1) was enacted, the
express purpose of its enactment, and subsequent Page 357 U. S. 70 expressions of congressional intent all suggest that the
principle of full payment was to be preserved.
The jurisdictional provision that is now 28 U.S.C. § 1346(a)(1)
was first enacted in Section 1310(c) of the Revenue Act of 1921.
[ Footnote 12 ] At that time,
the United States was already suable in the District Courts. Since
1887, the Tucker Act had allowed suit against the United States for
claims less than $10,000 "founded upon . . . any law of Congress .
. . ," [ Footnote 13 ] and
that language included suits to obtain refund of income taxes. United States v. Emery, Bird, Thayer Realty Co., 237 U. S. 28 . Since
R.S. § 3226 was cast in the broadest of terms, its requirement that
refund suits be preceded by an "appeal" to the Commissioner clearly
applied to the Tucker Act cases, United States v. Michel, 282 U. S. 656 , and
the related requirement that full payment must be made prior to
suit seems to have been assumed to be equally applicable. For
amounts in excess of the $10,000 Tucker Act limitation, the
taxpayer could invoke his old remedy against the Collector.
The complementary nature of the two District Court remedies was
impaired when this Court reemphasized the rule requiring the
Collector to be sued personally. A suit against the office or
the successor in office of a deceased collector could not be
maintained. Smietanka v. Indiana Steel Co., 257 U. S.
1 (1921). Senator Jones of New Mexico interrupted floor
debate on the Revenue Act of 1921 to call attention to this
decision. In his view, it meant that, when the particular collector
was dead, a taxpayer suing for more than $10,000 had to bring suit
in the Court of Claims. In addition to the extra expense and
inconvenience of litigating in Washington, a Court of Claims Page 357 U. S. 71 judgment carried no interest. The Senator proposed an amendment,
stating:
"What is here proposed is that we shall remedy that situation by
providing that, where the collector to whom the revenue was paid
has died, then the claimant may sue the United States. It simply
brings about an equitable situation, and prevents the taxpayer from
having to suffer the hardships which would be brought upon him
simply through the accident of the death of the collector to whom
he paid the money. I offer the amendment for the purpose of
remedying that situation. [ Footnote 14 ]"
The amendment, which was accepted without further comment,
conferred jurisdiction on the District Court,
"Concurrent with the Court of Claims, of any suit or proceeding,
commenced after the passage of the revenue act of 1921, for the
recovery of any internal revenue tax alleged to have been
erroneously or illegally assessed or collected, or of any penalty
claimed to have been collected without authority or any sum alleged
to have been excessive or in any manner wrongfully collected under
the internal revenue laws, even if the claim exceeds $10,000, if
the Collector of Internal Revenue by whom such tax, penalty, or
such was collected is dead at the time such suit or proceeding is
commenced. [ Footnote
15 ]"
The amendment's narrow-stated purpose refutes any suggestion
that Congress intended further to expand or even Page 357 U. S. 72 to restate the jurisdiction of the District Court in refund
suits brought against the United States. As we have seen, the
District Courts already had such jurisdiction under the Tucker Act,
and there is no indication that Congress intended any change in the
terms on which that action was made available other than the change
that was clearly set forth. The statute that is now 28 U.S.C. §
1346(a) (1) was enacted merely to remove the jurisdictional amount
limitation of the Tucker Act in the special situation where the
Collector could not be sued. See Lowe Bros. Co. v. United
States, 304 U. S. 302 , 304 U. S. 305 .
The House Conference Report and a contemporary Treasury Department
declaration confirm this view of the statute's effect. [ Footnote 16 ]
The similarity of essential language leaves no doubt that the
terms of the jurisdictional provision were copied from the claim
for refund statute, R.S. § 3226, as amended by Section 1318 of the
Revenue Act of 1921. [ Footnote
17 ] The fact that this language had for many years been
considered to require full payment before suing the Collector, and
the fact that the avowed purpose of the 1921 amendment was merely
to cure an inadequacy in the suit against the Collector, combine as
persuasive indications that no change was intended in the full
payment principle declared in Cheatham v. United States,
supra. When Congress created the Board of Tax Appeals in 1924,
[ Footnote 18 ] it
demonstrated a clear understanding that refund suits could only be
maintained upon full payment of the Page 357 U. S. 73 tax alleged to be due. The House Committee proposing the bill
explained its purpose as follows:
"The committee recommends the establishment of a Board of Tax
Appeals to which a taxpayer may appeal prior to the payment of an
additional assessment of income, excess profits, war profits, or
estate taxes. Although a taxpayer may, after payment of his tax,
bring suit for the recovery thereof, and thus secure a judicial
determination of the questions involved, he cannot, in view of
Section 3224 of the Revised Statutes, which prohibits suits to
enjoin the collection of taxes, secure such a determination prior
to the payment of the tax. The right of appeal after payment of the
tax is an incomplete remedy, and does little to remove the hardship
occasioned by an incorrect assessment. The payment of a large
additional tax on income received several years previous and which
may have, since its receipt, been either wiped out by subsequent
losses, invested in nonliquid assets, or spent, sometimes forces
taxpayers into bankruptcy, and often causes great financial
hardship and sacrifice. These results are not remedied by
permitting the taxpayer to sue for the recovery of the tax after
this payment. He is entitled to an appeal and to a determination of
his liability for the tax prior to its payment. [ Footnote 19 ]"
Petitioner argues that the "hardship" the Board of Tax Appeals
was created to alleviate was not the taxpayer's inability to sue
without paying the whole tax -- for petitioner erroneously
concludes that the 1921 amendment conferred that right -- but the
Government's power to Page 357 U. S. 74 collect the balance due while a refund suit was in progress. But
the Committee Report quoted above clearly demonstrates that the
hardship about which the Congress was concerned was the hardship of
prelitigation payment, not post-litigation collection. Old
Colony Trust Co. v. Commissioner, 279 U.
S. 716 , 279 U. S. 721 .
[ Footnote 20 ]
The final step in the evolvement of 28 U.S.C. § 1346(a)(1) took
place in the Act of July 30, 1954, [ Footnote 21 ] which removed the $10,000 jurisdictional
limitation and eliminated the condition about the Collector's being
dead or out of office. Far from indicating an intent to allow suit
without full payment of the tax due, the legislative history of
that amendment shows a clear understanding of the Cheatham requirement, and demonstrates a narrow purpose in no way
inconsistent with that requirement. The House Report states:
"The purpose of this bill is to permit taxpayers a greater
opportunity to sue the United States in the district court of their
own residence to recover taxes which they feel have been wrongfully
collected. This is done by removing the jurisdictional limitation
of $10,000 now imposed on such suits. [ Footnote 22 ]"
In explaining the present state of the law, the Report goes on
to point out that a taxpayer may contest a deficiency assessment by
a petition in the Tax Court. "The taxpayer Page 357 U. S. 75 may, however," the Report continues, "elect to pay his tax, and
thereafter bring suit to recover the amount claimed to have been
illegally exacted." [ Footnote
23 ]
The foregoing study of the legislative history of 28 U.S.C. §
1346(a)(1) and related statutes leaves no room for contention that
their broad terms were intended to alter in any way the Cheatham principle of "pay first and litigate later."
[ Footnote 24 ] For many
years, that principle has been reinforced by the rule that no suit
can be maintained for the purpose of restraining the assessment or
collection of any tax. [ Footnote
25 ] More recently, Congress took care to except from the
operation of the Federal Declaratory Judgments Act any
controversies "with respect to Federal taxes." [ Footnote 26 ] To ameliorate the hardship
produced by these requirements, Congress created a special court
where tax questions could be adjudicated in advance of any payment.
But there is no indication of any intent to create the hybrid
remedy for which petitioner contends.
It is suggested that a part-payment remedy is necessary for the
benefit of a taxpayer too poor to pay the full amount of the tax.
Such an individual is free to litigate in the Tax Court without any
advance payment. Where the time to petition that court has expired,
or where for some other reason a suit in the District Court seems
more desirable, the requirement of full payment may in some
instances work a hardship. But since any hardship would grow out of
an opinion whose effect Congress in successive Page 357 U. S. 76 statutory revisions has made no attempt to alter, if any
amelioration is required it is now a matter for Congress, not this
Court.
The judgment of the Court of Appeals is Affirmed. MR. JUSTICE WHITTAKER, believing that Bushmiaer v. United
States, 230 F.2d 146; Sirian Lamp Co. v. Manning, 123
F.2d 776, and Coates v. United States, 111 F.2d 609,
properly apply the statutes involved and should be followed, would
reverse the judgment below.
[ Footnote 1 ] See also Suhr v. United States, 18 F.2d 81. But cf.
Sirian Lamp Co. v. Manning, 123 F.2d 776.
[ Footnote 2 ] See also Sirian Lamp Co. v. Manning, 123 F.2d 776; Coates v. United States, 111 F.2d 609. But cf.
Bendheim v. Commissioner, 214 F.2d 26, 28; Elbert v.
Johnson, 164 F.2d 421, 423-424.
[ Footnote 3 ]
42 Stat. 311.
[ Footnote 4 ]
26 U.S.C. (Supp. V) § 7422(a):
"No suit or proceeding shall be maintained in any court for the
recovery of any internal revenue tax alleged to have been
erroneously or illegally assessed or collected, or of any penalty
claimed to have been collected without authority, or of any sum
alleged to have been excessive or in any manner wrongfully
collected, until a claim for refund or credit has been duly filed
with the Secretary or his delegate, according to the provisions of
law in that regard, and the regulations of the Secretary or his
delegate established in pursuance thereof."
R.S. § 3226 is quoted in note
7 infra. [ Footnote 5 ]
14 Stat. 152.
[ Footnote 6 ]
14 Stat. 111.
[ Footnote 7 ]
"No suit shall be maintained in any court for the recovery of
(1) any internal tax alleged to have been erroneously or illegally
assessed or collected, or of (2) any penalty claimed to have been
collected without authority, or of (3) any sum alleged to have been
excessive or in any manner wrongfully collected, until appeal shall
have been duly made to the Commissioner of Internal Revenue. . .
."
R.S. § 3226.
This language is practically identical to that used by the 1866
Act in giving the Commissioner his refunding powers. 14 Stat. 111,
restated in R.S. § 3220. The first category dates back to the 1863
Act. 12 Stat. 729. The third category was added in 1864. 13 Stat.
239. The 1866 Act rounded out the three categories by adding the
second. 14 Stat. 111. An examination of the legislative history
discloses no indication of the purpose of these successive
additions.
[ Footnote 8 ]
Initially, such suits depended upon diversity jurisdiction. Collector v.
Hubbard , 12 Wall. 1. Later, Congress created
jurisdiction for "all causes arising under any law providing
internal revenue. . . ." R.S. § 629(4). With slight modification,
that provision became Section 24(5) of the Judicial Code, 36 Stat.
1092, and is presently 28 U.S.C. § 1340. See Lowe Bros. Co. v.
United States, 304 U. S. 302 , 304 U. S.
305 .
[ Footnote 9 ]
92 U.S. at 92 U. S.
88 -89.
[ Footnote 10 ] Kings County Savings Institution v. Blair, 116 U.
S. 200 , 116 U. S. 205 (1886) ("No claim for the refunding of taxes can be made according
to law and the regulations until after the taxes have been paid
[and] . . . no suit can be maintained for taxes illegally collected
unless a claim therefor has been made within the time prescribed by
the law."); Pollock v. Farmers' Loan & Trust Co., 157 U. S. 429 , 157 U. S. 609 (1895) (dissenting opinion) ("The same authorities [including the Cheatham case] have established the rule that the proper
course, in a case of illegal taxation, is to pay the tax under
protest or with notice of suit, and then bring an action against
the officer who collected it."); Dodge v. Osborn, 240 U. S. 118 , 240 U. S. 120 (1916) ("The remedy of a suit to recover back the tax after it is
paid is provided by statute. . . ."); see note 20 infra. [ Footnote 11 ] E.g., Phillips v. Commissioner, 283 U.
S. 589 , 283 U. S. 595 ; United States v. Jefferson Electric Mfg. Co., 291 U.
S. 386 , 291 U. S.
395 -396; Dobson v. Commissioner, 320 U.
S. 489 , 320 U. S.
496 .
[ Footnote 12 ]
42 Stat. 311.
[ Footnote 13 ]
24 Stat. 505, 28 U.S.C. § 1346(a)(2).
[ Footnote 14 ]
61 Cong.Rec. 7506-7507.
[ Footnote 15 ]
61 Cong.Rec. 7507. A second amendment provided that interest
should be allowed in any judgment against the United States in
these refund suits. Ibid. A special amendment in 1925
added the right to bring such refund suits when the collector "is
not in office." 43 Stat. 972.
[ Footnote 16 ]
H.R.Rep.No.486, 67th Cong., 1st Sess. 57; II-1 Cum.Bull. 224,
225.
[ Footnote 17 ]
42 Stat. 314. The 1921 Act substituted "claim for refund or
credit" where the statute formerly referred to an "appeal" to the
Commissioner.
[ Footnote 18 ]
43 Stat. 336.
[ Footnote 19 ]
H.R.Rep.No.179, 68th Cong., 1st Sess. 7. The Senate Committee on
Finance made a similar explanation. S.Rep.No.398, 68th Cong., 1st
Sess. 8.
[ Footnote 20 ]
"The Board of Tax Appeals . . . was created by Congress to
provide taxpayers an opportunity to secure an independent review of
the Commissioner of Internal Revenue's determination of additional
income and estate taxes by the Board in advance of their paying the
tax found by the Commissioner to be due. Before the act of 1924,
the taxpayer could only contest the Commissioner's determination of
the amount of the tax after its payment."
[ Footnote 21 ]
68 Stat. 589.
[ Footnote 22 ]
H.R.Rep.No.659, 83d Cong., 1st Sess. 1.
[ Footnote 23 ] Id. at 2. And see S.Rep.No.115, 83d Cong., 1st
Sess.
[ Footnote 24 ] Allen v. Regents of University System of Georgia, 304 U. S. 439 , 304 U. S. 456 (concurring opinion).
[ Footnote 25 ]
14 Stat. 475 (1867), reenacted in R.S. § 3224, presently in
force as 26 U.S.C. (Supp. V) § 7421.
[ Footnote 26 ]
49 Stat. 1027, 28 U.S.C. § 2201. See S.Rep.No.1240,
74th Cong., 1st Sess. 11. | In Flora v. United States (1958), the Supreme Court held that a taxpayer must pay the full amount of an income tax deficiency assessed by the Internal Revenue Service before they can challenge its correctness by filing a lawsuit in federal district court for a refund under 28 U.S.C. § 1346(a)(1). The Court's decision affirmed the longstanding principle that taxpayers must first pay their taxes in full and then seek a refund if they believe the assessment was incorrect. This case established an important precedent for tax litigation and reinforced the government's interest in ensuring prompt and efficient tax collection. |
Taxes | James v. U.S. | https://supreme.justia.com/cases/federal/us/366/213/ | U.S. Supreme Court James v. United States, 366
U.S. 213 (1961) James v. United
States No. 63 Argued November 17,
1960 Decided May 15, 1961 366
U.S. 213 CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE SEVENTH
CIRCUIT Syllabus 1. Embezzled money is taxable income of the embezzler in the
year of the embezzlement under § 22(a) of the Internal Revenue Code
of 1939, which defines "gross income" as including "gains or
profits and income derived from any source whatever," and under §
61(a) of the Internal Revenue Code of 1954, which defines "gross
income" as "all income from whatever source derived." Commissioner v. Wilcox, 327 U. S. 404 ,
overruled. Pp. 366 U. S.
213 -222.
2. After this Court's decision in Commissioner v. Wilcox,
supra, petitioner embezzled large sums of money during the
years 1951 through 1954. He failed to report those amounts as gross
income in his income tax returns for those years, and he was
convicted of "willfully" attempting to evade the federal income tax
due for each of the years 1951 through 1954, in violation of
§145(b) of the Internal Revenue Code of 1939 and § 7201 of the
Internal Revenue Code of 1954. Held: the judgment affirming the conviction is
reversed, and the cause is remanded with directions to dismiss the
indictment. Pp. 366 U. S.
214 -215, 222.
273 F.2d 5, reversed.
MR. CHIEF JUSTICE WARREN announced the judgment of the Court and
an opinion in which MR. JUSTICE BRENNAN, and MR. JUSTICE STEWART
concur.
The issue before us in this case is whether embezzled funds are
to be included in the "gross income" of the embezzler in the year
in which the funds are misappropriated Page 366 U. S. 214 under § 22(a) of the Internal Revenue Code of 1939 [ Footnote 1 ] and § 61(a) of the Internal
Revenue Code of 1954. [ Footnote
2 ]
The facts are not in dispute. The petitioner is a union official
who, with another person, embezzled in excess of $738,000 during
the years 1951 through 1954 from his employer union and from an
insurance company with which the union was doing business.
[ Footnote 3 ] Petitioner failed
to report these amounts in his gross income in those years, and was
convicted for willfully attempting to evade the federal income tax
due for each of the years 1951 through 1954 in violation of §
145(b) of the Internal Revenue Code of 1939 [ Footnote 4 ] and § 7201 of the Internal Revenue Page 366 U. S. 215 Code of 1954. [ Footnote 5 ]
He was sentenced to a total of three years' imprisonment. The Court
of Appeals affirmed. 273 F.2d 5. Because of a conflict with this
Court's decision in Commissioner v. Wilcox, 327 U.
S. 404 , a case whose relevant facts are concededly the
same as those in the case now before us, we granted certiorari. 362
U.S. 974.
In Wilcox, the Court held that embezzled money does not
constitute taxable income to the embezzler in the year of the
embezzlement under § 22(a) of the Internal Revenue Code of 1939.
Six years later, this Court held, in Rutkin v. United
States, 343 U. S. 130 ,
that extorted money does constitutes taxable income to the
extortionist in the year that the money is received under § 22(a)
of the Internal Revenue Code of 1939. In Rutkin, the Court
did not overrule Wilcox, but stated:
"We do not reach in this case the factual situation involved in Commissioner v. Wilcox, 327 U. S. 404 . We limit that
case to its facts. There, embezzled funds were held not to
constitute taxable income to the embezzler under § 22(a)." Id. at 343 U. S. 138 .
[ Footnote 6 ] However,
examination of the reasoning used in Rutkin leads us
inescapably to the conclusion that Wilcox was thoroughly
devitalized.
The basis for the Wilcox decision was
"that a taxable gain is conditioned upon (1) the presence of a
claim of right to the alleged gain and (2) the absence of a
definite, Page 366 U. S. 216 unconditional obligation to repay or return that which would
otherwise constitute a gain. Without some bona fide legal
or equitable claim, even though it be contingent or contested in
nature, the taxpayer cannot be said to have received any gain or
profit within the reach of Section 22(a)." Commissioner v. Wilcox, supra, at 327 U. S. 408 .
Since Wilcox embezzled the money, held it "without any semblance of
a bona fide claim of right," ibid., and therefore
"was at all times under an unqualified duty and obligation to repay
the money to his employer," ibid., the Court found that
the money embezzled was not includible within "gross income." But
Rutkin's legal claim was no greater than that of Wilcox. It was
specifically found "that petitioner had no basis for his claim . .
. and that he obtained it by extortion." Rutkin v. United
States, supra, at 343 U. S. 135 .
Both Wilcox and Rutkin obtained the money by means of a criminal
act; neither had a bona fide claim of right to the funds.
[ Footnote 7 ] Nor was Rutkin's
obligation to repay the extorted money to the victim any less than
that of Wilcox. The victim of an extortion, like the victim of an
embezzlement, has a right to restitution. Furthermore, it is
inconsequential that an embezzler may lack title to the sums he
appropriates, while an extortionist may gain a voidable title.
Questions of federal income taxation are not determined by such
"attenuated subtleties." Lucas v. Earl, 281 U.
S. 111 , 281 U. S. 114 ; Corliss
v. Page 366 U. S. 217 Bowers, 281 U. S. 376 , 281 U. S. 378 .
Thus, the fact that Rutkin secured the money with the consent of
his victim, Rutkin v. United States, supra, at p. 343 U. S. 138 ,
is irrelevant. Likewise unimportant is the fact that the sufferer
of an extortion is less likely to seek restitution than one whose
funds are embezzled. What is important is that the right to
recoupment exists in both situations.
Examination of the relevant cases in the courts of appeals lends
credence to our conclusion that the Wilcox rationale was
effectively vitiated by this Court's decision in Rutkin. [ Footnote 8 ] Although this case
appears to be the first to arise that is "on all fours" with Wilcox, the lower federal courts, in deference to the
undisturbed Wilcox holding, have earnestly endeavored to
find distinguishing facts in the cases before them which would
enable them to include sundry unlawful gains within "gross income."
[ Footnote 9 ] Page 366 U. S. 218 It had been a well established principle, long before either Rutkin or Wilcox, that unlawful, as well as
lawful, gains are comprehended within the term "gross income."
Section II B of the Income Tax Act of 1913 provided that
"the net income of a taxable person shall include gains,
profits, and income . . . from . . . the transaction of any lawful business carried on for gain or profit, or gains or
profits and income derived from any source whatever. . . ."
(Emphasis supplied.) 38 Stat. 167. When the statute was amended
in 1916, the one word "lawful" was omitted. This revealed, we
think, the obvious intent of that Congress to tax income derived
from both legal and illegal sources, to remove the incongruity of
having the gains of the honest laborer taxed and the gains of the
dishonest immune. Rutkin v. United States, supra, at 343 U. S. 138 ; United States v. Sullivan, 274 U.
S. 259 , 274 U. S. 263 .
Thereafter, the Court held that gains from illicit traffic in
liquor are includible within "gross income." Ibid. See
also Johnson v. United States, 318 U.
S. 189 ; United States v. Johnson, 319 U.
S. 503 . And, the Court has pointed out, with approval,
that there "has been a widespread and settled administrative and
judicial recognition of the taxability of unlawful gains of many
kinds," Rutkin v. United States, supra, at 343 U. S. 137 .
These include protection payments made to racketeers, ransom
payments paid to kidnappers, bribes, money derived from the sale of
unlawful insurance policies, graft, black market gains, funds
obtained from the operation of lotteries, income from race track
bookmaking and illegal prize fight pictures. Ibid. The starting point in all cases dealing with the question of the
scope of what is included in "gross income" begins with the basic
premise that the purpose of Congress was "to use the full measure
of its taxing power." Helvering Page 366 U. S. 219 v. Clifford, 309 U. S. 331 , 309 U. S. 334 .
And the Court has given a liberal construction to the broad
phraseology of the "gross income" definition statutes in
recognition of the intention of Congress to tax all gains except
those specifically exempted. Commissioner v. Jacobson, 336 U. S. 28 , 336 U. S. 49 ; Helvering v. Stockholms Enskilda Bank, 293 U. S.
84 , 293 U. S. 87 -91.
The language of § 22(a) of the 1939 Code, "gains or profits and
income derived from any source whatever," and the more simplified
language of § 61(a) of the 1954 Code, "all income from whatever
source derived," have been held to encompass all "accessions to
wealth, clearly realized, and over which the taxpayers have
complete dominion." Commissioner v. Glenshaw Glass Co., 348 U. S. 426 , 348 U. S. 431 .
A gain
"constitutes taxable income when its recipient has such control
over it that, as a practical matter, he derives readily realizable
economic value from it." Rutkin v. United States, supra, at 343 U. S. 137 .
Under these broad principles, we believe that petitioner's
contention, that all unlawful gains are taxable except those
resulting from embezzlement, should fail.
When a taxpayer acquires earnings, lawfully or unlawfully,
without the consensual recognition, express or implied, of an
obligation to repay and without restriction as to their
disposition,
"he has received income which he is required to return, even
though it may still be claimed that he is not entitled to retain
the money, and even though he may still be adjudged liable to
restore its equivalent." North American Oil Consolidated v. Burnet, supra, at 286 U. S. 424 . In
such case, the taxpayer has "actual command over the property
taxed-the actual benefit for which the tax is paid," Corliss v.
Bowers, supra. This standard brings wrongful appropriations
within the broad sweep of "gross income;" it excludes loans. When a
law-abiding taxpayer mistakenly receives income in one year, which
receipt is assailed and found to be invalid in a subsequent Page 366 U. S. 220 year, the taxpayer must nonetheless report the amount as "gross
income" in the year received. United States v. Lewis, supra;
Healy v. Commissioner, supra. We do not believe that Congress
intended to treat a lawbreaking taxpayer differently. Just as the
honest taxpayer may deduct any amount repaid in the year in which
the repayment is made, the Government points out that "If, when,
and to the extent that the victim recovers back the misappropriated
funds, there is, of course, a reduction in the embezzler's income."
Brief for the United States, p. 24. [ Footnote 10 ]
Petitioner contends that the Wilcox rule has been in
existence since 1946; that, if Congress had intended to change the
rule, it would have done so; that there was a general revision of
the income tax laws in 1954 without mention of the rule; that a
bill to change it [ Footnote
11 ] was introduced in the Eighty-sixth Congress, but was not
acted upon; that therefore we may not change the rule now. But the
fact that Congress has remained silent or has reenacted a statute
which we have construed, or that congressional attempts to amend a
rule announced by this Court have failed, does not necessarily
debar us from reexamining and correcting the Court's own errors. Girouard v. United States, 328 U. S.
61 , 328 U. S. 69 -70; Helvering v. Hallock, 309 U. S. 106 , 309 U. S.
119 -122. There may have been any number of reasons why
Congress acted as it did. Helvering v. Hallock, supra. One
of the reasons could well � 8
and S. 221� be our subsequent decision in Rutkin which
has been thought by many to have repudiated Wilcox. Particularly might this be true in light of the decisions of the
Courts of Appeals which have been riding a narrow rail between the
two cases and further distinguishing them to the disparagement of Wilcox. See notes 8 and | 8 and S.
213fn9|>9, supra. We believe that Wilcox was wrongly decided, and we find
nothing in congressional history since then to persuade us that
Congress intended to legislate the rule. Thus, we believe that we
should now correct the error and the confusion resulting from it,
certainly if we do so in a manner that will not prejudice those who
might have relied on it. Cf. Helvering v. Hallock, supra, at 309 U. S. 119 .
We should not continue to confound confusion, particularly when the
result would be to perpetuate the injustice of relieving embezzlers
of the duty of paying income taxes on the money they enrich
themselves with through theft while honest people pay their taxes
on every conceivable type of income.
But we are dealing here with a felony conviction under statutes
which apply to any person who "willfully" fails to account for his
tax or who "willfully" attempts to evade his obligation. In Spies v. United States, 317 U. S. 492 , 317 U. S. 499 ,
the Court said that § 145(b) of the 1939 Code embodied "the gravest
of offenses against the revenues," and stated that willfulness must
therefore include an evil motive and want of justification in view
of all the circumstances. Id. at 317 U. S. 498 .
Willfulness
"involves a specific intent which must be proven by independent
evidence, and which cannot be inferred from the mere understatement
of income." Holland v. United States, 348 U.
S. 121 , 348 U. S.
139 .
We believe that the element of willfulness could not be proven
in a criminal prosecution for failing to include embezzled funds in
gross income in the year of misappropriation so long as the statute
contained the gloss placed upon it by Wilcox at the time
the alleged crime was Page 366 U. S. 222 committed. Therefore, we feel that petitioner's conviction may
not stand, and that the indictment against him must be
dismissed.
Since MR. JUSTICE HARLAN, MR. JUSTICE FRANKFURTER, and MR.
JUSTICE CLARK agree with us concerning Wilcox, that case
is overruled. MR. JUSTICE BLACK, MR. JUSTICE DOUGLAS, and MR.
JUSTICE WHITTAKER believe that petitioner's conviction must be
reversed and the case dismissed for the reasons stated in their
opinions.
Accordingly, the judgment of the Court of Appeals is reversed,
and the case is remanded to the District Court with directions to
dismiss the indictment. It is so ordered. [ Footnote 1 ]
"§ 22. GROSS INCOME."
"(a) General definitions. -- 'Gross income' includes
gains, profits, and income derived from salaries, wages, or
compensation for personal service . . . of whatever kind and in
whatever form paid, or from professions, vocations, trades,
businesses, commerce, or sales, or dealings in property, whether
real or personal, growing out of the ownership or use of or
interest in such property; also from interest, rent, dividends,
securities, or the transaction of any business carried on for gain
or profit, or gains or profits and income derived from any source
whatever. . . ."
(26 U.S.C. (1952 ed.) § 22(a).)
[ Footnote 2 ]
"§ 61. Gross Income Defined."
"(a) General Definition. -- Except as otherwise
provided in this subtitle, gross income means all income from
whatever source derived. . . ."
(26 U.S.C. § 61(a).)
[ Footnote 3 ]
Petitioner has pleaded guilty to the offense of conspiracy to
embezzle in the Court of Essex County, New Jersey.
[ Footnote 4 ]
"§ 145. Penalties."
" * * * *" "(b) Failure to Collect and Pay Over Tax, or Attempt to
Defeat or Evade Tax . -- Any person required under this chapter
to collect, account for, and pay over any tax imposed by this
chapter, who willfully fails to collect or truthfully account for
and pay over such tax, and any person who willfully attempts in any
manner to evade or defeat any tax imposed by this chapter or the
payment thereof, shall, in addition to other penalties provided by
law, be guilty of a felony and, upon conviction thereof, be fined
not more than $10,000 or imprisoned for not more than five years,
or both, together with the costs of prosecution."
(26 U.S.C. (1952 ed.) § 145(b).)
[ Footnote 5 ]
"§ 7201. Attempt to Evade or Defeat Tax."
"Any person who willfully attempts in any manner to evade or
defeat any tax imposed by this title or the payment thereof shall,
in addition to other penalties provided by law, be guilty of a
felony and, upon conviction thereof, shall be fined not more than
$10,000, or imprisoned not more than 5 years, or both, together
with the costs of prosecution."
26 U.S.C. § 7201.
[ Footnote 6 ]
The dissenters in Rutkin stated that the Court had
rejected the Wilcox interpretation of § 22(a). Id. at 343 U. S.
140 .
[ Footnote 7 ]
The Government contends that the adoption in Wilcox of
a claim of right test as a touchstone of taxability had no support
in the prior cases of this Court; that the claim of right test was
a doctrine invoked by the Court in aid of the concept of annual
accounting, to determine when, not whether, receipts constituted
income. See North American Oil Consolidated v. Burnet, 286 U. S. 417 ; United States v. Lewis, 340 U. S. 590 ; Healy v. Commissioner, 345 U. S. 278 . In
view of our reasoning set forth below, we need not pass on this
contention. The use to which we put the claim of right test here is
only to demonstrate that, whatever its validity as a test of
whether certain receipts constitute income, it calls for no
distinction between Wilcox and Rutkin. [ Footnote 8 ]
In Marienfeld v. United States, 214 F.2d 632, the
Eighth Circuit stated, "We find it difficult to reconcile the Wilcox case with the later opinion of the Supreme Court in Rutkin. . . ." Id. at 636. The Second Circuit
announced, in United States v. Bruswitz, 219 F.2d 59, "It
is difficult to perceive what, if anything, is left of the Wilcox holding after Rutkin. . . ." Id. at 61. The Seventh Circuit's prior decision in Macias v.
Commissioner, 255 F.2d 23, observed,
"If this reasoning [of Rutkin ] had been employed in Wilcox, we see no escape from the conclusion that the
decision in that case would have been different. In our view, the
Court in Rutkin repudiated its holding in Wilcox; certainly it repudiated the reasoning by which the result was
reached in that case." Id. at 26.
[ Footnote 9 ]
For example, Kann v. Commissioner, 210 F.2d 247, was
differentiated on the following grounds: the taxpayer was never
indicted or convicted of embezzlement; there was no adequate proof
that the victim did not forgive the misappropriation; the taxpayer
was financially able to both pay the income tax and make
restitution; the taxpayer would have likely received most of the
misappropriated money as dividends. In Marienfeld v. United
States, supra, the court believed that the victim was not
likely to repudiate. In United States v. Wyss, 239 F.2d
658, the distinguishing factors were that the district judge had
not found as a fact that the taxpayer embezzled the funds, and the
money had not as yet been reclaimed by the victim. See also
Briggs v. United States, 214 F.2d 699, 702; Prokop v.
Commissioner, 254 F.2d 544, 554-555. Cf. J. J. Dix, Inc.
v. Commissioner, 223 F.2d 436.
[ Footnote 10 ]
Petitioner urges upon us the case of Alison v. United
States, 344 U. S. 167 . But
that case dealt with the right of the victim of an embezzlement to
take a deduction, under § 23(e) and (f) of the 1939 Code, in the
year of the discovery of the embezzlement, rather than the year in
which the embezzlement occurred. The Court held only
"that the special factual circumstances found by the District
Courts in both these cases justify deductions under I.R.C., § 23(e)
and (f) and the longstanding Treasury Regulations applicable to
embezzlement losses." Id. at 344 U. S. 170 .
The question of inclusion of embezzled funds in "gross income" was
not presented in Alison. [ Footnote 11 ]
H.R. 8854, 86th Cong., 1st Sess.
MR. JUSTICE BLACK, whom MR. JUSTICE DOUGLAS joins, concurring in
part and dissenting in part.
On February 25, 1946, fifteen years ago, this Court, after
mature consideration, and in accordance with what at that time
represented the most strongly supported judicial view, held, in an
opinion written by Mr. Justice Murphy to which only one Justice
dissented, that money secretly taken by an embezzler for his own
use did not constitute a taxable gain to him under the federal
income tax laws. Commissioner v. Wilcox, 327 U.
S. 404 . The Treasury Department promptly accepted this
ruling in a bulletin declaring that the "mere act of embezzlement
does not, of itself, result in taxable income," although properly
urging that "taxable income may result to the embezzler depending
on the facts in the particular case." [ Footnote 2/1 ] Page 366 U. S. 223 During the fifteen years since Wilcox was decided, both
this Court and Congress, although urged to do so, have declined to
change the Wilcox interpretation of statutory "income"
with respect to embezzlement. In this case, however, a majority of
the Court overrules Wilcox. Only three of the members of
the Court who decided the Wilcox case are participating in
this case -- MR. JUSTICE FRANKFURTER, MR. JUSTICE DOUGLAS, and
myself. MR. JUSTICE DOUGLAS and I dissent from the Court's action
in "overruling" Wilcox and from the prospective way in
which this is done. We think Wilcox was sound when
written, and is sound now. I We dissent from the way the majority of the Court overrules Wilcox. If the statutory interpretation of "taxable
income" in Wilcox is wrong, then James is guilty of
violating the tax evasion statute, for the trial court's judgment
establishes that he embezzled funds and willfully refrained from
reporting them as income. It appears to us that District Courts are
bound to be confused as to what they can do hereafter in tax
evasion cases involving "income" from embezzlements committed prior
to this day. Three Justices vote to overrule Wilcox under
what we believe to be a questionable formula, at least a new one in
the annals of this Court, and say that, although failure to report
embezzled funds has, despite Wilcox, always been a crime
under the statute, people who have violated this law in the past
cannot be prosecuted, but people who embezzle funds after this
opinion is announced can be prosecuted for failing to report these
funds as a "taxable gain." Three other Justices who vote to
overrule Wilcox say that past embezzlers can be prosecuted
for the crime of tax evasion, although two of those Justices
believe the Government must prove that the past embezzler did not
commit his crime in reliance on Wilcox. Page 366 U. S. 224 Thus, although it was not the law yesterday, it will be the law
tomorrow that funds embezzled hereafter are taxable income; and
although past embezzlers could not have been prosecuted yesterday,
maybe they can and maybe they cannot be prosecuted tomorrow for the
crime of tax evasion. (The question of the civil tax liability of
past embezzlers is left equally unclear.) We do not challenge the
wisdom of those of our Brethren who refuse to make the Court's new
tax evasion crime applicable to past conduct. This would be good
governmental policy even though the ex post facto provision of the Constitution has not ordinarily been thought to
apply to judicial legislation. Our trouble with this aspect of the
Court's action is that it seems to us to indicate that the Court
has passed beyond the interpretation of the tax statute and
proceeded substantially to amend it.
We realize that there is a doctrine with wide support to the
effect that ,under some circumstances, courts should make their
decisions as to what the law is apply only prospectively. [ Footnote 2/2 ] Objections to such a judicial
procedure, however, seem to us to have peculiar force in the field
of criminal law. In the first place, a criminal statute that is so
ambiguous in scope that an interpretation of it brings about
totally unexpected results, thereby subjecting people to penalties
and punishments for conduct which they could not know was criminal
under existing law, raises serious questions of unconstitutional
vagueness. [ Footnote 2/3 ] Moreover,
for a court to interpret a criminal statute in such a way as to
make punishment for past conduct under it so unfair and unjust that
the interpretation should be given only prospective application
seems to us to be the creation of a judicial crime that Congress
might not want Page 366 U. S. 225 to create. This country has never been sympathetic with
judge-created crimes. Their rejection under our Constitution was
said to have been "long since settled in public opinion" even as
early as 1812, when the question first reached this Court in United States v. Hudson &
Goodwin , 7 Cranch 32. In that case, this Court
emphatically declared that the federal courts have no common law
jurisdiction in criminal cases. They are not "vested with
jurisdiction over any particular act done by an individual in
supposed violation of the peace and dignity of the sovereign
power." Rather,
"[t]he legislative authority of the Union must first make an act
a crime, affix a punishment to it, and declare the Court that shall
have jurisdiction of the offence. [ Footnote 2/4 ]"
In our judgment, one of the great inherent restraints upon this
Court's departure from the field of interpretation to enter that of
lawmaking has been the fact that its judgments could not be limited
to prospective application. This Court, and, in fact, all
departments of the Government, have always heretofore realized that
prospective lawmaking is the function of Congress, rather than of
the courts. We continue to think that this function should be
exercised only by Congress under the constitutional system. II We think Wilcox was right when it was decided, and is
right now. It announced no new, novel doctrine. One need only look
at the Government's briefs in this Court in the Wilcox case to see just how little past judicial support could then be
mustered had the Government sought to send Wilcox to jail for his
embezzlement under the guise of a tax evasion prosecution. The
Government did cite many cases from many courts saying that, under
the federal income tax law, gains are no less taxable because Page 366 U. S. 226 they have been acquired by illegal methods. This Court had
properly held long before Wilcox that there is no "reason
why the fact that a business is unlawful should exempt it from
paying the taxes that, if lawful, it would have to pay." [ Footnote 2/5 ] We fully recognize the
correctness of that holding in Wilcox: "Moral turpitude is not a touchstone of taxability. The
question, rather, is whether the taxpayer in fact received a
statutory gain, profit or benefit. That the taxpayer's motive may
have been reprehensible or the mode of receipt illegal has no
bearing upon the application of Section 22(a). [ Footnote 2/6 ]"
The Court today by implication attributes quite a different
meaning or consequence to the Wilcox opinion. One opinion
argues at length the "well established principle . . . that
unlawful, as well as lawful, gains are comprehended within the term gross income.'" Wilcox did not deny that; we do not
deny that. This repeated theme of our Brethren is wholly
irrelevant, since the Wilcox holding in no way violates
the sound principle of treating "gains" of honest and dishonest
taxpayers alike. The whole basis of the Wilcox opinion was
that an embezzlement is not in itself "gain" or "income" to the
embezzler within the tax sense, for the obvious reason that the
embezzled property still belongs, and is known to belong, to the
rightful owner. It is thus a mistake to argue that petitioner's
contention is "that all unlawful gains are taxable except those
resulting from embezzlement." As stated in Wilcox, that case was brought to us
because of a conflict among the Circuits. The Ninth Circuit in Wilcox had held that embezzled funds were not any more
"taxable income" to the embezzler than Page 366 U. S. 227 borrowed funds would have been. [ Footnote 2/7 ] The Fifth Circuit, in McKnight v.
Commissioner, had decided the same thing. [ Footnote 2/8 ] The Eighth Circuit, however, had
decided in Kurrle v. Helvering that embezzled funds were
taxable income. [ Footnote 2/9 ]
Comparison of the three opinions readily shows that the arguments
of the Fifth and Ninth Circuits against taxability of such funds
were much stronger than the arguments of the Eighth Circuit for
such taxability. The whole picture can best to obtained from the
court's opinion in McKnight v. Commissioner, written by
Judge Sibley, one of the ablest circuit judges of his time. He
recognized that the taxpayer could not rely upon the unlawfulness
of his business to defeat taxation if he had made a "gain" in that
business. He pointed out, however, that the ordinary embezzler
"got no title, void or voidable, to what he took. He was still
in possession as he was before, but with a changed purpose. He
still had no right nor color of right. He claimed none. [ Footnote 2/10 ]"
Judge Silbley's opinion went on to point out that the
"first takings [of an embezzler] are, indeed, nearly always with
the intention of repaying, a sort of unauthorized borrowing. It
must be conceded that no gain is realized by borrowing, because of
the offsetting obligation. [ Footnote
2/11 ]"
Approaching the matter from a practical standpoint, Judge Sibley
also explained that subjecting the embezzled funds to a tax would
amount to allowing the United States "a preferential claim for part
of the dishonest gain, to the direct loss and detriment of those to
whom it ought to be restored." [ Footnote 2/12 ] He was not willing to put the owner
of Page 366 U. S. 228 funds that had been stolen in competition with the United States
Treasury Department as to which one should have a preference to get
those funds.
It seems to us that Judge Sibley's argument was then, and is
now, unanswerable. The rightful owner who has entrusted his funds
to an employee or agent has troubles enough when those funds are
embezzled, without having the Federal Government step in with its
powerful claim that the embezzlement is a taxable event
automatically subjecting part of those funds (still belonging to
the owner) to the waiting hands of the Government's tax gatherer.
We say part of the owner's funds because it is on the supposed
"gain" from them that the embezzler is now held to be duty-bound to
pay the tax, and history probably records few instances of
independently wealthy embezzlers who have had nonstolen assets
available for payment of taxes.
There has been nothing shown to us on any of the occasions when
we have considered this problem to indicate that Congress ever
intended its income tax laws to be construed as imposing what is in
effect a property or excise tax on the rightful owner's embezzled
funds, for which the owner has already once paid income tax when he
rightfully acquired them. In our view, the Court today does
Congress a grave injustice by assuming that it has imposed this
double tax burden upon the victim of an embezzlement merely because
someone has stolen his money, particularly when Congress has
refused requests that it do so. The owner whose funds have been
embezzled has done nothing but entrust an agent with possession of
his funds for limited purposes, as many of us have frequent
occasion to do in the course of business or personal affairs.
Ordinarily the owner is not, and has no reason to be, at all aware
of an embezzlement until long after the first misuse occurs. If
Congress ever did manifest an intention to select the mere fact of
embezzlement Page 366 U. S. 229 as the basis for imposing a double tax on the owner, we think a
serious question of confiscation in violation of the Fifth
Amendment would be raised. All of us know that, with the strong
lien provisions of the federal income tax law, an owner of stolen
funds would have a very rocky road to travel before he got back,
without paying a good slice to the Federal Government, such funds
as an embezzler who had not paid the tax might, perchance, not have
dissipated. An illustration of what this could mean to a defrauded
employer is shown in this very case by the employer's loss of some
$700,000, upon which the Government claims a tax of $559,000.
It seems to be implied that one reason for overruling Wilcox is that a failure to hold embezzled funds taxable
would somehow work havoc with the public revenue or discriminate
against "honest" taxpayers and force them to pay more taxes. We
believe it would be impossible to substantiate either claim.
Embezzlers ordinarily are not rich people against whom judgments,
even federal tax judgments, can be enforced. Judging from the
meager settlements that those defrauded were apparently compelled
to make with the embezzlers in this very case, it is hard to
imagine that the Treasury will be able to collect the more than
$500,000 it claims. And certainly the Wilcox case does not
seem to have been one in which the Government could have collected
any great amount of tax. The employer's embezzled $11,000 there
went up in gambling houses. The scarcity of cases involving alleged
taxes due from embezzlers is another indication that the Government
cannot expect to make up any treasury deficits with taxes collected
from embezzlers and thieves, especially when the cost to the
Government of investigations and court proceedings against
suspected individuals is considered. And, as already indicated, to
the extent that the Government could be successful in collecting
some taxes from Page 366 U. S. 230 embezzlers, it would most likely do so at the expense of the
owner whose money had been stolen.
It follows that, except for the possible adverse effect on
rightful owners, the only substantial result that one can foresee
from today's holding is that the Federal Government will, under the
guise of a tax evasion charge, prosecute people for a simple
embezzlement. But the Constitution grants power to Congress to get
revenue, not to prosecute local crimes. And if there is any offense
which, under our dual system of government, is a purely local one
which the States should handle, it is embezzlement or theft. The
Federal Government stands to lose much money by trying to take over
prosecution of this type of local offense. It is very doubtful
whether the further congestion of federal court dockets to try such
local offenses is good for the Nation, the States or the people.
Here, the embezzler has already pleaded guilty to the crime of
embezzlement in a state court, although the record does not show
what punishment he has received. Were it not for the novel formula
of applying the Court's new law prospectively, petitioner would
have to serve three years in federal prison in addition to his
state sentence. This graphically illustrates one of the great
dangers of opening up the federal tax statutes, or any others, for
use by federal prosecutors against defendants who not only can be
but are tried for their crimes in local state courts and punished
there. If the people of this country are to be subjected to such
double jeopardy and double punishment, despite the constitutional
command against double jeopardy, it seems to us it would be far
wiser for this Court to wait and let Congress attempt to do it. III The Wilcox case was decided fifteen years ago. Congress
has met every year since then. All of us know that the House and
Senate Committees responsible for our Page 366 U. S. 231 tax laws keep a close watch on judicial rulings interpreting the
Internal Revenue Code. Each committee has one or more experts at
its constant disposal. It cannot possibly be denied that these
committees and these experts are, and have been, fully familiar
with the Wilcox holding. When Congress is dissatisfied
with a tax decision of this Court, it can and frequently does act
very quickly to overturn it. [ Footnote 2/13 ] On one occasion, such an overruling
enactment was passed by both the House and Senate and signed by the
President all within one day after the decision was rendered by
this Court. [ Footnote 2/14 ] In
1954, Congress, after extended study, completely overhauled and
recodified the Internal Revenue Code. The Wilcox holding
was left intact. In the Eighty-sixth Congress, and in the present
Eighty-seventh Congress, bills have been introduced to subject
embezzled funds to income taxation. [ Footnote 2/15 ] They have not been passed. This is not
an instance when we can say that Congress may have neglected to
change the law because it did not know what Page 366 U. S. 232 was going on in the courts or because it was not asked to do so,
as was the case in Helvering v. Hallock. [ Footnote 2/16 ] Nor is this a case in which
subsequent affirmative congressional action manifested a view
inconsistent with our prior decision, as was true in Girouard
v. United States. [ Footnote
2/17 ] What we have here, instead, is a case in which Congress
has not passed bills that have been introduced to make embezzled
funds taxable and thereby make failure to report them as income a
federal crime. For this Court to hold under such circumstances that
the inherent ambiguity of legislative inaction gives the Court
license to repudiate the longstanding interpretation of the income
tax statute, and thereby bring additional conduct within the tax
evasion criminal statute, seems to us to be flagrantly violative of
the almost universally accepted axiom that criminal statutes are
narrowly and strictly construed. Our Brethren cite no precedent in
which this or any other court in the English-speaking world has so
deliberately overruled a longstanding prior interpretation of a
statute in order to create a crime which up to that time did not
exist.
This Court, as well as Congress, was fully apprised of the
various criticisms made in some Courts of Appeals opinions and
elsewhere against the Wilcox holding, yet it has likewise,
until today, steadfastly refused to overrule that holding during
these fifteen years. This has been in the face of the fact that the
Government expressly urged that we do so in 1955, nine years after Wilcox was decided Page 366 U. S. 233 and three years after the decision in Rutkin v. United
States, 343 U. S. 130 . On
that occasion, the Court of Appeals for the Second Circuit,
speaking through Judge Frank for himself and Judge Medina, had held
in the case of J. J. Dix, Inc. v. Commissioner that
embezzled funds were not taxable as income, relying wholly on the Wilcox decision. [ Footnote
2/18 ] Judge Hincks dissented, saying that, if the facts of Dix were not enough to distinguish it from Wilcox, he would not follow Wilcox. In urging us
to grant certiorari, the Government said that the case presented a
recurring problem in the administration of the income tax laws. One
of the arguments the Government presented for overruling Wilcox, strange as it may seem, was that
"[s]everal prosecutions have recently been authorized and are
now pending in various District Courts, even though the disputed
income in those cases apparently came from embezzlements or closely
analogous crimes. [ Footnote
2/19 ]"
And the next to the last sentence of its petition was:
"In short, the question whether the proceeds of embezzlement,
unlike other illegal income, are to enjoy a preferred tax-exempt
status will continue to perplex the lower courts until it is
settled by this Court. [ Footnote
2/20 ]"
We denied certiorari. [ Footnote
2/21 ] There is surely less reason to repudiate and "devitalize" Wilcox now, six years after the Court, as composed at that
time, refused to overrule it.
Of course, the rule of stare decisis is not and should
not be an inexorable one. This is particularly true with reference
to constitutional decisions involving determinations beyond the
power of Congress to change, but Congress can and does change
statutory interpretations. It Page 366 U. S. 234 is perfectly proper and right that it should do so when it
believes that this Court's interpretation of a statute embodies a
policy that Congress is against. But Congress has not taken
favorable action on bills introduced to overturn our Wilcox holding even after we declined the Government's
request to reverse the identical holding in Dix, the
latter having occurred three years after the decision in Rutkin which our Brethren now say may have misled Congress
into thinking that we had repudiated the Wilcox holding.
It seems to us that we gave the doctrine of stare
decisis its proper scope in our treatment of this Court's
decision in Federal Baseball Club v. National League of
Professional Baseball Clubs, 259 U. S. 200 . In
that case, this Court had held, for reasons given, that
professional baseball was not covered by the antitrust acts.
Congress was asked through the years to change the law in this
respect, but declined to do so. In Toolson v. New York Yankees,
Inc., 346 U. S. 356 , we
followed the holding of that case without reexamination of the
underlying issues
"so far as that decision determines that Congress had no
intention of including the business of baseball within the scope of
the federal antitrust laws."
Later, we were asked to extend the Federal Baseball case and to hold that the business of boxing could not, without
congressional action, be brought within the antitrust laws. We
emphatically declined to do so in United States v.
International Boxing Club, 348 U. S. 236 , nor
did we overrule Toolson in that case, despite strong
arguments that the reasoning of the Court in the first baseball
case was equally applicable to the business of boxing. We said
about the proposed exemption of boxing from the antitrust laws that
"[t]heir remedy, if they are entitled to one, lies in further
resort to Congress." [ Footnote
2/22 ] That case and that statement fit this case precisely. In
fact, as we are about to explain, a Page 366 U. S. 235 far more meaningful distinction can be made between embezzlement
and extortion for purposes of this case than it was possible to
make between baseball and boxing for purposes of that case, as MR.
JUSTICE FRANKFURTER's dissenting opinion in that case
demonstrates.
If the Government wants to prosecute the local crime of
embezzlement, ostensibly because of "tax evasion," it seems clear
to us that it should take its request to Congress, which has power
to pass on it and which has, to date, refused to do what the
Government asks us to do in this case. IV Our Brethren advance as a reason for overruling Wilcox the 1952 decision in Rutkin v. United States, which was
decided three years before we denied certiorari in the Dix case. They say that "the reasoning used in Rutkin leads us
inescapably to the conclusion that Wilcox was thoroughly
devitalized." This follows, to some extent, the statement in the
Government's brief that
" Wilcox and Rutkin cannot be reconciled on the
basis of asserted technical differences between the extortionist
and the embezzler. . . . The proper course, we submit, . . . is to
recognize that the Wilcox rationale was rejected in Rutkin, is unsound, and can no longer be regarded as
having vitality. Embezzled funds represent taxable gains. [ Footnote 2/23 ]"
There is no doubt that some of the reasoning in the Rutkin opinion rejected some of the reasoning in the Wilcox opinion. But this it true only with respect to the
broad general standards formulated in the two cases, and such
standards, of course, cannot be accepted as universal panaceas to
be mechanically applied to solve all the concrete problems in cases
like these. Moreover, the Rutkin opinion expressly
purported not to overrule Wilcox and Page 366 U. S. 236 specifically said that Wilcox was still to govern cases
fitting its facts, clearly meaning embezzlement cases. [ Footnote 2/24 ] And the Government had not
asked in Rutkin that Wilcox be overruled. Its
argument was that Wilcox was "inapplicable" to the facts
in the Rutkin record. The Government's brief went on to
emphasize that the record in Wilcox showed only the bare
receipt of money wholly belonging to another, while Rutkin had
received the money "as a result of a bilateral agreement" and, as
the Court of Appeals had pointed out,
"with a 'semblance of a bona fide claim of right,' a
conclusion fully substantiated by the testimony of both the
petitioner and the Government witness Reinfeld. [ Footnote 2/25 ]"
The Government went on to distinguish Rutkin further by
pointing out that there was "not the slightest hint in the record"
that Rutkin ever had an obligation to repay the funds he took.
After this Court was persuaded by the Government in Rutkin to accept its distinctions between Rutkin and Wilcox, it seems rather odd to have the Government now
contend that the two cases are irreconcilable. While we disagreed,
we can understand why the majority in Rutkin Page 366 U. S. 237 drew the distinctions it did. Although the victim of either
embezzlement or extortion ordinarily has a legal right to
restitution, the extortion victim, like a blackmail victim, can in
a sense be charged with complicity in bringing about the taxable
event in that he knowingly surrendered the funds to the
extortionist, sometimes in payment of an actual obligation. Unlike
the victim of an ordinary theft, he generally knows who has taken
the property from him, and he consents to the taking though under
duress; and unlike most victims of embezzlement, he is able to
report the taking to law enforcement officers during the taxable
year, and his failure to do so might be considered a kind of
continuing consent to the extortionist's dominion over the
property. The longer he acquiesces, the less likely it becomes that
the extortion victim ever will demand restitution; [ Footnote 2/26 ] but once the victim of an
embezzlement finds out that his property has been stolen, he most
likely will immediately make efforts to get it back. Thus, although
we still think Rutkin was wrongly decided for the reasons
expressed in the dissenting opinion in that case, we can understand
the argument for application of a sort of caveat emptor rule to persons who submit to blackmail or extortion, since it is
far from certain that they will ever expose themselves by seeking
repayment of what they paid out. The distinctions between crimes
like embezzlement and crimes like blackmail and extortion,
therefore, are not merely Page 366 U. S. 238 technical, legalistic "attenuated subleties" for purposes of
this decision, but are differences based upon practicalities such
as often underlie the distinctions that have been developed in our
law.
In departing from both the Wilcox and Rutkin decisions today, our Brethren offer no persuasive reasons to prove
that their judgment in overruling Wilcox is better than
that of the Justices who decided that case. It contributes nothing
new to the analysis of this problem to say repeatedly that the
dishonest man must be subject to taxation, just as the honest. As
already said, Chief Justice Stone and the others sitting with him
on the Wilcox Court fully accepted that general principle,
and we do still. Applying it here, we would say the embezzler
should be treated just like the law-abiding, honest borrower who
has obtained the owner's consent to his use of the money. [ Footnote 2/27 ] It Page 366 U. S. 239 would be unthinkable to tax the borrower on his "gain" of the
borrowed funds, and thereby substantially impair the lender's
chance of ever recovering the debt. The injury that the Government
would inflict on the lender by making the borrower less able to
repay the loan surely would not be adequately compensated by
telling the lender that he can take a tax deduction for the loss,
and it is equally small comfort to the embezzlement victim for the
Government, after taking part of his property as a tax on the
embezzler, to tell the victim that he can take a deduction for his
loss if he has any income against which to offset the deduction.
There is, of course, one outstanding distinction between a borrower
and an embezzler, and that is that the embezzler uses the funds
without the owner's consent. This distinction can be of no
importance for purposes of taxability of the funds, however,
because, as a matter of common sense, it suggests that there is, if
anything, less reason to tax the embezzler than the borrower. But
if this distinction is to be the reason why the embezzlement must
be taxed just as "the gains of the honest laborer," then the use of
this slogan in this case is laid bare as no more than a means of
imposing a second punishment for the crime of embezzlement without
regard to revenue considerations, the effect on the rightful owner,
or the proper role of this Court when asked to overrule a criminal
statutory precedent. The double jeopardy implications would seem
obvious, [ Footnote 2/28 ] Page 366 U. S. 240 and discussion of the serious inadvisability for other reasons
of thus injecting the Federal Government into local law enforcement
can be found in the dissenting opinion in Rutkin. We regret very much that it seems to be implied that the writer
of the Rutkin opinion and those who agreed to it intended
to overrule Wilcox when it is manifest that the language
the Court used in Rutkin was meant to leave precisely the
opposite impression. We are sure that our Brethren at that time did
not intend to mislead the public, and it would be hard to imagine
why they said what they did in the Rutkin opinion had they
not specifically considered and rejected the possibility of
overruling Wilcox then and there. We think it is
unjustifiable to say nine years after Rutkin that it
"devitalized" or "repudiated" the Wilcox holding when the Rutkin opinion said explicitly that Wilcox is
still the rule as to embezzlement. Congress has seen fit to let
both decisions stand, and we think the present Court should do the
same. V Even if we were to join with our Brethren in accepting the
Government's present contention that Wilcox and Rutkin cannot both stand, we would disagree as to which of
the two decisions should now be repudiated. This is true not only
because we would feel less inhibition about narrowing, rather than
broadening, the reach of a previously construed criminal statute.
Regardless of such considerations, our conviction that the Rutkin case was wrongly decided in this Court remains
undiminished and has been further substantiated by the subsequent
events in that controversy, which show all the more clearly the
deplorable consequences that can result when federal courts subject
people who violate state criminal laws to Page 366 U. S. 241 a double or treble prosecution for the state crime under the
guise of attempted enforcement of federal tax laws. [ Footnote 2/29 ]
For the foregoing reasons, as well as the reasons stated in MR.
JUSTICE WHITTAKER's opinion, we would reaffirm our holding in Commissioner v. Wilcox, reverse this judgment and direct
that the case be dismissed.
[ Footnote 2/1 ]
G.C.M. No. 24945, 1946-2 Cum.Bull. 27, 28. This was precisely in
accord with this Court's statement of the proper rule in the Wilcox opinion:
"Taxable income may arise, to be sure, from the use or in
connection with the use of such [embezzled] property. . . . But,
apart from such factors, the bare receipt of property or money
wholly belonging to another lacks the essential characteristics of
a gain or profit within the meaning of Section 22(a)."
327 U.S. at 327 U. S.
408 .
[ Footnote 2/2 ] See, for example, Great Northern R. Co. v. Sunburst Oil
& Refining Co., 287 U. S. 358 .
[ Footnote 2/3 ] See, for example, United States v. L. Cohen Grocery
Co., 255 U. S. 81 .
[ Footnote 2/4 ]
7 Cranch at 11 U. S. 34 . And
see United States v. Coolidge, 1 Wheat. 415.
[ Footnote 2/5 ] United States v. Sullivan, 274 U.
S. 259 , 274 U. S.
263 .
[ Footnote 2/6 ]
327 U.S. at 327 U. S.
408 .
[ Footnote 2/7 ] Wilcox v. Commissioner, 148 F.2d 933.
[ Footnote 2/8 ]
127 F.2d 572.
[ Footnote 2/9 ]
126 F.2d 723.
[ Footnote 2/10 ]
127 F.2d at 573.
[ Footnote 2/11 ] Ibid. The same reasoning can be found in our opinion in Alison v. United States, 344 U. S. 167 , 344 U. S.
169 -170.
[ Footnote 2/12 ]
127 F.2d at 574.
[ Footnote 2/13 ] E.g., Commissioner v. Smith, 324 U.
S. 177 (compensation through exercise of stock option),
led to § 218 of the Revenue Act of 1950, adding § 130A to the 1939
Code; Commissioner v. Tower, 327 U.
S. 280 ; Lusthaus v. Commissioner, 327 U.
S. 293 ; and Commissioner v. Culbertson, 337 U. S. 733 (family partnerships), led to § 340 of the Revenue Act of 1951,
adding § 191 to the 1939 Code; United States v. Silk, 331 U. S. 704 ("employees" for purpose of Social Security employment tax), led to
the Joint Resolution of June 14, 1948, c. 468, 62 Stat. 438,
amending several sections of the 1939 Code; Commissioner v.
Estate of Church, 335 U. S. 632 , and Estate of Spiegel v. Commissioner, 335 U.
S. 701 (estate tax), led to the Act of October 25, 1949,
§ 7, 63 Stat. 891, 894, amending § 811(c) of the 1939 Code; Wilmette Park Dist. v. Campbell, 338 U.
S. 411 (amusement tax), led to § 402 of the Revenue Act
of 1951, adding § 1701(d) to the 1939 Code; Commissioner v.
Korell, 339 U. S. 619 (amortization of bond premium), led to § 217 of the Revenue Act of
1950, amending § 125(b)(1) of the 1939 Code.
[ Footnote 2/14 ]
46 Stat. 1516; see 74 Cong.Rec. 7078-7079,
7198-7199.
[ Footnote 2/15 ]
H.R. 8854, 86th Cong., 1st Sess.; H.R. 312, 87th Cong., 1st
Sess.
[ Footnote 2/16 ]
"To explain the cause of nonaction by Congress when Congress
itself sheds no light is to venture into speculative unrealities.
Congress may not have had its attention directed to an undesirable
decision; and there is no indication that, as to the St.
Louis Trust cases, it had, even by any bill that found its
way into a committee pigeonhole." 309 U. S. 309 U.S.
106, 309 U. S.
119 -120. (Emphasis supplied.)
[ Footnote 2/17 ]
"Thus, the affirmative action taken by Congress in 1942
negatives any inference that otherwise might be drawn from its
silence when it reenacted the oath in 1940." 328 U. S. 328 U.S.
61, 328 U. S.
70 .
[ Footnote 2/18 ]
223 F.2d 436.
[ Footnote 2/19 ]
Petition for certiorari, p. 14, n. 6, Commissioner v. Estate
of Dix, 350 U.S. 894.
[ Footnote 2/20 ] Id. at 15.
[ Footnote 2/21 ]
350 U.S. 894.
[ Footnote 2/22 ]
348 U.S. at 348 U. S.
244 .
[ Footnote 2/23 ]
Brief for the United States, pp. 32-33.
[ Footnote 2/24 ]
"We do not reach in this case the factual situation involved in Commissioner v. Wilcox, 327 U. S. 404 . We limit that
case to its facts. There, embezzled funds were held not to
constitute taxable income to the embezzler under § 22(a). The issue
here is whether money extorted from a victim with his consent
induced solely by harassing demands and threats of violence is
included in the definition of gross income under § 22(a)."
343 U.S. at 343 U. S.
138 .
[ Footnote 2/25 ]
Brief for the United States in Opposition to Petition for
Certiorari, Rutkin v. United States, 343 U.
S. 130 , pp. 13-14. The full sentence in the Court of
Appeals opinion from which the Government quoted was:
"So he [Rutkin] did receive the money with a 'semblance of a bona fide claim of right,' as the embezzler had not in Commissioner of Internal Revenue v. Wilcox, supra, at 327 U. S. 408 ." United States v. Rutkin, 189 F.2d 431, 435.
[ Footnote 2/26 ]
This factual distinction was clearly emphasized in the Court's
opinion in Rutkin: "[Rutkin] induced Reinfeld to consent to pay the money by
creating a fear in Reinfeld that harm otherwise would come to him
and to his family. Reinfeld thereupon delivered his own money to
petitioner. Petitioner's control over the cash so received was such
that, in the absence of Reinfeld's unlikely repudiation of the
transaction and demand for the money's return, petitioner
could enjoy its use as fully as though his title to it were
unassailable." Rutkin v. United States, 343 U.
S. 130 , 343 U. S.
136 -137. (Emphasis supplied.)
[ Footnote 2/27 ]
The analogy between the borrower and the embezzler was lucidly
analyzed by Judge Sibley in McKnight v. Commissioner, 127
F.2d 572, 573-574.
The several cases relied on by the Court do not, in our
judgment, justify imposing a tax upon embezzled money. Corliss
v. Bowers, 281 U. S. 376 ,
involved income accumulating in a trust fund belonging to the
taxpayer and over which he retained control. North American Oil
Consolidated v. Burnet, 286 U. S. 417 ; United States v. Lewis, 340 U. S. 590 ; and Healy v. Commissioner, 345 U. S. 278 ,
were cases in which the taxpayer had asserted a bona fide, though mistaken, claim of right. In North American Oil, the taxpayer not only had a bona fide claim to the money
taxed, but there had been an adjudication that he was entitled to
it, and there was only the tenuous possibility that a competing
claimant might later upset that adjudication. The Lewis and Healy cases involved a tax on payments made and
received as a result of mutual mistake, and it was held that the
administration of the tax laws on an annual basis need not be upset
for the convenience of those who caused the mistaken payments to be
made and reported as income. By contrast, the victims do not cause
embezzlements, and the Government is not misled or inconvenienced
under Wilcox, because the embezzler is always fully aware
that the embezzled funds are not rightfully his, and presumably
will not report otherwise.
[ Footnote 2/28 ] See the dissenting opinion in Bartkus v.
Illinois, 359 U. S. 121 , 359 U. S. 150 .
It is interesting to note that, on July 22, 1959, shortly after the Bartkus decision, Illinois, in order to avoid the danger
of prosecuting men in both state and federal courts for the same
crime, passed a statute making conviction or acquittal in a federal
prosecution a defense to a state prosecution for the same criminal
act. Illinois Laws, 1959, p. 1893, § 1; 38 Ill.Ann.Stat.
(Cum.Supp.1960) § 601.1. Thus, while Illinois is moving away from
such double prosecutions, this Court is moving even further than Bartkus in the direction of authorizing such
prosecutions.
[ Footnote 2/29 ]
The subsequent history of the Rutkin-Reinfeld controversy can,
in part, be read in United States v. Rutkin, 208 F.2d 647,
especially Judge Kalodner's dissenting opinion at 655; United
States v. Rutkin, 212 F.2d 641, especially at 644; and Rutkin v. Reinfeld, 122 F. Supp. 265, reversed, 229 F.2d 248.
MR. JUSTICE CLARK, concurring in part and dissenting in part as
to the opinion of THE CHIEF JUSTICE.
Although I join in the specific overruling of Commissioner
v. Wilcox, 327 U. S. 404 (1946), in THE CHIEF JUSTICE's opinion, I would affirm this
conviction on either of two grounds. I believe that the Court not
only devitalized Wilcox, by limiting it to its facts in Rutkin v. United States, 343 U. S. 130 (1952), but that, in effect, the Court overruled that case sub
silentio in Commissioner v. Glenshaw Glass Co., 348 U. S. 426 (1955). Even if that not be true, in my view, the proof shows
conclusively that petitioner, in willfully failing to correctly
report his income, placed no bona fide reliance on Wilcox. MR. JUSTICE HARLAN, whom MR. JUSTICE FRANKFURTER joins,
concurring in part and dissenting in part as to the opinion of THE
CHIEF JUSTICE.
I fully agree with so much of THE CHIEF JUSTICE's opinion as
dispatches Wilcox to a final demise. But, as to the
disposition of this case, I think that, rather than an outright
reversal, which his opinion proposes, the reversal should be for a
new trial. Page 366 U. S. 242 I share the view that it would be inequitable to sustain this
conviction when, by virtue of the Rutkin-Wilcox dilemma,
it might reasonably have been thought by one in petitioner's
position that no tax was due in respect of embezzled moneys. For,
as is pointed out, Rutkin did not expressly overrule Wilcox, but instead merely confined it "to its facts."
Having now concluded that Wilcox was wrongly decided
originally, the problem in this case thus becomes one of how to
overrule Wilcox "in a manner that will not prejudice those
who might have relied on it." 366 U.S. at 366 U.S. 221 .
It is argued, in reliance on Spies v. United States, 317 U. S. 492 , and Holland v. United States, 348 U.
S. 121 , that, so long as Wilcox remained on the
books, the element of "willfulness" required in prosecutions of
this kind [ Footnote 3/1 ] "could not
be proven," and hence, that the conviction of this petitioner fails
without more. This would mean, I take it, that no future
prosecution or past conviction involving tax derelictions of this
nature, occurring during the Wilcox period, may be brought
or allowed to stand. I cannot agree to such a disposition, which,
in my view, is warranted by neither principle nor authority, and
would carry mischievous implications for the future.
The Spies and Holland cases, which are said to
support outright reversal, stand for no more than that where, as
here, a criminal tax statute makes "willfulness" an element of the
offense, the Government must prove an "evil motive and want of
justification in view of all the financial circumstances" on the
part of the defendant in failing to do what was required of him.
While I agree that, in the present case, this made germane on the
issue of willfulness the petitioner's reliance or nonreliance on
the Page 366 U. S. 243 continued vitality of the Wilcox doctrine, [ Footnote 3/2 ] I can find nothing in Spies or Holland which justifies the view that
the mere existence of Wilcox suffices alone to vitiate
petitioner's conviction as a matter of law. If, as appears to have
been the case, there was erroneous failure to take that factor into
account at the trial on the issue of willfulness, the most that
should happen is that petitioner should be given a new trial. This
indeed is what Spies and Holland affirmatively
indicate as the right solution of the problem this case presents.
In Spies, it was said (at 317 U. S.
499 -500):
". . . By way of Illustration, and not by way of limitation, we
would think affirmative willful attempt may be inferred from
conduct such as keeping a double set of books, making false entries
or alterations, or false invoices or documents, destruction of
books or records, concealment of assets or covering up sources of
income, handling of one's affairs to avoid making the records usual
in transactions of the kind, and any conduct, the likely effect of
which would be to mislead or to conceal. If the tax evasion motive
plays any part in such conduct, the offense may be made out even
though the conduct may also serve other purposes, such as
concealment of other crime."
"In this case, there are several items of evidence, apart from
the default in filing the return and paying the tax, which the
Government claims will support an inference of willful attempt to
evade or Page 366 U. S. 244 defeat the tax. These go to establish that petitioner insisted
that certain income be paid to him in cash, transferred it to his
own bank by armored car, deposited it not in his own name, but in
the names of others of his family, and kept inadequate and
misleading records. Petitioner claims other motives animated him in
these matters. We intimate no opinion. Such inferences are for the
jury. If, on proper submission, the jury found these acts, taken
together with willful failure to file a return and willful failure
to pay the tax, to constitute a willful attempt to defeat or evade
the tax, we would consider conviction of a felony sustainable."
To the same effect, see Holland, supra, at p. 348 U. S.
139 .
In the case at hand, the evidence of devious financial
arrangements might well support the inference that petitioner's
purpose was not only to commit the embezzlement, but also to
secrete and immunize his gains from what he considered to be his
tax liabilities in respect of those gains. The District Court, as
the trier of the facts (there having been no jury), found that
petitioner's acts were "willful, and were done in a knowing and
conscious attempt to evade and defeat" his tax obligations. But
since it does not appear that petitioner's possible reliance on the Wilcox doctrine was considered below, Spies and Holland make it appropriate for us to send the case back
for a new trial. They do not support foreclosing the Government
from even undertaking to prove that the petitioner's conduct was
"willful" in this respect.
An outright reversal is equally unsound on principle. I take it
that our decisions in the tax, and any other field, for that
matter, relate back to the actual transactions with which they are
concerned, and that that is only the normal concomitant of the fact
that we do not sit as an administrative agency making rulings for
the future, but rather adjudicate actual controversies as Page 366 U. S. 245 to rights and liabilities under the laws of the United States.
There can be, I think, two justifications for barring a prosecution
of this petitioner in the unusual circumstances presented here: (1)
that, by reason of Rutkin having formally left intact the Wilcox doctrine, petitioner did not have due warning of
his possible criminal liability; and (2) that the Court, in making
new "law" in Rutkin, should, like the legislature, not
impose criminal liability ex post facto. As to the first consideration, where the defendant is charged in
a case like this with having "willfully" violated the law, I
believe that both reason and authority require no more than that
the trier of fact be instructed that it must take into account in
determining the defendant's "evil motive and want of
justification," Spies v. United States, 317 U.S. at 317 U. S. 498 ,
his possible reliance on Wilcox, which not until now has
this Court explicitly stated was wrongly decided. As far as
fairness to this petitioner is concerned, I do not see why that is
not amply accorded by the disposition which Spies itself
exemplifies. See p. 366 U. S. 243 supra. On the other hand, if the trier of fact, properly
instructed, finds that the petitioner did not act in bona
fide reliance on Wilcox, but deliberately refused to
report income and pay taxes thereon knowing of his obligation to do
so and not relying on any exception in the circumstances, I do not
see why even the strictest definition of the element of
"willfulness" would not have been satisfied. Willfulness goes to
motive, and the quality of a particular defendant's motive would
not seem to be affected by the fact that another taxpayer similarly
situated had a different motive.
An altogether analogous situation was presented in United
States v. Murdock, 290 U. S. 389 . In
that case, the respondent had been convicted of willfully failing
to supply information to the Bureau of Internal Revenue in that he
relied on the possibility of state prosecution as Page 366 U. S. 246 justifying his invoking the federal privilege against
self-incrimination. The Court said in that case:
". . . He whose conduct is defined as criminal is one who
' willfully ' fails to pay the tax, to make a return, to
keep the required records, or to supply the needed information.
Congress did not intend that a person, by reason of a bona
fide misunderstanding as to his liability for the tax, . . .
should become a criminal by his mere failure to measure up to the
prescribed standard of conduct. . . ."
"It follows that the respondent was entitled to the charge he
requested with respect to his good faith and actual belief. Not
until this court pronounced judgment in United States v.
Murdock, 284 U. S. 141 , had it been
definitely settled that one under examination in a federal tribunal
could not refuse to answer on account of probable incrimination
under state law. The question was involved, but not decided, in Ballman v. Fagin, 200 U. S. 186 , 200 U. S.
195 , and specifically reserved in Vajtauer v. Comm'r
of Immigration, 273 U. S. 103 , 273 U. S.
113 . The trial court could not, therefore, properly tell
the jury the defendant's assertion of the privilege was so
unreasonable and ill founded as to exhibit bad faith and establish
willful wrongdoing. This was the effect of the instructions given.
We think the Circuit Court of Appeals correctly upheld the
respondent's right to have the question of absence of evil motive
submitted to the jury. . . ."
(Emphasis supplied.) It would seem that precisely the same
disposition is in order in this case. Nor do I think that
distinctions in terms of the nature of the defendant's legal
misapprehension, its degree, its justifiability, or its source are
either warranted or would be manageable as a basis for deciding
future cases. Page 366 U. S. 247 Coming now to the other possible rationale for barring the
prosecution of this petitioner, it might be argued that petitioner,
at the time he failed to make his return, was not under any
misapprehension as to the law, but indeed that, at the time and
under the decisions of this Court, his view of the law was entirely
correct. The argument not only seems to beg the question, but
raises further questions as to the civil liability of one situated
in the circumstances of this petitioner. Petitioner's obligation
here derived not from the decisions of this or any other court, but
from the Act of Congress imposing the tax. It is hard to see what
further point is being made once it is conceded that petitioner, if
he was misled by the decisions of this Court, is entitled to plead
in defense that misconception. Only in the most metaphorical sense
has the law changed: the decisions of this Court have changed, and
the decisions of a court interpreting the acts of a legislature
have never been subject to the same limitations which are imposed
on legislatures themselves, United States Constitution, Art, I, §§
9, 10, forbidding them to make any ex post facto law,
[ Footnote 3/3 ] and, in the case of
States, to impair the obligation Page 366 U. S. 248 of a contract. Ross v. Oregon, 227 U.
S. 150 ; New Orleans Waterworks Co. v. Louisiana
Sugar Refining Co., 125 U. S. 18 .
The proper disposition of this case, in my view, is to treat as
plain error, Fed.Rules Crim.Proc. 52(b), the failure of the trial
court as trier of fact to consider whatever misapprehension may
have existed in the mind of the petitioner as to the applicable law
in determining whether the Government had proved that petitioner's
conduct had been willful as required by the statute. On that basis,
I would send the case back for a new trial.
[ Footnote 3/1 ]
The relevant statutes are set forth in footnotes 1-2 4-5 of
THE CHIEF JUSTICE's opinion Ante, pp. 214-215.
[ Footnote 3/2 ] Compare American Law Institute, Model Penal Code,
tentative draft No. 4, § 2.04:
"(1) Ignorance or mistake as to a matter of fact or law is a
defense if:"
"(a) the ignorance or mistake negatives the purpose, knowledge,
belief, recklessness or negligence required to establish a material
element of the offense. . . ."
[ Footnote 3/3 ]
Aside from problems of warning and specific intent, the policy
of the prohibition against ex post facto legislation would
seem to rest on the apprehension that the legislature, in imposing
penalties on past conduct, even though the conduct could properly
have been made criminal and even though the defendant who engaged
in that conduct in the past believed he was doing wrong (as, for
instance, when the penalty is increased retroactively on an
existing crime), may be acting with a purpose not to prevent
dangerous conduct generally, but to impose by legislation a penalty
against specific persons or classes of persons. That this policy is
inapplicable to decisions of the courts seems obvious: their
opportunity for discrimination is more limited than the
legislature's, in that they can only act in construing existing law
in actual litigation. Given the divergent pulls of flexibility and
precedent in our case law system, it is disquieting to think what
perplexities and what subtleties of distinction would be created in
applying this policy, which so properly limits legislative action,
to the decisions of the courts.
MR. JUSTICE WHITTAKER, whom MR. JUSTICE BLACK and MR. JUSTICE
DOUGLAS join, concurring in part and dissenting in part.
The starting point of any inquiry as to what constitutes taxable
income must be the Sixteenth Amendment, which grants Congress the
power "to lay and collect taxes on incomes, from whatever source
derived. . . ." It has long been settled that Congress' broad
statutory definitions of taxable income were intended "to use the
full measure of (the Sixteenth Amendment's) taxing power." Helvering v. Clifford, 309 U. S. 331 , 309 U. S. 334 ; Douglas v. Willcuts, 296 U. S. 1 , 296 U. S. 9 .
Equally well settled is the principle that the Sixteenth Amendment
"is to be taken as written, and is not to be extended beyond the
meaning clearly indicated by the language used." Edwards v.
Cuba R. Co., 268 U. S. 628 , 268 U. S. 631 .
[ Footnote 4/1 ] The language of the
Sixteenth Amendment, as well as our prior controlling
decisions, Page 366 U. S. 249 compels me to conclude that the question now before us --
whether an embezzler receives taxable income at the time of his
unlawful taking -- must be answered negatively. Since the
prevailing opinion reaches an opposite conclusion, I must
respectfully dissent from that holding, although I concur in the
Court's judgment reversing petitioner's conviction. I am convinced
that Commissioner v. Wilcox, 327 U.
S. 404 , which is today overruled, was correctly decided
on the basis of every controlling principle used in defining
taxable income since the Sixteenth Amendment's adoption.
THE CHIEF JUSTICE's opinion, although it correctly recites Wilcox's holding that "embezzled money does not constitute
taxable income to the embezzler in the year of the
embezzlement " (emphasis added), fails to explain or to answer
the true basis of that holding. Wilcox did not hold that
embezzled funds may never constitute taxable income to the
embezzler. To the contrary, it expressly recognized that an
embezzler may realize a taxable gain to the full extent of the
amount taken if and when it ever becomes his. The applicable test
of taxable income, i.e., the "presence of a claim of right
to the alleged gain," of which Wilcox spoke, was but a
correlative statement of the factor upon which the decision placed
its whole emphasis throughout, namely, the "absence of a definite,
unconditional obligation to repay or return [the money]." 327 U.S.
at 327 U. S. 408 .
In holding that this test was not met at the time of the
embezzlement, the Wilcox opinion repeatedly stressed that
the embezzler had no " bona fide legal or equitable claim"
to the embezzled funds, ibid.; that the victim never
"condoned or forgave the taking of the money, and still holds him
liable to restore it," id. at 327 U. S. 406 ;
and that the "debtor-creditor relationship was definite and
unconditional." Id. at 327 U. S. 409 .
These statements all express the same basic fact -- the fact which
is emphasized most strongly in the opinion's conclusion
explaining Page 366 U. S. 250 why the embezzler had not yet received taxable income:
"Sanctioning a tax under the circumstances before us would serve
only to give the United States an unjustified preference as to part
of the money which rightfully and completely belongs to the
taxpayer's employer. " Id. at 327 U. S. 410 .
(Emphasis added.)
However, Wilcox plainly stated that, "if the
unconditional indebtedness is cancelled or retired, taxable income
may adhere, under certain circumstances, to the taxpayer." 327 U.S.
at 327 U. S. 408 .
More specifically, it recognized that, had the embezzler's victim
"condoned or forgiven any part of the [indebtedness], the
[embezzler] might have been subject to tax liability to that
extent," id. at 327 U. S. 410 , i.e., in the tax year of such forgiveness.
These statements reflect an understanding of, and regard for,
substantive tax law concepts solidly entrenched in our prior
decisions. Since our landmark case of United States v. Kirby
Lumber Co., 284 U. S. 1 , it has
been settled that, upon a discharge of indebtedness by an event
other than full repayment, the debtor realizes a taxable gain in
the year of discharge to the extent of the indebtedness thus
extinguished. Such gains are commonly referred to as ones realized
through "bargain cancellations" of indebtedness, and it was in this
area, and, indeed, in Kirby Lumber Co. itself, that the
"accession" theory or "economic gain" concept of taxable income,
upon which THE CHIEF JUSTICE's opinion today mistakenly relies,
found its genesis. In that case, the taxpayer, a corporation, had
reduced a portion of its debt, with a corresponding gain in assets,
by purchasing its bonds in the open market at considerably less
than their issue price. Mr. Justice Holmes, who wrote the Court's
opinion, found it unnecessary to state the elementary principle
that, so long as the bonds remained a fully enforceable debt
obligation of the taxpayer, there could be no taxable gain.
However, when the taxpayer retired the debt by purchasing Page 366 U. S. 251 the bonds for less than their face value, it "made a clear
[taxable] gain," and "realized within the year an accession to
income" in the amount of its bargain. 284 U.S. at 284 U. S. 3 .
This doctrine has since been reaffirmed and strengthened by us, see e.g., Helvering v. American Chicle Co., 291 U.
S. 426 ; Commissioner v. Jacobson, 336 U. S.
28 , and by the lower federal courts in numerous
decisions involving a variety of "bargain cancellations" of
indebtedness, as by a creditor's release condoning or forgiving the
indebtedness in whole or in part, [ Footnote 4/2 ] or by the running of a statute of
limitations barring the legal enforceability of the obligation.
[ Footnote 4/3 ] In none of these
cases has it been suggested that a taxable gain might be realized
by the debtor at any time prior to the effective date of discharge,
and, as Wilcox recognized, there is no rational basis on
which to justify such a rule where the debt arises through
embezzlement.
An embezzler, like a common thief, acquires not a semblance of
right, title, or interest in his plunder, and, whether he spends it
or not, he is indebted to his victim in the full amount taken as
surely as if he had left a signed promissory note at the scene of
the crime. Of no consequence from any standpoint is the absence of
such formalities as (in the words of the prevailing opinion) "the
consensual recognition, express or implied, or an obligation to
repay." The law readily implies whatever "consensual recognition"
is needed for the rightful owner to assert an immediately ripe and
enforceable obligation of Page 366 U. S. 252 repayment against the wrongful taker. These principles are not
"attenuated subtleties," but are among the clearest and most easily
applied rules of our law. They exist to protect the rights of the
innocent victim, and we should accord them full recognition and
respect.
The fact that an embezzler's victim may have less chance of
success than other creditors in seeking repayment from his debtor
is not a valid reason for us further to diminish his prospects by
adopting a rule that would allow the Commissioner of Internal
Revenue to assert and enforce a prior federal tax lien against that
which "rightfully and completely belongs" to the victim. Commissioner v. Wilcox, supra, at 327 U. S. 410 .
THE CHIEF JUSTICE's opinion quite understandably expresses much
concern for "honest taxpayers," but it attempts neither to deny nor
justify the manifest injury that its holding will inflict on those
honest taxpayers, victimized by embezzlers, who will find their
claims for recovery subordinated to federal tax liens. Statutory
provisions, by which we are bound, clearly and unequivocally accord
priority to federal tax liens over the claims of others, including
"judgment creditors." [ Footnote
4/4 ] Page 366 U. S. 253 However, if it later happens that the debtor-creditor
relationship between the embezzler and his victim is discharged by
something other than full repayment, such as by the running of a
statute of limitations against the victim's claim, or by a release
given for less than the full amount owed, the embezzler, at that
time, but not before, will have made a clear taxable gain and
realized "an accession to income" which he will be required, under
full penalty of the law, to report in his federal income tax return
for that year. No honest taxpayer could be harmed by this rule.
The inherent soundness of this rule could not be more clearly
demonstrated than as applied to the facts of the case before us.
Petitioner, a labor union official, concededly embezzled sums
totaling more than $738,000 from the union's funds over a period
extending from 1951 to 1954. When the shortages were discovered in
1956, the union at once filed civil actions against petitioner to
compel repayment. For reasons which need not be detailed here,
petitioner effected a settlement agreement with the union on July
30, 1958, whereby, in exchange for releases fully discharging his
indebtedness, he repaid to the union the sum of $13,568.50.
Accordingly, at least so far as the present record discloses,
petitioner clearly realized a taxable gain in the year the releases
were executed to the extent of the difference between the amount
taken and the sum restored. However, the Government brought the
present action against him not for his failure to report this gain
in his 1958 return, but for his failure to report that he had
incurred "income" from -- actually indebtedness to -- the union in
each of the years 1951 through 1954. It is true that the Government
brought a criminal evasion prosecution, rather than a civil
deficiency proceeding, against petitioner, but this can in no way
alter the substantive tax law rules which alone are determinative
of liability in either case. Page 366 U. S. 254 There can be no doubt that, until the releases were executed in
1958, petitioner and the union stood in an absolute and
unconditional debtor-creditor relationship, and, under all of our
relevant decisions, no taxable event could have occurred until the
indebtedness was discharged for less than full repayment.
Application of the normal rule in such cases will not hinder the
efficient and orderly administration of the tax laws any more than
it does in other situations involving "bargain cancellations" of
indebtedness. More importantly, it will enhance the creditor's
position by assuring that prior federal tax liens will not attach
to the subject of the debt when he seeks to recover it.
Notwithstanding all of this, THE CHIEF JUSTICE's opinion
concludes that there is no difference between embezzled funds and
"gains" from other "illegal sources," and it points to the fact
that Congress, in its 1916 revision of the 1913 Income Tax Act,
omitted the word "lawful" in describing businesses whose income was
to be taxed. The opinion then cites United States v.
Sullivan, 274 U. S. 259 , in
which it was held that, under the revised statute, gains from
illicit traffic in liquor must be reported in gross income, since
there is no "reason why the fact that a business is unlawful should
exempt it from paying the taxes that, if lawful, it would
have to pay." Id. at 274 U. S. 263 .
(Emphasis added.) That theory has been the primary basis for taxing
"unlawful gains of many kinds" which the prevailing opinion today
recites, such as black market profits, gambling proceeds, money
derived from the sale of unlawful insurance policies, etc.
[ Footnote 4/5 ] For, even if lawful,
the gains from such activities would clearly Page 366 U. S. 255 not be exempted from taxation. However, as applied to embezzled
funds, the holding in Sullivan contradicts, rather than
supports, the Court's conclusion today. Obviously, embezzlement
could never become "lawful" and still retain its character. If
"lawful," it would constitute nothing more than a loan, or possibly
a gift, to the "embezzler," neither of which would produce a
taxable gain to him.
There is still another obvious and important distinction between
embezzlement and the varieties of illegal activity listed by the
prevailing opinion -- one which clearly calls for a different tax
treatment. Black marketeering, gambling, bribery, graft, and like
activities generally give rise to no legally enforceable right of
restitution -- to no debtor-creditor relationship which the law
will recognize. [ Footnote 4/6 ]
Condemned either by statute or public policy, or both, such
transactions are void ab initio. Since any consideration
which may have passed is not legally recoverable, its recipient has
realized a taxable gain, an "accession to income," as clearly as if
his "indebtedness" had been discharged by a full release or by the
running of a statute of limitations. As we have already shown at
length, quite the opposite is true when an embezzlement occurs; for
then the victim acquires an immediately ripe and enforceable claim
to repayment, and the embezzler assumes a legal debt equal to his
acquisition.
To reach the result that it does today, THE CHIEF JUSTICE's
opinion constructs the following theory for defining taxable
income:
"When a taxpayer acquires earnings, lawfully or unlawfully,
without the consensual recognition, Page 366 U. S. 256 express or implied, of an obligation to repay and without
restriction as to their disposition,"
"he has received income which he is required to return, even
though it may still be claimed that he is not entitled to retain
the money, and even though he may still be adjudged liable to
restore its equivalent."
" North American Oil Consolidated v. Burnet, supra, 286 U. S. 424 . In such case, the
taxpayer has 'actual command over the property taxed -- the actual
benefit for which the tax is paid,' Corliss v. Bowers,
supra. This standard brings wrongful appropriations within the
broad sweep of 'gross income;' it excludes loans. When a
law-abiding taxpayer mistakenly receives income in one year, which
receipt is assailed and found to be invalid in a subsequent year,
the taxpayer must nonetheless report the amount as 'gross income'
in the year received. United States v. Lewis, supra; Healy v.
Commissioner, supra. "
This novel formula finds no support in our prior decisions,
least of all in those which are cited. Corliss v. Bowers, 281 U. S. 376 ,
involved nothing more than an inter vivos trust created by
the taxpayer to pay the income to his wife. Since he had reserved
the power to alter or abolish the trust at will, its income was
taxable to him under the express provisions of § 219(g), (h) of the
Revenue Act of 1924. North American Oil Consolidated v.
Burnet, 286 U. S. 417 , is
the case which introduced the principle since used to facilitate
uniformity and certainty in annual tax accounting procedure, i.e., that a taxpayer must report in gross income, in the
year in which received, money or property acquired under a "claim
of right" -- a colorable claim of the right to exclusive
possession of the money or property. Thus, in its complete
form, the sentence in North American Oil from which the
above-quoted fragment was extracted reads:
"If a taxpayer receives earnings under a claim of right and without Page 366 U. S. 257 restriction as to its [ sic ] disposition, he has
received income which he is required to return, even though it may
still be claimed that he is not entitled to retain the money, and
even though he may still be adjudged liable to restore its
equivalent." Id. at 286 U. S. 424 .
(Emphasis added.) But embezzled funds, like stolen property
generally, are not "earnings" in any sense, and are held without a
vestige of a colorable claim of right; they constitute the
principal of a debt. Of no significance whatever is the formality
of "consensual recognition, express or implied" of an obligation to
repay. By substituting this meaningless abstraction in place of the
omitted portion of the North American Oil test of when a
receipt constitutes taxable income, the prevailing opinion today
goes far beyond overruling Wilcox -- it reduces a
substantial body of tax law into uncertainty and confusion. The
above-cited case of United States v. Lewis, 340 U.
S. 590 , decided 19 years after North American
Oil, demonstrates the truth of this. For, there we said:
"The 'claim of right' interpretation of the tax laws has long
been used to give finality to [the accounting] period, and is not
deeply rooted in the federal tax system. . . . We see no reason why
the Court should depart from this well settled interpretation
merely because it results in an advantage or disadvantage to a
taxpayer."
340 U.S. at 340 U. S. 592 .
The same principle was reiterated and applied in Healy v.
Commissioner, 345 U. S. 278 .
The supposed conflict between Wilcox and Rutkin, upon which THE CHIEF JUSTICE's opinion seeks to
justify its repudiation of Wilcox, [ Footnote 4/7 ] has been adequately treated in Page 366 U. S. 258 the opinion of MR. JUSTICE BLACK, and I agree with him that
those cases were fully intended to be, and are, reconcilable both
on their controlling facts and applicable law. If the unnecessarily
broad language used in the Rutkin opinion has misled any
of the lower federal courts in their understanding of the
principles underlying Wilcox, we should clarify their
understanding at this time, and continue our adherence to "a prior
doctrine more embracing in its scope, intrinsically sounder, and
verified by experience." Helvering v. Hallock, 309 U. S. 106 , 309 U. S.
119 .
[ Footnote 4/1 ]
"A proper regard for its genesis, as well as its very clear
language, requires also that [the Sixteenth] Amendment shall not be
extended by loose construction. . . . Congress cannot, by any
definition [of income] it may adopt, conclude the matter, since it
cannot, by legislation, alter the Constitution, from which alone it
derives its power to legislate, and within whose limitations alone
that power can be lawfully exercised." Eisner v. Macomber, 252 U. S. 189 , 252 U. S.
206 .
[ Footnote 4/2 ] See, e.g., Spear Box Co. v. Commissioner, 182 F.2d 844; Helvering v. Jane Holding Corp., 109 F.2d 933; Pacific
Magnesium, Inc. v. Westover, 86 F.
Supp. 644 .
[ Footnote 4/3 ] See, e.g., Schweppe v. Commissioner, 168 F.2d 284; North American Coal Corp. v. Commissioner, 97 F.2d 325; Securities Co. v. United States, 85 F. Supp.
532 .
[ Footnote 4/4 ]
26 U.S.C. §§ 6321-6323, 6331; Bankruptcy Act, § 64, sub. a, 11
U.S.C. § 104, sub, a. Moreover, R.S. § 3466 (1975), now codified in
31 U.S.C. § 191, pertaining to state insolvency proceedings against
debtors, commands that "the debts due to the United States shall be
first satisfied." We long ago established that the term "debts" in
this statute includes delinquent federal taxes. Price v. United
States, 269 U. S. 492 , 269 U. S.
499 -500. And even though the tax claim of the Government
may be only a general lien, with notice thereof not yet filed in
the proper local office pursuant to 26 U.S.C. § 6323, we have held
that it must be accorded priority over the claims of all prior
general lienholders, under R.S. § 3466, 31 U.S.C. § 191. United
States v. City of New Britain, 347 U. S.
81 , 347 U. S. 84 -85; United States v. Gilbert Associates, 345 U.
S. 361 , 345 U. S. 366 ; United States v. Texas, 314 U. S. 480 , 314 U. S. 488 . See Mertens, Law of Federal Income Taxation, § 12.103,
note 67; id., §§ 54.10-54.56.
[ Footnote 4/5 ] See cases cited in Rutkin v. United States, 343 U. S. 130 , 343 U. S. 137 ,
note 8. See also United States v. Bruswitz, 219 F.2d 59; Steinberg v. United States, 14 F.2d 564; Barker v.
United States, 26 F. Supp. 1004, 88 Ct.Cl. 468; Silberman
v. Commissioner, 44 B.T.A. 600.
[ Footnote 4/6 ]
Restatement, Contracts, § 598; 6 Corbin, Contracts, §§ 1373 et
seq. (1951). That the rule applies even as to "unlawful insurance
polices" is undoubted. Patterson, Essentials of Insurance Law (2d
ed. 1957), § 43 at 186.
[ Footnote 4/7 ]
I cannot agree with THE CHIEF JUSTICE's assertion that Wilcox has been "thoroughly devitalized" by Rutkin. See, e.g., the recent case of United
States v. Peelle, 159 F. Supp.
45 (D.C.E.D.N.Y.1958). There, the Government sought to enforce
liens for federal income taxes claimed to be due on items of
"income" aggregating $678,461.22 which the taxpayer had embezzled
from his corporate employer during the years 1945 through 1949. The
items in question consisted of customers' payments intended for the
corporation, and had been embezzled by the taxpayer and kept by him
in secret bank accounts. In 1951 and 1952, he discharged his
indebtedness by making full restitution of the embezzled funds to
the corporation. The corporation, which used the accrual method of
accounting, paid deficiencies which the Government determined in
its 1945-1949 income tax returns, based on its accrued right to
receive the embezzled customers' payments in those years. Not
satisfied with this, the Government took the position that the
payments were taxable twice during the same years -- once to the
corporation when it accrued the right to receive them, and again to
the embezzler when he diverted them into the secret bank accounts.
Had this effort at double taxation succeeded, the Government's
combined tax claims would have been far in excess of the amount
being taxed.
In rejecting the Government's argument that the embezzler
received taxable income at the time of the embezzlements, the
District Court relied wholly upon the decision which the Court
today overrules, Commissioner v. Wilcox, supra. | Here is a summary of the Supreme Court case, James v. United States (1961):
Issue:
Whether embezzled funds should be included in the "gross income" of the embezzler for tax purposes in the year the funds are stolen.
Facts:
The petitioner, a union official, embezzled over $738,000 from his union and an insurance company between 1951 and 1954. He did not report this amount as gross income on his tax returns and was convicted of willfully attempting to evade federal income tax.
Holding:
The Supreme Court held that embezzled money is taxable income to the embezzler in the year of embezzlement under the Internal Revenue Code. The Court overruled a previous decision, Commissioner v. Wilcox, which had held that embezzled funds were not taxable income.
Impact:
The ruling clarified that embezzled funds are subject to federal income tax and established that tax evasion related to embezzled funds could be prosecuted under the relevant sections of the Internal Revenue Code. |
Taxes | Commissioner v. P.G. Lake, Inc. | https://supreme.justia.com/cases/federal/us/356/260/ | U.S. Supreme Court Commissioner v. P. G. Lake, Inc., 356
U.S. 260 (1958) Commissioner of Internal Revenue v.
P. G. Lake, Inc. No. 108 Argued March 11, 1958 Decided April 14,
1958 356
U.S. 260 CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE FIFTH
CIRCUIT Syllabus 1. In each of the five cases here considered together, the
taxpayer received present consideration for assignment of a
so-called oil payment right (or sulphur payment right) carved out
by the taxpayer from a larger mineral interest producing income
taxable as ordinary income, subject to a depletion deduction. Held: the consideration received for the assignment was
taxable as ordinary income, subject to a depletion deduction, and
not as a long-term capital gain under § 117 of the Internal Revenue
Code of 1939. Pp. 356 U. S.
261 -267.
(a) The present consideration received by the taxpayer was paid
for the right to receive future income, not for an increase in the
value of the income-producing property. Pp. 356 U. S.
264 -267.
(b) An earlier administrative practice (reversed in 1946)
contrary to this holding will not be presumed to have been known to
Congress and incorporated into the law by reenactment, because it
was not reflected in any published ruling or regulation. P. 265, n 5.
(c) Moreover, prior administrative practice is always subject to
change through exercise by the administrative agency of its
continuing rulemaking power. P. 356 U. S. 265 ,
n. 5.
2. In the Fleming case, the taxpayers exchanged oil
payment rights for fee simple interests in real estate. Held: this did not constitute a tax-free exchange of
property of like kind within the meaning of § 112(b)(1) of the
Internal Revenue Code of 1939. Pp. 356 U. S.
267 -268.
241 F.2d 65, 69, 71, 78, 84, reversed. Page 356 U. S. 261 MR. JUSTICE DOUGLAS delivered the opinion of the Court.
We have here, consolidated for argument, five cases involving an
identical question of law. Four are from the Tax Court, whose
rulings may be found in 24 T.C. 1016 (the Lake case); 24
T.C. 818 (the Fleming case); 24 T.C. 1025 (the Weed case). (Its findings and opinion in the Wrather case
are not officially reported.) Those four cases involved income tax
deficiencies. The fifth, the O'Connor case, is a suit for
a refund originating in the District Court. 143 F. Supp. 240. All
five are from the same Court of Appeals, 241 F.2d 71, 65, 78, 84,
69. The cases are here on writs of certiorari which we granted
because of the public importance of the question presented. 353
U.S. 982.
The facts of the Lake case are closely similar to those
in the Wrather and O'Connor cases. Lake is a
corporation engaged in the business of producing oil and gas. It
has a seven-eighths working interest [ Footnote 1 ] in two commercial oil Page 356 U. S. 262 and gas leases. In 1950, it was indebted to its president in the
sum of $600,000, and, in consideration of his cancellation of the
debt, assigned him an oil payment right in the amount of $600,000,
plus an amount equal to interest at 3 percent a year on the unpaid
balance remaining from month to month, payable out of 25 percent of
the oil attributable to the taxpayer's working interest in the two
leases. At the time of the assignment, it could have been estimated
with reasonable accuracy that the assigned oil payment right would
pay out in three or more years. It did in fact pay out in a little
over three years.
In its 1950 tax return, Lake reported the oil payment assignment
as a sale of property producing a profit of $600,000 and taxable as
a long-term capital gain under § 117 of the Internal Revenue Code
of 1939. The Commissioner determined a deficiency, ruling that the
purchase price (less deductions not material here) was taxable as
ordinary income, subject to depletion. The Wrather case
has some variations in its facts. In the O'Connor case,
the assignors of the oil payments owned royalty interests,
[ Footnote 2 ] rather than
working interests. But these differences are not material to the
question we have for decision.
The Weed case is different only because it involves
sulphur rights, rather than oil rights. The taxpayer was the owner
of a pooled overriding royalty in a deposit known and Boling Dome.
[ Footnote 3 ] The royalty
interest entitled Page 356 U. S. 263 the taxpayer to receive $0.00966133 per long ton of sulphur
produced from Boling Dome, irrespective of the market price.
Royalty payments were made each month, based on the previous
month's production.
In 1947, the taxpayer, in order to obtain a sure source of funds
to pay his individual income taxes, agreed with one Munro, his tax
advisor, on a sulphur payment assignment. The taxpayer assigned to
Munro a sulphur payment totaling $50,000 and consisting of
86.254514 percent of his pooled royalty interest, which represented
the royalty interest on 6,000,000 long tons of the estimated
remaining 21,000,000 long tons still in place. The purchase price
was paid in three installments over a three-year period. Most of
the purchase price was borrowed by Munro from a bank with the
sulphur payment assignment as security. The assigned sulphur
payment right paid out within 28 months. The amounts received by
the taxpayer in 1948 and 1949 were returned by him as capital
gains. The Commissioner determined that these amounts were taxable
as ordinary income, subject to depletion.
The Fleming case is a bit more complicated, and
presents an additional question not in the other cases. Here, oil
payment assignments were made, not for cash, but for real estate.
Two transactions are involved. Fleming and others with whom he was
associated made oil payment assignments, the rights and interests
involved being held by them for productive use in their respective
businesses of producing oil. Each oil payment was assigned for an
interest in a ranch. Each was in an amount which represented the
uncontested fair value of the undivided interest in the ranch
received by the assignor, plus an amount equal to the interest per
annum on the balance remaining unpaid from time to time. The other
transaction consisted of an oil payment assignment by an owner of
oil and gas leases, held for productive use in the assignor's
business, for the fee simple title to business Page 356 U. S. 264 real estate. This oil payment assignment, like the ones
mentioned above, was in the amount of the uncontested fair market
value of the real estate received, plus interest on the unpaid
balance remaining from time to time. First, as to whether the proceeds were taxable as
long-term capital gains under § 117 [ Footnote 4 ] or as ordinary income subject to depletion.
The Court of Appeals started from the premise, laid down in Texas
decisions, see especially Tennant v. Dunn, 130 Tex. 285,
110 S.W.2d 53, that oil payments are interests in land. We too
proceed on that basis; and yet we conclude that the consideration
received for these oil payment rights (and the sulphur payment
right) was taxable as ordinary income, subject to depletion. Page 356 U. S. 265 The purpose of § 117 was
"to relieve the taxpayer from . . . excessive tax burdens on
gains resulting from a conversion of capital investments, and to
remove the deterrent effect of those burdens on such
conversions." See Burnet v. Harmel, 287 U. S. 103 , 287 U. S. 106 .
And this exception has always been narrowly construed so as to
protect the revenue against artful devices. See Corn Products
Refining Co. v. Commissioner, 350 U. S.
46 , 350 U. S.
52 .
We do not see here any conversion of a capital investment. The
lump sum consideration seems essentially a substitute for what
would otherwise be received at a future time as ordinary income.
The pay-out of these particular assigned oil payment rights could
be ascertained with considerable accuracy. Such are the
stipulations, findings, or clear inferences. In the O'Connor case, the pay-out of the assigned oil payment
right was so assured that the purchaser obtained a $9,990,350
purchase money loan at 3 1/2 percent interest without any security
other than a deed of trust of the $10,000,000 oil payment right, he
receiving 4 percent from the taxpayer. Only a fraction of the oil
or sulphur rights were transferred, the balance being retained.
[ Footnote 5 ] Except in the Fleming Page 356 U. S. 266 case, which we will discuss later, cash was received which was
equal to the amount of the income to accrue during the term of the
assignment, the assignee being compensated by interest on his
advance. The substance of what was assigned was the right to
receive future income. The substance of what was received was the
present value of income which the recipient would otherwise obtain
in the future. In short, consideration was paid for the right to
receive future income, not for an increase in the value of the
income-producing property.
These arrangements seem to us transparent devices. Their forms
do not control. Their essence is determined Page 356 U. S. 267 not by subtleties of draftsmanship, but by their total effect. See Helvering v. Clifford, 309 U.
S. 331 ; Harrison v. Schaffner, 312 U.
S. 579 . We have held that if one, entitled to receive at
a future date interest on a bond or compensation for services,
makes a grant of it by anticipatory assignment, he realizes taxable
income as if he had collected the interest or received the salary
and then paid it over. That is the teaching of Helvering v.
Horst, 311 U. S. 112 , and Harrison v. Schaffner, supra; and it is applicable here.
As we stated in Helvering v. Horst, supra, at 311 U. S.
117 ,
"The taxpayer has equally enjoyed the fruits of his labor or
investment and obtained the satisfaction of his desires whether he
collects and uses the income to procure those satisfactions, or
whether he disposes of his right to collect it as the means of
procuring them."
There, the taxpayer detached interest coupons from negotiable
bonds and presented them as a gift to his son. The interest when
paid was held taxable to the father. Here, even more clearly than
there, the taxpayer is converting future income into present
income. Second, as to the Fleming case. The Court of
Appeals in the Fleming case held that the transactions
were tax-free under §112(b)(1), which provides:
"No gain or loss shall be recognized if property held for
productive use in trade or business or for investment (not
including stock in trade or other property held primarily for sale,
nor stocks, bonds, notes, choses in action, certificates of trust
or beneficial interest, or other securities or evidences of
indebtedness or interest) is exchanged solely for property of a
like kind to be held either for productive use in trade or business
or for investment."
53 Stat. 37.
In the alternative and as a second ground, it held that this
case, too, was governed by § 117. Page 356 U. S. 268 We agree with the Tax Court, 24 T.C. 818, that this is not a
tax-free exchange under § 112(b)(1). Treasury Regulations 111,
promulgated under the 1939 Act, provide in § 39.112(b)(1)-1 as
respects the words "like kind," as used in § 112(b)(1), that "One
kind or class of property may not . . . be exchanged for property
of a different kind or class." The exchange cannot satisfy that
test where the effect under the tax laws is a transfer of future
income from oil leases for real estate. As we have seen, these oil
payment assignments were merely arrangements for delayed cash
payment of the purchase price of real estate, plus interest.
Moreover, § 39.112(a)-1 states that the
"underlying assumption of these exceptions is that the new
property is substantially a continuation of the old investment
still unliquidated."
Yet the oil payment assignments were not conversions of capital
investments, as we have seen. Reversed. [ Footnote 1 ]
An oil and gas lease ordinarily conveys the entire mineral
interest less any royalty interest retained by the lessor. The
owner of the lease is said to own the "working interest," because
he has the right to develop and produce the minerals.
In Anderson v. Helvering, 310 U.
S. 404 , we described an oil payment as
"the right to a specified sum of money, payable out of a
specified percentage of the oil, or the proceeds received from the
sale of such oil, if, as and when produced." Id. at 310 U. S. 410 .
A royalty interest is "a right to receive a specified percentage of
all oil and gas produced" but, unlike the oil payment, is not
limited to a specified sum of money. The royalty interest lasts
during the entire term of the lease. Id. at 310 U. S.
409 .
[ Footnote 2 ] See note 1 supra. [ Footnote 3 ]
Boling Dome is a tract composed of various parcels of land. The
owners of the royalty interests in sulphur produced from the
separate parcels entered into a pooling agreement by which
royalties from sulphur produced anywhere in Boling Dome were
distributed pro rata among all the royalty interest holders. In
that sense was the interest of each "pooled."
[ Footnote 4 ]
Section 117(a)(1) provides in relevant part:
"The term 'capital assets' means property held by the taxpayer
(whether or not connected with his trade or business), but does not
include stock in trade of the taxpayer or other property of a kind
which would properly be included in the inventory of the taxpayer
if on hand at the close of the taxable year, or property held by
the taxpayer primarily for sale to customers in the ordinary course
of his trade or business, or property, used in the trade or
business, of a character which is subject to the allowance for
depreciation provided in section 23(l), or real property used in
the trade or business of the taxpayer."
53 Stat. 50, as amended, 56 Stat. 846.
Section 117(a)(4) provides:
"The term 'long-term capital gain' means gain from the sale or
exchange of a capital asset held for more than 6 months, if and to
the extent such gain is taken into account in computing net
income."
53 Stat. 51, as amended, 56 Stat. 843.
Section 117(b) provides:
"In the case of a taxpayer, other than a corporation, only the
following percentages of the gain or loss recognized upon the sale
or exchange of a capital asset shall be taken into account in
computing net capital gain, net capital loss, and net income:"
"100 per centum if the capital asset has been held for not more
than 6 months;"
"50 per centum if the capital asset has been held for more than
6 months."
56 Stat. 843.
[ Footnote 5 ]
Until 1946, the Commissioner agreed with the contention of the
taxpayers in these cases that the assignment of an oil payment
right was productive of a long-term capital gain. In 1946, he
changed his mind and ruled that
"consideration (not pledged for development) received for the
assignment of a short-lived in-oil payment right carved out of any
type of depletable interest in oil and gas in place (including a
larger in-oil payment right) is ordinary income subject to the
depletion allowance in the assignor's hands."
G.C.M. 24849, 1946�1 Cum.Bull. 66, 69. This ruling was made
applicable "only to such assignments made on or after April 1,
1946," I.T. 3895, 1948�1 Cum.Bull. 39. In 1950, a further ruling
was made that represents the present view of the Commissioner. I.T.
4003, 1950�1 Cum.Bull. 10, 11, reads in relevant part as
follows:
"After careful study and considerable experience with the
application of G.C.M. 24849, supra, it is now concluded
that there is no legal or practical basis for distinguishing
between short-lived and long-lived in-oil payment rights. It is,
therefore, the present position of the Bureau that the assignment
of any in-oil payment right (not pledged for development), which
extends over a period less than the life of the depletable property
interest from which it is carved, is essentially the assignment of
expected income from such property interest. Therefore, the
assignment for a consideration of any such in-oil payment right
results in the receipt of ordinary income by the assignor which is
taxable to him when received or accrued, depending upon the method
of accounting employed by him. Where the assignment of the in-oil
payment right is donative, the transaction is considered as an
assignment of future income which is taxable to the donor at such
time as the income from the assigned payment right arises."
"Notwithstanding the foregoing, G.C.M. 24849, supra, and I.T. 3935, supra, do not apply where the assigned
in-oil payment right constitutes the entire depletable interest of
the assignor in the property or a fraction extending over the
entire life of the property."
The pre-1946 administrative practice was not reflected in any
published ruling or regulation. It therefore will not be presumed
to have been known to Congress and incorporated into the law by
reenactment. See Helvering v. New York Trust Co., 292 U. S. 455 , 292 U. S.
467 -468. Cf. United States v. Leslie Salt Co., 350 U. S. 383 , 350 U. S.
389 -397. Moreover, prior administrative practice is
always subject to change "through exercise by the administrative
agency of its continuing rulemaking power." See Helvering v.
Reynolds, 313 U. S. 428 , 313 U. S.
432 . | Here is a summary of the Supreme Court case Commissioner v. P. G. Lake, Inc:
Issue: Whether the assignment of oil payment rights by a taxpayer is considered ordinary income or a long-term capital gain for tax purposes.
Holding: The Supreme Court held that the assignment of oil payment rights is taxable as ordinary income, subject to depletion deductions. This is because the consideration received by the taxpayer is for the right to receive future income, not for an increase in the value of the income-producing property. The Court also ruled that the exchange of oil payment rights for real estate interests does not qualify as a tax-free exchange of like-kind property.
Facts: P. G. Lake, Inc., an oil and gas production company, assigned oil payment rights to its president as repayment for a debt. The company treated the income from this transaction as a long-term capital gain. The Commissioner of Internal Revenue disagreed, arguing that it should be taxed as ordinary income.
Reasoning: The Court reasoned that the consideration received by the taxpayer was for the right to receive future income from the oil leases, not for an increase in the value of the underlying property. Therefore, it should be taxed as ordinary income, subject to depletion deductions. The Court also noted that prior administrative practice, which treated such assignments as capital gains, was subject to change and had not been incorporated into law by Congress.
Conclusion: The Supreme Court reversed the lower court's decision and held that the assignment of oil payment rights is taxable as ordinary income, not as a long-term capital gain. |
Taxes | Commissioner v. Gillette Motor Transport, Inc. | https://supreme.justia.com/cases/federal/us/364/130/ | U.S. Supreme Court Commissioner v. Gillette Motor
Transport, Inc., 364
U.S. 130 (1960) Commissioner v. Gillette Motor
Transport, Inc. No. 359 Argued April 21, 1960 Decided June 27, 1960 364
U.S. 130 CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE FIFTH
CIRCUIT Syllabus Respondent trucking company ceased operations during World War
II because of a strike, and the Director of the Office of Defense
Transportation took possession and assumed control of its business
but left title to its properties in respondent, which resumed
normal operations and functioned under the control of a federal
manager until termination of possession and control by the
Government. The Motor Carrier Claims Commission determined that, by
assuming possession and control of respondent's facilities, the
Government had deprived it of the right to determine freely what
use was to be made of them, and it awarded to respondent as
compensation a sum representing the fair rental value of its
facilities during the period of government control. Held: under the Internal Revenue Code of 1939, this
award constituted ordinary income, and not a capital gain resulting
from an "involuntary conversion" of respondent's capital assets
consisting of real or depreciable personal property used in its
trade or business, within the meaning of §117(j). Pp. 364 U. S.
130 -136.
265 F.2d 648, reversed.
MR. JUSTICE HARLAN delivered the opinion of the Court.
The question in this case is whether a sum received by
respondent from the United States as compensation for the temporary
taking by the Government of its business facilities during World
War II represented ordinary income or a capital gain. The issue
involves the construction Page 364 U. S. 131 and application of § 117(j) of the Internal Revenue Code of
1939.
In 1944, respondent was a common carrier of commodities by motor
vehicle. On August 4, 1944, respondent's drivers struck, and it
completely ceased to operate. Shortly thereafter, because of the
need for respondent's facilities in the transportation of war
materiel, the President ordered the Director of the Office of
Defense Transportation to "take possession and assume control of"
them. The Director assumed possession and control as of August 12,
and appointed a Federal Manager, who ordered respondent to resume
normal operations. The Federal Manager also announced his intention
to leave title to the properties in respondent and to interfere as
little as possible in the management of them. Subject to certain
orders given by the Federal Manager from time to time, respondent
resumed normal operations and continued so to function until the
termination of all possession and control by the Government on June
16, 1945.
Pursuant to an Act of Congress creating a Motor Carrier Claims
Commission, 62 Stat. 1222, respondent presented its claim for just
compensation. The Government contended that there had been no
"taking" of respondent's property, but only a regulation of it. The
Commission, however, determined that, by assuming actual possession
and control or respondent's facilities, the United States had
deprived respondent of the valuable right to determine freely what
use was to be made of them. In ascertaining the fair market value
of that right, the Commission found that one use to which
respondent's facilities could have been put was to rent them out,
and that therefore their rental value represented a fair measure of
respondent's pecuniary loss. The Commission noted that, in other
cases of temporary takings, it has typically been held that the
market value of what is taken is the sum which would be arrived at
by a willing lessor Page 364 U. S. 132 and a willing lessee. Accordingly, it awarded, and the
respondent received in 1952, the sum of $122,926.21, representing
the fair rental value of its facilities from August 12, 1944, until
June 16, 1945, plus $34,917.78, representing interest on the former
sum, or a total of $157,843.99.
The Commission of Internal Revenue asserted that the total
compensation award represented ordinary income to respondent in
1952. Respondent contended that it constituted an amount received
upon an "involuntary conversion" of property used in its trade or
business, and was therefore taxable as long-term capital gain
pursuant to § 117(j) of the Internal Revenue Code of 1939. * Page 364 U. S. 133 The Tax Court, adopting its opinion in Midwest Motor
Express, Inc., 27 T.C. 167, affirmed, 251 F.2d 405,
which involved substantially identical facts, held that the award
represented ordinary income. The Court of Appeals, one judge
dissenting, in this instance reversed. 265 F.2d 648. We granted
certiorari because of the conflict between the decisions of the two
Circuits. 361 U.S. 881.
Respondent stresses that the Motor Carrier Claims Commission,
rejecting the Government's contention that only a regulation,
rather than a taking, of its facilities had occurred, found that
respondent had been deprived of property, and awarded
compensation therefor. That is indeed true. But the fact that
something taken by the Government is property compensable under the
Fifth Amendment does not answer the entirely different question
whether that thing comes within the capital gains provisions of the
Internal Revenue Code. Rather, it is necessary to determine the
precise nature of the property taken. Here, the Commission
determined that what respondent had been deprived of, and what the
Government was obligated to pay for, was the right to determine
freely what use to make of its transportation facilities. The
measure of compensation adopted reflected the nature of that
property right. Given these facts, we turn to the statute.
Section 117(j), under which respondent claims, is an integral
part of the statute's comprehensive treatment of capital gains and
losses. Long established principles govern the application of the
more favorable tax rates to long-term capital gains: (1) There must
be first, a "capital asset," and second, a "sale or exchange" of
that asset (§ 117(a)); (2) "capital asset" is defined as "property
held by the taxpayer," with certain exceptions not here relevant (§
117(a)(1)); and (3) for purposes of Page 364 U. S. 134 calculating gain, the cost or other basis of the property (§
113(b)) must be subtracted from the amount realized on the sale or
exchange (§ 111(a)).
Section 117(j), added by the Revenue Act of 1942, effects no
change in the nature of a capital asset. It accomplishes only two
main objectives. First, it extends capital gains treatment to real
and depreciable personal property used in the trade or business,
the type of property involved in this case. Second, it accords such
treatment to involuntary conversions of both capital assets,
strictly defined, and property used in the trade or business. Since
the net effect of the first change is merely to remove one of the
exclusions made to the definition of capital assets in § 117(a)(1),
it seems evident that "property used in the trade or business," to
be eligible for capital gains treatment, must satisfy the same
general criteria as govern the definition of capital assets. The
second change was apparently required by the fact that this Court
had given a narrow construction to the term "sale or exchange." See Helvering v. William Flaccus Oak Leather Co., 313 U. S. 247 . But
that change similarly had no effect on the basic notion of what
constitutes a capital asset.
While a capital asset is defined in § 117(a)(1) as "property
held by the taxpayer," it is evident that not everything which can
be called property in the ordinary sense and which is outside the
statutory exclusions qualifies as a capital asset. This Court has
long held that the term "capital asset" is to be construed narrowly
in accordance with the purpose of Congress to afford capital gains
treatment only in situations typically involving the realization of
appreciation in value accrued over a substantial period of time,
and thus to ameliorate the hardship of taxation of the entire gain
in one year. Burnet v. Harmel, 287 U.
S. 103 , 287 U. S. 106 .
Thus, the Court has held that an unexpired lease, Hort v.
Commissioner, 313 U. S. 28 , corn
futures, Corn Products Refining Co. v. Commissioner, 350 U. S. 46 , Page 364 U. S. 135 and oil payment rights, Commissioner v. P. G. Lake,
Inc., 356 U. S. 260 , are
not capital assets, even though they are concededly "property"
interests in the ordinary sense. And see Surrey,
Definitional Problems in Capital Gains Taxation, 69 Harv.L.Rev.
985, 987-989 and Note 7.
In the present case, respondent's right to use its
transportation facilities was held to be a valuable property right
compensable under the requirements of the Fifth Amendment. However,
that right was not a capital asset within the meaning of §§
117(a)(1) and 117(j). To be sure, respondent's facilities were
themselves property embraceable as capital assets under § 117(j).
Had the Government taken a fee in those facilities, or damaged them
physically beyond the ordinary wear and tear incident to normal
use, the resulting compensation would no doubt have been treated as
gain from the involuntary conversion of capital assets. See,
e.g., Waggoner, 15 T.C. 496; Henshaw, 23 T.C. 176.
But here, the Government took only the right to determine the use
to which those facilities were to be put.
That right is not something in which respondent had any
investment, separate and apart from its investment in the physical
assets themselves. Respondent suggests no method by which a cost
basis could be assigned to the right; yet it is necessary, in
determining the amount of gain realized for purposes of § 117, to
deduct the basis of the property sold, exchanged, or involuntarily
converted from the amount received. § 111(a). Further, the right is
manifestly not of the type which gives rise to the hardship of the
realization in one year of an advance in value over cost built up
in several years, which is what Congress sought to ameliorate by
the capital gains provisions. See cases cited ante, p. 364 U. S. 134 .
In short, the right to use is not a capital asset, but is simply an
incident of the underlying physical property, the recompense for
which is commonly regarded as rent. That is precisely the situation
here, Page 364 U. S. 136 and the fact that the transaction was involuntary on
respondent's part does not change the nature of the case.
Respondent lays stress on the use of the terms "seizure" and
"requisition" in § 117(j). More specifically, the section refers to
the
"involuntary conversion (as a result of destruction in whole or
in part, theft or seizure, or an exercise of the power of
requisition or condemnation or the threat or imminence thereof) of property used in the trade or business and capital
assets. . . ."
(Emphasis added.) It is contended that the Government's action
in the present case is perhaps the most typical example of a
seizure or requisition, and that, therefore, Congress must have
intended to treat it as a capital transaction. This argument,
however, overlooks the fact that the seizure or requisition must be
"of property used in the trade or business [or] capital assets." We
have already shown that § 117(j) does not change the longstanding
meaning of these terms, and that the property taken by the
Government in the present case does not come within them. The words
"seizure" and "requisition" are not thereby deprived of effect,
since they equally cover instances in which the Government takes a
fee or damages or otherwise impairs the value of physical
property.
We conclude that the amount paid to respondent as the fair
rental value of its facilities from August 12, 1944, to June 16,
1945, represented ordinary income to it. A fortiori, the
interest on that sum is ordinary income. Kieselbach v.
Commissioner, 317 U. S. 399 . Reversed. MR. JUSTICE DOUGLAS dissents.
* Section 117(j) provides as follows:
"Gains and losses from involuntary conversion and from the sale
or exchange of certain property used in the trade or business
--"
"(1) Definition of property used in the trade or business."
"For the purposes of this subsection, the term 'property used in
the trade or business' means property used in the trade or
business, of a character which is subject to the allowance for
depreciation provided in section 23( l ), held for more than
6 months, and real property used in the trade or business, held for
more than 6 months, which is not (A) property of a kind which would
properly be includible in the inventory of the taxpayer if on hand
at the close of the taxable year, or (B) property held by the
taxpayer primarily for sale to customers in the ordinary course of
his trade or business. . . ."
"(2) General rule."
"If, during the taxable year, the recognized gains upon sales or
exchanges of property used in the trade or business, plus the
recognized gains from the compulsory or involuntary conversion (as
a result of destruction in whole or in part, theft or seizure, or
an exercise of the power of requisition or condemnation or the
threat or imminence thereof) of property used in the trade or
business and capital assets held for more than 6 months into other
property or money, exceed the recognized losses from such sales,
exchanges, and conversions, such gains and losses shall be
considered as gains and losses from sales or exchanges of capital
assets held for more than 6 months. . . ." | The U.S. Supreme Court case, Commissioner v. Gillette Motor Transport, Inc. (1960), dealt with the question of whether compensation for a temporary government taking of a business's facilities during World War II was considered ordinary income or a capital gain for tax purposes. The Court held that the compensation was ordinary income, not a capital gain, as it did not meet the definition of "property used in the trade or business" or "capital assets" under the Internal Revenue Code of 1939, Section 117(j). This decision reinforced the longstanding meaning of these tax terms and had implications for how similar cases would be treated in the future. |
Taxes | Knetsch v. U.S. | https://supreme.justia.com/cases/federal/us/364/361/ | U.S. Supreme Court Knetsch v. United States, 364
U.S. 361 (1960) Knetsch v. United
States No. 23 Argued October 17-18,
1960 Decided November 14,
1960 364
U.S. 361 CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE NINTH
CIRCUIT Syllabus In 1953, a 60-year-old taxpayer purchased single-premium 30-year
maturity deferred annuity savings bonds with an aggregate face
value of $4,000,000 from a life insurance company, paying only a
nominal sum in cash, giving nonrecourse notes secured by the bonds
for the balance, and paying a substantial amount as "interest" in
advance on that "indebtedness." A few days later, he borrowed from
the company nearly all of the excess of the cash surrender value
which the bonds would have at the end of the first contract year
over the amount of the existing "indebtedness," and again paid in
advance the "interest" on such additional "indebtedness." These
borrowings and "interest" payments were repeated in 1954 and 1955,
and the bonds were surrendered and the indebtedness was cancelled
in 1956. Held: the amounts paid as "interest" in 1953 and 1954
were not deductible from the gross income of the taxpayer and his
wife in their joint income tax returns for those years as "interest
paid . . . on indebtedness," within the meaning of § 23(b) of the
Internal Revenue Code of 1939 and §163(a) of the Internal Revenue
Code of 1954. Pp. 364 U. S.
362 -370.
(a) On the record in this case, it is patent that the
transaction between the taxpayer and the insurance company was a
sham which created no "indebtedness" within the meaning of those
sections of the Codes. Pp. 364 U. S. 362 -366.
(b) Congress did not authorize deduction of such payments by
enacting § 264(a)(2) of the Internal Revenue Code of 1954, which
expressly denies a deduction for amounts paid on indebtedness
incurred to purchase or carry a single premium annuity contract,
but only as to contracts purchased after March 1, 1954. Pp. 364 U. S.
367 -370.
272 F.2d 200 affirmed. Page 364 U. S. 362 MR. JUSTICE BRENNAN delivered the the opinion of the Court.
This case presents the question of whether deductions from gross
income claimed on petitioners' 1953 and 1954 joint federal income
tax returns, of $143,465 in 1953 and of $147,105 in 1954, for
payments made by petitioner, Karl F. Knetsch, to Sam Houston Life
Insurance Company, constituted "interest paid . . . on
indebtedness" within the meaning of § 23(b) of the Internal Revenue
Code of 1939 and § 163(a) of the Internal Revenue Code of 1954.
[ Footnote 1 ] The Commissioner
of Internal Revenue disallowed the deductions and determined a
deficiency for each year. The petitioners paid the deficiencies and
brought this action for refund in the District Court for the
Southern District of California. The District Court rendered
judgment for the United States, and the Court of Appeals for the
Ninth Circuit affirmed, 272 F.2d 200. Because of a suggested
conflict with the decision of the Court of Appeals for the Fifth
Circuit in United States v. Bond, 258 F.2d 577, we granted
certiorari, 361 U.S. 958.
On December 11, 1953, the insurance company sold Knetsch ten
30-year maturity deferred annuity savings bonds, each in the face
amount of $400,000 and bearing interest at 2 1/2% compounded
annually. The purchase price was $4,004,000. Knetsch gave the
Company his check for $4,000, and signed $4,000,000 of nonrecourse
annuity loan notes for the balance. The notes bore Page 364 U. S. 363 3 1/2% interest, and were secured by the annuity bonds. The
interest was payable in advance, and Knetsch on the same day
prepaid the first year's interest, which was $140,000. Under the
Table of Cash and Loan Values made part of the bonds, their cash or
loan value at December 11, 1954, the end of the first contract
year, was to be $4,100,000. The contract terms, however, permitted
Knetsch to borrow any excess of this value above his indebtedness
without waiting until December 11, 1954. Knetsch took advantage of
this provision only five days after the purchase. On December 16,
1953, he received from the company $99,000 of the $100,000 excess
over his $4,000,000 indebtedness, for which he gave his notes
bearing 3 1/2% interest. This interest was also payable in advance,
and, on the same day, he prepaid the first year's interest of
$3,465. In their joint return for 1953, the petitioners deducted
the sum of the two interest payments, that is $143,465, as
"interest paid . . . within the taxable year on indebtedness,"
under § 23(b) of the 1939 Code.
The second contract year began on December 11, 1954, when
interest in advance of $143,465 was payable by Knetsch on his
aggregate indebtedness of $4,099,000. Knetsch paid this amount on
December 27, 1954. Three days later, on December 30, he received
from the company cash in the amount of $104,000, the difference
less $1,000 between his then $4,099,000 indebtedness and the cash
or loan value of the bonds of $4,204,000 on December 11, 1955. He
gave the company appropriate notes and prepaid the interest thereon
of $3,640. In their joint return for the taxable year 1954, the
petitioners deducted the sum of the two interest payments, that is,
$147,105, as "interest paid . . . within the taxable year on
indebtedness," under § 163(a) of the 1954 Code.
The tax years 1955 and 1956 are not involved in this proceeding,
but a recital of the events of those years is Page 364 U. S. 364 necessary to complete the story of the transaction. On December
11, 1955, the start of the third contract year, Knetsch became
obligated to pay $147,105 as prepaid interest on an indebtedness
which now totalled $4,203,000. He paid this interest on December
28, 1955. On the same date, he received $104,000 from the company.
This was $1,000 less than the difference between his indebtedness
and the cash or loan value of the bonds of $4,308,000 at December
11, 1956. Again, he gave the company notes upon which he prepaid
interest of $3,640. Petitioners claimed a deduction on their 1955
joint return for the aggregate of the payments, or $150,745.
Knetsch did not go on with the transaction for the fourth
contract year beginning December 11, 1956, but terminated it on
December 27, 1956. His indebtedness at that time totalled
$4,307,000. The cash or loan value of the bonds was the $4,308,000
value at December 11, 1956, which had been the basis of the "loan"
of December 28, 1955. He surrendered the bonds, and his
indebtedness was canceled. He received the difference of $1,000 in
cash.
The contract called for a monthly annuity of $90,171 at maturity
(when Knetsch would be 90 years of age) or for such smaller amount
as would be produced by the cash or loan value after deduction of
the then existing indebtedness. It was stipulated that, if Knetsch
had held the bonds to maturity and continued annually to borrow the
net cash value less $1,000, the sum available for the annuity at
maturity would be $1,000 ($8,388,000 cash or loan value less
$8,387,000 of indebtedness), enough to provide an annuity of only
$43 per month.
The trial judge made findings that "[t]here was no commercial
economic substance to the . . . transaction," that the parties did
not intend that Knetsch "become indebted to Sam Houston," that
"[n]o indebtedness of [Knetsch] was created by any of the . . .
transactions," and that Page 364 U. S. 365 "[n]o economic gain could be achieved from the purchase of these
bonds without regard to the tax consequences. . . ." His conclusion
of law, based on this Court's decision in Deputy v. du
Pont, 308 U. S. 488 , was
that,
"[w]hile, in form, the payments to Sam Houston were compensation
for the use or forbearance of money, they were not in substance. As
a payment of interest, the transaction was a sham."
We first examine the transaction between Knetsch and the
insurance company to determine whether it created an "indebtedness"
within the meaning of § 23(b) of the 1939 Code and § 163(a) of the
1954 Code, or whether, as the trial court found, it was a sham. We
put aside a finding by the District Court that Knetsch's "only
motive in purchasing these 10 bonds was to attempt to secure an
interest deduction." [ Footnote
2 ] As was said in Gregory v. Helvering, 293 U.
S. 465 , 293 U. S.
469 :
"The legal right of a taxpayer to decrease the amount of what
otherwise would be his taxes, or altogether avoid them, by means
which the law permits, cannot be doubted. . . . But the question
for determination is whether what was done, apart from the tax
motive, was the thing which the statute intended."
When we examine "what was done" here, we see that Knetsch paid
the insurance company $294,570 during the two taxable years
involved and received $203,000 back in the form of "loans." What
did Knetsch get for the out-of-pocket difference of $91,570? In
form, he had an annuity contract with a so-called guaranteed cash
value at maturity of $8,388,000, which would produce monthly
annuity payments of $90,171, or substantial life insurance proceeds
in the event of his death before maturity. This, Page 364 U. S. 366 as we have seen, was a fiction, because each year Knetsch's
annual borrowings kept the net cash value, on which any annuity or
insurance payments would depend, at the relative pittance of
$1,000. [ Footnote 3 ] Plainly,
therefore, Kentsch's transaction with the insurance company did
"not appreciably affect his beneficial interest except to reduce
his tax. . . ." Gilbert v. Commissioner, 248 F.2d 399, 411
(dissenting opinion). For it is patent that there was nothing of
substance to be realized by Knetsch from this transaction beyond a
tax deduction. What he was ostensibly "lent" back was in reality
only the rebate of a substantial part of the so-called "interest"
payments. The $91,570 difference retained by the company was its
fee for providing the facade of "loans" whereby the petitioners
sought to reduce their 1953 and 1954 taxes in the total sum of
$233,297.68. There may well be single premium annuity arrangements
with nontax substance which create an "indebtedness" for the
purposes of § 23(b) of the 1939 Code and § 163(a) of the 1954 Code.
But this one is a sham. [ Footnote
4 ] Page 364 U. S. 367 The petitioners contend, however, that the Congress, in enacting
§ 264 of the 1954 Code, authorized the deductions. They point out
that § 264(a)(2) denies a deduction for amounts paid on
indebtedness incurred to purchase to carry a single premium annuity
contract, but only as to contracts purchased after March 1, 1954.
[ Footnote 5 ] The petitioners
thus would attribute to Congress a purpose to allow the deduction
of pre-1954 payments under transactions of the kind carried on by
Knetsch with the insurance company without regard to whether the
transactions created a true obligation to pay interest. Unless that
meaning plainly appears, we will not attribute it to Congress. "To
hold otherwise would be to exalt artifice above reality and to
deprive the statutory provision in question of all serious
purpose." Gregory v. Helvering, supra, p. 293 U. S. 470 . We
therefore look to the statute and materials relevant to its
construction for evidence that Congress meant in § 264(a)(2) to
authorize the deduction of payments made under sham transactions
entered into before 1954. We look in vain.
Provisions denying deductions for amounts paid on indebtedness
incurred to purchase or carry insurance contracts are not new in
the revenue acts. A provision applicable to all annuities, but not
to life insurance or endowment contracts, was in the statute from
1932 to 1934, 47 Stat. 179. It was added at a time when Congress
was Page 364 U. S. 368 developing a policy to deny a deduction for interest allocable
to tax-exempt income; [ Footnote
6 ] the proceeds of annuities were excluded from gross income up
to the amount of the consideration paid in by the annuitant. See H.R.Rep. No. 708, 72d Cong., 1st Sess., p. 11. The
provision was repealed by the Revenue Act of 1934, 48 Stat. 688,
when the method by which annuity payments were taken into gross
income was changed in such way that more would be included. 48
Stat. 687. See S.Rep. No. 558, 73d Cong., 2d Sess., p.
24.
Congress then, in 1942, denied a deduction for amounts paid on
indebtedness incurred to purchase single premium life insurance and
endowment contracts. This provision was enacted by an amendment to
the 1939 Code, 56 Stat. 827, "to close a loophole" in respect of
interest allocable to partially exempt income. See Hearings before Senate Finance Committee on H.R. 7378, 77th Cong.,
2d Sess., p. 54; § 22(b)(1) of the 1939 Code (now § 101(a)(1) of
the 1954 Code).
The 1954 provision extending the denial to amounts paid on
indebtedness incurred to purchase or carry single premium annuities
appears to us simply to expand the application of the policy in
respect of interest allocable to partially exempt income. The
proofs are perhaps not as strong as in the case of life insurance
and endowment contracts, but, in the absence of any contrary
expression of the Congress, their import is clear enough. There
is Page 364 U. S. 369 first the fact that the provision was incorporated in
the section covering life insurance and endowment contracts, which
unquestionably was adopted to further that policy. There is second the fact that Congress' attention was directed to
annuities in 1954; the same 1954 statute again changed the basis
for taking part of the proceeds of annuities into gross income. See § 72(b) of the 1954 Code. These are signs that
Congress' longstanding concern with the problem of interest
allocable to partially exempt income, and not any concern with sham
transactions, explains the provision.
Moreover, the provision itself negates any suggestion that sham
transactions were the congressional concern, for the deduction
denied is of certain interest payments on actual "indebtedness."
And we see nothing in the Senate Finance and House Ways and Means
Committee Reports on § 264, H.R.Rep. No. 1337, 83d Cong., 2d Sess.,
p. 31; S.Rep. No. 1622, 83d Cong., 2d Sess., p. 38, to suggest that
Congress in exempting pre-1954 annuities intended to protect sham
transactions. [ Footnote 7 ] Page 364 U. S. 370 Some point is made in an amicus curiae brief of the
fact that Knetsch, in entering into these annuity agreements,
relied on individual ruling letters issued by the Commissioner to
other taxpayers. This argument has never been advanced by
petitioners in this case. Accordingly, we have no reason to pass
upon it.
The judgment of the Court of Appeals is Affirmed. [ Footnote 1 ]
The relevant words of the two sections are the same, namely that
there shall be allowed as a deduction "All interest paid or accrued
within the taxable year on indebtedness. . . ."
[ Footnote 2 ]
We likewise put aside Knetsch's argument that, because he
received ordinary income when he surrendered the annuities in 1956,
he has suffered a net loss even if the contested deductions are
allowed, and that therefore his motive in taking out the annuities
could not have been tax avoidance.
[ Footnote 3 ]
Petitioners argue further that, in 10 years, the net cash value
of the bonds would have exceeded the amounts Knetsch paid as
"interest." This contention, however, is predicated on the wholly
unlikely assumption that Knetsch would have paid off in cash the
original $4,000,000 "loan."
[ Footnote 4 ]
Every court which has considered this or similar contracts has
agreed with our conclusion, except the Court of Appeals for the
Fifth Circuit in the Bond case and one District Court
bound by that decision, Roderick v. United States, 59-2
U.S.T.C. � 9650. See Diggs v. Commissioner, 281 F.2d 326
(C.A. 2d Cir.), pending on petition for certiorari (later denied, post, p. 908); Emmons and Weller v. Commissioner, 270 F.2d 294 (C.A. 3d Cir.), certiorari denied, 347 U.S.
908; Haggard v. United States, 59-1 U.S.T.C. � 9299; Oliver L Williams, 18 T.C.M. 205. See also Rev.Rul. 54-94, 1954-1 Cum.Bull. 53, and the dissenting opinion of
Judge Wisdom in Bond. [ Footnote 5 ]
Section 264(a)(2) provides:
"(a) General rule -- No deduction shall be allowed for --"
" * * * *" "(2) Any amount paid or accrued on indebtedness incurred or
continued to purchase or carry a single premium life insurance,
endowment, or annuity contract."
" Paragraph (2) shall apply in respect of annuity contracts
only as to contracts purchased after March 1, 1954. "
(Emphasis supplied.)
The substance of the section without the italicized language was
added to the 1939 Code in 1942. 56 Stat. 827.
[ Footnote 6 ] See § 23(b) of the Revenue Act of 1932, 47 Stat. 179,
which provided:
"(b) INTEREST -- All interest paid or accrued within the taxable
year on indebtedness, except (1) on indebtedness incurred or
continued to purchase or carry obligations or securities (other
than obligations of the United States issued after September 24,
1917, and originally subscribed for by the taxpayer) the interest
upon which is wholly exempt from the taxes imposed by this title,
or (2) on indebtedness incurred or continued in connection with the
purchasing or carrying of an annuity."
[ Footnote 7 ]
The Reports are as follows:
"Under existing law, no interest deduction is allowed in the
case of indebtedness incurred, or continued, to purchase a single
premium life-insurance or endowment contract. . . ."
"Existing law does not extend the denial of the interest
deduction to indebtedness incurred to purchase single premium
annuity contracts. It has come to your committee's attention that a
few insurance companies have promoted a plan for selling annuity
contracts based on the tax advantage derived from omission of
annuities from the treatment accorded single premium life insurance
or endowment contracts. The annuity is sold for a nominal cash
payment with a loan to cover the balance of the single premium cost
of the annuity. Interest on the loan (which may be a nonrecourse
loan) is then taken as a deduction annually by the purchaser, with
a resulting tax saving that reduces the real interest cost below
the increment in value produced by the annuity."
"Your committee's bill will deny an interest deduction in such
cases, but only as to annuities purchased after March 1, 1954."
MR. JUSTICE DOUGLAS, with whom MR. JUSTICE WHITTAKER and MR.
JUSTICE STEWART concur, dissenting.
I agree with the views expressed by Judge Moore in Diggs v.
Commissioner, 281 F.2d 326, 330-332, and by Judge Brown,
writing for himself and Judge Hutcheson, in United States v.
Bond, 258 F.2d 577.
It is true that, in this transaction, the taxpayer was bound to
lose if the annuity contract is taken by itself. At least the
taxpayer showed by his conduct that he never intended to come out
ahead on that investment apart from this income tax deduction. Yet
the same may be true where a taxpayer borrows money at 5% or 6%
interest to purchase securities that pay only nominal interest; or
where, with money in the bank earning 3%, he borrows from the
self-same bank at a higher rate. His aim there, as here, may only
to be get a tax deduction for interest paid. Yet as long as the
transaction itself is not hocus-pocus, the interest charges
incident to completing it would seem to be deductible under the
Internal Revenue Code as respects annuity contracts made prior to
March 1, 1954, the date Congress selected for terminating this
class of deductions. 26 U.S.C. § 264. The insurance company
existed; it operated under Texas law; it was authorized to issue
these policies and to make these annuity loans. While the taxpayer
was obligated to pay interest at the rate of 3 1/2% per annum, the
annuity bonds increased Page 364 U. S. 371 in cash value at the rate of only 2 1/2% per annum. The
insurance company's profit was in that 1-point spread.
Tax avoidance is a dominating motive behind scores of
transactions. It is plainly present here. Will the Service that
calls this transaction a "sham" today not press for collection of
taxes * arising out of
the surrender of the annuity contract? I think it should, for I do
not believe any part of the transaction was a "sham." To disallow
the "interest" deduction because the annuity device was devoid of
commercial substance is to draw a line which will affect a host of
situations now now before us and which, with all deference, I do
not think we can maintain when other cases reach here. The remedy
is legislative. Evils or abuses can be particularized by Congress.
We deal only with "interest" as commonly understood and as used
across the board in myriad transactions. Since these transactions
were real and legitimate in the insurance world, and were
consummated within the limits allowed by insurance policies, I
would recognize them tax-wise.
* Petitioners terminated this transaction in 1956 by allowing
the bonds to be cancelled and receiving a check for $1,000. The
termination was reflected in their tax return for 1956. It might
also be noted that the insurance company reported as gross income
the interest payments which it received from petitioners in 1953
and 1954. | The Supreme Court held that a taxpayer's transaction with an insurance company was a sham and did not create any "indebtedness" for which interest deductions could be claimed under the Internal Revenue Code. The Court found that the taxpayer's purchase of annuity savings bonds with non-recourse notes and subsequent borrowings against the cash value of the bonds was a pretense to generate tax deductions, as the taxpayer had no intention of making a genuine investment. Justice Brennan delivered the opinion, while Justice Douglas dissented, arguing that the transaction was legitimate within the insurance context and should be recognized for tax purposes. |
Taxes | Commissioner v. Lester | https://supreme.justia.com/cases/federal/us/366/299/ | U.S. Supreme Court Commissioner v. Lester, 366
U.S. 299 (1961) Commissioner v.
Lester No. 376 Argued April 25, 1961 Decided May 22, 1961 366
U.S. 299 CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE SECOND
CIRCUIT Syllabus Section 23(u) of the Internal Revenue Code of 1939 permits a
husband to deduct from his gross income for income tax purposes
amounts includible under § 22(k) in the gross income of his
divorced wife, and § 22(k) provides that periodic payments received
by the wife after a decree of divorce in discharge of a legal
obligation imposed upon the husband under a written instrument
incident to such divorce shall be includible in the gross income of
the wife, but that
"This subsection shall not apply to that part of any such
periodic payment which the terms of the . . . written
instrument fix, in terms of . . . a portion of the payment, as
a sum which is payable for the support of minor children of such
husband." Held: in order to come within this exception to §
22(k), the written agreement providing for the periodic payments to
the wife must specifically designate the amounts or parts thereof
allocable to the support of the children, and must not leave such
amounts to determination by inference or conjecture. Pp. 366 U. S.
299 -306.
279 F.2d 354 affirmed.
MR. JUSTICE CLARK delivered the opinion of the Court.
The sole question presented by this suit, in which the
Government seeks to recover personal income tax deficiencies,
involves the validity of respondent's deductions Page 366 U. S. 300 from his gross income for the taxable years 1951 and 1952 of the
whole of his periodic payments during those years to his divorced
wife pursuant to a written agreement entered into by them and
approved by the divorce court. The Commissioner claims that
language in this agreement providing
"[i]n the event that any of the [three] children of the parties
hereto shall marry, become emancipated, or die, then the payments
herein specified shall . . . be reduced in a sum equal to one-sixth
of the payments which would thereafter otherwise accrue"
sufficiently identifies one-half of the periodic payments as
having been "payable for the support" of the taxpayer's minor
children under § 22(k) of the Internal Revenue Code of 1939 and,
therefore, not deductible by him under § 23(u) of the Code.
[ Footnote 1 ] The Tax Court
approved the Commissioner's disallowance, 32 T.C. 1156, but the
Court of Appeals reversed, 279 F.2d 354, holding that the agreement
did not "fix" with requisite clarity any specific amount or portion
of the periodic payments as payable for the support of the
children, and that all sums paid to the wife under the agreement
were, therefore, deductible from Page 366 U. S. 301 respondent's gross income under the alimony provision of §
23(u). To resolve a conflict among the Courts of Appeals on the
question, [ Footnote 2 ] we
granted certiorari. 364 U.S. 890. We have concluded that the
Congress intended that, to come within the exception portion of §
22(k), the agreement providing for the periodic payments must
specifically state the amounts or parts thereof allocable to the
support of the children. Accordingly, we affirm the judgment of the
Court of Appeals.
Prior to 1942, a taxpayer was generally not entitled to deduct
from gross income amounts payable to a former spouse as alimony, Douglas v. Willcuts, 296 U. S. 1 (1935),
except in situations in which the divorce decree, the settlement
agreement, and state law operated as a complete discharge of the
liability for support. Helvering v. Fitch, 309 U.
S. 149 (1940). The hearings, Senate debates and the
Report of the Ways and Means Committee of the House all indicate
that it was the intention of Congress, in enacting § 22(k) and §
23(u) of the Code, to eliminate the uncertain and inconsistent tax
consequences resulting from the many variations in state law.
"[T]he amendments are designed to remove the uncertainty as to the
tax consequences of payments made to a divorced spouse. . . ."
S.Rep. No. 673 Pt. 1, 77th Cong., 1st Sess. 32. They "will produce
uniformity in the treatment of amounts paid . . . regardless of
variance in the laws of different States. . . ." H.R.Rep. No. 2333,
77th Cong., 2d Sess. 72. In addition, Congress realized that the
"increased surtax rates [ Footnote
3 ] would intensify" the Page 366 U. S. 302 hardship on the husband who, in many cases, "would not have
sufficient income left after paying alimony to meet his income tax
obligations," H.R.Rep. No. 2333, 77th Cong., 2d Sess. 46, and
perhaps also that, on the other hand, the wife, generally being in
a lower income tax bracket than the husband, could more easily
protect herself in the agreement and, in the final analysis,
receive a larger net payment from the husband if he could deduct
the gross payment from his income.
The first version of § 22(k) was proposed by the Senate as an
amendment to the Revenue Act of 1941. The sums going to child
support were to be includible in the husband's gross income only if
the amount thereof was "specifically designated as a sum payable
for the support of minor children of the spouses." H.R. 5417, 77th
Cong., 1st Sess., § 117. The proposed amendment thus drew a
distinction between a case in which the amount for child support
was "specifically designated" in the agreement and one in which
there was no such designation. In the latter event, "the whole of
such amounts are includible in the income of the wife. . . ."
S.Rep. No. 673, Pt. 1, 77th Cong., 1st Sess. 35. Action on the bill
was deferred by the conference committee, [ Footnote 4 ] and hearings on the measure were again held
the following year. The subsequent Report of the Senate Finance
Committee on § 22(k) carried forward the term "specifically
designated," used in the 1941 Report (No. 673), with this
observation:
"If, however, the periodic payments . . . are received by the
wife for the support and maintenance of herself and of minor
children of the husband without such specific designation of the
portion for the support of such children, then the whole of
such Page 366 U. S. 303 amounts is includible in the income of the wife as provided in
section 22(k). . . ."
S.Rep. No. 1631, 77th Cong., 2d Sess. 86. As finally enacted in
1942, the Congress used the word "fix" instead of the term
"specifically designated," but the change was explained in the
Senate hearings as "a little more streamlined language." Hearings
before Senate Committee on Finance on H.R. 7378, 77th Cong., 2d
Sess. 48. As the Office of the Legislative Counsel reported to the
Senate Committee:
"If an amount is specified in the decree of divorce attributable
to the support of minor children, that amount is not income of the
wife. . . . If, however, that amount paid the wife includes the
support of children, but no amount is specified for the support
of the children, the entire amount goes into the income of the
wife. . . ." Ibid. (Italics supplied.) This language leaves no room
for doubt. The agreement must expressly specify or "fix" a sum
certain or percentage of the payment for child support before any
of the payment is excluded from the wife's income. The statutory
requirement is strict and carefully worded. It does not say that "a
sufficiently clear purpose" on the part of the parties is
sufficient to shift the tax. It says that the "written instrument"
must "fix" that "portion of the payment" which is to go to the
support of the children. Otherwise, the wife must pay the tax on
the whole payment. We are obliged to enforce this mandate of the
Congress.
One of the basic precepts of the income tax law is that
"[t]he income that is subject to a man's unfettered command, and
that he is free to enjoy at his own option, may be taxed to him as
his income, whether he sees fit to enjoy it or not." Corliss v. Bowers, 281 U. S. 376 , 281 U. S. 378 (1930). Page 366 U. S. 304 Under the type of agreement here, the wife is free to spend the
monies paid under the agreement as she sees fit. "The power to
dispose of income is the equivalent of ownership of it." Helvering v. Horst, 311 U. S. 112 , 311 U. S. 118 (1940). Including the entire payments in the wife's gross income
under such circumstances, therefore, comports with the underlying
philosophy of the Code. And, as we have frequently stated, the Code
must be given "as great an internal symmetry and consistency as its
words permit." United States v. Olympic Radio &
Television, 349 U. S. 232 , 349 U. S. 236 (1955).
It does not appear that the Congress was concerned with the
perhaps restricted uses of unspecified child support payments
permitted the wife by state law when it made those sums includible
within the wife's alimony income. Its concern was with a revenue
measure and with the specificity, for income tax purposes, of the
amount payable under the terms of the written agreement for support
of the children. Therefore, in construing that revenue act, we too
are unconcerned with the variant legal obligations, if any, which
such an agreement, by construction of its nonspecific provisions
under local rules, imposes upon the wife to use a certain portion
of the payments solely for the support of the children. The Code
merely affords the husband a deduction for any portion of such
payment not specifically earmarked in the agreement as payable for
the support of the children.
As we read § 22(k), the Congress was, in effect, giving the
husband and wife the power to shift a portion of the tax burden
from the wife to the husband by the use of a simple provision in
the settlement agreement which fixed the specific portion of the
periodic payment made to the wife as payable for the support of the
children. Here, the agreement does not so specifically provide. On
the contrary, it calls merely for the payment of certain monies
to Page 366 U. S. 305 the wife for the support of herself and the children. The
Commissioner makes such of the fact that the agreement provides
that as, if, and when any one of the children married, became
emancipated or died, the total payment would be reduced by
one-sixth, saying that this provision did "fix" one-half (one-sixth
multiplied by three, the number of children) of the total payment
as payable for the support of the children. However, the agreement
also pretermitted the entire payment in the event of the wife's
remarriage, and it is as consistent to say that this provision had
just the opposite effect. It was just such uncertainty in tax
consequences that the Congress intended to, and, we believe, did
eliminate when it said that the child support payments should be
"specifically designated" or, as the section finally directed,
"fixed." It does not say that "a sufficiently clear purpose" on the
part of the parties would satisfy. It says that the written
instrument must "fix" that amount or "portion of the payment" which
is to go to the support of the children.
The Commissioner contends that administrative interpretation has
been consistently to the contrary. It appears, however, that there
was such a contrariety of opinion among the Courts of Appeals that
the Commissioner was obliged as late as 1959 to issue a Revenue
Ruling which stated that the Service would follow the rationale of Eisinger v. Commissioner, 250 F.2d 303 (1957), [ Footnote 5 ] but that Weil v.
Commissioner 240 F.2d 584 Page 366 U. S. 306 (C.A. 2d Cir. 1957), [ Footnote
6 ] would be followed "in cases involving similar facts and
circumstances." Rev.Rul. 59-93, 1959-1 Cum.Bull. 22, 23.
All of these considerations lead to the conclusion that, if
there is to be certainty in the tax consequences of such
agreements, the allocations to child support made therein must be
"specifically designated," and not left to determination by
inference or conjecture. We believe that the Congress has so
demanded in § 22(k). After all, the parties may, for tax purposes,
act as their best interests dictate, provided, as that section
requires, their action be clear and specific. Certainly the
Congress has required no more and expects no less. Affirmed. [ Footnote 1 ]
Section 22(k) of the Internal Revenue Code of 1939, 56 Stat.
816-817, provided in part that
". . . periodic payments . . . received [by the wife] subsequent
to [a decree of divorce] . . . in discharge of . . . a legal
obligation which, because of the marital or family relationship, is
imposed upon or incurred by such husband under . . . a written
instrument incident to such divorce . . . shall be includible in
the gross income of such wife. . . . This subsection shall not
apply to that part of any such periodic payment which the terms
of the . . . written instrument fix, in terms of . . . a
portion of the payment, as a sum which is payable for the support
of minor children of such husband."
(Emphasis added.) Section 23(u), 56 Stat. 817, stated in
pertinent part that there shall be allowed as a deduction
"[i]n the case of a husband described in section 22(k), amounts
includible under section 22(k) in the gross income of his wife,
payment of which is made within the husband's taxable year."
[ Footnote 2 ]
Both Metcalf v. Commissioner, 1959, 271 F.2d 288, and Eisinger v. Commissioner, 1957, 250 F.2d 303, have arrived
at conclusions contrary to those of the court below.
[ Footnote 3 ]
Sections 22(k) and 23(u) were enacted as part of the Revenue Act
of 1942, which provided for greatly increased tax revenue to meet
the expenses of World War II.
[ Footnote 4 ]
H.R.Rep. No. 1203, 77th Cong., 1st Sess. 11.
[ Footnote 5 ]
The court there approved the rule that,
"when the settlement agreement, read as a whole, discloses that
the parties have earmarked or designated . . . the payments to be
made, one part to be payable for alimony, and another part to be
payable for the support of children, with sufficient certainty and
specificity to readily determine which is which, without reference
to contingencies which may never come into being, then the 'part of
any periodic payment' has been fixed 'by the terms of the decree or
written instrument'. . . ."
250 F.2d at 308.
[ Footnote 6 ]
In that case, the agreement provided for reduction only in the
event the divorced wife remarried. The court stated that
"[t]he fortuitous or incidental mention of a figure in a
provision meant to be inoperative, unless some more or less
probable future event occurs, will not suffice to shift the tax
burden from the wife to the husband."
240 F.2d at 588.
MR. JUSTICE DOUGLAS, concurring.
While I join the opinion of the Court, I add a few words. In an
early income tax case, Mr. Justice Holmes said "Men must turn
square corners when they deal with the Government." Rock
Island, A. & L. R. Co. v. United States, 254 U.
S. 141 , 254 U. S. 143 . The
revenue laws have become so complicated and intricate that I think
the Government, in moving against the citizen, should also turn
square corners. The Act, 1939 I.R.C. § 22(k), makes taxable to the
husband that part of alimony payments "which the terms of the
decree or written instrument fix, in terms of an amount of money or
a portion of the payment, as a sum" payable for support of minor
children.
I agree with the Court that this agreement did not "fix" any
such amount. To be sure, an amount payable in Page 366 U. S. 307 support of minor children may be inferred from the proviso that
one-sixth of the payment shall no longer be due, if the children
marry, become emancipated, or die. But Congress, in enacting this
law, realized that some portion of alimony taxable to the wife
might be used for support of the children, as the opinion of the
Court makes clear.
The present agreement makes no specific designation of the
portion that is intended for the support of the children. It is not
enough to say that the sum can be computed. Congress drew a clear
line when it used the word "fix." Resort to litigation, rather than
to Congress, for a change in the law is too often the temptation of
government, which has a longer purse and more endurance than any
taxpayer. | The Supreme Court held that a written agreement must explicitly designate the amounts or portions of periodic payments to a divorced spouse that are for child support, and cannot leave such amounts to inference or conjecture, in order for those amounts to be excluded from the spouse's gross income under the Internal Revenue Code. |
Taxes | American Automobile Ass'n v. U.S. | https://supreme.justia.com/cases/federal/us/367/687/ | U.S. Supreme Court American Automobile Ass'n v. United
States, 367
U.S. 687 (1961) American Automobile Association v.
United States No. 288 Argued April 17, 1961 Decided June 19, 1961 367
U.S. 687 CERTIORARI TO THE COURT OF
CLAIMS Syllabus Petitioner keeps its books and makes its income tax returns on a
calendar year accrual basis. For the years 1952 and 1953, it
reported as gross income only that portion of the total prepaid
annual membership dues actually received or collected in the
calendar year which ratably corresponded with the number of
membership months covered by those dues occurring during the same
taxable year. The balance was reserved for ratable monthly accrual
over the remaining membership periods in the following calendar
year, as deferred or unearned income reflecting the estimated
expense of service to its members. In the exercise of his
discretion under § 41 of the Internal Revenue Code of 1939, the
Commissioner determined not to accept petitioner's accounting
system, and assessed deficiencies resulting mainly from
petitioner's failure to include in its gross income for each year
the total amount of dues received during that year. Held: the Commissioner's action is sustained. Pp. 367 U. S.
688 -698.
(a) The accounting method used by petitioner may present an
accurate image of the total financial structure, but it fails to
respect the criteria of annual tax accounting, and it may be
rejected by the Commissioner. Pp. 367 U. S.
690 -692.
(b) A different conclusion is not required by the finding of the
Court of Claims that petitioner's method of accounting had been
used regularly by it since 1931, and was in accord with generally
accepted commercial accounting principles and practices. Pp. 367 U. S.
692 -694.
(c) The conclusion here reached is confirmed by the facts that
Congress introduced into the Internal Revenue Code of 1954
provisions which specifically permitted essentially the same
practice as that employed by petitioner; it repealed those
provisions retroactively one year later; and, in 1958, it rejected
a proposed amendment which would have specifically permitted this
practice with respect to prepaid automobile association membership
dues. Pp. 367 U. S.
694 -698.
___ Ct. Cl. ___, 181 F. Supp. 255, affirmed. Page 367 U. S. 688 MR. JUSTICE CLARK delivered the opinion of the Court.
In this suit for refund of federal income taxes, the petitioner,
American Automobile Association, seeks determination of its tax
liability for the years 1952 and 1953. Returns filed for its
taxable calendar years were prepared on the basis of the same
accrual method of accounting as was used in keeping its books. The
Association reported as gross income only that portion of the total
prepaid annual membership dues, actually received or collected in
the calendar year, which ratably corresponded with the number of
membership months covered by those dues and occurring within the
same taxable calendar year. The balance was reserved for ratable
monthly accrual over the remaining membership period in the
following calendar year as deferred or unearned income reflecting
an estimated future service expense to members. The Commissioner
contends that petitioner should have reported in its gross income
for each year the entire amount of membership dues actually
received in the taxable calendar year, without regard to expected
future service expense in the subsequent year. The sole point at
issue, therefore, is in what year the prepaid dues are taxable as
income.
In auditing the Association's returns for the years 1952 through
1954, the Commissioner, in the exercise of his discretion under §
41 of the Internal Revenue Code of 1939, [ Footnote 1 ] Page 367 U. S. 689 determined not to accept the taxpayer's accounting system. As a
result, adjustments were made for those years principally by adding
to gross income for each taxable year the amount of prepaid dues
which the Association had received but not recognized as income,
and subtracting from gross income amounts recognized in the year
although actually received in the prior year. A net operating loss
claimed for 1954 and corresponding carryback deductions were
greatly reduced, and tax deficiencies were assessed for 1952 and
1953. Petitioner paid the deficiencies, and its timely claim for
refund was denied. Suit to recover was instituted in the Court of
Claims, but the court sustained the Commissioner, 181 F. Supp. 255.
Recognizing a conflict between the decision below and that in Bressner Radio, Inc. v. Commissioner, 267 F.2d 520, we
granted certiorari. 364 U.S. 813. We have concluded that for tax
purposes the dues must be included as income in the calendar year
of their actual receipt.
The Association is a national automobile club organized as a
nonstock membership corporation with its principal office in
Washington, D.C. It provides a variety of services [ Footnote 2 ] to the members of affiliated
local automobile clubs and those of ten clubs which taxpayer itself
directly Page 367 U. S. 690 operates as divisions, but such services are rendered solely
upon a member's demand. Its income is derived primarily from dues
paid one year in advance by members of the clubs. Memberships may
commence or be renewed in any month of the year. For many years,
the association has employed an accrual method of accounting, and
the calendar year as its taxable year. It is admitted that, for its
purposes, the method used is in accord with generally accepted
commercial accounting principles. The membership dues, as received,
were deposited in the Association's bank accounts without
restriction as to their use for any of its corporate purposes.
However, for the Association's own accounting purposes, the dues
were treated in its books as income received ratably [ Footnote 3 ] over the 12-month membership
period. The portions thereof ratably attributable to membership
months occurring beyond the year of receipt, i.e., in a
second calendar year, were reflected in the Association's books at
the close of the first year as unearned or deferred income. Certain
operating expenses were chargeable as prepaid membership cost and
deducted ratably over the same periods of time as those over which
dues were recognized as income.
The Court of Claims bottomed its opinion on Automobile Club
of Michigan v. Commissioner, 353 U. S. 180 (1957), finding that
"the method of treatment of prepaid automobile club membership
dues employed [by Page 367 U. S. 691 the Association here was] . . . for Federal income tax purposes,
'purely artificial.'"
181 F. Supp. 255, 258. It accepted that case as "a rejection by
the Supreme Court of the accounting method advanced by plaintiff in
the case at bar." Ibid. The Association does not deny that
its accounting system is substantially identical to that used by
the petitioner in Michigan. It maintains, however, that Michigan does not control this case, because of a
difference in proof, i.e., that, in this case, the record
contains expert accounting testimony indicating that the system
used was in accord with generally accepted accounting principles;
that its proof of cost of member service was detailed; and that the
correlation between that cost and the period of time over which the
dues were credited as income was shown and justified by proof of
experience. The holding of Michigan, however, that the
system of accounting was "purely artificial" was based upon the
finding that
"substantially all services are performed only upon a member's
demand, and the taxpayer's performance was not related to fixed
dates after the tax year." 353 U. S. 353 U.S.
180, 353 U. S. 189 ,
note 20. That is also true here. [ Footnote 4 ] As the Association's own accounting expert
testified:
"You are dealing with a group or pool. Any pooling or risk
situation, particular members may, in a particular year, require
very little of a specific service that is rendered to certain other
members. I wouldn't know that the experience on that would be, but
I would think it would be rather irregular between individual
members. . . . I am buying the Page 367 U. S. 692 availability of services, the protection. . . . Frankly, the
irregularity of the actual furnishing of the maps and helping you
out when you run out of gasoline, and so on, I frankly don't think
that has a blessed thing to do with the over-all accounting."
It may be true that, to the accountant, the actual incidence of
cost in serving an individual member in exchange for his individual
dues is inconsequential, or, from the viewpoint of commercial
accounting, unessential to determination and disclosure of the
overall financial condition of the Association. That
"irregularity," however, is highly relevant to the clarity of an
accounting system which defers receipt, as earned income, of dues
to a taxable period in which no, some, or all the services paid for
by those dues may or may not be rendered. The Code exacts its
revenue from the individual member's dues which, no one disputes,
constitute income. When their receipt as earned income is
recognized ratably over two calendar years, without regard to
correspondingly fixed individual expense or performance
justification, but consistently with overall experience, their
accounting doubtless presents a rather accurate image of the total
financial structure, but fails to respect the criteria of annual
tax accounting, and may be rejected by the Commissioner.
The Association further contends that the findings of the court
below support its position. We think not. The Court of Claims' only
finding as to the accounting system itself is as follows:
"22. The method of accounting employed by plaintiff during the
years in issue has been used regularly by plaintiff since 1931, and
is in accord with generally accepted commercial accounting
principles and practices, and was, prior to the adverse
determination by the Commissioner of the Internal Revenue,
customarily and generally employed in the motor club field. " Page 367 U. S. 693 This is only to say that, in performing the function of business
accounting, the method employed by the Association "is in accord
with generally accepted commercial accounting principles and
practices." It is not to hold that, for income tax purposes, it so
clearly reflects income as to be binding on the Treasury. [ Footnote 5 ] Likewise, other findings
merely reflecting statistical computations of average monthly cost
per member on a group or pool basis are without determinate
significance to our decision that the federal revenue cannot,
without legislative consent and over objection of the Commissioner,
be made to depend upon average experience in rendering performance
and turning a profit. Indeed, such tabulations themselves
demonstrate the inadequacy, from an income tax standpoint, of the pro rata method of allocating each year's membership dues
in equal monthly installments not in fact related to the expenses
incurred. Not only did individually incurred expenses actually vary
from month to month, but even the average expense varied --
recognition of income nonetheless remaining ratably constant.
Although the findings below seem to indicate that it would produce
substantially the same result as that of the system of ratable
monthly recognition actually employed, we consider similarly
unsatisfactory, from an income tax standpoint, allocation of
monthly dues to gross monthly income to the extent of actual
service expenditures for the same month computed on a group or pool
basis. In addition, the Association's election in 1954 to change
its monthly recognition formula [ Footnote 6 ] to one which treats one-half of the dues as
income in the year of receipt Page 367 U. S. 694 and the other half as income received in the subsequent year,
without regard to month of payment, only more clearly indicates the
artificiality of its method, at least so far as controlling tax
purposes are concerned. Moreover, the Association realized that the
findings of the Court of Claims were not alone sufficient for its
purposes. In its petition for rehearing below, petitioner
specifically asked that they be amended and enlarged, especially as
to No. 22 set out above. Rehearing and amendment were denied.
Whether or not the Court's judgment in Michigan controls our disposition of this case, there are other
considerations requiring our affirmance. They concern the action of
the Congress with respect to its own positive and express statutory
authorization of employment of such sound commercial accounting
practices in reporting taxable income. In 1954, the Congress found
dissatisfaction in the fact that,
"as a result of court decisions and rulings, there have
developed many divergencies between the computation of income for
tax purposes and income for business purposes as computed under
generally accepted accounting principles. The areas of difference
are confined almost entirely to questions of when certain types of
revenue and expenses should be taken into account in arriving at
net income."
House Ways and Means Committee Report, H.R.Rep.No.1337, 83d
Cong., 2d Sess. 48. As a result, it introduced into the Internal
Revenue Code of 1954 § 452 and § 462, [ Footnote 7 ] which specifically permitted essentially the
same practice as was employed by the Association here. [ Footnote 8 ] Only one year later,
however, Page 367 U. S. 695 in June 1955, the Congress repealed these sections
retroactively. It appears that, in this action, Congress first
overruled the long administrative practice of the Commissioner and
holdings of the courts in disallowing such deferral of income for
tax purposes, and then, within a year, reversed its own action.
This repeal, we believe, confirms our view that the method used by
the Association could be rejected by the Commissioner. While the
claim is made that Congress did not "intend to disturb prior law as
it affected permissible accrual accounting provisions for tax
purposes," H.R.Rep. No. 293, 84th Cong., 1st Sess. 4-5, the cold
fact is that it repealed the only law incontestably permitting the
practice upon which the Association depends. To say that, as to
taxpayers using such systems, Congress was merely declaring
existing law when it adopted § 452 in 1954, and that it was merely
restoring unaffected the same prior law when it repealed the new
section in 1955 for good reason, is a contradiction in itself,
"varnishing nonsense with the charm of sound." Instead of
constituting a merely duplicative creation, the fact is that § 452
for the first time specifically declared petitioner's system of
accounting to be acceptable for income tax purposes, and overruled
the longstanding position of the Commissioner and courts to the
contrary. And the repeal of the section the following year, upon
insistence by the Treasury that the proposed endorsement of such
tax accounting would have a disastrous impact on the Government's
revenue, was just as clearly a mandate from the Congress that
petitioner's system was not acceptable for tax purposes. To
interpret its careful consideration of the problem otherwise is
to Page 367 U. S. 696 accuse the Congress of engaging in sciamachy. We are further
confirmed in this view by consideration of the even more recent
action of the Congress in 1958, subsequent to the decision in Michigan, supra. In that year, § 455 [ Footnote 9 ] was added to the Internal Revenue Code
of 1954. It permits publishers to defer receipt as income of
prepaid subscriptions of newspapers, magazines and periodicals. An
effort was made in the Senate to add a provision in § 455 which
would extend its coverage to prepaid automobile club membership
dues. [ Footnote 10 ] However,
in conference, the House Conferees refused to accept this
amendment. Senator Byrd explained the rejection of the amendment to
the Senate (104 Cong.Rec., Part 14, p. 17744):
"It was the position of the House conferees that this matter of
prepaid dues and fees received by nonprofit service organizations
was a part of the entire subject dealing with the treatment of
prepaid income, and that such subject should be left for study of
this entire problem. . . . [ Footnote 11 ]"
It appears, therefore, that, pending its own further study,
Congress has given publishers but denied automobile Page 367 U. S. 697 clubs the very relief that the Association seeks in this
Court.
To recapitulate, it appears that Congress has long been aware of
the problem this case presents. In 1954, it enacted § 452 and §
462, but quickly repealed them. Since that time, Congress has
authorized the desired accounting only in the instance of prepaid
subscription income, which, as was pointed out in Michigan, is ratably earned by performance on "publication
dates after the tax year." 353
U. S. 353 U.S. 180, 353 U. S. 189 ,
note 20. It has refused to enlarge § 455 to include prepaid
membership dues. At the very least, this background indicates
congressional recognition of the complications inherent in the
problem and its seriousness to the general revenue. We must leave
to the Congress the fashioning of a rule which, in any event, must
have wide ramifications. The Committees of the Congress have
standing committees expertly grounded in tax problems, with
jurisdiction covering the whole field of taxation and facilities
for studying considerations of policy as between the various
taxpayers and the necessities of the general revenues. The validity
of the long established policy of the Court in deferring, where
possible, to congressional procedures in the tax field is clearly
indicated in this case. [ Footnote 12 ] Finding only that, in light of Page 367 U. S. 698 existing provisions not specifically authorizing it, the
exercise of the Commissioner's discretion in rejecting the
Association's accounting system was not unsound, we need not
anticipate what will be the product of further "study of this
entire problem." Affirmed. [ Footnote 1 ]
A taxpayer's
"net income shall be computed . . . in accordance with the
method of accounting regularly employed in keeping the books . . .
but . . . if the method employed does not clearly reflect the
income, the computation shall be made in accordance with such
method as in the opinion of the Commissioner does clearly reflect
the income. . . ."
53 Stat. 24, 26 U.S.C. (1952 ed.) § 41. See also the
similar provision in the Internal Revenue Code of 1954, 26 U.S.C.
(1958 ed.) § 446.
[ Footnote 2 ]
These generally include furnishing road maps, routing, tour
books, etc.; emergency road service through contracts with local
garages; bail bond protection; personal automobile accident
insurance and theft protection; and, in some of its divisions,
motor license procurement, brake and headlight adjustment service,
notarial duties and advice in the prosecution of small claims.
[ Footnote 3 ]
In 1952 and 1953, dues collected in any month were accounted as
income to the extent of one-twenty-fourth for that month (on the
assumption that the mean date of receipt was the middle of the
month), one-twelfth for each of the next eleven months, and again
one-twenty-fourth in the anniversary month. In 1954, however,
guided by its own statistical average experience, the Association
changed its system so as to more simply reach almost the same
result by charging to year of receipt, without regard to month of
receipt, one-half of the entire dues payment, and deferring the
balance to the following year.
[ Footnote 4 ] Beacon Publishing Co. v. Commissioner, 218 F.2d 697,
and Schuessler v. Commissioner, 230 F.2d 722, may be
distinguished from the present case on the same grounds which made
them distinguishable in Automobile Club of Michigan v.
Commissioner, 353 U. S. 180 , 353 U. S. 189 ,
note 20.
[ Footnote 5 ]
The Hearing Commissioner of the Court of Claims had specifically
found as fact that petitioner's "method of accounting . . . clearly
reflected its net income for such years." The court, however, did
not adopt that finding.
[ Footnote 6 ] See note 2 supra. [ Footnote 7 ]
26 U.S.C. (1952 ed., Supp. II) §§ 452, 462, repealed, 69 Stat.
134 (1955).
[ Footnote 8 ]
The Senate Report included this language:
"Under the 1939 Code, regardless of the method of accounting . .
. , amounts are includible in gross income by the recipient not
later than the time of receipt if they are subject to free and
unrestricted use by the taxpayer even though the payments are for
goods or services to be provided by the taxpayer at a future
time."
S.Rep. No. 1622, 83d Cong., 2d Sess. 301.
[ Footnote 9 ]
26 U.S.C. (1958 ed.) § 455.
[ Footnote 10 ]
An unsuccessful attempt to induce congressional action on this
problem was made last year, see H.R. 11266, 86th Cong., 2d
Sess., which passed the House August 24, 1960, 106 Cong.Rec. 17482,
but failed to draw any action by the Senate before adjournment. An
identical bill is currently pending, see H.R. 929, 87th
Cong., 1st Sess., and H.R.Rep. No. 381, accompanying the bill and
recommending its passage. Under that measure, the taxpayer's
liability to its members " shall be deemed to exist ratably over the period . . . that such services are required to be
rendered, or . . . privileges . . . made available." (Emphasis
added.)
[ Footnote 11 ]
The Eighty-fourth Congress started the study of "legislation
dealing with prepaid income and reserves for estimated expenses. .
. ." S.Rep. No. 372, 84th Cong., 1st Sess. 6.
[ Footnote 12 ]
In 1955, it was estimated that transitional loss of revenue
under § 452 and § 462, repealed that year, would total in excess of
a billion dollars. H.R.Rep. No. 293, 84th Cong., 1st Sess. 3. That
this impact on the revenue continues to be an important factor in
congressional consideration of the problem is indicated by the
observation of the House Committee on Ways and Means that a
"transitional rule" is necessary "to minimize the initial revenue
impact" of the measure currently pending. H.R.Rep. No. 381, 87th
Cong., 1st Sess. 4. That the system used by petitioner here is,
perhaps, presently not uncommon may be indicated by the fact that,
during this Term alone, several cases involving similar systems
have reached this Court.
MR. JUSTICE STEWART, whom MR. JUSTICE DOUGLAS, MR. JUSTICE
HARLAN and MR. JUSTICE WHITTAKER join, dissenting.
In Automobile Club of Michigan, the Court pointed out
that the method of accounting employed by the taxpayer was "purely
artificial" so far as the record there showed. 353 U.S. at 353 U. S. 189 .
Here, by contrast, the petitioner proved, and the Court of Claims
found, that the method of accounting employed by the petitioner
during the years in issue was in accord with generally accepted
commercial accounting principles and practice, was customarily
employed by similar taxpayers, and, in the opinion of qualified
experts in the accounting field, clearly reflected the petitioner's
net income. I do not understand that the Court today questions
either that proof or those findings. [ Footnote 2/1 ]
The Court thus holds that the Commissioner is authorized to
disregard and override a method of reporting income under which
prepaid dues are deferred in direct Page 367 U. S. 699 relation to the taxpayer's costs under its membership contracts.
The effect of the Court's decision is to allow the Commissioner to
prevent an accrual basis taxpayer from making returns in accordance
with the accepted and clearly valid accounting practice of
excluding from gross income amounts received as advances until the
right to such amounts is earned by rendition of the services for
which the advances were made. To permit the Commissioner to do
this, I think, is to ignore the clear statutory command that a
taxpayer must be allowed to make his returns in accord with his
regularly employed method of accounting so long as that method
clearly reflects his income. [ Footnote
2/2 ] The result, I am afraid, will be to engender far-reaching
confusion and injustice in the administration of the Internal
Revenue Laws. [ Footnote 2/3 ] I The Commissioner's basic argument against the deferred reporting
of prepayments has traditionally been that such a method conflicts
with a series of decisions of this Court Page 367 U. S. 700 which establish the so-called "claim of right doctrine."
[ Footnote 2/4 ] In this case, the
Government abandoned that argument, with good reason. As four
Circuits have correctly held, the claim of right doctrine furnishes
no support for the Government's position. Bressner Radio, Inc.
v. Commissioner, 267 F.2d 520, 524, 525-528; Schlude v.
Commissioner, 283 F.2d 234; Schuessler v.
Commissioner, 230 F.2d 722, 725; Beacon Publishing Co. v.
Commissioner, 218 F.2d 697, 699-701. [ Footnote 2/5 ] A claim of right without "restriction on
use" may be the crucial factor in determining that particular funds
are includable in gross income. See North American Oil
Consolidated . Burnet, 286 U. S. 417 ; United States v. Lewis, 340 U. S. 590 ; Healy v. Commissioner, 345 U. S. 278 . But
it hardly follows that all such funds must necessarily be reported
by an accrual basis taxpayer as income in the year of receipt,
whether or not then earned. Page 367 U. S. 701 The Government shifted its argument in this case to the
contention that the "annual accounting requirement" demands
that
"[n]either income nor deduction items may be accelerated or
postponed from one taxable year to another in order to reflect the
long-term economic result of a particular transaction or group of
transactions."
The Government finds a basis for this argument in such cases as Security Flour Mills Co. v. Commissioner, 321 U.
S. 281 ; Brown v. Helvering, 291 U.
S. 193 ; Burnet v. Sanford & Brooks Co., 282 U. S. 359 ; Guaranty Trust Co. v. Commissioner, 303 U.
S. 493 ; and Heiner v. Mellon, 304 U.
S. 271 .
The Court today does not base its decision on this theory,
presumably because the Court believes, as I do, that the theory is
not valid. Putting to one side the point that many of the cases
relied on involved cash basis taxpayers, [ Footnote 2/6 ] these decisions no more pertain to
deferred reporting of totally unearned receipts than do the claim
of right decisions. These cases, like the claim of right cases,
start from the premise that the income in question Page 367 U. S. 702 has been fully earned. [ Footnote
2/7 ] The underlying premise of the annual accounting
requirement is that otherwise reportable income derived from a
transaction cannot be excluded from gross income in order to let
the taxpayer wait to see in a later year how the over-all
transaction turns out. [ Footnote
2/8 ] That is not the issue in this case. The question here is
whether any reportable income has been derived from a transaction
when payments are received in advance of performance.
Although wisely rejecting the claim of right and annual
accounting arguments, the Court decides this case upon grounds
which seem to me equally invalid. I can find nothing in Automobile Club of Michigan which controls disposition of
this case. And the legislative history upon which the Court
alternatively relies seems to me upon examination to be singularly
unconvincing.
In Michigan, there was no offer of proof to show the
rate at which the taxpayer fulfilled its obligations under its
membership contracts. The deferred reporting of prepaid dues was,
therefore, rejected in that case simply because there was no
showing of a correlation between the amounts deferred and the costs
incurred by the taxpayer in carrying Page 367 U. S. 703 out its obligations to its members. Until today, that case has
been recognized as one that simply held that, in the absence of
proof that the proration used by the taxpayer reasonably matched
actual expenses with the earning of related revenue, the
Commissioner was justified in rejecting the taxpayer's proration. I
am hardly alone in thinking that Michigan was decided upon
the very premise that a realistic deferral of income based upon
proof of average costs of service during identifiable periods would
be entirely permissible. See Bressner Radio, Inc. v.
Commissioner, 267 F.2d 520, 526-529. [ Footnote 2/9 ] Such proof was concededly adduced in this
case.
As to the enactment and repeal of § 452 and § 462, upon which
the Court places so much reliance, there are at the outset obvious
difficulties in relying on what happened in 1954 and 1955 to
ascertain the meaning of § 41 of the 1939 Code. See Fogarty v.
United States, 340 U. S. 8 , 340 U. S. 13 -14; Gemsco, Inc. v. Walling, 324 U. S. 244 , 324 U. S. 265 ; Cammarano v. United States, 358 U.
S. 498 , 358 U. S. 510 .
But, these problems aside, I think that the enactment and
subsequent repeal of § 452 and § 462 give no indication of
Congressional approval of the position taken by the Commissioner in
this case. If anything, the legislative action leads to the
contrary impression.
The statutory provisions in question were passed as part of a
general revision of the internal revenue laws in 1954. Section 452
permitted an accrual basis taxpayer to defer the inclusion of
advances in gross income until they were earned. [ Footnote 2/10 ] Most significantly, a taxpayer
could shift to Page 367 U. S. 704 this method without the consent of the Commissioner. Section
462, which permitted the deduction of anticipated expenses, was not
aimed specifically at the problem of reporting advances. [ Footnote 2/11 ] The function of the
provisions was to bring
"[t]ax accounting . . . more nearly in line with accepted
business accounting by allowing prepaid income to be taxed as it is
earned, rather than as it is received, and by allowing reserves to
be established for known future expenses. [ Footnote 2/12 ]"
In seeking to accomplish this objective, Congress recognized
that, as a result of "court decisions and rulings," the claim of
right approach had been used to require reporting for the year of
receipt all payments "subject to free and unrestricted use . . .
even though the payments are for goods or services to be provided
by the taxpayer at a future time." H.R.Rep. No. 1337, 83d Cong., 2d
Sess. Page 367 U. S. 705 48, A159. [ Footnote 2/13 ]
Congressional awareness of administrative and judicial
misapplication of the claim of right doctrine clearly did not imply
approval of it. For, by 1954, "[i]t was long recognized that the
difficulty lay not with the statute, but with administrative and
court interpretation." [ Footnote
2/14 ] And while the Committee reports contain no express
rejection of the Commissioner's interpretation of the 1939 statute,
the language used in explaining the need for a change certainly
indicates disapproval. [ Footnote
2/15 ]
Although § 452 and § 462 were short-lived, the shape of the
decisional law with respect to § 41 of the 1939 Code changed
considerably during the interval between the passage and repeal of
the new sections. In Beacon Publishing Co. v.
Commissioner, 218 F.2d 697, 699, the Tenth Circuit rejected
the Commissioner's reliance on the claim of right rationale and
found that the deferment of Page 367 U. S. 706 advances in accord with accrual principles did "clearly reflect
. . . income" under § 41. At about the same time, a Ninth Circuit
decision permitted income received from the sale of goods to be
offset by a deduction for the future expense of shipping the goods. Pacific Grape Products Co. v. Commissioner, 219 F.2d
862.
When Congress repealed § 452 and § 462, the record shows that it
was fully aware of these decisions. Congress recognized that the
rationale of these cases would produce a complete reversal of the
previous administrative position with respect to the reporting of
unearned receipts under § 41 and its counterpart under the 1954
Code, § 446. Congressional intent with respect to this possibility
was entirely clear -- the trend of judicial decisions should be
allowed to run its course without any inference of disapproval
being drawn from the repeal of § 452 and § 462. This intent was
evidenced in the assurances which the House Ways and Means
Committee demanded and received from the Secretary of the Treasury,
who had sought the repeal of the two sections. In a letter to the
Chairman of the Committee, the Secretary stated:
"My dear Mr. Chairman: This letter will confirm the statements
made to you today by Treasury representatives."
" * * * *" "Furthermore, the Treasury Department will not consider the
repeal of section 452 as any indication of congressional intent as
to the proper treatment for prepaid subscriptions and other
items of prepaid income, either under prior law or under other
provisions of the 1954 code. In other words, the repeal of
section 452 will not be considered by the Department as either the
acceptance or the rejection by Congress of the decision in Beacon Publishing Co. v. Commissioner Page 367 U. S. 707 (218 F.2d 697, C.A. 10, 1955) or any other judicial
decisions."
"It is my understanding that the foregoing is consistent
with the desire of your committee, with which I agree, that
the repeal of sections 452 and 462 should operate simply to
reestablish the principles of law which would have been applicable
if sections 452 and 462 had never been enacted."
H.R.Rep. No. 293, 84th Cong., 1st Sess. 5. (Emphasis supplied.)
The same viewpoint was expressed in the Senate Report, which
stated:
"Another aspect of the uncertainty with respect to subscription
income if section 452 is repealed arises from a recent circuit
court decision in Beacon Publishing Company v.
Commissioner (C.C.A.10th, January 3, 1955). The court in this
case held that the deferral of prepaid subscription income was in
fact proper under the accrual method of accounting. The Secretary
of the Treasury, in the letter previously referred to, which he
sent to the chairman of the House Committee on Ways and Means,
indicated that the repeal of section 452 would not be taken as an
indication by the Treasury Department of congressional intent as to
the proper treatment of prepaid subscription income under prior law
or under other provisions of the 1954 code. He also indicated that
the repeal of section 452 will not be considered by the Department
as either acceptance or rejection by Congress of the decision in Beacon Publishing Company v. Commissioner, or in any other
judicial decisions. . . ."
"Uncertainty will also exist in other areas with the repeal of
these two provisions. In Pacific Grape Products (C.C.A.9th, February 10, 1955), for example, the circuit court held
that certain freight and Page 367 U. S. 708 shipping expenses incurred after the end of the year could be
accrued for tax purposes as of the end of the year. An extension of
the principles laid down in this case might well lead the courts in
the future to permit the accrual of most estimated expenses which
would be covered by section 462 even though this section is
repealed."
S.Rep. No. 372, 84th Cong., 1st Sess. 5-6. [ Footnote 2/16 ]
To my mind, this legislative history shows that Congress made
every effort to dissuade the courts from doing exactly what the
Court is doing in this case -- drawing from the repeal of § 452 an
inference of Congressional disapproval of deferred reporting of
advances. [ Footnote 2/17 ] But
even if the legislative history on this point were hazy, the same
conclusion would have to be reached upon examination of
Congressional purpose in repealing § 452 and § 462. Cf. United
States v. Benedict, 338 U. S. 692 , 338 U. S. 696 .
For the fact of the matter is, contrary to the impression left by
the Court's opinion, that the reasons for rejecting § 452 and § 462
were entirely consistent with accepting the deferred reporting of
receipts in a case like this. Sections 452 and 462 were repealed
solely because of a prospective loss of revenue during the first
year in which taxpayers would take advantage of the new sections.
[ Footnote 2/18 ] Insofar as the
reporting of advances was concerned, that Page 367 U. S. 709 loss of revenue would have occurred solely as a consequence of
taxpayers' changing their method of reporting, without the
necessity of securing the Commissioner's consent, to that
authorized under § 452 and § 462. [ Footnote 2/19 ] The taxpayer who shifted his basis for
reporting advances would have been allowed what was commonly termed
a "double deduction" during the transitional year. [ Footnote 2/20 ] Under § 462, deductions
could be taken in the year of change for expenses attributable to
advances taxed in prior years under a claim of right theory, as
well as for reserves for future expenditures attributable to
advances received and reported during that year. Similarly, under §
452, prepayments received during the year of transition would be
excluded from gross income, while current expenditures attributable
to past income would still be deductible. [ Footnote 2/21 ]
The Congressional purpose in repealing § 452 and § 462 --
maintenance of the revenues -- does not, however, require
disapproval of sound accounting principles in cases of taxpayers
who, like the petitioner, have customarily and regularly used a
sound accrual accounting method in reporting advance payments. No
transition Page 367 U. S. 710 is involved, and no "double deduction" is possible. Moreover,
taxpayers formerly reporting advances as income in the year of
receipt can now shift to a true accrual system of reporting only
with the approval of the Commissioner. See Treas.Reg. 111,
§ 29.41-2 (1943); Treas.Reg. 118, § 39.41-2(c) (1953); Int.Rev.Code
of 1954, § 446(e). [ Footnote
2/22 ] Before giving his approval, the Commissioner can be
expected to insist upon adjustments in the taxpayer's transition
year to forestall any revenue loss which would otherwise result
from the change in accounting method. See Kahuku Plantation Co.
v. Commissioner, 132 F.2d 671, 674; 2 Mertens, Law of Federal
Income Taxation, §§ 12.21, 12.21a. Cf. Brown v. Helvering, 291 U. S. 193 , 291 U. S.
204 .
In short, even if the legislative history of the repeal of § 452
and § 462 did not clearly indicate, as it does, that the repeal of
those sections should have no bearing upon judicial determination
of whether the deferred reporting of advances "clearly reflects
income," the purpose of the Congress which repealed those
provisions would lead to the same conclusion. It need hardly be
added that the subsequent legislative activity cited by the Court
in no way alters this conclusion. Contrary to the Court's
suggestion, the "relief that the Association seeks in this Court"
is far short of what was sought in 1958 in urging that the coverage
of § 455 be extended to prepaid automobile club membership dues. As
enacted, § 455 was not limited in application to publishers
previously reporting prepaid subscriptions on a deferral basis. See I.T. 3369, 1940-1 Cum.Bull. 46. It applied to all
publishers using the accrual method, and permitted a change Page 367 U. S. 711 to deferred reporting of subscriptions for the year 1958 without consent of the Commissioner. 26 U.S.C. §
455(c)(3)(B). II I think the Government's position in this case is at odds with
the statutes, [ Footnote 2/23 ]
regulations [ Footnote 2/24 ] and
court decision, [ Footnote
2/25 ] Page 367 U. S. 712 which, since 1916, have recognized that realistic accrual
accounting does "clearly reflect income." If I am correct, the law
did not give the Commissioner any "discretion . . . not to accept
the taxpayer's accounting system."
The basic concept of including advances in gross income only as
they are earned is but an aspect of accrual accounting principles
which have consistently received judicial approval. We have, for
example, often recognized that deductions for business expenses
must be reported as soon as the obligation to pay becomes
"certain." See, e.g., United States v. Anderson, 269 U. S. 422 ; American National Co. v. United States, 274 U. S.
99 ; Niles Bement Pond Co. v. United States, 281 U. S. 357 , 281 U. S. 360 ; United States v. Olympic Radio & Television, 349 U. S. 232 , 349 U. S. 236 .
This may be before or after cash payment is made, [ Footnote 2/26 ] or even before it is due. [ Footnote 2/27 ] The controlling factor is
not the flow of cash, but the "economic and bookkeeping" principles
with which § 41 is concerned. United States v. Anderson,
supra, at 269 U. S. 441 . See also American National Co. v. United States, supra. These principles are at the foundation of the so-called "all
events" test for determining the accrual of deductions. See
United States v. Anderson, supra, at 269 U. S. 441 ;
[ Footnote 2/28 ] United
States v. Consolidated Page 367 U. S. 713 Edison Co., 366 U. S. 380 , 366 U. S.
384 -386. The same principles are applicable to the
accrual of income. See Continental Tie & Lumber Co. v.
United States, 286 U. S. 290 . As
has been correctly noted, "[i]t is a necessary corollary of this economic and bookkeeping' proposition" upon which Anderson rested that receipts are not reportable in income
until "substantially 'all the events' have occurred, both as to the
cost and time of performance, which must occur in order to
discharge the liability to perform which was given by [the
taxpayer] in return for the receipt." Bressner Radio, Inc. v. Commissioner, 267 F.2d 520,
524. See also United States v. Anderson, supra, at 269 U. S. 440 ; Beacon Publishing Co. v. Commissioner, 218 F.2d 697, 699.
Indeed, "accrual" of income has been commonly defined in terms of
"earnings" from the sale of goods or the performance of services. See, e.g., Spring City Foundry Co. v. Commissioner, 292 U. S. 182 , 292 U. S.
184 -185; Stanley and Kilcullen, The Federal Income Tax
(3d ed. 1955), 190. [ Footnote
2/29 ] In rejecting Page 367 U. S. 714 petitioner's method of allocating prepaid advances, the Court, I
think, disregards these basic principles.
The net effect of compelling the petitioner to include all dues
in gross income in the year received is to force the petitioner to
utilize a hybrid accounting method -- a cash basis for dues and an
accrual basis for all other items. Schlude v.
Commissioner, 283 F.2d 234, 239. Cf. Commissioner v. South
Texas Lumber Co., 333 U. S. 496 , 333 U. S. 501 .
For taxpayers generally, the enforcement of such a hybrid
accounting method may result in a gross distortion of actual
income, particularly in the first and last years of doing business.
On the return for the first year in which advances are received, a
taxpayer will have to report an unrealistically high net income,
since he will have to include unearned receipts, without any
offsetting deductions for the future cost of earning those
receipts. On subsequent tax returns, each year's unearned
prepayments will be partially offset by the deduction of current
expenses attributable to prepayments taxed in prior years. Even
then, however, if the taxpayer is forbidden to correlate earnings
with related expenditures, the result will be a distortion of
normal fluctuations in the taxpayer's net income. For example, in a
year when there are low current expenditures because of fewer
advances received in the preceding year, the result may be an
inflated adjusted gross income for the current year. Finally,
should the taxpayer decide to go out of business upon fulfillment
of the contractual obligations already undertaken, in the final
year, there will be no advances to report and many costs
attributable to advances received in prior years. The result will
be a grossly unrealistic reportable not loss.
The Court suggests that the application of sound accrual
principles cannot be accepted here because deferment is based on an
estimated rate of earnings, and because this estimate, in turn, is
based on average, not Page 367 U. S. 715 individual, costs. It is true, of course, that the petitioner
cannot know what service an individual member will require, or when
he will demand it. Accordingly, in determining the portion of its
outstanding contractual obligations which have been discharged
during a particular period (and hence the portion of receipts
earned during that period), the petitioner can only compare the
total expenditures for that period against estimated average
expenditures for the same number of members over a full contract
term. But this use of estimates and averages is in no way
inconsistent with long accepted accounting practices in reflecting
and reporting income.
As the Government has pointed out in past litigation,
"many business concerns . . . keep accounts on an accrual basis
and have to estimate for the tax year the amount to be received on
transactions undoubtedly allocable to such year." Continental Tie & Lumber Co. v. United States, 286 U. S. 290 , 286 U. S.
295 -296. Similarly, the deduction of future expenditures
which have already accrued often requires estimates like those
involved here. See, e.g., Harrold v. Commissioner, 192
F.2d 1002; Schuessler v. Commissioner, 230 F.2d 722; Denise Coal Co. v. Commissioner, 271 F.2d 930, 934-937; Hilinski v. Commissioner, 237 F.2d 703. Finally, it is to
be noted that the regulations under both the 1939 and 1954 Codes
permit various methods of reporting income which require the use of
estimates. [ Footnote 2/30 ] In the
absence of any showing that the estimates used here were faulty, I
think the law did not Page 367 U. S. 716 permit the Commissioner to forbid the use of standard accrual
methods simply upon the ground that estimates were necessary to
determine what the rate of deferral should be.
Similarly, it is not relevant that the petitioner "defers
receipt . . . of dues to a taxable period in which no, some, or all
the services paid for by those dues may or may not be rendered."
The fact of the matter is that what the petitioner has an
obligation to provide, i.e., the constant readiness of
services if needed, will with certainty be provided during the
period to which deferment has been made. Averages are frequently
utilized in tax reporting. In computing the value of work in
process, in distributing overhead to product cost, and in various
other areas, the use of averages has long been accepted. See,
e.g., Rookwood Pottery Co. v. Commissioner, 6 Cir., 45 F.2d
43; Eatonville Lumber Co. v. Commissioner, 10 B.T.A. 232.
The use of an "average cost" is particularly appropriate here,
where the dues are earned by making services continuously
available. The cost of doing so must necessarily be based on
composite figures.
For these reasons, I think that the petitioner's original
returns clearly reflected its income, that the Commissioner was
therefore without authority under the law to override the
petitioner's accounting method, and that the judgment should be
reversed.
[ Footnote 2/1 ]
The Court does not, for example, challenge Finding No. 26 of the
Court of Claims:
"Had the plaintiff recognized, assigned and transferred to its
gross income account its monthly receipts of dues collected in
advance in the proportion to its cost of servicing all of its
members each month, instead of ratably over the membership period
of 12 months, the proportion of advance dues which would have been
recognized and assigned to gross income during the years in issue
herein would have been substantially the same as the gross income
from dues as determined and reported by the plaintiff under the
method of accounting actually employed."
[ Footnote 2/2 ]
Int.Rev.Code of 1939, § 41, 53 Stat. 24. Int.Rev.Code of 1954, §
446, 26 U.S.C. § 446.
[ Footnote 2/3 ]
The scope of the problem is well illustrated by the reported
cases. See, e.g., South Dade Farms v. Commissioner, 138
F.2d 818 (rent received in advance); Clay Sewer Pipe Ass'n v.
Commissioner, 139 F.2d 130 (subscriptions for promotion
campaign to be consummated in years subsequent to receipt); Beacon Publishing Co. v. Commissioner, 218 F.2d 697
(advance newspaper subscription payments); Bressner Radio, Inc.
v. Commissioner, 267 F.2d 520 (advance payments in a
television servicing contract); Schlude v. Commissioner, 283 F.2d 234 (fees for dancing lessons paid in advance); Moritz
v. Commissioner, 21 T.C. 622 ("customers' deposits" on
undeveloped photographs); South Tacoma Motor Co. v.
Commissioner, 3 T.C. 411 (proceeds from sale of coupons
entitling bearer to garage services in later years); Your
Health Club, Inc. v. Commissioner, 4 T.C. 385 (advance
payments for use of gym and other facilities); Northern
Illinois College of Optometry v. Commissioner, 2 CCH Tax
Ct.Mem. 664 (tuition paid in advance).
[ Footnote 2/4 ]
Almost all of the decisions sustaining the Commissioner's
disallowance of deferred reporting of advances by accrual basis
taxpayers have relied on the claim of right doctrine. See,
e.g., Andrews v. Commissioner, 23 T.C. 1026, 1032-1033; South Dade Farms v. Commissioner, 138 F.2d 818 ( but
compare Schuessler v. Commissioner, 230 F.2d 722); Clay
Sewer Pipe Ass'n v. Commissioner, 139 F.2d 130; Automobile
Club of Michigan v. Commissioner, 230 F.2d 585, 591, affirmed on other grounds, 353 U. S. 353 U.S.
180. The Tax Court has carried the claim of right doctrine to the
point where it was found applicable to advance fees which were due
but not yet paid. Your Health Club, Inc. v. Commissioner, 4 T.C. 385.
[ Footnote 2/5 ]
The rejection of the applicability of the claim of right
doctrine in these cases has been enthusiastically approved by legal
commentators. See, e.g., Gelfand, The "Claim of Right"
Doctrine, 33 Taxes 726; Wolder, Deduction of Reserves for Future
Expenses and Deferring of Prepaid Income, 34 Taxes 524; Note, 59
Col.L.Rev. 942, 946. But cf. Freeman, Tax Accrual
Accounting for Contested Items, 56 Mich.L.Rev. 727, 730-732,
747.
[ Footnote 2/6 ] See, e.g., Guaranty Trust Co. v. Commissioner, 303 U. S. 493 ; Burnet v. Sanford & Brooks Co., 282 U.
S. 359 . In the latter case, the Court took special
notice of the fact that the taxpayer had not "attempted to avail
itself" of the accrual system under which "expenses of a
transaction incurred in one year might be offset by the amounts
actually received from it in another." 282 U.S. at 282 U. S. 366 .
In Security Mills Flour Co. v. Commissioner, 321 U.
S. 281 , the taxpayer was attempting to use what the
Court described as "a divided and inconsistent method of accounting
not properly to be denominated either a cash or an accrual system."
321 U.S. at 321 U. S. 287 .
In Brown v. Helvering, 291 U. S. 193 , the
taxpayer was on an accrual basis generally, but its assertion of a
right to defer reporting "overriding commissions" constituted a
change in accounting procedures as to the acceptance of which the
Commissioner was said to have "wide discretion." 291 U.S. at 291 U. S. 204 . See the discussion in Bressner Radio, Inc. v.
Commissioner, 267 F.2d 520, 525-526.
[ Footnote 2/7 ]
With the possible exception of contingent related expenditures,
which cannot not be accurately measured. See Brown v.
Helvering, 291 U. S. 193 , 291 U. S.
200 -201.
[ Footnote 2/8 ]
This becomes entirely clear upon examination of the cases upon
which the Government relies. For example, in Heiner v.
Mellon, 304 U. S. 271 ,
members of partnerships which had been formed to liquidate two
corporations attempted to defer reporting income earned during the
year until it could be determined in a subsequent year whether the
partnerships' over-all liquidation enterprise had been profitable.
The Court held that such a postponement was barred by the annual
accounting principle. In Security Flour Mills Co. v.
Commissioner, 321 U. S. 281 , the
taxpayer attempted to reopen a prior year's return so as to deduct
amounts which it had subsequently paid but of receipts earned in
that year. Again, the Court relied on the annual accounting
principle in denying the taxpayer's claim.
[ Footnote 2/9 ] See also Hoffman, Accounting Treatment Counts in
Determining Net Taxable Income, 35 Taxes 918, 921; Behren, Prepaid
Income-Accounting Concepts and The Tax Law, 15 Tax L.Rev. 343,
359-360; Note, 67 Yale L.J. 1425, 1439-1440.
[ Footnote 2/10 ]
There were certain restrictions upon the period over which the
advances could be deferred, but these are not relevant for our
purposes here. See Proposed Treas.Reg. § 1.452, 20
Fed.Reg. 515; Wolder, Deduction of Reserves for Future Expenses and
Deferring of Prepaid Income, 34 Taxes 524; Bierman and Helstein,
Accounting for Prepaid Income and Estimated Expenses under the
Internal Revenue Code of 1954, 10 Tax L.Rev. 83, 93-96. Section 452
specifically envisage the deferral of club dues. See H.R.Rep. No. 1337, 83d Cong., 2d Sess. 48.
[ Footnote 2/11 ] See, e.g., S.Rep. No. 372, 84th Cong., 1st Sess. 2.
Section 462 provided that,
"In computing taxable income for the taxable year, there shall
be taken into account (in the discretion of the secretary or his
delegate) a reasonable addition to each reserve for estimated
expenses. . . ."
§ 462(a), 68A Stat. 158. "Estimated expense" was defined as a
deduction
"(A) part or all of which would . . . be required to be taken
into account for a subsequent taxable year; (B) which is
attributable to the income of the taxable year or prior taxable
years for which an election under this section is in effect; and
(C) which the Secretary or his delegate is satisfied can be
estimated with reasonable accuracy."
§ 462(d)(1), 68A Stat. 158. See Bierman and Helstein,
Accounting for Prepaid Income and Estimated Expenses under the
Internal Revenue Code of 1954. 10 Tax L.Rev. 83, 103-113.
[ Footnote 2/12 ]
S.Rep. No. 372, 84th Cong., 1st Sess. 3 (quoting from the tax
recommendation in the Presidential budget message of 1954).
[ Footnote 2/13 ]
There were some exceptions to the rigid application of this rule
which had been recognized. See I.T. 3369, 1940-1 Cum.Bull.
46 (permitting deferred reporting of subscriptions for publishers
who had consistently followed that practice); I.T. 2080, III-2
Cum.Bull. 48 (1924) (permitting deferment of receipts from sales of
tickets for tourist cruises), but compare National Airlines,
Inc. v. Commissioner, 9 T.C. 159. See also Veenstra &
DeHaan Coal Co. v. Commissioner, 11 T.C. 964; Summit Coal
Co. v. Commissioner, 18 B.T.A. 983.
[ Footnote 2/14 ]
Freeman, Tax Accrual Accounting for Contested Items, 56
Mich.L.Rev. 727, 729, n. 9. See Bierman and Helstein,
Accounting for Prepaid Income and Estimated Expenses under the
Internal Revenue Code of 1954, 10 Tax L.Rev. 83, 84.
[ Footnote 2/15 ]
"Present law provides that the net income of a taxpayer shall be
computed in accordance with the method of accounting regularly
employed by the taxpayer if such method clearly reflects the income
and the regulations state that approved standard methods of
accounting will ordinarily be regarded as clearly reflecting
taxable income. Nevertheless, as a result of court decisions and
rulings, there have developed many divergencies between the
computation of income for tax purposes and income for business
purposes as computed under generally accepted accounting
principles. . . ."
H.R.Rep. No. 1337, 83d Cong., 2d Sess. 48.
[ Footnote 2/16 ] See also H.R.Rep. No. 293, 84th Cong., 1st Sess.
4-5.
[ Footnote 2/17 ]
It is to be noted that no such inference was relied upon in the Michigan case, although the same arguments with respect to
§§ 452 and 462 were pressed upon the Court by the Government. See Brief for Respondent, pp. 62-65, Automobile Club
of Michigan v. Commissioner, 353 U. S. 180 .
[ Footnote 2/18 ] See H.R.Rep. No. 293, 84th Cong., 1st Sess. 2-5; S.Rep.
No. 372, 84th Cong., 1st Sess. 4-5; Hearings Before the Senate
Finance Committee on H.R. 4725, 84th Cong., 1st Sess. 6. The
prospective loss was more than ten times the original estimate of
47 million. Ibid. See Note, 67 Yale L.J. 1425,
1432, n. 25.
[ Footnote 2/19 ]
There was also a problem of expanded use of reserves for
estimated expenditures under § 462 for items like vacation pay
which were not related to the reporting of advances. See Hearings Before the Senate Finance Committee on H.R. 4725, 84th
Cong., 1st Sess. 5, 9; Sporrer, The Past and Future of Deferring
Income and Reserving for Expenses, 34 Taxes 45, 55-56; Griswold,
Federal Taxation (5th ed. 1960), 497-498.
[ Footnote 2/20 ] See S.Rep. No. 372, 84th Cong., 1st Sess. 4; Hearings
Before the Senate Finance Committee on H.R. 4725, 84th Cong., 1st
Sess. at 7, 8, 10; Dakin, The Change from Cash to Accrual
Accounting for Federal Income Tax Purposes -- Pyramided Income,
Double Deductions and Double Talk, 51 Nw.U.L.Rev. 515, 50 -538;
Griswold, Federal Taxation (5th ed. 1960), 497-498; Note, 67 Yale
L.J. 1425, 1430.
[ Footnote 2/21 ]
Only one-tenth of the estimated loss during the transitional
year was attributable to § 452. See Hearings Before the
Senate Finance Committee on H.R. 4725, 84th Cong., 1st Sess.
21.
[ Footnote 2/22 ] See also Treas.Reg. § 1.446-1(e)(2) (1957); Brown
v. Helvering, 291 U. S. 193 , 291 U. S.
204 -205; Advertisers Exchange, Inc. v.
Commissioner, 25 T.C. 1086; 2 Mertens, Law of Federal Income
Taxation, §§ 12.19-12.20.
[ Footnote 2/23 ]
The Revenue Act of 1913, 38 Stat. 114, provided only for a
strict cash receipts and disbursements method of accounting. See e.g., § IIB, 38 Stat. 167. In the 1916 Act, the
sections dealing with permissible methods of computing income were
revised to provide that:
"A corporation . . . keeping accounts upon any basis other than
that of actual receipts and disbursements, unless such other basis
does not clearly reflect its income, may, subject to regulations
made by the Commissioner of Internal Revenue, with the approval of
the Secretary of the Treasury, make its return upon the basis upon
which its accounts are kept, . . ."
§ 13(d), 39 Stat. 771. See also § 8(g), 39 Stat. 763
(identical provision with respect to returns filed by
individuals).
These sections were designed specifically to permit accrual
accounting. See H.R.Rep. No. 922, 64th Cong., 1st Sess. 4; United States v. Anderson, 269 U.
S. 422 , 269 U. S.
439 -441. In the Revenue Act of 1918, the necessity of
obtaining special permission to use the accrual method was omitted, see § 212(b), 40 Stat. 1064-1065, and the provision
permitting the use of accrual accounting remained substantially the
same for the next thirty-six years. See Int.Rev.Code of
1939, § 41, 53 Stat. 24; Reubel v. Commissioner, 1 B.T.A.
676, 677-678. In 1954, the pertinent provision was again changed,
with specific mention of the "accrual method." See Int.Rev.Code of 1954, § 446, 26 U.S.C. § 446. See
generally May, Accounting and the Accountant in the
Administration of Income Taxation, 47 Col.L.Rev. 377, 380-382.
[ Footnote 2/24 ] See, e.g., T.D. 2433, 19 Treas.Dec. 5 (1917);
Treas.Reg. 45, Art. 23, Art. 111 (1920); Treas.Reg. 118, § 39.41
(1953); Treas.Reg. § 1.446-1 (1957).
[ Footnote 2/25 ] See, e.g., United States v. Anderson, 269 U.
S. 422 ; Niles Bement Pond Co. v. United States, 281 U. S. 357 ; Aluminum Castings Co. v. Routzahn, 282 U. S.
92 ; Spring City Foundry Co. v. Commissioner, 292 U. S. 182 , 292 U. S.
184 -185; see also Weed & Brothers v. United
States, 38 F.2d 935, 938-940, 69 Ct.Cl. 246, 251-257.
[ Footnote 2/26 ] Compare, e.g., Aluminum Castings Co. v. Routzahn, 282 U. S. 92 (deduction taken in year prior to cash disbursement) with
Shelby Salesbook Co. v. United States, 104 F. Supp. 237
(deduction taken in later year).
[ Footnote 2/27 ] United States v. Anderson, 269 U.
S. 422 ; American National Co. v. United States, 274 U. S. 99 ; Aluminum Castings Co. v. Routzahn, 282 U. S.
92 .
[ Footnote 2/28 ]
The Court there held that an accrual taxpayer should have
deducted a tax expense in 1916 so that it properly could have been
offset against the profits from sales in 1916, upon which the tax
was levied. The Court rejected the contention that the tax could
not accrue in 1916 because it was not due until 1917. It
stated:
"In a technical legal sense, it may be argued that a tax does
not accrue until it has been assessed and becomes due; but it is
also true that, in advance of the assessment of a tax, all the
events may occur which fix the amount of the tax and determine the
liability of the taxpayer to pay it. In this respect, for purposes
of accounting and of ascertaining true income for a given
accounting period, the munitions tax here in question did not stand
on any different footing than other accrued expenses appearing on
appellee's books. In the economic and bookkeeping sense with which
the statute and Treasury decision were concerned, the taxes had
accrued. It should be noted that § 13(d) makes no use of the words
'accrue' or 'accrual,' but merely provides for a return upon the
basis upon which the taxpayer's accounts are kept, if it reflects
income -- which is precisely the return insisted upon by the
government."
269 U.S. at 269 U. S.
441 .
[ Footnote 2/29 ]
The authors there state:
"In the ordinary case, accrual precedes actual receipt, since
there is an accrual when there is a right to receive. But, in some
cases, items are received before they are earned, and then the
receipt precedes the accrual." See also Continental Tie & Lumber Co. v. United
States, 286 U. S. 290 ; Georgia School Book Depository, Inc. v. Commissioner, 1
T.C. 463; 1961 C.C.H.Tax Reporter § 2820.025 ("On the accrual
basis, income is reported when earned"); Freeman, Tax Accrual
Accounting for Contested Items, 56 Mich.L.Rev. 727, 728.
[ Footnote 2/30 ] See, e.g., Treas.Reg. 111, § 29.42-4 (1943), Treas.Reg.
118, § 39.42-4 (1953), and Treas.Reg. § 1.451-3 (1957) (providing
for the percentage of completion method of reporting income on
long-term contracts); Treas.Reg. 111, § 29.42-5 (1943), Treas.Reg.
118, § 39.42-5 (1953), and Treas.Reg. § 1.451-4 (1957) (providing
for the deduction for redemption of trading stamps based upon "The
rate, in percentage, which the stamps redeemed in each year bear to
the total stamps issued in such year"). See generally Brown
& Williamson Tobacco Corp. v. Commissioner, 16 T.C.
432. | The Supreme Court ruled that the American Automobile Association (AAA) must include the total amount of prepaid annual membership dues received during the year as gross income for tax purposes, even if the dues cover membership periods extending into the following year. The Court upheld the Commissioner's discretion to reject AAA's accounting method, which tried to allocate the dues over the membership period, as it deviated from the principle of annual tax accounting. The Court's decision was influenced by Congress's actions in the Internal Revenue Code of 1954 and subsequent amendments, indicating that AAA's practice was not in line with tax legislation. |
Taxes | U.S. v. Gilmore | https://supreme.justia.com/cases/federal/us/372/39/ | U.S. Supreme Court United States v. Gilmore, 372 U.S.
39 (1963) United States v.
Gilmore No. 21 Argued March 27-28,
1962 Restored to the calendar for
reargument April 2, 1962 Reargued December 5-6,
1962 Decided February 18,
1963 372 U.S.
39 CERTIORARI TO THE UNITED STATES
COURT OF CLAIMS Syllabus Respondent sued for refund of part of the income taxes paid by
him for the years 1953 and 1954, on the ground that legal expenses
incurred by him in defending divorce litigation with his former
wife were deductible under § 23(a)(2) of the Internal Revenue Code
of 1939, as amended, which allots as deductions from gross income
"ordinary and necessary expenses . . . incurred . . . for the
conservation . . . of property held for the production of income."
His gross income was derived almost entirely from his salary as
president of three corporations which were franchised automobile
dealers and from dividends from his controlling stock in such
corporations. His wife had sued for divorce, alimony, and an
alleged community property interest in such stock, and he alleged
that, had he not succeeded in defeating these claims, he might have
lost his stock, his corporate positions, and the dealer franchises,
from which nearly all of his income was derived. Held: none of respondent's expenditures in resisting
these claims is deductible under § 23(a)(2). Pp. 372 U. S.
40 -52.
(a) The origin and character of the claim with respect to which
an expense was incurred, rather than its potential consequences
upon the fortunes of the taxpayer, is the controlling basic test of
whether the expense was "business" or "personal," and hence whether
or not it is deductible under § 23(a)(2). Pp. 372 U. S.
44 -51.
(b) The wife's claims stemmed entirely from the marital
relationship, and not, under any tenable view of things, from
income-producing activity. Therefore, none of respondent's
expenditures in resisting these claims can be deemed "business"
expenses deductible under § 23(a)(2). Pp. 372 U. S.
51 -52.
___ Ct. Cl. ___, 290 F.2d 942, reversed and case remanded. Page 372 U. S. 40 MR. JUSTICE HARLAN delivered the opinion of the Court.
In 1955, the California Supreme Court confirmed the award to the
respondent taxpayer of a decree of absolute divorce, without
alimony, against his wife Dixie Gilmore. [ Footnote 1 ] Gilmore v. Gilmore, 45 Cal. 2d
142 , 287 P.2d 769. The case before us involves the
deductibility for federal income tax purposes of that part of the
husband's legal expense incurred in such proceedings as is
attributable to his successful resistance of his wife's claims to
certain of his assets asserted by her to be community property
under California law. [ Footnote
2 ] The claim to such deduction, which has been upheld by the
Court of Claims, 290 F.2d 942, is founded on § 23(a)(2) of the
Internal Revenue Code of 1939, 26 U.S.C. (1952 ed.) § 23(a)(2),
which allows as deductions from gross income
". . . ordinary and necessary expenses . . . incurred during the
taxable year [ Footnote 3 ] . . .
for the . . . conservation . . . of property held for the
production of income."
Because of a conflict of views among the Court of Claims, the
Courts of Appeals, and the Tax Court regarding the Page 372 U. S. 41 proper application of this provision, [ Footnote 4 ] and the continuing importance of the
question in the administration of the federal income tax laws, we
granted certiorari on the Government's petition. 368 U.S. 816. The
case was first argued at the last Term and set for reargument at
this one. 369 U.S. 835.
At the time of the divorce proceedings, instituted by the wife
but in which the husband also cross-claimed for divorce,
respondent's property consisted primarily of controlling stock
interests in three corporations, each of which was a franchised
General Motors automobile dealer. [ Footnote 5 ] As president and principal managing officer of
the three corporations, he received salaries from them aggregating
about $66,800 annually, and in recent years his total annual
dividends had averaged about $83,000. His total annual income
derived from the corporations was thus approximately $150,000. His
income from other sources was negligible. [ Footnote 6 ]
As found by the Court of Claims, the husband's overriding
concern in the divorce litigation was to protect these assets
against the claims of his wife. Those claims had two aspects:
first, that the earnings accumulated and retained by these three
corporations during the Gilmores' marriage (representing an
aggregate increase in corporate net worth of some $600,000) were
the product of respondent's personal services, and not the result
of accretion in capital values, thus rendering respondent's
stockholdings in the enterprises pro tanto community
property Page 372 U. S. 42 under California law; [ Footnote
7 ] second, that, to the extent that such stockholdings were
community property, the wife, allegedly the innocent party in the
divorce proceeding, was entitled under California law to more than
a one-half interest in such property. [ Footnote 8 ]
The respondent wished to defeat those claims for two important
reasons. First, the loss of his controlling stock interests,
particularly in the event of their transfer in substantial part to
his hostile wife, might well cost him the loss of his corporate
positions, his principal means of livelihood. Second, there was
also danger that if he were found guilty of his wife's sensational
and reputation-damaging charges of marital infidelity, General
Motors Corporation might find it expedient to exercise its right to
cancel these dealer franchises.
The end result of this bitterly fought divorce case was a
complete victory for the husband. He, not the wife, was granted a
divorce on his cross-claim; the wife's community property claims
were denied in their entirety; and she was held entitled to no
alimony. 45 Cal. 2d
142 , 287 P.2d 769.
Respondent's legal expenses in connection with this litigation
amounted to $32,537.15 in 1953 and $8,074.21 in 1954 -- a total of
$40,611.36 for the two taxable years in question. The Commissioner
of Internal Revenue found all of these expenditures "personal" or
"family" expenses, and, as such, none of them deductible. 26 U.S.C.
(1952 ed.) Page 372 U. S. 43 § 24(a)(1). [ Footnote 9 ] In
the ensuing refund suit, however, the Court of Claims held that 80%
of such expense (some $32,500) was attributable to respondent's
defense against his wife's community property claims respecting his
stockholdings, and hence deductible under § 23(a)(2) of the 1939
Code as an expense "incurred . . . for the . . . conservation . . .
of property held for the production of income." In so holding the
Court of Claims stated:
"Of course, it is true that, in every divorce case, a certain
amount of the legal expenses are incurred for the purpose of
obtaining the divorce and a certain amount are incurred in an
effort to conserve the estate, and are not necessarily deductible
under section 23(a)(2), but when the facts of a particular case
clearly indicate (as here) that the property around which the
controversy evolves is held for the production of income, and,
without this property, the litigant might be denied not only the
property itself but the means of earning a livelihood, then it must
come under the provisions of section 23(a)(2). . . . The only
question then is the allocation of the expenses to this phase of
the proceedings. [ Footnote
10 ]"
290 F.2d at 947.
The Government does not question the amount or formula for the
expense allocation made by the Court of Claims. Its sole contention
here is that the court below misconceived the test governing §
23(a)(2) deductions, in that the deductibility of these expenses
turns, so it is argued, not upon the consequences to respondent of
a Page 372 U. S. 44 failure to defeat his wife's community property claims, but upon
the origin and nature of the claims themselves. So viewing Dixie
Gilmore's claims, whether relating to the existence or division of
community property, it is contended that the expense of resisting
them must be deemed nondeductible "personal" or "family" expense
under § 24(a)(1), not deductible expense under § 23(a)(2). For
reasons given hereafter we think the Government's position is
sound, and that it must be sustained. I For income tax purposes, Congress has seen fit to regard an
individual as having two personalities:
"one is [as] a seeker after profit who can deduct the expenses
incurred in that search; the other is [as] a creature satisfying
his needs as a human and those of his family but who cannot deduct
such consumption and related expenditures. [ Footnote 11 ]"
The Government regards § 23(a)(2) as embodying a category of the
expenses embraced in the first of these roles.
Initially, it may be observed that the wording of § 23(a)(2)
more readily fits the Government's view of the provision than that
of the Court of Claims. For, in context, "conservation of property"
seems to refer to operations performed with respect to the property
itself, such as safeguarding or upkeep, rather than to a taxpayer's
retention of ownership in it. [ Footnote 12 ] But more illuminating than the mere language
of § 23(a)(2) is the history of the provision.
Prior to 1942, § 23 allowed deductions only for expenses
incurred "in carrying on any trade or business," the deduction
presently authorized by § 23(a)(1). In Higgins v.
Commissioner, 312 U. S. 212 ,
this Court gave that provision Page 372 U. S. 45 a narrow construction, holding that the activities of an
individual in supervising his own securities investments did not
constitute the "carrying on of trade or business," and hence that
expenses incurred in connection with such activities were not tax
deductible. Similar results were reached in United States v.
Pyne, 313 U. S. 127 , and City Bank Farmers Trust Co. v. Helvering, 313 U.
S. 121 . The Revenue Act of 1942 (56 Stat. 798, § 121),
by adding what is now § 23(a)(2), sought to remedy the inequity
inherent in the disallowance of expense deductions in respect of
such profit-seeking activities, the income from which was
nonetheless taxable. [ Footnote
13 ]
As noted in McDonald v. Commissioner, 323 U. S.
57 , 323 U. S. 62 ,
the purpose of the 1942 amendment was merely to enlarge "the
category of incomes with reference to which expenses were
deductible." And committee reports make clear that deductions under
the new section were subject to the same limitations and
restrictions that are applicable to those allowable under §
23(a)(1). [ Footnote 14 ]
Further, this Court has said that § 23(a)(2) "is comparable and in pari materia with § 23(a)(1)," providing for a class of
deductions "coextensive with the business deductions allowed by §
23(a)(1), except for" the requirement that the income-producing
activity qualify as a trade or business. Trust of Bingham v.
Commissioner, 325 U. S. 365 , 325 U. S.
373 -374 .
A basic restriction upon the availability of a § 23(a)(1)
deduction is that the expense item involved must be one that has a
business origin. That restriction not only Page 372 U. S. 46 inheres in the language of § 23(a)(1) itself, confining such
deductions to "expenses . . . incurred . . . in carrying on any
trade or business," but also follows from § 24(a)(1), expressly
rendering nondeductible "in any case . . . [p]ersonal, living, or
family expenses." See note
9 supra. In light of what has already been said with
respect to the advent and thrust of § 23(a)(2), it is clear that
the "[p]ersonal . . . or family expenses" restriction of § 24(a)(1)
must impose the same limitation upon the reach of § 23(a)(2) -- in
other words, that the only kind of expenses deductible under §
23(a)(2) are those that relate to a "business," that is,
profit-seeking, purpose. The pivotal issue in this case then
becomes: was this part of respondent's litigation costs a
"business," rather than a "personal" or "family," expense?
The answer to this question has already been indicated in prior
cases. In Lykes v. United States, 343 U.
S. 118 , the Court rejected the contention that legal
expenses incurred in contesting the assessment of a gift tax
liability were deductible. The taxpayer argued that, if he had been
required to pay the original deficiency, he would have been forced
to liquidate his stockholdings, which were his main source of
income, and that his legal expenses were therefore incurred in the
"conservation" of income-producing property, and hence deductible
under § 23(a)(2). The Court first noted that the "deductibility [of
the expenses] turns wholly upon the nature of the activities to
which they relate" (343 U.S. at 343 U. S.
123 ), and then stated:
"Legal expenses do not become deductible merely because they are
paid for services which relieve a taxpayer of liability. That
argument would carry us too far. It would mean that the expense of
defending almost any claim would be deductible by a taxpayer on the
ground that such defense was made to help him keep clear of liens
whatever income-producing Page 372 U. S. 47 property he might have. For example, it suggests that the
expense of defending an action based upon personal injuries caused
by a taxpayer's negligence while driving an automobile for pleasure
should be deductible. Section 23(a)(2) never has been so
interpreted by us. . . ."
"While the threatened deficiency assessment . . . added urgency
to petitioner's resistance of it, neither its size nor its urgency
determined its character. It related to the tax payable on
petitioner's gifts. . . . The expense of contesting the amount of
the deficiency was thus at all times attributable to the gifts, as
such, and accordingly was not deductible."
"If, as suggested, the relative size of each claim, in
proportion to the income-producing resources of a defendant, were
to be a touchstone of the deductibility of the expense of resisting
the claim, substantial uncertainty and inequity would inhere in the
rule. . . . It is not a ground for [deduction] that the claim, if
justified, will consume income-producing property of the
defendant."
343 U.S. at 343 U. S.
125 -126.
In Kornhauser v. United States, 276 U.
S. 145 , this Court considered the deductibility of legal
expenses incurred by a taxpayer in defending against a claim by a
former business partner that fees paid to the taxpayer were for
services rendered during the existence of the partnership. In
holding that these expenses were deductible even though the
taxpayer was no longer a partner at the time of suit, the Court
formulated the rule that,
"where a suit or action against a taxpayer is directly connected
with, or . . . proximately resulted from, his business, the expense
incurred is a business expense. . . ."
276 U.S. at 276 U. S. 153 .
Similarly, in a case involving an expense incurred in satisfying an
obligation (though not a litigation expense), it was said that "it
is the origin of the Page 372 U. S. 48 liability out of which the expense accrues" or "the kind of
transaction out of which the obligation arose . . . which [is]
crucial and controlling." Deputy v. du Pont, 308 U.
S. 488 , 308 U. S. 494 , 308 U. S.
496 .
The principle we derive from these cases is that the
characterization, as "business" or "personal," of the litigation
costs of resisting a claim depends on whether or not the claim
arises in connection with the taxpayer's profit-seeking activities.
It does not depend on the consequences that might result to a
taxpayer's income-producing property from a failure to defeat the
claim, for, as Lykes teaches, that "would carry us too
far," [ Footnote 15 ] and
would not be compatible with the basic lines of expense
deductibility drawn by Congress. [ Footnote 16 ] Moreover, such a rule would lead to
capricious results. If two taxpayers are each sued for an
automobile accident while driving for pleasure, deductibility of
their litigation costs would turn on the mere circumstance of the
character of the assets each happened to possess, that is, whether
the judgments against them stood to be satisfied out of income- or
nonincome-producing property. We should be slow to attribute to
Congress a purpose producing such unequal treatment among
taxpayers, resting on no rational foundation. Page 372 U. S. 49 Confirmation of these conclusions is found in the incongruities
that would follow from acceptance of the Court of Claims' reasoning
in this case. Had this respondent taxpayer conducted his automobile
dealer business as a sole proprietorship, rather than in corporate
form, and claimed a deduction under § 23(a)(1), [ Footnote 17 ] the potential impact of his
wife's claims would have been no different than in the present
situation. Yet it cannot well be supposed that § 23(a)(1) would
have afforded him a deduction, since his expenditures, made in
connection with a marital litigation, could hardly be deemed
"expenses . . . incurred . . . in carrying on any trade or
business." Thus, under the Court of Claims' view, expenses may be
even less deductible if the taxpayer is carrying on a trade or
business instead of some other income-producing activity. But it
was manifestly Congress' purpose with respect to deductibility to
place all income-producing activities on an equal footing. And it
would surely be a surprising result were it now to turn out that a
change designed to achieve equality of treatment in fact had served
only to reverse the inequality of treatment.
For these reasons, we resolve the conflict among the lower
courts on the question before us ( note 4 supra ) in favor of the view that the
origin and character of the claim with respect to which an expense
was incurred, rather than its potential consequences upon the
fortunes of the taxpayer, is the controlling basic test of whether
the expense was "business" or "personal," and hence whether it is
deductible or not under § 23(a)(2). We find the reasoning
underlying the cases taking the "consequences" view
unpersuasive. Baer v. Commissioner, 196 F.2d 646, upon which the
Court of Claims relied in the present case, is the leading Page 372 U. S. 50 authority on that side of the question. [ Footnote 18 ] There, the Court of Appeals for the
Eighth Circuit allowed a § 23(a)(2) expense deduction to a taxpayer
husband with respect to attorney's fees paid in a divorce
proceeding in connection with an alimony settlement which had the
effect of preserving intact for the husband his controlling stock
interest in a corporation, his principal source of livelihood. The
court reasoned that, since the evidence showed that the taxpayer
was relatively unconcerned about the divorce itself,
"[t]he controversy did not go to the question of . . . [his]
liability [for alimony] [ Footnote 19 ] but to the manner in which [that liability]
might be met . . . without greatly disturbing his financial
structure;"
therefore, the legal services were "for the purpose of
conserving and maintaining" his income-producing property. 196 F.2d
at 649-650, 651.
It is difficult to perceive any significant difference between
the "question of liability" and "the manner" of its discharge, for,
in both instances, the husband's purpose is to avoid losing
valuable property. Indeed, most of the cases which have followed Baer have placed little reliance on that distinction, and
have tended to confine the deduction to situations where the wife's
alimony claims, if successful, might have completely destroyed the
husband's Page 372 U. S. 51 capacity to earn a living. [ Footnote 20 ] Such may be the situation where loss of
control of a particular corporation is threatened, in contrast to
instances where the impact of a wife's support claims is only upon
diversified holdings of income-producing securities. [ Footnote 21 ] But that rationale too
is unsatisfactory. For diversified security holdings are no less
"property held for the production of income" than a large block of
stock in a single company. And, as was pointed out in Lykes,
supra, at 343 U. S. 126 ,
if the relative impact of a claim on the income-producing resources
of a taxpayer were to determine deductibility, substantial
"uncertainty and inequity would inhere in the rule."
We turn then to the determinative question in this case: did the
wife's claims respecting respondent's stockholdings arise in
connection with his profit-seeking activities? II In classifying respondent's legal expenses, the court below did
not distinguish between those relating to the claims of the wife
with respect to the existence of community property and those
involving the division of any such property. Supra, p. 372 U. S. 41 -42.
Nor is such a breakdown necessary for a disposition of the present
case. It is enough to say that in both aspects the wife's claims
stemmed entirely from the marital relationship, and not, under any
tenable view of things, from income-producing activity. This is
obviously so as regards the claim to more than an equal division of
any community property Page 372 U. S. 52 found to exist. For any such right depended entirely on the
wife's making good her charges of marital infidelity on the part of
the husband. The same conclusion is no less true respecting the
claim relating to the existence of community property. For no such
property could have existed but for the marriage relationship.
[ Footnote 22 ] Thus, none of
respondent's expenditures in resisting these claims can be deemed
"business" expenses, and they are therefore not deductible under §
23(a)(2).
In view of this conclusion, it is unnecessary to consider the
further question suggested by the Government: whether that portion
of respondent's payments attributable to litigating the issue of
the existence of community property was a capital expenditure or a
personal expense. In neither event would these payments be
deductible from gross income.
The judgment of the Court of Claims is reversed, and the case is
remanded to that court for further proceedings consistent with this
opinion. It is so ordered. MR. JUSTICE BLACK and MR. JUSTICE DOUGLAS believe that the Court
reverses this case because of an unjustifiably narrow
interpretation of the 1942 amendment to § 23 of the Internal
Revenue Code, and would accordingly affirm the judgment of the
Court of Claims.
[ Footnote 1 ]
Despite the divorce, Dixie Gilmore is referred to throughout
this opinion as the "wife."
[ Footnote 2 ]
Although the second Mrs. Gilmore, having been a party to one of
the tax returns involved in this case, is also a respondent here,
Mr. Gilmore will be referred to herein as the sole respondent.
[ Footnote 3 ]
The taxable years in question are 1953 and 1954. The year 1954
is governed by the 1954 Code. Since the relevant provisions, §§ 212
and 262, are substantially identical with those of the 1939 Code,
for the sake of clarity, we shall refer only to the 1939 Code.
[ Footnote 4 ] Compare Lewis v. Commissioner, 253 F.2d 821 (C.A.2d
Cir.), and Douglas v. Commissioner, 33 T.C. 349, with
Gilmore v. United States, 290 F.2d 942 (Ct.Cl.) -- the present
case -- and Baer v. Commissioner, 196 F.2d 646 (C.A.8th
Cir.).
[ Footnote 5 ]
He owned 100% of the outstanding stock of Don Gilmore-San
Francisco, 73 1/3% of the outstanding stock of Don Gilmore-Hayward,
and 60% of the outstanding stock of Don Gilmore-Riverside.
[ Footnote 6 ]
$1,024.90 in 1953, and $516.60 in 1954.
[ Footnote 7 ] See Pereira v. Pereira, 156 Cal. 1, 103 P. 488; Lenninger v. Lenninger, 167 Cal. 297, 139 P. 679; Huber v. Huber, 27 Cal. 2d
784 , 167 P.2d 708.
[ Footnote 8 ]
Under California law, a party granted a divorce on grounds of
extreme cruelty or adultery may, in the court's discretion, be
awarded up to all of the community property of the marriage.
Cal.Civ.Code, § 146. See Barham v. Barham, 33 Cal. 2d
416 , 202 P.2d 289; Wilson v. Wilson, 159 Cal. App.
2d 330 , 323 P.2d 1017. Such grounds for divorce were alleged by
each of these spouses against the other.
[ Footnote 9 ]
Section 24(a)(1) provides: "In computing net income no deduction
shall in any case be allowed in respect of -- (1) Personal, living,
or family expenses. . . ."
[ Footnote 10 ]
Several other issues involving deficiency assessments for the
years 1953, 1954, and 1955 were decided by the Court of Claims, but
they are not before this Court.
[ Footnote 11 ]
Surrey and Warren, Cases on Federal Income Taxation, 272
(1960).
[ Footnote 12 ] See 4 Mertens, Law of Federal Income Taxation (rev. ed.
1960), § 25 A. 09 at 19-20.
[ Footnote 13 ] See H.R.Rep. No. 2333, 77th Cong., 2d Sess. 46.
[ Footnote 14 ]
H.R.Rep. No. 2333, 77th Cong., 2d Sess. 75:
"A deduction under this section is subject, except for the
requirement of being incurred in connection with a trade or
business, to all the restrictions and limitations that apply in the
case of the deduction under section 23(a)(1)(A) of an expense paid
or incurred in carrying on any trade or business." See also S.Rep. No. 1631, 77th Cong., 2d Sess. 88.
[ Footnote 15 ]
The Treasury Regulations have long provided:
"An expense (not otherwise deductible) paid or incurred by an
individual in determining or contesting a liability asserted
against him does not become deductible by reason of the fact that
property held by him for the production of income may be required
to be used or sold for the purpose of satisfying such
liability."
Treas.Reg. (1954 Code) § 1.212-1(m); see Treas.Reg. 118
(1939 Code) § 39.23(a)-15(k).
[ Footnote 16 ]
Expenses of contesting tax liabilities are now deductible under
§ 212(3) of the 1954 Code. This provision merely represents a
policy judgment as to a particular class of expenditures otherwise
nondeductible, like extraordinary medical expenses, and does not
cast any doubt on the basic tax structure set up by Congress.
[ Footnote 17 ]
We find no indication that Congress intended § 23(a)(2) to
include such expenses.
[ Footnote 18 ]
Besides the present case see to the same effect, e.g.,
Patrick v. United States, 288 F.2d 292 (C.A.4th Cir.), No. 22, reversed today, post, p. 372 U. S. 53 ; Owens v. Commissioner, 273 F.2d 251 (C.A.5th Cir.); Bowers v. Commissioner, 243 F.2d 904 (C.A.6th Cir.); McMurtry v. United States, 132 F. Supp. 114.
[ Footnote 19 ]
Expenses incurred in divorce litigation have generally been held
to be nondeductible. See, e.g., Richardson v.
Commissioner, 234 F.2d 248 (C.A.4th Cir.); Smith's Estate
v. Commissioner, 208 F.2d 349 (C.A.3d Cir.); Joyce v.
Commissioner, 3 B.T.A. 393. See also Treas.Reg. (1954
Code) § 1.262-1(b)(7):
"Generally, attorney's fees and other costs paid in connection
with a divorce, separation, or decree for support are not
deductible by either the husband or the wife."
[ Footnote 20 ] See, e.g., the present case, 290 F.2d at 947; Tressler v. Commissioner, 228 F.2d 356, 361 (C.A.9th
Cir.); Howard v. Commissioner, 202 F.2d 28, 30 (C.A.9th
Cir.).
[ Footnote 21 ] Compare with the present case Davis v. United States, 287 F.2d 168, 152 Ct.Cl. 805, reversed in part on other
grounds, 370 U. S. 65 , in
which the Court of Claims held to be nondeductible the legal
expenses of resisting the wife's threat to stock not essential to
protect the husband's employment.
[ Footnote 22 ]
The respondent's attempted analogy of a marital "partnership" to
the business partnership involved in the Kornhauser case, supra, is, of course, unavailing. The marriage
relationship can hardly be deemed an income-producing activity. | In United States v. Gilmore, the Supreme Court held that legal expenses incurred by an individual in defending against their spouse's claims to certain assets during divorce proceedings are not deductible under the Internal Revenue Code. The Court determined that the origin and nature of the claim, rather than its potential financial impact on the taxpayer, is the deciding factor in determining whether an expense is "business" or "personal." In this case, the wife's claims stemmed from the marital relationship and not from income-producing activity, thus classifying the expenses as non-deductible personal expenses. |
Taxes | Schlude v. Commissioner | https://supreme.justia.com/cases/federal/us/372/128/ | U.S. Supreme Court Schlude v. Commissioner, 372
U.S. 128 (1963) Schlude v. Commissioner of Internal
Revenue No. 80 Argued December 10,
1962 Decided February 18,
1963 372
U.S. 128 CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE EIGHTH
CIRCUIT Syllabus Petitioners, who operated dance studios, kept their books and
made their income tax returns on a fiscal year accrual basis. They
obtained from students contracts for dancing lessons over periods
of years, to be paid for partly in cash and partly in installments,
sometimes represented by negotiable notes which were discounted at
banks. For the years 1952, 1953 and 1954, they reported as gross
income only that portion of the advance payments received in cash
and the amounts of notes and contracts executed during the
respective years which corresponded with the number of hours
taught. The balance was reserved for accrual in future years when
additional lessons were taught, waived or forfeited. Held: it was proper for the Commissioner, in the
exercise of his discretion under § 41 of the Internal Revenue Code
of 1939 and § 446(b) of the Internal Revenue Code of 1954, to
reject petitioners' accounting system as not clearly reflecting
income, and to include as income in a particular year advance
payments by way of cash, negotiable notes and contract installments
falling due but remaining unpaid during that year. America
Automobile Association v. United States, 367 U.
S. 687 . Pp. 372 U. S.
129 -137.
296 F.2d 721 affirmed in part, reversed in part, and
remanded. Page 372 U. S. 129 MR. JUSTICE WHITE delivered the opinion of the Court.
This is still another chapter in the protracted problem of the
time certain items are to be recognized as income for the purposes
of the federal income tax. The Commissioner of Internal Revenue
increased the 1952, 1953, and 1954 ordinary income of the taxpayers
[ Footnote 1 ] by including in
gross income for those years amounts received or receivable under
contracts executed during those years despite the fact that the
contracts obligated taxpayers to render performance in subsequent
periods. These increases produced tax deficiencies which the
taxpayers unsuccessfully challenged in the Tax Court on the ground
that the amounts could be deferred under their accounting method.
On appeal, the Court of Appeals for the Eighth Circuit agreed with
the taxpayers and reversed the Tax Court, 283 F.2d 234, the
decision having been rendered prior to ours in American
Automobile Ass'n v. United States, 367 U.
S. 687 . Following the American Automobile
Association case, certiorari in this case was granted, the
judgment of the lower court vacated, 367 U.
S. 911 , and the cause remanded for further consideration
in light of American Automobile Association. 368 U.S. 873.
In a per curiam opinion, the Court of Appeals held that, in view of American Automobile Association, the taxpayers' accounting
method "does not, for income tax purposes, clearly reflect income,"
and affirmed the judgment for the Page 372 U. S. 130 Commissioner, 296 F.2d 721. We brought the case back once again
to consider whether the lower court misapprehended the scope of American Automobile Association, 370 U.S. 902.
Taxpayers, husband and wife, formed a partnership to operate
ballroom dancing studios (collectively referred to as "studio")
pursuant to Arthur Murray, Inc., franchise agreements. Dancing
lessons were offered under either of two basic contracts. The cash
plan contract required the student to pay the entire downpayment in
cash at the time the contract was executed with the balance due in
installments thereafter. The deferred payment contract required
only a portion of the downpayment to be paid in cash. The remainder
of the downpayment was due in stated installments, and the balance
of the contract price was to be paid as designated in a negotiable
note signed at the time the contract was executed.
Both types of contracts provided that (1) the student should pay
tuition for lessons in a certain amount, (2) the student should not
be relieved of his obligation to pay the tuition, (3) no refunds
would be made, and (4) the contract was noncancelable. [ Footnote 2 ] The contracts prescribed a
specific number of lesson hours ranging from five to 1,200 hours,
and some contracts provided lifetime courses entitling the student
additionally to two hours of lessons per month plus two parties a
year for life. Although the contracts designated the period during
which the lessons had to be taken, there was no schedule of
specific dates, which were arranged from time to time as lessons
were given. Page 372 U. S. 131 Cash payments received directly from students and amounts
received when the negotiable notes were discounted at the bank or
fully paid [ Footnote 3 ] were
deposited in the studio's general bank account without segregation
from its other funds. The franchise agreements required the studio
to pay to Arthur Murray, Inc., on a weekly basis, 10% of these cash
receipts as royalty and 5% of the receipts in escrow, the latter to
continue until a $20,000 indemnity fund was accumulated. Similarly,
sales commissions for lessons sold were paid at the time the sales
receipts were deposited in the studio's general bank account.
The studio, since its inception in 1946, has kept its books and
reported income for tax purposes [ Footnote 4 ] on an accrual system of accounting. In
addition to the books, individual student record cards were
maintained showing the number of hours taught and the number still
remaining under the contract. The system, in substance, operated as
follows. When a contract was entered into, a "deferred income"
account was credited for the total contract price. At the close of
each fiscal period, the student record cards were analyzed and the
total number of taught hours was multiplied by the designated rate
per hour of each contract. The resulting sum was deducted from the
deferred income account and reported as earned income Page 372 U. S. 132 on the financial statements and the income tax return. In
addition, if there had been no activity in a contract for over a
year, or if a course were reduced in amount, an entry would be made
canceling the untaught portion of the contract, removing that
amount from the deferred income account, and recognizing gain to
the extent that the deferred income exceeded the balance due on the
contract, i.e., the amounts received in advance. The
amounts representing lessons taught and the gains from
cancellations constituted the chief sources of the partnership's
gross income. [ Footnote 5 ] The
balance of the deferred income account would be carried forward
into the next fiscal year, to be increased or decreased in
accordance with the number of new contracts, lessons taught and
cancellations recognized.
Deductions were also reported on the accrual basis, except that
the royalty payments and the sales commissions were deducted when
paid, irrespective of the period in which the related receipts were
taken into income. Three certified public accountants testified
that, in their opinion, the accounting system employed truly
reflected net income in accordance with commercial accrual
accounting standards.
The Commissioner included in gross income for the years in
question not only advance payments received in Page 372 U. S. 133 cash, but the full face amounts of notes and contracts executed
during the respective years. The Tax Court and the Court of Appeals
upheld the Commissioner, but the United States in this Court has
retreated somewhat, and does not now claim the includability in
gross income of future payments which were not evidenced by a note
and which were neither due by the terms of the contract nor matured
by performance of the related services. [ Footnote 6 ] The question remaining for decision, then,
is this: was it proper for the Commissioner, exercising his
discretion under § 41, [ Footnote
7 ] 1939 Code, and § 446(b), [ Footnote 8 ] 1954 Code, Page 372 U. S. 134 to reject the studio's accounting system as not clearly
reflecting income, and to include as income in a particular year
advance payments by way of cash, negotiable notes, and contract
installments falling due but remaining unpaid during that year? We
hold that it was, since we believe the problem is squarely
controlled by American Automobile Association, 367 U. S. 687 .
The court there had occasion to consider the entire legislative
background of the treatment of prepaid income. The retroactive
repeal of § 452 of the 1954 Code, "the only law incontestably
permitting the practice upon which [the taxpayer] depends," was
regarded as reinstating longstanding administrative and lower court
rulings that accounting systems deferring prepaid income could be
rejected by the Commissioner.
"[T]he fact is that § 452, for the first time, specifically
declared petitioner's system of accounting to be acceptable for
income tax purposes, and overruled the longstanding position of the
Commissioner and courts to the contrary. And the repeal of the
section the following year, upon insistence by the Treasury that
the proposed endorsement of such tax accounting would have a
disastrous impact on the Government's revenue, was just as clearly
a mandate from the Congress that petitioner's system was not
acceptable for tax purposes."
367 U.S. at 367 U. S.
695 . Page 372 U. S. 135 Confirming that view was the step-by-step approach of Congress
in granting the deferral privilege to only limited groups of
taxpayers while exploring more deeply the ramifications of the
entire problem.
Plainly, the considerations expressed in American Automobile
Association are apposite here. We need only add here that,
since the American Automobile Association decision, a specific
provision extending the deferral practice to certain membership
corporations was enacted, § 456, 1954 Code, added by § 1, Act of
July 26, 1961, 75 Stat. 222, continuing at least so far the
congressional policy of treating this problem by precise provisions
of narrow applicability. Consequently, as in the American
Automobile Association case, we invoke the "long established
policy of the Court in deferring, where possible, to congressional
procedures in the tax field," and, as in that case, we cannot say
that the Commissioner's rejection of the studio's deferral system
was unsound.
The American Automobile Association case rested upon an
additional ground which is also controlling here. Relying upon Automobile Club of Michigan v. Commissioner, 353 U.
S. 180 , the Court rejected the taxpayer's system as
artificial, since the advance payments related to services which
were to be performed only upon customers' demands, without relation
to fixed dates in the future. The system employed here suffers from
that very same vice, for the studio sought to defer its cash
receipts on the basis of contracts which did not provide for
lessons on fixed dates after the taxable year, but left such dates
to be arranged from time to time by the instructor and his student.
Under the contracts, the student could arrange for some or all of
the additional lessons or could simply allow their rights under the
contracts to lapse. But even though the student did not demand the
remaining lessons, the contracts permitted the studio to insist
upon payment in accordance with the obligations undertaken, and to
retain Page 372 U. S. 136 whatever prepayments were made without restriction as to use and
without obligation of refund. At the end of each period, while the
number of lessons taught had been meticulously reflected, the
studio was uncertain whether none, some, or all of the remaining
lessons would be rendered. Clearly, services were rendered solely
on demand in the fashion of the American Automobile
Association and Automobile Club of Michigan cases.
[ Footnote 9 ]
Moreover, percentage royalties and sales commissions for lessons
sold, which were paid as cash was received from students or from
its note transactions with the bank, were deducted in the year
paid, even though the related items of income had been deferred, at
least in part, to later periods. In view of all these
circumstances, we hold the studio's accrual system vulnerable under
§ 41 and § 446(b) with respect to its deferral of prepaid income.
Consequently, the Commissioner was fully justified in including
payments in cash or by negotiable note [ Footnote 10 ] in gross income for the year in which
such payments were received. If these payments are includible in
the year of receipt because their allocation to a later year does
not clearly reflect income, the contract installments are likewise
includible in gross income, as the United States now Page 372 U. S. 137 claims, in the year they become due and payable. For an accrual
basis taxpayer "it is the right to receive, and not the actual
receipt, that determines the inclusion of the amount in gross
income," Spring City Foundry Co. v. Commissioner, 292 U. S. 182 , 292 U. S. 184 ; Commissioner v. Hansen, 360 U. S. 446 , and
here the right to receive these installments had become fixed at
least at the time they were due and payable.
We affirm the Court of Appeals insofar as that court held
includible the amounts representing cash receipts, notes received
and contract installments due and payable. Because of the
Commissioner's concession, we reverse that part of the judgment
which included amounts for which services had not yet been
performed and which were not due and payable during the respective
periods, and we remand the case with directions to return the case
to the Tax Court for a redetermination of the proper income tax
deficiencies now due in light of this opinion. It is so ordered. [ Footnote 1 ]
The controversy turns upon the accounting method employed by a
partnership in which the taxpayers were equal partners. Since a
partnership is not a taxable entity, the partners being liable in
their individual capacities for their distributive share of
partnership income, § 181, Int.Rev.Code of 1939; § 701,
Int.Rev.Code of 1954, the proper statement of the partnership's
income affects only the tax liabilities of the partners
individually. However, as there is no other dispute in the case,
for convenience, the discussion will center upon the partnership's
accounting method without further mention of its effect upon the
respective tax liabilities of the partners.
[ Footnote 2 ]
Although the contracts stated they were noncancelable, the
studio frequently rewrote contracts reducing the number of lessons
for a smaller sum of money. Also, despite the fact that the
contracts provided that no refunds would be made, and despite the
fact that the studio discouraged refunds, occasionally a refund
would be made on a canceled contract.
[ Footnote 3 ]
Notes taken from the students were ordinarily transferred, with
full recourse, to a local bank which would deduct the interest
charges and credit the studio with approximately 50% of the face
amount. The remaining 50% was held in a reserve account,
unavailable to the studio, until the note was fully paid, at which
time the reserved amount was transferred to the studio's general
bank account.
[ Footnote 4 ]
Though the studio is not a taxable entity, it is still required
to prepare and file an information return showing, inter
alia, items of gross income and allowable deductions. § 187,
1939 Code; § 6031, 1954 Code.
[ Footnote 5 ]
The following schedule reflects ordinary net income on the
studio's books and returns:
bwm:
Gross income:
Contract amounts trans- 1952 1953 1954
ferred to earned income $143,949.63 $243,277.46 $325,266.97
Gains from cancellation. . 26,861.40 19,483.36 28,488.61
Other income . . . . . . . 4,041.21 11,426.23 16,987.31
----------- ----------- -----------
Total. . . . . . . . . . 174,852.24 274,187.05 370,702.89
Deductions. . . . . . . . . . 137,267.91 223,390.69
301,609.76
=========== =========== ===========
Ordinary net income . . . . . 37,584.33 50,796.36 69,093.13
ewm:
[ Footnote 6 ]
"Upon reconsideration, however, we concede the error of accruing
future payments which are neither due as a matter of contract nor
matured by performance of the related services. Indeed, the
Studio's right to collect the installment on its due date depends
on its continuing ability and willingness to perform. Until that
time, its right to receive payment has not fully ripened."
Brief for the United States, p. 67.
[ Footnote 7 ]
" SEC. 41. GENERAL RULE." "The net income shall be computed upon the basis of the
taxpayer's annual accounting period (fiscal year or calendar year,
as the case may be) in accordance with the method of accounting
regularly employed in keeping the books of such taxpayer; but if no
such method of accounting has been so employed, or if the method
employed does not clearly reflect the income, the computation shall
be made in accordance with such method as in the opinion of the
Commissioner does clearly reflect the income. If the taxpayer's
annual accounting period is other than a fiscal year as defined in
section 48 or if the taxpayer has no annual accounting period or
does not keep books, the net income shall be computed on the basis
of the calendar year."
[ Footnote 8 ]
" § 446. GENERAL RULE FOR METHODS OF ACCOUNTING" "(a) GENERAL RULE. -- Taxable income shall be computed under the
method of accounting on the basis of which the taxpayer regularly
computes his income in keeping his books."
"(b) EXCEPTIONS. -- If no method of accounting has been
regularly used by the taxpayer, or if the method used does not
clearly reflect income, the computation of taxable income shall be
made under such method as, in the opinion of the Secretary or his
delegate, does clearly reflect income."
"(c) PERMISSIBLE METHODS. -- Subject to the provisions of
subsections (a) and (b), a taxpayer may compute taxable income
under any of the following methods of accounting-"
"(1) the cash receipts and disbursements method;"
"(2) an accrual method;"
"(3) any other method permitted by this chapter; or"
"(4) any combination of the foregoing methods permitted under
regulations prescribed by the Secretary or his delegate."
[ Footnote 9 ]
The treatment of "gains from cancellations" underlines this
aspect of the case. These gains, representing amounts paid or
promised in advance of lessons given, were recognized in those
periods in which the taxpayers arbitrarily decided the contracts
were to be deemed canceled. The studio made no attempt to report
estimated cancellations in the year of receipt, choosing instead to
defer these gains to periods bearing no economic relationship to
the income recognized. Cf. Continental Tie & Lumber Co. v.
United States, 286 U. S. 290 .
[ Footnote 10 ]
Negotiable notes are regarded as the equivalent of cash
receipts, to the extent of their fair market value, for the
purposes of recognition of income. § 39.22(a)-4, Treas.Reg. 118,
1939 Code; § 1.61-2(d)(4), Treas.Reg., 1954 Code; Mertens, Federal
Income Taxation (1961), § 11.07. See Pinellas Ice & Cold
Storage Co. v. Commissioner, 287 U. S. 462 .
MR. JUSTICE STEWART, with whom MR. JUSTICE DOUGLAS, MR. JUSTICE
HARLAN, and MR. JUSTICE GOLDBERG join, dissenting.
As the Court notes, this case is but the most recent episode in
a protracted dispute concerning the proper income tax treatment of
amounts received as advances for services to be performed in a
subsequent year by a taxpayer who is on an accrual, rather than a
cash, basis. The Government has consistently argued that such
amounts are taxable in the year of receipt, relying upon two
alternative arguments: it has claimed that deferral of such
payments would violate the "annual accounting" principle which
requires that income not be postponed from one year to the next to
reflect the long-term economic result of a transaction.
Alternatively, the Government Page 372 U. S. 138 has argued that advance payments must be reported as income in
the year of receipt under the "claim of right doctrine," which
requires otherwise reportable income, held under a claim of right
without restriction as to use, to be reported when received despite
the fact that the taxpayer's claim to the funds may be disputed.
[ Footnote 2/1 ]
As I have elsewhere pointed out, neither of these doctrines has
any relevance to the question whether any reportable income at all
has been derived when payments are received in advance of
performance by an accrual-basis taxpayer. [ Footnote 2/2 ] The most elementary principles of accrual
accounting require that advances be considered reportable income
only in the year they are earned by the taxpayer's rendition of the
services for which the payments were made. The Government's
theories would Page 372 U. S. 139 force upon an accrual basis taxpayer a cash basis for advance
payments in disregard of the federal statute, which explicitly
authorizes income tax returns to be based upon sound accrual
accounting methods. [ Footnote
2/3 ]
Apparently the Court agrees that neither the annual accounting
requirement nor the claim of right doctrine has any relevance or
applicability to the question involved in this case. For the Court
does not base its decision on either theory, but rather, as in two
previous cases, [ Footnote 2/4 ] upon
the ground that the system of accrual accounting used by these
particular taxpayers does not "clearly reflect income" in accord
with the statutory command. [ Footnote
2/5 ] This result is said to be compelled both by a
consideration of legislative history and by an analysis of the
particular accounting system which these taxpayers employed.
For the reasons I have elsewhere stated at some length,
[ Footnote 2/6 ] to rely on the
repeal of §§ 452 and 462 as indicating congressional Page 372 U. S. 140 disapproval of accrual accounting principles is conspicuously to
disregard clear evidence of legislative intent. The Secretary of
the Treasury, who proposed the repeal of these sections, made
explicitly clear that no inference of disapproval of accrual
accounting principles was to be drawn from the repeal of the
sections. [ Footnote 2/7 ] So did the
Senate Report. [ Footnote 2/8 ] The
repeal of these sections was occasioned solely by the fear of
temporary revenue losses which would result from the taking of
"double deductions" during the year of transition by taxpayers who
had not previously maintained their books on an accrual basis.
[ Footnote 2/9 ]
The Court's decision can be justified, then, only upon the basis
that the system of accrual accounting used by the taxpayers in this
case did not "clearly reflect income" in accordance with the
command of § 41. In the Automobile Club of Michigan case,
[ Footnote 2/10 ] the taxpayer
allocated yearly dues ratably over 12 months, so that only a
portion of the dues received during any fiscal year was reported as
income for that year. In the absence of any proof that services
demanded by the Automobile Club members were distributed in the
same proportion over the year, the Court held that the system used
by the taxpayer did not clearly reflect income. In the American
Automobile Association case, [ Footnote 2/11 ] the taxpayer offered statistical proof
to show that its proration of dues reasonably matched the
proportion of its yearly costs incurred each month in rendering
services attributable to those dues. The Court discounted the
validity of this statistical evidence because Page 372 U. S. 141 the amount and timing of the services demanded were wholly
within the control of the individual members of the Association,
and the Court thought that the Association could not, therefore,
estimate with accuracy the costs attributable to each individual
member's demands.
In the present case, the difficulties which the Court perceived
in Automobile Club of Michigan and American Automobile
Association have been entirely eliminated in the accounting
system which these taxpayers have consistently employed. The
records kept on individual students accurately measured the amount
of services rendered -- and therefore the costs incurred by the
taxpayer -- under each individual contract during each taxable
year. But, we are told, there is a fatal flaw in the taxpayers'
accounts in this case too: the individual contracts did not provide
"for lessons on fixed dates . . . , but left such dates to be
arranged from time to time by the instructor and his student." Yet
this "fixed date of performance" standard, it turns out, actually
has nothing whatever to do with those aspects of the taxpayers'
accounting system which the Court ultimately finds
objectionable.
There is nothing in the Court's opinion to indicate disapproval
of the basic method by which income earned by the rendition of
services was recorded. On the contrary, the taxpayers' system was
admittedly wholly accurate in recording lessons given under each
individual contract. It was only in connection with lessons which
had not yet been taught that the taxpayers were "uncertain whether
none, some, or all" of the contractual services would be rendered,
and the condemned "arbitrariness" therefore is limited solely to
the method by which cancellations were recognized. [ Footnote 2/12 ] It is, of course, true of
all businesses in Page 372 U. S. 142 which services are not rendered simultaneously with payment that
the number and amount of cancellations are necessarily unknown at
the time advances are received. But surely it cannot be contended
that a contract which specified the times at which lessons were to
be given would make any more certain how many of the remaining
lessons students would in fact demand. Indeed, the Court does not
suggest that a schedule fixing the dates of all future lessons
would, if embodied in each contract, suffice to make petitioners'
accounting system "clearly reflect income."
Instead, the cure suggested by the Court for the defect which it
finds in the accounting system used by these taxpayers is that
estimated cancellations should be reported as income in the year
advance payments are received. I agree that such estimates might
more "clearly reflect income" than the system actually used by the
taxpayers. But any such estimates would necessarily have to be
based on precisely the type of statistical evaluations which the
Court struck down in the American Automobile Association case. Whatever other artificialities the exigencies of revenue
collection may require in the field of tax accounting, it has never
before today been suggested that a consistent method of accrual
accounting, valid for purposes of recognizing income, is not
equally valid for purposes of deferring income. Yet, in this case,
the Court says that the taxpayers, in recognizing income, should
have used the very system of statistical estimates which, Page 372 U. S. 143 for income deferral purposes, the American Automobile decision held impermissible.
It seems to me that this decision, the third of a trilogy of
cases purportedly decided on their own peculiar facts, in truth
completes the mutilation of a basic element of the accrual method
of reporting income -- a method which has been explicitly approved
by Congress for almost half a century. [ Footnote 2/13 ]
I respectfully dissent.
[ Footnote 2/1 ]
The Commissioner has sometimes been successful in urging the
"claim of right doctrine" as a bar to the deferral of advances by
accrual basis taxpayers. See e.g., Andrews v.
Commissioner, 23 T.C. 1026, 1032-1033; South Dade Farms v.
Commissioner, 138 F.2d 818 (C.A.5th Cir.); Clay Sewer Pipe
Ass'n v. Commissioner, 139 F.2d 130 (C.A.3d Cir.); Automobile Club of Michigan v. Commissioner, 230 F.2d 585,
591 (C.A.6th Cir.), aff'd on other grounds, 353 U. S. 353 U.S.
180.
In more recent cases, on the other hand, the Courts of Appeals
have held the claim of right doctrine irrelevant to this problem. Bressner Radio, Inc. v. Commissioner, 267 F.2d 520, 524,
525-528 (C.A.2d Cir.); Schuessler v. Commissioner, 230
F.2d 722, 725 (C.A.5th Cir.); Beacon Publishing Co. v.
Commissioner, 218 F.2d 697, 699-701 (C.A.10th Cir.).
In the present case, the Commissioner urged that the "claim of
right doctrine" was applicable even to advance fees which were due
under the contract but not yet paid, a position from which he
receded only when the case reached this Court. The Tax Court, at
least in one case, has accepted the argument. Your Health Club,
Inc. v. Commissioner, 4 T.C. 385.
[ Footnote 2/2 ] See American Automobile Ass'n v. United States, 367 U. S. 687 at 367 U. S.
699 -702 (dissenting opinion).
[ Footnote 2/3 ]
" § 446. GENERAL RULE FOR METHODS OF ACCOUNTING" "(a) GENERAL RULE. -- Taxable income shall be computed under the
method of accounting on the basis of which the taxpayer regularly
computes his income in keeping his books."
"(b) EXCEPTIONS. -- If no method of accounting has been
regularly used by the taxpayer, or if the method used does not
clearly reflect income, the computation of taxable income shall be
made under such method as, in the opinion of the Secretary or his
delegate, does clearly reflect income."
"(c) PERMISSIBLE METHODS. -- Subject to the provisions of
subsections (a) and (b), a taxpayer may compute taxable income
under any of the following methods of accounting --"
" * * * *" "(2) an accrual method; . . . ."
[ Footnote 2/4 ] Automobile Club of Michigan v. Commissioner, 353 U. S. 180 , and American Automobile Ass'n v. United States, 367 U.
S. 687 .
[ Footnote 2/5 ] See 372
U.S. 128 fn2/3|>note 3, supra. See also §
41, 1939 Code.
[ Footnote 2/6 ] See American Automobile Ass'n v. United States, 367
U.S. at 367 U. S.
703 -711 (dissenting opinion).
[ Footnote 2/7 ]
H.R.Rep.No.293, 84th Cong., 1st Sess. 5.
[ Footnote 2/8 ]
S.Rep.No.372, 84th Cong., 1st Sess. 5-6. See also H.R.Rep.No.293, 84th Cong., 1st Sess. 4-5.
[ Footnote 2/9 ]
Since the taxpayers in the present case have consistently
maintained their books on an accrual basis, they could not have
taken advantage of a "double deduction" even under the repealed
sections.
[ Footnote 2/10 ] 353 U. S. 353 U.S.
180.
[ Footnote 2/11 ] 367 U. S. 367 U.S.
687.
[ Footnote 2/12 ]
The Court also urges that the taxpayers' treatment of the
commissions paid to sales personnel and royalties paid to Arthur
Murray, Inc., were inconsistent with an accrual accounting system.
It should be noted that § 1.461-1(a)(3), Treas.Reg., 1954 Code,
specifically provides:
". . . However, in a going business, there are certain
overlapping deductions. If these overlapping items do not
materially distort income, they may be included in the years in
which the taxpayer consistently takes them into account."
If, however, the Court is holding that these items do
"materially distort income," then the case should be remanded for
recomputation as to these items.
[ Footnote 2/13 ] See § 13(d) of the Revenue Act of 1916, 39 Stat.
771. | The Supreme Court ruled that the Commissioner of Internal Revenue was correct in rejecting the taxpayers' accounting system, which did not accurately reflect their income for tax purposes. The Court affirmed that the Commissioner has the discretion to make this decision under the relevant sections of the Internal Revenue Code. This case highlights the importance of accurately reporting income and the authority of the Commissioner to ensure taxpayers' compliance with tax laws. |
Taxes | U.S. v. Correll | https://supreme.justia.com/cases/federal/us/389/299/ | U.S. Supreme Court United States v. Correll, 389
U.S. 299 (1967) United States v.
Correll No. 113 Argued November 14,
1967 Decided December 11,
1967 389
U.S. 299 CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE SIXTH
CIRCUIT Syllabus The Commissioner of Internal Revenue's longstanding ruling that
"traveling expenses" incurred in the pursuit of business "while
away from home," which are deductible under § 162(a)(2) of the
Internal Revenue Code of 1954, include the cost of meals only if
the trip requires sleep or rest, held to achieve not only
ease and certainty of application, but also substantial fairness
and to be within the Commissioner's authority to implement the
statute in any reasonable manner. Pp. 389 U. S.
301 -307.
369 F.2d 87, reversed.
MR. JUSTICE STEWART delivered the opinion of the Court.
The Commissioner of Internal Revenue has long maintained that a
taxpayer traveling on business may deduct the cost of his meals
only if his trip requires him to stop for sleep or rest. The
question presented here is the validity of that rule. Page 389 U. S. 300 The respondent in this case was a traveling salesman for a
wholesale grocery company in Tennessee. [ Footnote 1 ] He customarily left home early in the
morning, ate breakfast and lunch on the road, and returned home in
time for dinner. In his income tax returns for 1960 and 1961, he
deducted the cost of his morning and noon meals as "traveling
expenses" incurred in the pursuit of his business "while away from
home" under § 162(a)(2) of the Internal Revenue Code of 1954.
[ Footnote 2 ] Because the
respondent's daily trips required neither sleep nor rest, the
Commissioner disallowed the deductions, ruling that the cost of the
respondent's meals was a "personal, living" expense under § 262,
[ Footnote 3 ] rather than a
travel expense under § 162(a)(2). The respondent paid the tax, sued
for a refund in the District Court, and there received a favorable
jury verdict. [ Footnote 4 ] The
Court of Appeals for the Sixth Page 389 U. S. 301 Circuit affirmed, holding that the Commissioner's sleep or rest
rule is not "a valid regulation under the present statute." 369
F.2d 87, 90. In order to resolve a conflict among the circuits on
this recurring question of federal income tax administration,
[ Footnote 5 ] we granted
certiorari. 388 U.S. 905.
Under § 162(a)(2), taxpayers "traveling . . . away from home in
the pursuit of trade or business" may deduct the total amount
"expended for meals and lodging" [ Footnote 6 ] As a result, even the taxpayer who incurs
substantial Page 389 U. S. 302 hotel and restaurant expenses because of the special demands of
business travel receives something of a windfall, for at least part
of what he spends on meals represents a personal living expense
that other taxpayers must bear without receiving any deduction at
all. [ Footnote 7 ] Not
surprisingly, therefore, Congress did not extend the special
benefits of § 162(a)(2) to every conceivable situation involving
business travel. It made the total cost of meals and lodging
deductible only if incurred in the course of travel that takes the
taxpayer "away from home." The problem before us involves the
meaning of that limiting phrase.
In resolving that problem, the Commissioner has avoided the
wasteful litigation and continuing uncertainty that would
inevitably accompany any purely case-by-case approach to the
question of whether a particular taxpayer was "away from home" on a
particular day. [ Footnote 8 ]
Rather than requiring "every meal-purchasing taxpayer to take pot
luck in the courts," [ Footnote
9 ] the Commissioner has consistently construed travel "away
from home" to exclude all trips requiring neither sleep nor rest,
[ Footnote 10 ] regardless Page 389 U. S. 303 of how many cities a given trip may have touched, [ Footnote 11 ] how many miles it may
have covered, [ Footnote 12 ]
or how many hours it may have consumed. [ Footnote 13 ] By so interpreting the statutory phrase,
the Commissioner has achieved not only ease and certainty of
application, but also substantial fairness, for the sleep or rest
rule places all one-day travelers on a similar tax footing, rather
than discriminating against intracity travelers and commuters, who,
of course, cannot deduct the cost of the meals they eat on the
road. See Commissioner v. Flowers, 326 U.
S. 465 .
Any rule in this area must make some rather arbitrary
distinctions, [ Footnote 14 ]
but at least the sleep or rest rule avoids the obvious inequity of
permitting the New Yorker who makes a quick trip to Washington and
back, missing neither his breakfast nor his dinner at home, to
deduct the cost of his lunch merely because he covers more
miles Page 389 U. S. 304 than the salesman who travels locally and must finance all his
meals without the help of the Federal Treasury. [ Footnote 15 ] And the Commissioner's rule
surely makes more sense than one which would allow the respondent
in this case to deduct the cost of his breakfast and lunch simply
because he spends a greater percentage of his time at the wheel
than the commuter who eats breakfast on his way to work and lunch a
block from his office.
The Court of Appeals nonetheless found in the "plain language of
the statute" an insuperable obstacle to the Commissioner's
construction. 369 F.2d 87, 89. We disagree. The language of the
statute -- "meals and lodging . . . away from home" -- is obviously
not self-defining. [ Footnote
16 ] And to the extent that the words chosen by Congress cut in
either direction, they tend to support, rather than defeat, the
Commissioner's position, for the statute speaks of "meals and
lodging" as a unit, suggesting -- at least arguably -- that
Congress contemplated a deduction for the cost of meals only where
the travel in question involves lodging as well. [ Footnote 17 ] Ordinarily, at least, only the
taxpayer who finds it necessary to stop for sleep or rest incurs
significantly higher living expenses as a direct Page 389 U. S. 305 result of his business travel, [ Footnote 18 ] and Congress might well have thought that
only taxpayers in that category should be permitted to deduct their
living expenses while on the road. [ Footnote 19 ] In any event, Congress certainly recognized,
when it promulgated § 162(a)(2), that the Commissioner had so
understood its statutory predecessor. [ Footnote 20 ] This case thus comes within the settled
principle that
"Treasury regulations and interpretations long continued without
substantial change, applying to unamended or substantially
reenacted statutes, are deemed to have Page 389 U. S. 306 received congressional approval and have the effect of law." Helvering v. Winmill, 305 U. S. 79 , 305 U. S. 83 ; Fribourg Nav. Co. v. Commissioner, 383 U.
S. 272 , 383 U. S.
283 .
Alternatives to the Commissioner's sleep or rest rule are, of
course, available. [ Footnote
21 ] Improvements might be imagined. [ Footnote 22 ] But we do not sit as a committee of
revision to Page 389 U. S. 307 perfect the administration of the tax laws. Congress has
delegated to the Commissioner, not to the courts, the task of
prescribing "all needful rules and regulations for the enforcement"
of the Internal Revenue Code. 26 U.S.C. § 7805(a). In this area of
limitless factual variations, "it is the province of Congress and
the Commissioner, not the courts, to make the appropriate
adjustments." Commissioner v. Stidger, 386 U.
S. 287 , 386 U. S. 296 .
The role of the judiciary in cases of this sort begins and ends
with assuring that the Commissioner's regulations fall within his
authority to implement the congressional mandate in some reasonable
manner. Because the rule challenged here has not been shown
deficient on that score, the Court of Appeals should have sustained
its validity. The judgment is therefore Reversed. MR. JUSTICE MARSHALL took no part in the consideration or
decision of this case.
[ Footnote 1 ]
Since Mr. and Mrs. Correll filed a joint income tax return, both
are respondents here. Throughout this opinion, however, the term
"respondent" refers only to Mr. Correll.
[ Footnote 2 ]
"(a) In General. -- There shall be allowed as a deduction all
the ordinary and necessary expenses paid or incurred during the
taxable year in carrying on any trade or business, including --
"
" * * * *" "(2) traveling expenses (including the entire amount expended
for meals and lodging) while away from home in the pursuit of a
trade or business. . . ."
§ 162(a)(2) of the Internal Revenue Code of 1954, 26 U.S.C. §
162(a)(2) (1958 ed.).
[ Footnote 3 ]
"Except as otherwise expressly provided in this chapter, no
deduction shall be allowed for personal, living, or family
expenses."
§ 262 of the Internal Revenue Code of 1954, 26 U.S.C. § 262.
[ Footnote 4 ]
After denying the Government's motion for a directed verdict,
the District Judge charged the jury that it would have to
"determine under all the facts of this case whether or not" the
Commissioner's rule was "an arbitrary regulation as applied to
these plaintiffs under the facts in this case." He told the jury to
consider whether the meal expenses were "necessary for the employee
to properly perform the duties of his work."
"Should he have eaten them at his home, rather than . . . away
from home, in order to properly carry on this business or to
perform adequately his duties as an employee of this produce
company[?]"
"You are instructed that the cost of meals while on one-day
business trips away from home need not be incurred while on an
overnight trip to be deductible, so long as the expense of such
meals . . . proximately results from the carrying on the particular
business involved and has some reasonable relation to that
business."
Under these instructions, the jury found for the respondent. The
District Court denied the Government's motion for judgment
notwithstanding the verdict.
[ Footnote 5 ]
The decision below conflicts with that of the First Circuit in Commissioner v. Bagley, 374 F.2d 204, but is in accord
with that of the Eighth Circuit in Hanson v. Commissioner, 298 F.2d 391, reaffirmed in United States v. Morelan, 356
F.2d 199, 208-210.
[ Footnote 6 ]
Prior to the enactment in 1921 of what is now § 162(a)(2), the
Commissioner had promulgated a regulation allowing a deduction for
the cost of meals and lodging away from home, but only to the
extent that this cost exceeded "any expenditures ordinarily
required for such purposes when at home." Treas.Reg. 45 (1920 ed.),
Art. 292, 4 Cum.Bull. 209 (1921). Despite it s logical appeal, the
regulation proved so difficult to administer that the Treasury
Department asked Congress to grant a deduction for the "entire
amount" of such meal and lodging expenditures. See Statement of Dr. T. S. Adams, Tax Adviser, Treasury Department, in
Hearings on H.R. 8245 before the Senate Committee on Finance, 67th
Cong., 1st Sess., at 50, 234-235 (1921). Accordingly § 214(a)(1) of
the Revenue Act of 1921, c. 136, 42 Stat. 239, for the first time
included that language that later became § 162(a)(2). See n 2, supra. The
section was amended in a respect not here relevant by the Revenue
Act of 1962, § 4(b), 76 Stat. 976.
[ Footnote 7 ]
Because § 262 makes "personal, living, or family expenses"
nondeductible, see n 3, supra, the taxpayer whose business requires no travel
cannot ordinarily deduct the cost of the lunch he eats away from
home. But the taxpayer who can bring himself within the reach of §
162(a)(2) may deduct what he spends on his noontime meal although
it costs him no more, and relates no more closely to his business,
than does the lunch consumed by his less mobile counterpart.
[ Footnote 8 ]
Such was the approach of the Tax Court in Bagley v.
Commissioner, 46 T.C. 176, 183, vacated, 374 F.2d
204; of the Eighth Circuit in Hanson v. Commissioner, 298
F.2d 391, 397, and evidently of the Sixth Circuit in this case, see 369 F.2d 87, 90.
[ Footnote 9 ] Commissioner v. Bagley, 374 F.2d 204, 207.
[ Footnote 10 ]
The Commissioner's interpretation, first expressed in a 1940
ruling, I.T. 3395, 1910-2 Cum.Bull. 64, was originally known as the
overnight rule. See Commissioner v. Bagley, supra, at
205.
[ Footnote 11 ]
The respondent lived in Fountain City, Tennessee, some 45 miles
from his employer's place of business in Morristown. His territory
included restaurants in the cities of Madisonville, Engelwood,
Etowah, Athens, Sweetwater, Lake City, Caryville, Jacksboro, La
Follette, and Jellico, all in eastern Tennessee.
[ Footnote 12 ]
The respondent seldom traveled farther than 55 miles from his
home, but he ordinarily drove a total of 150 to 175 miles
daily.
[ Footnote 13 ]
The respondent's employer required him to be in his sales
territory at the start of the business day. To do so, he had to
leave Fountain City at about 5 a.m. He usually finished his daily
schedule by 4 p.m., transmitted his orders to Morristown, and
returned home by 5:30 p.m.
[ Footnote 14 ]
The rules proposed by the respondent and by the two amici
curiae filing briefs on his behalf are not exceptional in this
regard. Thus, for example, the respondent suggests that § 162(a)(2)
be construed to cover those taxpayers who travel outside their "own
home town," or outside "the greater . . . metropolitan area" where
they reside. One amicus stresses the number of "hours
spent and miles traveled away from the taxpayer's principal post of
duty," suggesting that some emphasis should also be placed upon the
number of meals consumed by the taxpayer "outside the general area
of his home."
[ Footnote 15 ] See Amoroso v. Commissioner, 193 F.2d 583.
[ Footnote 16 ]
The statute applies to the meal and lodging expenses of
taxpayers "traveling . . . away from home." The very concept of
"traveling" obviously requires a physical separation from one's
house. To read the phrase "away from home" as broadly as a
completely literal approach might permit would thus render the
phrase completely redundant. But, of course, the words of the
statute have never been so woodenly construed. The commuter, for
example, has never been regarded as "away from home" within the
meaning of § 162(a)(2) simply because he has traveled from his
residence to his place of business. See Commissioner v.
Flowers, 326 U. S. 465 , 326 U. S. 473 .
More than a dictionary is thus required to understand the provision
here involved, and no appeal to the "plain language" of the section
can obviate the need for further statutory construction.
[ Footnote 17 ] See Commissioner v. Bagley, 374 F.2d 204, 207, n.
10.
[ Footnote 18 ]
The taxpayer must ordinarily "maintain a home for his family at
his own expense even when he is absent on business," Barnhill
v. Commissioner, 148 F.2d 913, 917, and if he is required to
stop for sleep or rest, "continuing costs incurred at a permanent
place of abode are duplicated." James v. United States, 308 F.2d 204, 206. The same taxpayer, however, is unlikely to incur
substantially increased living expenses as a result of business
travel, however far he may go, so long as he does not find it
necessary to stop for lodging. One amicus curiae brief
filed in this case asserts that "those who travel considerable
distances such as [on] a one-day jet trip between New York and
Chicago" spend more for "comparable meals [than] those who remain
at their home base" and urges that all who travel "substantial
distances" should therefore be permitted to deduct the entire cost
of their meals. It may be that eating at a restaurant costs more
than eating at home, but it cannot seriously be suggested that a
taxpayer's bill at a restaurant mysteriously reflects the distance
he has traveled to get there.
[ Footnote 19 ]
The court below thought that,
"[i]n an era of supersonic travel, the time factor is hardly
relevant to the question of whether or not . . . meal expenses are
related to the taxpayer's business. . . ."
369 F.2d 87, 89-90. But that completely misses the point. The
benefits of § 162(a)(2) are limited to business travel "away from
home," and all meal expenses incurred in the course of such travel
are deductible, however unrelated they may be to the taxpayer's
income-producing activity. To ask that the definition of "away from
home" be responsive to the business necessity of the taxpayer's
meals is to demand the impossible.
[ Footnote 20 ]
In considering the proposed 1954 Code, Congress heard a taxpayer
plea for a change in the rule disallowing deductions for meal
expenses on one-day trips. Hearings on General Revision of the
Internal Revenue Code before the House Committee on Ways and Means,
83d Cong., 1st Sess., pt. 1, at 216-219 (1953); Hearings on H.R.
8300 before the Senate Committee on Finance, 83d Cong., 2d Sess.,
pt. 4, at 2396 (1954). No such change resulted.
In recommending § 62(2)(C) of the 1954 Code, permitting
employees to deduct certain transportation expenses in computing
adjusted gross income, the Senate Finance Committee stated:
"At present, business transportation expenses can be deducted by
an employee in arriving at adjusted gross income only if they are
reimbursed by the employer or if they are incurred while he was away from home overnight. . . ."
"Because these expenses, when incurred, usually are substantial,
it appears desirable to treat employees in this respect like
self-employed persons. For this reason both the House and your
committee's bill permit employees to deduct business transportation
expenses in arriving at adjusted gross income even though the
expenses are not incurred in travel away from home or not
reimbursed by the employer. . . ."
S.Rep. No. 1622, 83d Cong., 2d Sess., 9 (1954) (emphasis added). See also H.R.Rep. No. 1337, 83d Cong., 2d Sess., 9
(1954).
And in discussing § 120 of the 1954 Code (repealed by 72 Stat.
1607 (1958)), which allowed policemen to exclude from taxable
income up to $5 per day in meal allowances, both the House and
Senate Reports noted that, under the prevailing rule, police
officers could deduct expenses over the $5 limit of § 120
"for meals while away from home overnight. " H.R.Rep. No.
1337, 83d Cong., 2d Sess., A40 (1954) (emphasis added); S.Rep. No.
1622, 83d Cong., 2d Sess., 191 (1954) (emphasis added). Thus,
Congress was well aware of the Commissioner's rule when it retained
in § 162(a)(2) the precise terminology it had used in 1921.
[ Footnote 21 ] See n 14, supra. [ Footnote 22 ] See, e.g., the 1963 proposal of the Treasury
Department, in Hearings on the President's 1963 Tax Message before
the House Committee on Ways and Means, 88th Cong., 1st Sess., pt.
1, at 98 (1963).
MR. JUSTICE DOUGLAS, with whom MR. JUSTICE BLACK and MR. JUSTICE
FORTAS concur, dissenting.
The statutory words "while away from home," 26 U.S.C. §
162(a)(2), may not, in my view, be shrunken to "overnight" by
administrative construction or regulations. "Overnight" injects a
time element in testing deductibility, while the statute speaks
only in terms of geography. As stated by the Court of Appeals:
"In an era of supersonic travel, the time factor is hardly
relevant to the question of whether or not travel and meal expenses
are related to the taxpayer's business, and cannot be the basis of
a valid regulation under the present statute." Correll v. United States, 369 F.2d 87, 89-90.
I would affirm the judgment below. | The Supreme Court ruled that the Commissioner of Internal Revenue's long-standing rule on deducting meal costs for business travel is valid. The rule states that meal costs are deductible only if the trip requires sleep or rest, and this ruling provides ease and fairness in application. The Court's decision considers the legislative history and Congress's awareness of the rule, concluding that the Commissioner has the authority to implement the statute reasonably. |
Taxes | U.S. v. Skelly Oil Co. | https://supreme.justia.com/cases/federal/us/394/678/ | U.S. Supreme Court United States v. Skelly Oil Co., 394
U.S. 678 (1969) United States v. Skelly Oil
Co. No. 280 Argued January 15,
1969 Decided April 21,
1969 394
U.S. 678 CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE TENTH
CIRCUIT Syllabus Respondent, a natural gas producer, in 1958 refunded $505,536 to
two customers for excess amounts it had collected during the
previous six years under a minimum price order which this Court
subsequently invalidated. In its tax returns for those years,
respondent included that sum in its gross income and it also
included that amount in its "gross income from the property," which
§ 613 of the Internal Revenue Code of 1954 makes the basis for the
27 1/2% depletion allowed upon the production of oil and natural
gas. Respondent's actual increase in taxable income attributable to
the receipts in question was thus $36,513. However, in its tax
return for 1958, respondent attempted to deduct the $505,536,
claiming that § 1341 permitted it to deduct the full amount of the
overcharges refunded to respondent's customers. Under that section,
income which a taxpayer receives under a claim of right is included
as gross income in the year of receipt, and, under § 1341(a)(4) (on
which respondent relies here), a deduction may be claimed in the
year of repayment. Section 1341 applies if (1) "an item was
included in gross income for a prior taxable year (or years)" under
a claim of right: (2) "a deduction is allowable for the taxable
year because it was established after the close of such prior
taxable year (or years) that the taxpayer did not have an
unrestricted right to such item", and (3) the deduction exceeds
$3,000. The Commissioner reduced the amount of the deduction by the
2 1/2% depletion allowance which respondent had taken in its
returns for the years 1952-1957. Respondent paid the deficiency,
and, after disallowance of its claim, instituted this action for a
refund. The District Court upheld the Commissioner, but the Court
of Appeals reversed. Held: Under § 1341 of the Internal Revenue Code of
1954, the deduction allowable in the year of repayment must be
reduced by the percentage depletion allowance granted respondent in
the years of receipt as a result of the inclusion of the
later-refunded items in respondent's "gross income from the
property" in those years, since Congress did not intend to give
taxpayers, and the Code should not be interpreted Page 394 U. S. 679 as allowing, a deduction for refunding money that was not taxed
when received. Pp. 394 U. S.
680 -687.
32 F.2d 128, reversed and remanded.
MR. JUSTICE MARSHALL delivered the opinion of the Court.
During its tax year ending December 31, 1958, respondent
refunded $505,536.54 to two of its customers for overcharges during
the six preceding years. Respondent, an Oklahoma producer of
natural gas, had set its prices during the earlier years in
accordance with a minimum price order of the Oklahoma Corporation
Commission. After that order was vacated as a result of a decision
of this Court, Michigan Wisconsin Pipe Line Co. v. Corporation
Comm'n of Oklahoma, 355 U. S. 425 (1958), respondent found it necessary to settle a number of claims
filed by its customers; the repayments in question represent
settlements of two of those claims. Since respondent had claimed an
unrestricted right to its sales receipts during the years 1952
through 1957, it had included the $505,536.54 in its gross income
in those years. The amount was also included in respondent's "gross
income from the property" as defined in § 613 of the Internal
Revenue Code of 1954, the section which allows taxpayers to deduct
a fixed percentage of certain receipts to compensate for the
depletion of natural resources from which they derive income.
Allowable percentage depletion for receipts from oil and gas wells
is fixed at 27 1/2% of the "gross income from the property." Since
respondent Page 394 U. S. 680 claimed and the Commissioner allowed percentage depletion
deductions during these years, 27 1/2% of the receipts in question
was added to the depletion allowances to which respondent would
otherwise have been entitled. Accordingly, the actual increase in
respondent's taxable income attributable to the receipts in
question was not $505,536.54, but only $366,513.99. Yet, when
respondent made its refunds in 1958, it attempted to deduct the
full $505,536.54. The Commissioner objected, and assessed a
deficiency. Respondent paid, and, after its claim for a refund had
been disallowed, began the present suit. The Government won in the
District Court, 255 F.
Supp. 228 (D.C.N.D. Okla.1966), but the Court of Appeals for
the Tenth Circuit reversed, 392 F.2d 128 (1968). Upon petition by
the Government, we granted certiorari, 393 U.S. 820 (1968), to
consider whether the Court of Appeals decision had allowed
respondent "the practical equivalent of double deduction," Charles Ilfeld Co. v. Hernandez, 292 U. S.
62 , 292 U. S. 68 (1934), in conflict with past decisions of this Court and sound
principles of tax law. We reverse. I The present problem is an outgrowth of the so-called
"claim-of-right" doctrine. Mr. Justice Brandeis, speaking for a
unanimous Court in North American Oil Consolidated v.
Burnet, 286 U. S. 417 , 286 U. S. 424 (1932), gave that doctrine its classic formulation.
"If a taxpayer receives earnings under a claim of right and
without restriction as to its disposition, he has received income
which he is required to return, even though it may still be claimed
that he is not entitled to retain the money, and even though he may
still be adjudged liable to restore its equivalent."
Should it later appear that the taxpayer was not entitled to
keep the money, Mr. Justice Brandeis explained, he would be
entitled to a deduction in the year of repayment; the taxes due for
the year of receipt would Page 394 U. S. 681 not be affected. This approach was dictated by Congress'
adoption of an annual accounting system as an integral part of the
tax code. See Burnet v. Sanford & Brooks Co., 282 U. S. 359 , 282 U. S.
365 -366 (1931). Of course, the tax benefit from the
deduction in the year of repayment might differ from the increase
in taxes attributable to the receipt; for example, tax rates might
have changed, or the taxpayer might be in a different tax
"bracket." See Healy v. Commissioner, 345 U.
S. 278 , 345 U. S.
284 -285 (1953). But, as the doctrine was originally
formulated, these discrepancies were accepted as an unavoidable
consequence of the annual accounting system.
Section 1341 of the 1954 Code was enacted to alleviate some of
the inequities which Congress felt existed in this area. [ Footnote 1 ] See H.R.Rep. No.
1337, 83d Cong., 2d Sess., Page 394 U. S. 682 887 (1954); S.Rep. No. 1622, 83d Cong., 2d Sess., 118-119
(1954). As an alternative to the deduction in the year of repayment
[ Footnote 2 ] which prior law
allowed, § 1341(a)(5) permits certain taxpayers to recompute their
taxes for the year of receipt. Whenever § 1341(a)(5) applies, taxes
for the current year are to be reduced by the amount taxes were
increased in the year or years of receipt because the disputed
items were included in gross income. Nevertheless, it is clear that
Congress did not intend to tamper with the underlying
claim-of-right doctrine; it only provided an alternative for
certain cases in which the new approach favored the taxpayer. When
the new approach was not advantageous to the taxpayer, the old law
was to apply under § 1341(a)(4).
In this case, the parties have stipulated that § 1341(a)(5) does
not apply. Accordingly, as the courts below recognized,
respondent's taxes must be computed under § 1341(a)(4), and, thus,
in effect, without regard to the special relief Congress provided
through the enactment of § 1341. Nevertheless, respondent argues,
and the Court of Appeals seems to have held, that the language used
in § 1341 requires that respondent be allowed a deduction for the
full amount it refunded to its customers. We think the section has
no such significance. Page 394 U. S. 683 In describing the situations in which the section applies, §
1341(a)(2) talks of cases in which
"a deduction is allowable for the taxable year because it was
established after the close of [the year or years of receipt] that
the taxpayer did not have an unrestricted right to such item. . .
."
The "item" referred to is first mentioned in § 1341(a)(1); it is
the item included in gross income in the year of receipt. The
section does not imply in any way that the "deduction" and the
"item" must necessarily be equal in amount. In fact, the use of the
words "a deduction" and the placement of § 1341 in subchapter Q --
the subchapter dealing largely with side effects of the annual
accounting system -- make it clear that it is necessary to refer to
other portions of the Code to discover how much of a deduction is
allowable. The regulations promulgated under the section make the
necessity for such a cross-reference clear. Treas.Reg. on Income
Tax (1954 Code) § 1.1341-1(26 CFR § 1.1341-1). Therefore, when §
1341(a)(4) -- the subsection applicable here -- speaks of "the tax
. . . computed with such deduction," it is referring to the
deduction mentioned in § 1341(a)(2), and that deduction must be
determined not by any mechanical equation with the "item"
originally included in gross income, but by reference to the
applicable sections of the Code and the case law developed under
those sections. II There is some dispute between the parties about whether the
refunds in question are deductible as losses under § 165 of the
1954 Code or as business expenses under § 162. [ Footnote 3 ] Although, in some situations, the
distinction may have relevance, cf. Equitable Life Ins. Co.
of Page 394 U. S. 684 Iowa v. United States, 340 F.2d 9 (C.A. 8th Cir.1965),
we do not think it makes any difference here. In either case, the
Code should not be interpreted to allow respondent "the practical
equivalent of double deduction," Charles Ilfeld Co. v.
Hernandez, 292 U. S. 62 , 292 U. S. 68 (1934), absent a clear declaration of intent by Congress. See
United States v. Ludey, 274 U. S. 295 (1927). Accordingly, to avoid that result in this case, the
deduction allowable in the year of repayment must be reduced by the
percentage depletion allowance which respondent claimed and the
Commissioner allowed in the years of receipt as a result of the
inclusion of the later-refunded items in respondent's "gross income
from the property" in those years. Any other approach would allow
respondent a total of $1.27 1/2 in deductions for every $1 refunded
to its customers.
Under the annual accounting system dictated by the Code, each
year's tax must be definitively calculable at the end of the tax
year.
"It is the essence of any system of taxation that it should
produce revenue ascertainable, and payable to the government, at
regular intervals." Burnet v. Sanford & Brooks Co., supra, at 282 U. S. 365 .
In cases arising under the claim-of-right doctrine, this emphasis
on the annual accounting period normally requires that the tax
consequences of a receipt should not determine the size of the
deduction allowable in the year of repayment. There is no
requirement that the deduction save the taxpayer the exact amount
of taxes he paid because of the inclusion of the item in income for
a prior year. See Healy v. Commissioner, supra. Nevertheless, the annual accounting concept does not require us
to close our eyes to what happened in prior years. For instance, it
is well settled that the prior year may be examined to determine
whether the repayment gives rise to a regular loss or a capital
loss. Arrowsmith Page 394 U. S. 685 v. Commissioner, 344 U. S. 6 (1952).
The rationale for the Arrowsmith rule is easy to see; if
money was taxed at a special lower rate when received, the taxpayer
would be accorded an unfair tax windfall if repayments were
generally deductible from receipts taxable at the higher rate
applicable to ordinary income. The Court in Arrowsmith was
unwilling to infer that Congress intended such a result.
This case is really no different. [ Footnote 4 ] In essence, oil and gas producers are taxed on
only 72 1/2% of their "gross income from the property" whenever
they claim percentage depletion. The remainder of their oil and gas
receipts is in reality tax-exempt. We cannot believe that Congress
intended to give taxpayers a deduction for refunding money that was
not taxed when received. Cf. O'Mearo, v. Commissioner, 8
T.C. 622, 63635 (1947). Accordingly, Arrowsmith teaches
that the full amount of the repayment cannot, in the circumstances
of this case, be allowed as a deduction.
This result does no violence to the annual accounting system.
Here, as in Arrowsmith, the earlier returns are not being
reopened. And no attempt is being made to require the tax savings
from the deduction to equal the Page 394 U. S. 686 tax consequences of the receipts in prior years. [ Footnote 5 ] In addition, the approach here
adopted will affect only a few cases. The percentage depletion
allowance is quite unusual; unlike most other deductions provided
by the Code, it allows a fixed portion of gross income to go
untaxed. As a result, the depletion allowance increases in years
when disputed amounts are received under claim of right; there is
no corresponding decrease in the allowance because of later
deductions for repayments. [ Footnote 6 ] Therefore, if a deduction for 100% of the
repayments were allowed, every time money is received and later
repaid the taxpayer would make a profit equivalent to the taxes on
27 1/2% of the amount refunded. In other situations when the taxes
on a receipt do not equal the tax benefits of a repayment, either
the taxpayer or the Government may, depending on circumstances, be
the beneficiary. Here, the taxpayer always wins and the Government
always loses. We cannot believe that Congress would have intended
such an inequitable result.
The parties have stipulated that respondent is entitled to a
judgment for $20,932.64 plus statutory interest for Page 394 U. S. 687 claims unrelated to the matter in controversy here; the District
Court entered a judgment for that amount. Accordingly, the judgment
of the Court of Appeals is reversed and the case is remanded to
that court with instructions that it be returned to the District
Court for reentry of the original District Court judgment. Reversed and remanded. [ Footnote 1 ]
Section 1341(a) provides:
"If -- "
"(1) an item was included in gross income for a prior taxable
year (or years) because it appeared that the taxpayer had an
unrestricted right to such item;"
"(2) a deduction is allowable for the taxable year because it
was established after the close of such prior taxable year (or
years) that the taxpayer did not have an unrestricted right to such
item or to a portion of such item; and"
"(3) the amount of such deduction exceeds $3,000,"
"then the tax imposed by this chapter for the taxable year shall
be the lesser of the following: "
"(4) the tax for the taxable year computed with such deduction;
or"
"(5) an amount equal to -- "
"(A) the tax for the taxable year computed without such
deduction, minus"
"(B) the decrease in tax under this chapter (or the
corresponding provisions of prior revenue laws) for the prior
taxable year (or years) which would result solely from the
exclusion of such item (or portion thereof) from gross income for
such prior taxable year (or years)."
"For purposes of paragraph (5)(B), the corresponding provisions
of the Internal Revenue Code of 1939 shall be chapter 1 of such
code (other than subchapter E, relating to self employment income)
and subchapter E of chapter 2 of such code."
Section 1341(b)(2) contains an exclusion covering certain cases
involving sales of stock in trade or inventory. However, because of
special treatment given refunds made by regulated public utilities,
both parties agree that § 1341(b)(2) is inapplicable to this case
and that, accordingly, § 1341(a) applies.
[ Footnote 2 ]
In the case of an accrual basis taxpayer, the legislative
history makes it clear that the deduction is allowable at the
proper time for accrual. H.R.Rep. No. 1337, 83d Cong., 2d Sess.,
A294 (1954); S.Rep. No. 1622, 83d Cong., 2d Sess., 451-452
(1954).
[ Footnote 3 ]
The Commissioner has long recognized that a deduction under some
section is allowable. G.C.M. 16730, XV-1 Cum.Bull. 179 (1936).
[ Footnote 4 ]
The analogy would be even more striking if in Arrowsmith the individual taxpayers had not utilized the
alternative tax for capital gains, as they were permitted to do by
what is now § 1201 of the 1954 Code. Where the 25% alternative tax
is not used, individual taxpayers are taxed at ordinary rates on
50% of their capital gains. See § 1202. In such a
situation, the rule of the Arrowsmith case prevents
taxpayers from deducting 100% of an item refunded when they were
taxed on only 50% of it when it was received. Although Arrowsmith prevents this inequitable result by treating
the repayment as a capital loss, rather than by disallowing 50% of
the deduction, the policy behind the decision is applicable in this
case. Here it would be inequitable to allow a 100% deduction when
only 72 1/2% was taxed on receipt.
[ Footnote 5 ] Compare the analogous approach utilized under the "tax
benefit" rule. Alice Phelan Sullivan Corp. v. United
States, 180 Ct.Cl. 659, 381 F.2d 399 (197); see Internal Revenue Code of 1954 § 111. In keeping with the analogy,
the Commissioner has indicated that the Government will only seek
to reduce the deduction in the year of repayment to the extent that
the depletion allowance attributable to the receipt directly or
indirectly reduced taxable income. Proposed Treas. Peg. §
1.613-2(c)(8), 33 Fed.Reg. 10702-10703 (1968).
[ Footnote 6 ]
The 10% standard deduction mentioned in MR. JUSTICE STEWART's
dissent, post at 394 U. S. 697 ,
differs in that it allows as a deduction a percentage of adjusted
gross income, rather than of gross income. See § 141; cf. §§ 170, 213. As a result, repayments may in certain
cases cause a decrease in the 10% standard deduction allowable in
the year of repayment, assuming that the repayment is of the
character to be deducted in calculating adjusted gross income. See § 62.
MR. JUSTICE DOUGLAS, dissenting.
I share MR. JUSTICE STEWART's views as to this case, and add
only a word.
If we sat in chancery reviewing tax cases, much of what the
Court says would have appeal. But we do not sit to do equity in tax
cases; that is one of Congress' main concerns.
The search for equity in the tax laws is wondrous and elusive.
As Edmond Cahn said: "[T]hose only are equal whom the law has
elected to equalize." E. Cahn, The Sense of Injustice 14
(1949).
Percentage depletion had its roots in granting a reward to men
who go into undeveloped territory in search of oil and gas. But
today it is granted anyone who has an interest in oil or gas; the
beneficiary need not live the life of the oil wildcatter or bear
his risks to obtain the benefits of percentage depletion.
When it comes to capital gains, what "equities" are to be
applied? Is it fair that earned income pay a heavier tax?
A son who spends $1,000 on his destitute father does not get the
same tax benefit as he who pays a like sum to his alma mater. Louis
Eisenstein pursues example after example of so-called inequities in
tax laws in his book The Ideologies of Taxation (1961). For
example, the profits on the sale of unbred pigs are taxable as
ordinary income, while the profits on the sale of pigs once
bred Page 394 U. S. 688 are taxable as capital gains. Id. 174. The same is true
of turkeys, but not of chickens, even though "a bred chicken and a
bred turkey are similarly situated. Each has feathers and two
legs." Ibid. Treasury recently noted numerous basic inequities resulting in
preferred tax treatment for some people's dollars. Tax Reform
Studies and Proposals, U.S. Treasury Dept., Joint Publication of
House Committee on Ways and Means and Senate Committee on Finance,
91st Cong., 1st Sess., pt. 1, pp. 13-17 (Comm.Print 1969).
Apart from certain aspects of percentage depletion were the
reduced taxation on long-term capital gains and the exclusion of
interest on state and local government bonds. The examples are
legion. The Tax Reform study gives an unusual example:
"An individual had a total income of $1,284,718 of which
$1,210,426 was in capital gains, the remaining $74,292 from wages,
dividends, and interest. He excluded one-half of his capital gains,
which he is allowed to do under present law, thereby reducing his
present law (adjusted gross) income to $679,405 (after allowing for
the $100 dividend exclusion). From this income he subtracted all
his personal deductions, which amounted to $676,419 and which
included $587,693 for interest on funds borrowed presumably for the
purpose of purchasing the securities on which the capital gains
were earned. As a result, after allowing $1,200 of personal
exemptions, his taxable income was reduced to $1,786 and he paid a
tax of $274. His overall tax rate, therefore, was about
two-hundredths of one percent." Id. at 15.
This was made possible by using a taxpayer's deductions only
against that part of his income which is subject to the tax,
ignoring the excluded part. Page 394 U. S. 689 Tax laws are indeed arbitrary; the lines they draw are the
products of pressures inside the Congress with compromises carrying
the day.
The Court of Appeals held that the "item" here in question was
properly included in "gross income" prior to 1958 and was an
allowable "deduction" in 1958 because the taxpayer did not have "an
unrestricted right" to a "portion of such item," and that the
amount of such deduction exceeds $3,000 -- all as provided in §
1341. [ Footnote 2/1 ] Skelly Oil
Co. v. United States, 392 F.2d 128, 131.
There is no irregularity on the face of the return. There is no
conflict with any decision of any other Court of Appeals. We are
asked, however, to put a gloss on the statute that Treasury
desires. I would adhere to the construction given by the Court of
Appeals, leaving to Congress the correction of any inequities in
the tax scheme. Page 394 U. S. 690 The Congress many years ago created the Joint Committee on
Internal Revenue Taxation, which is a standing committee. 26 U.S.C.
§ § 8001-8005, 8021-8023. One of its statutory mandates is "[t]o
investigate the operation and effects of the Federal system of
internal revenue taxes." Id. § 8022.
In that connection, a recent report states:
"[T]he Joint Committee staff has in recent years been used as a
committee liaison with the Treasury Department in working on tax
proposals for the committee. The staff aids the two tax committees
in explaining provisions, in writing committee reports, and in
aiding in the drafting of bills."
The Joint Committee makes regular reports to Congress for
revision of the tax laws. Inequities that arise as a result of
interpretations that are given existing laws either at the
administrative or judicial level can be quickly corrected by this
agency of oversight. [ Footnote
2/2 ]
Treasury unhappily has developed the habit of jockeying in the
courts, testing one theory against another. In California, it may
take one position and in Massachusetts the opposite position, the
issue in each being the same. The hope is that conflicts over
litigious and important issues will develop and the case will be
brought here. [ Footnote 2/3 ]
If we were trained in the art and science of taxation, we might
serve a useful function. But taxation is a Page 394 U. S. 691 specialty in which we have only sporadic, and no continuous,
experience. It has been said that one of our decisions is like a
"lightning bolt" that "illuminates only a very small portion of the
landscape," leaving a darkness that later decisions do not remove.
R. Paul, Studies in Federal Taxation 249-250 (3d series 1940). Our
contributions, if such they can be called, are dubious indeed, for
the Joint Committee can and does rewrite the Code frequently.
It is therefore the rare tax case [ Footnote 2/4 ] we should consider, except the even rarer
constitutional case. The present case has no constitutional
overtones; the taxpayer followed the words of the tax law
literally, using no new or strained construction of words to find a
tax advantage; there is no conflict between this case and any other
decision. The Solicitor General only claims that the result reached
by the Court of Appeals does not fit the neat logic which he finds
in a group of related tax cases.
An account of the cost, confusion, and inequity in tax
administration that ensues while everyone waits for a conflict
among the Circuits (which takes at least 10 years) is related in
Griswold, The Need for a Court of Tax Appeals, 57 Harv.L.Rev. 1153
(1944). The role we presently play was stated as follows:
"Our present system of tax adjudication inevitably leaves nearly
every question uncertain during the entire period while it must be
dealt with, usually in thousands of instances, by the
administrative officers. And yet that is just the period when there
should be an authoritative rule if the system is to work smoothly,
effectively, speedily, fairly, and Page 394 U. S. 692 without discrimination. Under our present system, delay and
discrimination are typical and inevitable." Id. at 1161.
In absence of an unmistakably clear conflict among the Circuits,
I would abide by the opinions of the Courts of Appeals in tax cases
and leave to the Joint Committee whether the gloss which Treasury
now tries to put on the statute is or is not desirable.
[ Footnote 2/1 ]
Section 1341 reads as follows:
"(a) General rule. If -- "
"(1) an item was included in gross income for a prior taxable
year (or years) because it appeared that the taxpayer had an
unrestricted right to such item;"
"(2) a deduction is allowable for the taxable year because it
was established after the close of such prior taxable year (or
years) that the taxpayer did not have an unrestricted right to such
item or to a portion of such item; and"
"(3) the amount of such deduction exceeds $3,000,"
"then the tax imposed by this chapter for the taxable year shall
be the lesser of the following: "
"(4) the tax for the taxable year computed with such deduction;
or"
"(5) an amount equal to -- "
"(A) the tax for the taxable year computed without such
deduction, minus"
"(B) the decrease in tax . . . for the prior taxable year . . .
which would result solely from the exclusion of such item . . .
from gross income for such prior taxable year. . . ."
[ Footnote 2/2 ]
Perhaps the most egregious error that we made in my time (one
for which I take partial blame), was Helvering v. Hallock, 309 U. S. 106 , an
opinion for the Court, written by Mr. Justice Frankfurter, that
overruled Helvering v. St. Louis Trust Co., 296 U. S.
39 , and Becker v. St. Louis Trust Co., 296 U. S. 48 . This
is one classic example of the type of problem which should be left
to the Joint Committee.
[ Footnote 2/3 ]
For a classic example, see R. Paul, Studies in Federal
Taxation 449-450 (3d series 1940).
[ Footnote 2/4 ]
The validity of Regulations and the effect of reenactment of a
statutory provision on them present distinct questions. Helvering v. Wilshire Oil Co., 308 U. S.
90 ; Commissioner v. South Texas Co., 333 U. S. 496 ; Commissioner v. Stidger, 386 U. S. 287 .
MR. JUSTICE STEWART, with whom MR. JUSTICE DOUGLAS and MR.
JUSTICE HARLAN join, dissenting.
The Court today denies the respondent a tax benefit fairly
provided by the Code for no other discernible reasons than that,
under the statute as written, "the taxpayer always wins and the
Government always loses," [ Footnote
3/1 ] and that "the approach here adopted will affect only a few
cases." Ante at 394 U. S. 686 .
But we are not free, even in a few cases, to abandon settled
principles of annual accounting and statutory construction merely
to avoid what the Court thinks Congress might consider an
"inequitable result." [ Footnote
3/2 ]
"[T]he rule that general equitable considerations do not control
the measure of deductions or tax benefits cuts both ways. It is as
applicable to the Page 394 U. S. 693 Government as to the taxpayer. Congress may be strict or lavish
in its allowance of deductions or tax benefits. The formula it
writes may be arbitrary and harsh in its applications. But where
the benefit claimed by the taxpayer is fairly within the statutory
language and the construction sought is in harmony with the statute
as an organic whole, the benefits will not be withheld from the
taxpayer though they represent an unexpected windfall." Lewyt Corp. v. Commissioner, 349 U.
S. 237 , 349 U. S.
240 .
From any natural reading of § 1341, it is apparent that Congress
believed the "deduction" in § 1341(a)(2) would be in the amount of
the "item" described in § 1341(a)(1). If that understanding is not
manifest from the face of the statute and the legislative history,
[ Footnote 3/3 ] it is the
unavoidable inference from a study of the pre-1954 law which Page 394 U. S. 694 the Court concedes § 1341(a)(4) was intended to codify. In every
case in this area previously decided by the Court, the amount
deductible in the year of repayment was considered to be exactly
the same as the amount of the previously included item. In two of
the cases most sharply in congressional focus in 1954, the
Government had conceded without hesitation that the taxpayers were
"entitled to a deduction for a loss in the year of repayment of the
amount earlier included in income." Healy v. Commissioner, 345 U. S. 278 , 345 U. S. 284 . See also United States v. Lewis, 340 U.
S. 590 , 340 U. S. 591 .
That has been the express position of the Treasury since at least
1936, [ Footnote 3/4 ] and the Court
today has not cited a single instance of deviation from that
understanding.
The Court says that § 1341 is not alone controlling, and that
"it is necessary to refer to other portions of the Code to discover
how much of a deduction is allowable." Page 394 U. S. 695 Ante at 394 U. S. 683 .
I agree that § 1341 must be considered in the context of the
Internal Revenue Code as an "organic whole." But no other
provisions of the Code in any manner bolster the Court's argument.
The Court assumes, quite correctly, that either § 162 or § 165 does
permit a deduction for the refund. But it does not, and cannot,
suggest that either of those sections -- or any other statutory
provision -- limits the amount of the deduction for the undeniable
loss of profits in the full amount of the repayment. Instead, the
Court assumes a broad equitable authority to weed out tax benefits
which it calls "double deductions" -- a characterization wholly
inapposite to the facts of this case.
In prior decisions disallowing what truly were "double
deductions," the Court has relied on evident statutory indications,
not just its own view of the equities, that Congress intended to
preclude the second deduction. In those cases, the taxpayers sought
to benefit twice from the same statutory deduction. [ Footnote 3/5 ] In this case, by
contrast, Page 394 U. S. 696 the respondent has taken two different deductions accorded by
Congress for distinct purposes. In the years 1952 through 1957, it
deducted the proper amounts for depletion -- a deduction which is
allowed by Congress "on the theory that the extraction of minerals
gradually exhausts the capital investment in the mineral deposit,"
and which is
"designed to permit a recoupment of the owner's capital
investment in the minerals so that, when the minerals are
exhausted, the owner's capital is unimpaired." Commissioner v. Southwest Exploration Co., 350 U.
S. 308 , 350 U. S. 312 .
The respondent's 1958 deduction was granted by Congress for the
entirely different reason that the refund of previously reported
income constituted a loss, or business expense. In purpose and
effect the deductions are wholly unrelated, and each is sustainable
on its own merits. Certainly it cannot be said either that the
respondent did not, in fact, exhaust the capital assets for which
the deductions were allowed in 1952 through 1957, or that it did
not suffer a business loss by the 1958 repayment.
The sole nexus between these distinct transactions on which the
Court constructs its "double deduction" theory is that the
depletion deductions were computed as a percentage of gross income
from the property. But this fact cannot distinguish percentage
depletion from any other deduction. If the respondent had elected
to take cost depletion in 1952 through 1957, for example, there
would also have been a portion of the gross income in those years
-- perhaps less than 27 1/2%, perhaps more -- which was not
included in taxable income. Whether a deduction is computed as a
fixed percentage of income or Page 394 U. S. 697 in some other manner, it always reduces by some percentage the
income which is ultimately taxed. There are other deductions, of
course, whose amount is a function of a certain percentage of the
taxpayer's income. With respect to the individual taxpayer, the
standard 10% deduction, § 141, and those for charitable
contributions, § 170, and medical expenses, § 213, are doubtless
the most frequent. Under the Court's ruling today, any taxpayer who
repays money included in gross income in a prior year in which he
also took one of the above mentioned deductions will have to reduce
his refund deduction by that portion of the previous year's
deduction attributable to the included income. Surely this result
contravenes the purpose of the annual accounting concept to prevent
recomputations of the prior year's tax.
The Court says today that there can be no deduction "for
refunding money that was not taxed when received." Ante at 394 U. S. 685 .
This means nothing less than that, whenever a taxpayer seeks to
deduct a refund of money received as income under a claim of right
in a prior year, the deduction must be reduced by the percentage of
gross income in that, prior year which, for whatever reason, was
not also taxable income. Otherwise there will be precisely the same
kind of so-called "double deduction" as the Court finds in this
case.
It is clear that the Court has wrought a major transformation of
the deduction which has heretofore been allowed and which Congress
recognized in § 1341(a)(4). That deduction is permitted because, in
the words of § 1341, the item "was included in gross income for a prior taxable year" (emphasis added), not because it
was included in taxable income. It is no answer to say
that the "annual accounting concept does not require us to close
our eyes to what happened in prior years." Page 394 U. S. 698 Ante at 394 U. S. 684 .
Of course, we must look to the prior years to ascertain the amounts
included in gross income and the nature of that income as it bears
on the provision under which it is deductible in the year of
repayment. Arrowsmith v. Commissioner, 344 U. S.
6 . [ Footnote 3/6 ] But
the very purpose of the annual accounting concept is to preclude
adjustments in the amount of the deduction to reflect the tax
consequences of the item's inclusion in the prior year.
"Congress has enacted an annual accounting system under which
income is counted up at the end of each year. It would be
disruptive of an orderly collection of the revenue to rule that the
accounting must be done over again to reflect events occurring
after the year for which the accounting is made, and would violate
the spirit of the annual accounting system. This basic principle
cannot be changed simply because it is of advantage to a taxpayer
or to the Government in a particular case that a different rule be
followed." Healy v. Commissioner, 345 U.
S. 278 , 345 U. S.
284 -285.
One of the major factors, in addition to changes in tax rates
and brackets, that determine who will benefit from adherence to the
annual accounting principles embodied in § 1341(a)(4) is the extent
to which the taxpayer had deductions in the prior or subsequent
taxable years to offset gross income. And it is no less
inconsistent Page 394 U. S. 699 with annual accounting principles to pare down the allowable
loss deduction in the year of repayment because of other deductions
in the year of inclusion than because of a lower tax rate or
bracket in that year.
Because I cannot agree that the Court's equitable sensibilities
empower it to depart from the sound principles of tax accounting
specifically endorsed by Congress in § 1341, I respectfully
dissent.
[ Footnote 3/1 ]
Section 1341, of course, is designed precisely to create a
situation where "the taxpayer always wins and the Government always
loses." Strict adherence to annual accounting and the
claim-of-right doctrine before 1954 sometimes benefited the
taxpayer, sometimes the Government. Section 1341 retains those
principles where they benefit the taxpayer, but allows
recomputation of the taxes of a prior year if that method would
result in a greater tax saving.
[ Footnote 3/2 ]
Judicial assumptions that Congress did not intend liberal
benefits for taxpayers are particularly suspect in the area of
percentage depletion, perhaps the most generous business deduction
in the Code. And Congress had the recipients of percentage
depletion specifically in mind when it drafted § 1341. The House
bill excluded from the coverage of § 1341 all refunds relating to
inventory sales. The Senate Committee promptly removed refunds by
regulated utilities from this exclusion with the following
remarks:
"Your committee's bill provides that the exclusion of refunds
pertaining to inventory sales will not exclude from the benefits of
this section refunds made by a regulated public utility where the
refunds are required to be made by the regulatory body, such as the
Federal Power Commission. It is made clear, for example, that
refunds of charges for the sale of natural gas under rates approved
temporarily would be eligible for the benefits of this
section."
S.Rep. No. 1622, 83d Cong., 2d Sess., 118 (1954).
[ Footnote 3/3 ]
The House and Senate Reports give no indication that Congress
thought the deduction would be other than the amount of the item
included in gross income for the prior year. They refer to the
amount of the deduction and of the item interchangeably.
"If the taxpayer included an item in gross income in one taxable
year, and in a subsequent taxable year he becomes entitled to a
deduction because the item or a portion thereof is no longer
subject to his unrestricted use, and the amount of the deduction is
in excess of $3,000, the tax for the subsequent year is reduced by
either the tax attributable to the deduction or the decrease in the
tax for the prior year attributable to the removal of the item,
whichever is greater. Under the rule of the Lewis case ( 340 U. S. 340 U.S. 590 (1951)),
the taxpayer is entitled to a deduction only in the year of
repayment."
"In the case of a cash basis taxpayer, in order to be entitled
to a deduction in the later year, the amount must be repaid.
However, in the case of an accrual basis taxpayer, if the item was
accrued but never received, the section applies when the deduction
accrues in the later year although there is, of course, no amount
to be repaid."
S.Rep. No. 1622, supra, 394
U.S. 678 fn3/2|>n. 2, at 451. See also H.R.Rep. No.
1337, 83d Cong., 2d Sess., A294 (1954).
[ Footnote 3/4 ] See G.C.M. 16730, XV-1 Cum.Bull. 179, 181 (1936):
"In the instant case the taxpayer received the income under a
claim of right and without restriction as to its disposition. On
authority of the cases cited herein, this office is of the opinion
that the profits in question should not be eliminated from the
taxpayer's gross income for the years 1928 and 1929 [the years of
inclusion], but that the taxpayer is entitled to a deduction,
for the year in which paid, of the amount of the profits paid. . .
. "
(Emphasis supplied.) See also 2 J. Mertens, Law of
Federal Income Taxation § 12.106a, p. 431 (P. Zimet & J.
Stanley rev. ed.1967).
[ Footnote 3/5 ] Charles Ilfeld Co. v. Hernandez, 292 U. S.
62 , and United States v. Ludey, 274 U.
S. 295 , both involved situations in which the taxpayer
tried to take the same deduction twice. In Ilfeld, the
taxpayer had taken deductions, through consolidated returns, for
the annual losses of its subsidiaries; when the subsidiaries'
assets were sold and the companies dissolved, the parent taxpayer
sought to take deductions for losses of its investment in the
subsidiaries. As the Court held, "[t]he allowance claimed would
permit [the parent] twice to use the subsidiaries' losses for the
reduction of its taxable income," a double deduction that "nothing
in the Act . . . purports to authorize. . . ." 292 U.S. at 292 U. S. 68 . In Ludey, the taxpayer had taken deductions for depletion of
his min, but, when the properties were sold in the taxable year in
question, the taxpayer did not, in computing the gain from the
sale, adjust the basis of the property to reflect the depletion
deductions. The Court held that depletion allowances, like those
for depreciation, are granted in recognition of the fact that the
asset is disappearing year by year. When it is disposed of,
therefore,
"the thing then sold is not the whole thing originally acquired.
The amount of the depreciation must be deducted from the original
cost of the whole in order to determine the cost of that disposed
of in the final sale of properties. Any other construction would
permit a double deduction for the loss of the same capital
assets."
274 U.S. at 274 U. S.
301 .
[ Footnote 3/6 ]
As the Court recognizes, ante at 394 U. S. 685 ,
n. 4, the Court in Arrowsmith did not hold that the amount
of the deduction in the year of repayment would be reduced because
in the year of inclusion the money had been taxed at a lower rate
or had been offset by deductions. It held merely that the losses
fell within the definition of "capital losses" contained in the
sections authorizing deductions for the repayment. The Court does
not in this case point to any comparable statutory provision
affecting the nature or amount of the deduction for the refund. | The United States v. Skelly Oil Co. case (1969) revolved around a natural gas producer, Skelly Oil, refunding overcharges to customers and the resulting tax implications. Skelly Oil included the refunded amount in its gross income and "gross income from the property," which is the basis for a 27.5% depletion allowance. They also attempted to deduct the full refunded amount in their 1958 tax return under Section 1341 of the Internal Revenue Code, which allows deductions for repayments made in certain circumstances. The Court held that Skelly Oil could not deduct the full amount and must reduce the deduction by the percentage depletion allowance they had already claimed in previous years. The Court interpreted the tax code as not intending to allow taxpayers to deduct money that was not taxed when received. |
Taxes | Malat v. Riddell | https://supreme.justia.com/cases/federal/us/383/569/ | U.S. Supreme Court Malat v. Riddell, 383
U.S. 569 (1966) Malat v. Riddell No. 47 Argued March 3, 1966 Decided March 21,
1966 383
U.S. 569 CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE NINTH
CIRCUIT Syllabus Upon the sale of real estate which had been acquired by a joint
venture in which petitioners participated, petitioners reported the
profits therefrom as capital gains. Respondent argued that the
venture had a dual purpose -- to develop the property for rental or
to sell it -- and that the profit was taxable as ordinary income.
The District Court ruled that petitioners failed to establish that
the property was not held primarily for sale to customers in the
ordinary course of business, and that the profits were not capital
gains under 26 U.S.C. § 1221(1). The Court of Appeals affirmed.
Respondent urges the construction of "primarily" as meaning that a
purpose may be "primary" if it is a "substantial" one. Held: The word "primarily," as used in §1221(1), means
"of first importance," or "principally."
347 F.2d 23, vacated and remanded.
PER CURIAM.
Petitioner [ Footnote 1 ] was
a participant in a joint venture which acquired a 45-acre parcel of
land, the intended use for which is somewhat in dispute. Petitioner
contends that the venturers' intention was to develop and operate
an apartment project on the land; the respondent's position Page 383 U. S. 570 is that there was a "dual purpose" of developing the property
for rental purposes or selling, whichever proved to be the more
profitable. In any event, difficulties in obtaining the necessary
financing were encountered, and the interior lots of the tract were
subdivided and sold. The profit from those sales was reported and
taxed as ordinary income.
The joint venturers continued to explore the possibility of
commercially developing the remaining exterior parcels. Additional
frustrations in the form of zoning restrictions were encountered.
These difficulties persuaded petitioner and another of the joint
venturers of the desirability of terminating the venture;
accordingly, they sold out their interests in the remaining
property. Petitioner contends that he is entitled to treat the
profits from this last sale as capital gains; the respondent takes
the position that this was "property held by the taxpayer primarily
for sale to customers in the ordinary course of his trade or
business," [ Footnote 2 ] and
thus subject to taxation as ordinary income.
The District Court made the following finding:
"The members of [the joint venture], as of the date the 44.901
acres were acquired, intended either to sell the property or
develop it for rental, depending upon which course appeared to be
most profitable. The venturers realized that they had made a good
purchase price-wise, and, if they were unable to obtain acceptable
construction financing or rezoning . . . which would be
prerequisite to commercial development, they would sell the
property Page 383 U. S. 571 in bulk so they wouldn't get hurt. The purpose of either selling
or developing the property continued during the period in which
[the joint venture] held the property."
The District Court ruled that petitioner had failed to establish
that the property was not held primarily for sale to customers in
the ordinary course of business, and thus rejected petitioner's
claim to capital gain treatment for the profits derived from the
property's resale. The Court of Appeals affirmed, 347 F.2d 23. We
granted certiorari (382 U.S. 900) to resolve a conflict among the
courts of appeals [ Footnote 3 ]
with regard to the meaning of the term "primarily" as it is used in
§ 1221(1) of the Internal Revenue Code of 1954.
The statute denies capital gain treatment to profits reaped from
the sale of "property held by the taxpayer primarily for
sale to customers in the ordinary course of his trade or business."
(Emphasis added.) The respondent urges upon us a construction of
"primarily" as meaning that a purpose may be "primary" if it is a
"substantial" one.
As we have often said, "the words of statutes -- including
revenue acts -- should be interpreted where possible in their
ordinary, everyday senses." Crane v. Commissioner, 331 U. S. 1 , 331 U. S. 6 . And see Hanover Bank v. Commissioner, 369 U.
S. 672 , 369 U. S.
687 -688; Commissioner v. Korell, 339 U.
S. 619 , 339 U. S.
627 -628. Departure from a literal reading of statutory
language may, on occasion, be indicated by relevant internal
evidence of the statute itself Page 383 U. S. 572 and necessary in order to effect the legislative purpose. See, e.g., Board of Governors v. Agnew, 329 U.
S. 441 , 329 U. S.
446 -448. But this is not such an occasion. The purpose
of the statutory provision with which we deal is to differentiate
between the "profits and losses arising from the everyday operation
of a business," on the one hand ( Corn Products Refining Co. v.
Commissioner, 350 U. S. 46 , 350 U. S. 52 )
and "the realization of appreciation in value accrued over a
substantial period of time," on the other. ( Commissioner v.
Gillette Motor Transport, Inc., 364 U.
S. 130 , 364 U. S.
134 .) A literal reading of the statute is consistent
with this legislative purpose. We hold that, as used in § 1221(1),
"primarily" means "of first importance" or "principally."
Since the courts below applied an incorrect legal standard, we
do not consider whether the result would be supportable on the
facts of this case had the correct one been applied. We believe,
moreover, that the appropriate disposition is to remand the case to
the District Court for fresh factfindings addressed to the statute
as we have now construed it. Vacated and remanded. MR. JUSTICE BLACK would affirm the judgments of the District
Court and the Court of Appeals.
MR. JUSTICE WHITE took no part in the decision of this case.
[ Footnote 1 ]
The taxpayer and his wife, who filed a joint return, are the
petitioners, but, for simplicity, are referred to throughout as
"petitioner."
[ Footnote 2 ]
Internal Revenue Code of 1954, § 1221(1), 26 U.S.C. §
1221(1):
"For purposes of this subtitle, the term 'capital asset' means
property held by the taxpayer (whether or not connected with his
trade or business), but does not include --"
"(1) . . . property held by the taxpayer primarily for sale to
customers in the ordinary course of his trade or business."
[ Footnote 3 ] Compare Rollingwood Corp. v. Commissioner, 190 F.2d
263, 266 (C.A.9th Cir.); American Can Co. v. Commissioner, 317 F.2d 604, 605 (C.A.2d Cir.), with United States v.
Bennett, 186 F.2d 407, 410-411 (C.A.5th Cir.); Municipal
Bond Corp. v. Commissioner, 341 F.2d 683, 688-689 (C.A.8th
Cir.). Cf. Recordak Corp. v. United States, 325 F.2d 460,
463-464, 163 Ct.Cl. 294, 300-301. | The Supreme Court remanded the case to the District Court, holding that the word "primarily" in 26 U.S.C. § 1221(1) means "of first importance" or "principally." The Court found that the District Court applied an incorrect legal standard and should reconsider the case using the correct interpretation of "primarily." |
Taxes | Diedrich v. Commissioner | https://supreme.justia.com/cases/federal/us/457/191/ | U.S. Supreme Court Diedrich v. Commissioner, 457
U.S. 191 (1982) Diedrich v.
Commissioner No. 80-2204 Argued February 24,
1982 Decided June 15, 1982 457
U.S. 191 CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE EIGHTH CIRCUIT Syllabus Held: A donor (such as petitioner husband and wife and
petitioner executor's decedent) who makes a gift of property on
condition that the donee pay the resulting gift taxes realizes
taxable income to the extent that the gift taxes paid by the donee
exceed the donor's adjusted basis in the property. Pp. 457 U. S.
194 -200.
(a) The substance, not the form, of the agreed transaction
controls in determining whether taxable income was realized. Old Colony Trust Co. v. Commissioner, 279 U.
S. 716 ; Crane v. Commissioner, 331 U. S.
1 . Pp. 457 U. S.
194 -196.
(b) When a donor makes a gift, he incurs a "debt" to the United
States for the amount of whatever gift taxes are due, which are as
much the donor's legal obligation as his income taxes. When
conditional gifts, such as those in question here, are made, the
donor realizes an immediate economic benefit by the donee's
assumption of the donor's legal obligation to pay the gift taxes.
Subjective intent, while relevant in determining whether a gift has
been made, is not characteristically a factor in determining
whether an individual has realized income. Even if intent were a
factor, the donor's intent as to the condition shifting the gift
tax obligation to the donee is plainly to relieve the donor of the
debt owed to the United States. And the economic benefit realized
by the donor is not diminished by the fact that the liability
attaches during the course of the donative transfer, such benefit
being indistinguishable from the benefit arising from discharge of
a preexisting obligation. Pp. 457 U. S.
196 -198.
(c) Treating the amount by which the gift taxes exceed the
donor's adjusted basis in the property as income is consistent with
§ 1001 of the Internal Revenue Code, which provides that the gain
from the disposition of property is the excess of the amount
realized over the transferor's adjusted basis in the property. Pp. 457 U. S.
198 -199.
643 F.2d 499, affirmed.
BURGER, C.J., delivered the opinion of the Court, in which
BRENNAN, WHITE, MARSHALL, BLACKMUN, POWELL, STEVENS, and O'CONNOR,
JJ., joined. REHNQUIST, J., filed a dissenting opinion, post, p. 457 U. S.
200 . Page 457 U. S. 192 CHIEF JUSTICE BURGER delivered the opinion of the Court.
We granted certiorari to resolve a Circuit conflict as to
whether a donor who makes a gift of property on condition that the
donee pay the resulting gift tax receives taxable income to the
extent that the gift tax paid by the donee exceeds the donor's
adjusted basis in the property transferred. 454 U.S. 813 (1981).
The United States Court of Appeals for the Eighth Circuit held that
the donor realized income. 643 F.2d 499 (1981). We affirm. I A Diedrich v. Commissioner of Internal
Revenue In 1972, petitioners Victor and Frances Diedrich made gifts of
approximately 85,000 shares of stock to their three children, using
both a direct transfer and a trust arrangement. The gifts were
subject to a condition that the donees pay the resulting federal
and state gift taxes. There is no dispute concerning the amount of
the gift tax paid by the donees. The donors' basis in the
transferred stock was $51,073; the gift tax paid in 1972 by the
donees was $62,992. Petitioners did not include as income on their
1972 federal income tax returns any portion of the gift tax paid by
the donees. After Page 457 U. S. 193 an audit, the Commissioner of Internal Revenue determined that
petitioners had realized income to the extent that the gift tax
owed by petitioners, but paid by the donees, exceeded the donors'
basis in the property. Accordingly, petitioners' taxable income for
1972 was increased by $5,959. [ Footnote 1 ] Petitioners filed a petition in the United
States Tax Court for redetermination of the deficiencies. The Tax
Court held for the taxpayers, concluding that no income had been
realized. 39 TC M 433 (1979). B United Missouri Bank of Kansas City v. Commissioner of Internal Revenue In 1970 and 1971, Mrs. Frances Grant gave 90,000 voting trust
certificates to her son on condition that he pay the resulting gift
tax. Mrs. Grant's basis in the stock was $8,742.60; the gift tax
paid by the donee was $232,620.09. As in Diedrch, there is
no dispute concerning the amount of the gift tax or the fact of its
payment by the donee pursuant to the condition.
Like the Diedrichs, Mrs. Grant did not include as income on her
1970 or 1971 federal income tax returns any portion of the amount
of the gift tax owed by her but paid by the donee. After auditing
her returns, the Commissioner determined that the gift of stock to
her son was part gift and part sale, with the result that Mrs.
Grant realized income to the extent that the amount of the gift tax
exceeded the adjusted basis in the property. Accordingly, Mrs.
Grant's taxable income was increased by approximately $112,000.
[ Footnote 2 ] Mrs. Grant
filed Page 457 U. S. 194 a petition in the United States Tax Court for redetermination of
the deficiencies. The Tax Court held for the taxpayer, concluding
that no income had been realized. Grant v. Commissioner, 39 TCM 108 (1980). C The United States Court of Appeals for the Eighth Circuit
consolidated the two appeals and reversed, concluding that, "to the
extent the gift taxes paid by donees" exceeded the donors' adjusted
bases in the property transferred, "the donors realized taxable
income." 643 F.2d at 504. The Court of Appeals rejected the Tax
Court's conclusion that the taxpayers merely had made a "net gift"
of the difference between the fair market value of the transferred
property and the gift taxes paid by the donees. The court reasoned
that a donor receives a benefit when a donee discharges a donor's
legal obligation to pay gift taxes. The Court of Appeals agreed
with the Commissioner in rejecting the holding in Turner v.
Commissioner, 49 T.C. 356 (1968), aff'd per curiam, 410 F.2d 752 (CA6 1969), and its progeny, and adopted the approach
of Johnson v. Commissioner, 59 T.C. 791 (1973), aff'd, 495 F.2d 1079 (CA6), cert. denied, 419
U.S. 1040 (1974), and Estate of Levine v. Commissioner, 72
T.C. 780 (1979), aff'd, 634 F.2d 12 (CA2 1980). We granted
certiorari to resolve this conflict, and we affirm. II A Pursuant to its constitutional authority, Congress has defined
"gross income" as income "from whatever source derived," including
"[i]ncome from discharge of indebtedness." Page 457 U. S. 195 26 U.S.C. § 61(12). [ Footnote
3 ] This Court has recognized that "income" may be realized by a
variety of indirect means. In Old Colony Trust Co. v.
Commissioner, 279 U. S. 716 (1929), the Court held that payment of an employee's income taxes
by an employer constituted income to the employee. Speaking for the
Court, Chief Justice Taft concluded that
"[t]he payment of the tax by the employe[r] was in consideration
of the services rendered by the employee, and was a gain derived by
the employee from his labor." Id. at 279 U. S. 729 .
The Court made clear that the substance, not the form, of the
agreed transaction controls. "The discharge by a third person of an
obligation to him is equivalent to receipt by the person taxed." Ibid. The employee, in other words, was placed in a better
position as a result of the employer's discharge of the employee's
legal obligation to pay the income taxes; the employee thus
received a gain subject to income tax.
The holding in Old Colony was reaffirmed in Crane
v. Commissioner, 331 U. S. 1 (1947).
In Crane, the Court concluded that relief from the
obligation of a nonrecourse mortgage in which the value of the
property exceeded the value of the mortgage constituted income to
the taxpayer. The taxpayer in Crane acquired depreciable
property, an apartment building, subject to an unassumed mortgage.
The taxpayer later sold the apartment building, which was still
subject to the nonrecourse mortgage, for cash plus the buyer's
assumption Page 457 U. S. 196 of the mortgage. This Court held that the amount of the mortgage
was properly included in the amount realized on the sale, noting
that, if the taxpayer transfers subject to the mortgage,
"the benefit to him is as real and substantial as if the
mortgage were discharged, or as if a personal debt in an equal
amount had been assumed by another." Id. at 331 U. S. 14 .
[ Footnote 4 ] Again, it was the
"reality," not the form, of the transaction that governed. Ibid. The Court found it immaterial whether the seller
received money prior to the sale in order to discharge the
mortgage, or whether the seller merely transferred the property
subject to the mortgage. In either case the taxpayer realized an
economic benefit. B The principles of Old Colony and Crane control. [ Footnote 5 ] A common
method of structuring gift transactions is for the donor Page 457 U. S. 197 to make the gift subject to the condition that the donee pay the
resulting gift tax, as was done in each of the cases now before us.
When a gift is made, the gift tax liability falls on the donor
under 26 U.S.C. § 2502(d). [ Footnote 6 ] When a donor makes a gift to a donee, a "debt"
to the United States for the amount of the gift tax is incurred by
the donor. Those taxes are as much the legal obligation of the
donor as the donor's income taxes; for these purposes, they are the
same kind of debt obligation as the income taxes of the employee in Old Colony, supra. Similarly, when a donee agrees to
discharge an indebtedness in consideration of the gift, the person
relieved of the tax liability realizes an economic benefit. In
short, the donor realizes an immediate economic benefit by the
donee's assumption of the donor's legal obligation to pay the gift
tax.
An examination of the donor's intent does not change the
character of this benefit. Although intent is relevant in
determining whether a gift has been made, subjective intent has not
characteristically been a factor in determining whether an
individual has realized income. [ Footnote 7 ] Even if intent Page 457 U. S. 198 were a factor, the donor's intent with respect to the condition
shifting the gift tax obligation from the donor to the donee was
plainly to relieve the donor of a debt owed to the United States;
the choice was made because the donor would receive a benefit in
relief from the obligation to pay the gift tax. [ Footnote 8 ]
Finally, the benefit realized by the taxpayer is not diminished
by the fact that the liability attaches during the course of a
donative transfer. It cannot be doubted that the donors were aware
that the gift tax obligation would arise immediately upon the
transfer of the property; the economic benefit to the donors in the
discharge of the gift tax liability is indistinguishable from the
benefit arising from discharge of a preexisting obligation. Nor is
there any doubt that, had the donors sold a portion of the stock
immediately before the gift transfer in order to raise funds to pay
the expected gift tax, a taxable gain would have been realized. 26
U.S.C. § 1001. The fact that the gift tax obligation was discharged
by way of a conditional gift, rather than from funds derived from a
pre-gift sale, does not alter the underlying benefit to the
donors. C Consistent with the economic reality, the Commissioner has
treated these conditional gifts as a discharge of indebtedness
through a part gift and part sale of the gift property transferred.
The transfer is treated as if the donor sells the property to the
donee for less than the fair market value. The "sale" price is the
amount necessary to discharge the gift Page 457 U. S. 199 tax indebtedness; the balance of the value of the transferred
property is treated as a gift. The gain thus derived by the donor
is the amount of the gift tax liability less the donor's adjusted
basis in the entire property. Accordingly, income is realized to
the extent that the gift tax exceeds the donor's adjusted basis in
the property. This treatment is consistent with § 1001 of the
Internal Revenue Code, which provides that the gain from the
disposition of property is the excess of the amount realized over
the transferor's adjusted basis in the property. [ Footnote 9 ] III We recognize that Congress has structured gift transactions to
encourage transfer of property by limiting the tax consequences of
a transfer. See, e.g., 26 U.S.C. § 102 (gifts excluded
from donee's gross income). Congress may obviously provide a
similar exclusion for the conditional gift. Should Congress wish to
encourage "net gifts," changes in the income tax consequences of
such gifts lie within the legislative responsibility. Until such
time, we are bound by Congress' mandate that gross income includes
income "from whatever source derived." We therefore hold that a
donor who makes a gift of property on condition that the donee pay
the resulting gift taxes realizes taxable income to the extent Page 457 U. S. 200 that the gift taxes paid by the donee exceed the donor's
adjusted basis in the property. [ Footnote 10 ]
The judgment of the United States Court of Appeals for the
Eighth Circuit is Affirmed. [ Footnote 1 ]
Subtracting the stock basis of $51,073 from the gift tax paid by
the donees of $62,992, the Commissioner found that petitioners had
realized a long-term capital gain of $11,919. After a 50% reduction
in long-term capita gain, 26 U.S.C. § 1202, the Diedrichs' taxable
income increased by $5,959.
[ Footnote 2 ]
The gift taxes were $232,630.09. Subtracting the adjusted basis
of $8,742.60, the Commissioner found that Mrs. Grant realized a
long-term capital gain of $223,887.49. After a 50% reduction for
long-term capital gain, 26 U.S.C. § 1202, Mrs. Grant's taxable
income increased by $111,943.75
During pendency of this lawsuit, Mrs. Grant died and the United
Missouri Bank of Kansas City, the decedent's executor, was
substituted as petitioner.
[ Footnote 3 ]
The United States Constitution provides that Congress shall have
the power to lay and collect taxes on income "from whatever source
derived." Art. I, 8, cl. 1; Amdt. 16.
In Helvering v. Bruun, 309 U.
S. 461 , 309 U. S. 469 (1940), the Court noted:
"While it is true that economic gain is not always taxable as
income, it is settled that the realization of gain need not be in
cash derived from the sale of an asset. Gain may occur as a result
of exchange of property, payment of the taxpayer's
indebtedness, relief from a liability, or other profit
realized from the completion of a transaction."
(Emphasis supplied.)
[ Footnote 4 ]
In Crane, the taxpayer received favorable tax treatment
for the loan and was allowed depreciation on the property. The
Court concluded that the taxpayer could not then later escape
taxation after having received these benefits when the loan
obligation was assumed by another.
Whether income would have been realized in Crane if the
value of the property at the time of transfer had been less than
the amount of the mortgage need not be considered here. See
Crane, 331 U.S. at 331 U. S. 14 , n.
37.
[ Footnote 5 ]
Although the Commissioner has argued consistently that payment
of gift taxes by the donee results in income to the donor, several
courts have rejected this interpretation. See, e.g., Turner v.
Commissioner, 49 T.C. 356 (1968), aff'd per curiam, 410 F.2d 752 (CA6 1969); Hirst v. Commissioner, 572 F.2d
427 (CA4 1978) (en banc). Cf. Johnson v. Commissioner, 495
F.2d 1079 (CA6), cert. denied, 419 U.S. 1040 (1974).
It should be noted that the gift tax consequences of a
conditional gift will be unaffected by the holding in this case.
When a conditional "net" gift is given, the gift tax attributable
to the transfer is to be deducted from the value of the property in
determining the value of the gift at the time of transfer. See Rev.Rul. 75-72, 1975-1 Cum.Bull. 310 (general formula
for computation of gift tax on conditional gift); Rev.Rul. 71-232,
1971-1 Cum.Bull. 275.
[ Footnote 6 ]
"The tax imposed by section 2501 shall be paid by the
donor."
Section 6321 imposes a lien on the personal property of the
donor when a tax is not paid when due. The donee is secondarily
responsible for payment of the gift tax should the donor fail to
pay the tax. 26 U.S.C. § 6324(b). The donee's liability, however,
is limited to the value of the gift. Ibid. This
responsibility of the donee is analogous to a lien or security. Ibid. See also S.Rep. No. 665, 72d Cong., 1st
Sess., 42 (1932); H.R.Rep. No. 708, 72d Cong., 1st Sess., 30
(1932).
[ Footnote 7 ]
Several courts have found it highly significant that the donor
intended to make a gift. Turner v. Commissioner, supra; Hirst
v. Commissioner, supra. It is not enough, however, to state
that the donor intended simply to make a gift of the amount which
will remain after the donee pays the gift tax. As noted above,
subjective intent has not characteristically been a factor in
determining whether an individual has realized income. In Commissioner v. Duberstein, 363 U.
S. 278 , 363 U. S. 286 (1960), the Court noted that "the donor's characterization of his
action is not determinative." See also Minnesota Tea Co. v.
Helvering, 302 U. S. 609 , 302 U. S. 613 (1938) ("A given result at the end of a straight path is not made a
different result because reached by following a devious path").
[ Footnote 8 ]
The existence of the "condition" that the gift will be made only
if the donee assumes the gift tax consequences precludes any
characterization that the payment of the taxes was simply a gift
from the donee back to the donor.
A conditional gift not only relieves the donor of the gift tax
liability, but also may enable the donor to transfer a larger sum
of money to the donee than would otherwise be possible due to such
factors as differing income tax brackets of the donor and
donee.
[ Footnote 9 ]
Section 1001 provides:
"(a) Computation of gain or loss. -- The gain from the
sale or other disposition of property shall be the excess of the
amount realized therefrom over the adjusted basis provided in
section 1011 for determining gain, and the loss shall be the excess
of the adjusted basis provided in such section for determining loss
over the amount realized."
"(b) Amount realized. -- The amount realized from the
sale or other disposition of property shall be the sum of any money
received plus the fair market value of the property (other than
money) received. . . ."
"By treating conditional gifts as a part gift and part sale,
income is realized only when highly appreciated property is
transferred, for only highly appreciated property will result in a
gift tax greater than the adjusted basis."
[ Footnote 10 ]
Petitioners argue that even if this Court holds that a donor
realizes income on a conditional gift to the extent that the gift
tax exceeds the adjusted basis, that holding should be applied
prospectively, and should not apply to the taxpayers in this case.
In this case, however, there was no dispositive Eighth Circuit
holding prior to the decision on review. In addition, this Court
frequently has applied decisions which have altered the tax law and
applied the clarified law to the facts of the case before it. See, e.g., United States v. Estate of Donnelly, 397 U. S. 286 , 397 U. S.
294 -295 (1970).
JUSTICE REHNQUIST, dissenting.
It is a well-settled principle today that a taxpayer realizes
income when another person relieves the taxpayer of a legal
obligation in connection with an otherwise taxable transaction. See Crane v. Commissioner, 331 U. S.
1 (1947) (sale of real property); Old Colony Trust
Co. v. Commissioner, 279 U. S. 716 (1929) (employment compensation). In neither Old Colony nor Crane was there any question as to the existence of a
taxable transaction; the only question concerned the amount of
income realized by the taxpayer as a result of the taxable
transaction. The Court in this case, however, begs the question of
whether a taxable transaction has taken place at all when it
concludes that "[t]he principles of Old Colony and Crane control" this case. Ante at 457 U. S.
196 .
In Old Colony, the employer agreed to pay the
employee's federal tax liability as part of his compensation. The
employee provided his services to the employer in exchange for
compensation. The exchange of compensation for services was
undeniably a taxable transaction. The only question was whether the
employee's taxable income included the employer's assumption of the
employee's income tax liability.
In Crane, the taxpayer sold real property for cash plus
the buyer's assumption of a mortgage. Clearly a sale had occurred,
and the only question was whether the amount of the Page 457 U. S. 201 mortgage assumed by the buyer should be included in the amount
realized by the taxpayer. The Court rejected the taxpayer's
contention that what she sold was not the property itself, but her
equity in that property.
Unlike Old Colony or Crane, the question in
this case is not the amount of income the taxpayer has realized as
a result of a concededly taxable transaction, but whether a taxable
transaction has taken place at all. Only after one
concludes that a partial sale occurs when the donee agrees to pay
the gift tax do Old Colony and Crane become
relevant in ascertaining the amount of income realized by the donor
as a result of the transaction. Nowhere does the Court explain why
a gift becomes a partial sale merely because the donor and donee
structure the gift so that the gift tax imposed by Congress on the
transaction is paid by the donee, rather than the donor.
In my view, the resolution of this case turns upon congressional
intent: whether Congress intended to characterize a gift as a
partial sale whenever the donee agrees to pay the gift tax.
Congress has determined that a gift should not be considered income
to the donee. 26 U.S.C. § 102. Instead, gift transactions are to be
subject to a tax system wholly separate and distinct from the
income tax. See 26 U.S.C. § 2501 et seq. Both the
donor and the donee may be held liable for the gift tax. §§
2502(d), 6324(b). Although the primary liability for the gift tax
is on the donor, the donee is liable to the extent of the value of
the gift should the donor fail to pay the tax. I see no evidence in
the tax statutes that Congress forbade the parties to agree among
themselves as to who would pay the gift tax upon pain of such an
agreement being considered a taxable event for the purposes of the
income tax. Although Congress could certainly determine that the
payment of the gift tax by the donee constitutes income to the
donor, the relevant statutes do not affirmatively indicate that
Congress has made such a determination.
I dissent. | In *Diedrich v. Commissioner* (1982), the U.S. Supreme Court held that a donor who makes a gift on the condition that the recipient pays the resulting gift tax realizes taxable income if the gift tax paid by the recipient exceeds the donor's adjusted basis in the property. The Court determined that the substance of the transaction, rather than its form, controls whether taxable income was realized. When a donor makes a gift, they incur a "debt" for gift taxes, similar to income taxes. If the recipient assumes this debt by agreeing to pay the gift tax, the donor realizes an economic benefit, which is considered taxable income. This interpretation is consistent with the Internal Revenue Code's definition of gain from the disposition of property. |
Taxes | Commissioner v. Tufts | https://supreme.justia.com/cases/federal/us/461/300/ | U.S. Supreme Court Commissioner v. Tufts, 461
U.S. 300 (1983) Commissioner v. Tufts No. 81-1536 Argued November 29,
1982 Decided May 2, 1983 461
U.S. 300 CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE FIFTH CIRCUIT Syllabus Section 72(d) of the Internal Revenue Code of 1954 (IRC)
provides that liabilities involved in the sale or exchange of a
partnership interest are to be treated "in the same manner as
liabilities in connection with the sale or exchange of property not
associated with partnerships." Under § 1001(a) of the IRC, the gain
or loss from a sale or other disposition of property is defined as
the difference between "the amount realized" on the disposition and
the property's adjusted basis. Section 1001(b) defines the "amount
realized" as "the sum of any money received plus the fair market
value of the property (other than money) received." A general
partnership formed by respondents in 1970 to construct an apartment
complex entered into a $1,851,500 nonrecourse mortgage loan with a
savings association. The complex was completed in 1971. Due to the
partners' capital contributions to the partnership and income tax
deductions for their allocable shares of ordinary losses and
depreciation, the partnership's claimed adjusted basis in the
property in 1972 was $1,455,740. Because of an unanticipated
reduction in rental income, the partnership was unable to make the
payments due on the mortgage. Each partner thereupon sold his
interest to a third party, who assumed the mortgage. The fair
market value on the date of transfer did not exceed $1,400,000.
Each partner reported the sale on his income tax return and
indicated a partnership loss of $55,740. The Commissioner of
Internal Revenue, however, determined that the sale resulted in a
partnership gain of approximately $400,000 on the theory that the
partnership had realized the full amount of the nonrecourse
obligation. The United States Tax Court upheld the deficiencies,
but the Court of Appeals reversed. Held: When a taxpayer sells or disposes of property
encumbered by a nonrecourse obligation exceeding the fair market
value of the property sold, as in this case, the Commissioner may
require him to include in the "amount realized" the outstanding
amount of the obligation; the fair market value of the property is
irrelevant to this calculation. Cf. Crane v. Commissioner, 331 U. S. 1 . Pp. 461 U. S.
304 -317. Page 461 U. S. 301 (a) When the mortgagor's obligation to repay the mortgage loan
is canceled, he is relieved of his responsibility to repay the sum
he originally received, and thus realizes value to that extent
within the meaning of § 1001(b). To permit the taxpayer to limit
his realization to the fair market value of the property would be
to recognize a tax loss for which he has suffered no corresponding
economic loss. A taxpayer must account for the proceeds of
obligations he has received tax-free and has included in basis.
Nothing in either § 1001(b) or in this Court's prior decisions
requires the Commissioner to permit a taxpayer to treat a sale of
encumbered property asymmetrically, by including the proceeds of
the nonrecourse obligation in basis but not accounting for the
proceeds upon transfer of the property. Pp. 461 U. S.
304 -319.
(b) Section 752(c) of the IRC -- which provides that, for
purposes of § 752,
"a liability to which property is subject shall, to the extent
of the fair market value of such property, be considered as a
liability of the owner of the property"
-- does not authorize this type of asymmetrical treatment in the
sale or disposition of partnership property. Rather, the
legislative history indicates that the fair market value limitation
of § 752(c) was intended to apply only to transactions between a
partner and his partnership under §§ 752(a) and (b), and was not
intended to limit the amount realized in a sale or exchange of a
partnership interest under § 752(d). Pp. 461 U. S.
314 -317.
651 F.2d 1058, reversed.
JUSTICE BLACKMUN delivered the opinion of the Court.
Over 35 years ago, in Crane v. Commissioner, 331 U. S. 1 (1947),
this Court ruled that a taxpayer, who sold property encumbered by a
nonrecourse mortgage (the amount of the Page 461 U. S. 302 mortgage being less than the property's value), must include the
unpaid balance of the mortgage in the computation of the amount the
taxpayer realized on the sale. The case now before us presents the
question whether the same rule applies when the unpaid amount of
the nonrecourse mortgage exceeds the fair market value of the
property sold. I On August 1, 1970, respondent Clark Pelt, a builder, and his
wholly owned corporation, respondent Clark, Inc., formed a general
partnership. The purpose of the partnership was to construct a
120-unit apartment complex in Duncanville, Tex., a Dallas suburb.
Neither Pelt nor Clark, Inc., made any capital contribution to the
partnership. Six days later, the partnership entered into a
mortgage loan agreement with the Farm & Home Savings
Association (F&H). Under the agreement, F&H was committed
for a $1,851,500 loan for the complex. In return, the partnership
executed a note and a deed of trust in favor of F&H. The
partnership obtained the loan on a nonrecourse basis: neither the
partnership nor its partners assumed any personal liability for
repayment of the loan. Pelt later admitted four friends and
relatives, respondents Tufts, Steger, Stephens, and Austin, as
general partners. None of them contributed capital upon entering
the partnership.
The construction of the complex was completed in August, 1971.
During 1971, each partner made small capital contributions to the
partnership; in 1972, however, only Pelt made a contribution. The
total of the partners' capital contributions was $44,212. In each
tax year, all partners claimed as income tax deductions their
allocable shares of ordinary losses and depreciation. The
deductions taken by the partners in 1971 and 1972 totalled
$439,972. Due to these contributions and deductions, the
partnership's adjusted basis in the property in August, 1972, was
$1,455,740. Page 461 U. S. 303 In 1971 and 1972, major employers in the Duncanville area laid
off significant numbers of workers. As a result, the partnership's
rental income was less than expected, and it was unable to make the
payments due on the mortgage. Each partner, on August 28, 1972,
sold his partnership interest to an unrelated third party, Fred
Bayles. As consideration, Bayles agreed to reimburse each partner's
sale expenses up to $250; he also assumed the nonrecourse
mortgage.
On the date of transfer, the fair market value of the property
did not exceed $1,400,000. Each partner reported the sale on his
federal income tax return and indicated that a partnership loss of
$55,740 had been sustained. [ Footnote 1 ] The Commissioner of Internal Revenue, on
audit, determined that the sale resulted in a partnership capital
gain of approximately $400,000. His theory was that the partnership
had realized the full amount of the nonrecourse obligation.
[ Footnote 2 ]
Relying on Millar v. Commissioner, 577 F.2d 212, 215
(CA3), cert. denied, 439 U.S. 1046 (1978), the United
States Tax Court, in an unreviewed decision, upheld the asserted
deficiencies. 70 T.C. 756 (1978). The United States Court of
Appeals for the Fifth Circuit reversed. 651 F.2d 1058 (1981). That
court expressly disagreed with the Millar analysis, and,
in limiting Crane v. Commissioner, supra, to its facts,
questioned the theoretical underpinnings of the Crane Page 461 U. S. 304 decision. We granted certiorari to resolve the conflict. 456
U.S. 960 (1982). II Section 752(d) of the Internal Revenue Code of 1954, 26 U.S.C. §
752(d), specifically provides that liabilities involved in the sale
or exchange of a partnership interest are to "be treated in the
same manner as liabilities in connection with the sale or exchange
of property not associated with partnerships." Section 1001 governs
the determination of gains and losses on the disposition of
property. Under § 1001(a), the gain or loss from a sale or other
disposition of property is defined as the difference between "the
amount realized" on the disposition and the property's adjusted
basis. Subsection (b) of § 1001 defines "amount realized":
"The amount realized from the sale or other disposition of
property shall be the sum of any money received plus the fair
market value of the property (other than money) received."
At issue is the application of the latter provision to the
disposition of property encumbered by a nonrecourse mortgage of an
amount in excess of the property's fair market value. A In Crane v. Commissioner, supra, this Court took the
first and controlling step toward the resolution of this issue.
Beulah B. Crane was the sole beneficiary under the will of her
deceased husband. At his death in January, 1932, he owned an
apartment building that was then mortgaged for an amount which
proved to be equal to its fair market value, as determined for
federal estate tax purposes. The widow, of course, was not
personally liable on the mortgage. She operated the building for
nearly seven years, hoping to turn it into a profitable venture;
during that period, she claimed income tax deductions for
depreciation, property taxes, interest, and operating expenses, but
did not make payments upon the mortgage principal. In computing her
basis for the depreciation deductions, she included the full amount
of the Page 461 U. S. 305 mortgage debt. In November, 1938, with her hopes unfulfilled and
the mortgagee threatening foreclosure, Mrs. Crane sold the
building. The purchaser took the property subject to the mortgage
and paid Crane $3,000; of that amount, $500 went for the expenses
of the sale.
Crane reported a gain of $2,500 on the transaction. She reasoned
that her basis in the property was zero (despite her earlier
depreciation deductions based on including the amount of the
mortgage) and that the amount she realized from the sale was simply
the cash she received. The Commissioner disputed this claim. He
asserted that Crane's basis in the property, under § 113(a)(5) of
the Revenue Act of 1938, 52 Stat. 490 (the current version is §
1014 of the 1954 Code, as amended, 26 U.S.C. § 1014 (1976 ed. and
Supp. V)), was the property's fair market value at the time of her
husband's death, adjusted for depreciation in the interim, and that
the amount realized was the net cash received plus the amount of
the outstanding mortgage assumed by the purchaser.
In upholding the Commissioner's interpretation of § 113 (a)(5)
of the 1938 Act, [ Footnote 3 ]
the Court observed that to regard merely the taxpayer's equity in
the property as her basis would lead to depreciation deductions
less than the actual physical deterioration of the property, and
would require the basis to be recomputed with each payment on the
mortgage. 331 U.S. at 331 U. S. 9 -10.
The Court rejected Crane's claim that any loss due to depreciation
belonged to the mortgagee. The effect of the Court's ruling was
that the taxpayer's basis was the value of the property
undiminished by the mortgage. Id. at 331 U. S. 11 . Page 461 U. S. 306 The Court next proceeded to determine the amount realized under
§ 111(b) of the 1938 Act, 52 Stat. 484 (the current version is §
1001(b) of the 1954 Code, 26 U.S.C. § 1001(b)). In order to avoid
the "absurdity," see 331 U.S. at 331 U. S. 13 , of
Crane's realizing only $2,500 on the sale of property worth over a
quarter of a million dollars, the Court treated the amount realized
as it had treated basis, that is, by including the outstanding
value of the mortgage. To do otherwise would have permitted Crane
to recognize a tax loss unconnected with any actual economic loss.
The Court refused to construe one section of the Revenue Act so as
"to frustrate the Act as a whole." Ibid. Crane, however, insisted that the nonrecourse nature of the
mortgage required different treatment. The Court, for two reasons,
disagreed. First, excluding the nonrecourse debt from the amount
realized would result in the same absurdity and frustration of the
Code. Id. at 331 U. S. 13 -14.
Second, the Court concluded that Crane obtained an economic benefit
from the purchaser's assumption of the mortgage identical to the
benefit conferred by the cancellation of personal debt. Because the
value of the property in that case exceeded the amount of the
mortgage, it was in Crane's economic interest to treat the mortgage
as a personal obligation; only by so doing could she realize upon
sale the appreciation in her equity represented by the $2,500 boot.
The purchaser's assumption of the liability thus resulted in a
taxable economic benefit to her, just as if she had been given, in
addition to the boot, a sum of cash sufficient to satisfy the
mortgage. [ Footnote 4 ] Page 461 U. S. 307 In a footnote, pertinent to the present case, the Court
observed:
"Obviously, if the value of the property is less than the amount
of the mortgage, a mortgagor who is not personally liable cannot
realize a benefit equal to the mortgage. Consequently, a different
problem might be encountered where a mortgagor abandoned the
property or transferred it subject to the mortgage without
receiving boot. That is not this case." Id. at 331 U. S. 14 , n.
37. B This case presents that unresolved issue. We are disinclined to
overrule Crane, and we conclude that the same rule applies
when the unpaid amount of the nonrecourse mortgage exceeds the
value of the property transferred. Crane ultimately does
not rest on its limited theory of economic benefit; instead, we
read Crane to have approved the Commissioner's decision to
treat a nonrecourse mortgage in this context as a true loan. This
approval underlies Crane's holdings that the amount of the
nonrecourse liability is to be included in calculating both the
basis and the amount realized on disposition. That the amount of
the loan exceeds the fair market value of the property thus becomes
irrelevant.
When a taxpayer receives a loan, he incurs an obligation to
repay that loan at some future date. Because of this obligation,
the loan proceeds do not qualify as income to the taxpayer. When he
fulfills the obligation, the repayment of the loan likewise has no
effect on his tax liability.
Another consequence to the taxpayer from this obligation occurs
when the taxpayer applies the loan proceeds to the purchase price
of property used to secure the loan. Because of the obligation to
repay, the taxpayer is entitled to include the amount of the loan
in computing his basis in the property; the loan, under § 1012, is
part of the taxpayer's cost of the Page 461 U. S. 308 property. Although a different approach might have been taken
with respect to a nonrecourse mortgage loan, [ Footnote 5 ] the Commissioner has chosen to accord
it the same treatment he gives to a recourse mortgage loan. The
Court approved that choice in Crane, and the respondents
do not challenge it here. The choice and its resultant benefits to
the taxpayer are predicated on the assumption that the mortgage
will be repaid in full.
When encumbered property is sold or otherwise disposed of and
the purchaser assumes the mortgage, the associated Page 461 U. S. 309 extinguishment of the mortgagor's obligation to repay is
accounted for in the computation of the amount realized. [ Footnote 6 ] See United States v.
Hendler, 303 U. S. 564 , 303 U. S.
566 -567 (1938). Because no difference between recourse
and nonrecourse obligations is recognized in calculating basis,
[ Footnote 7 ] Crane teaches that the Commissioner may ignore the nonrecourse nature of
the obligation in determining the amount realized upon disposition
of t.he encumbered property. He thus may include in the amount
realized the amount of the nonrecourse mortgage assumed by the
purchaser. The rationale for this treatment is that the original
inclusion of the amount of the mortgage in basis rested on the
assumption that the mortgagor incurred an obligation to repay.
Moreover, this treatment balances the fact that the mortgagor
originally received the proceeds of the nonrecourse loan tax-free
on the same assumption. Page 461 U. S. 310 Unless the outstanding amount of the mortgage is deemed to be
realized, the mortgagor effectively will have received untaxed
income at the time the loan was extended, and will have received an
unwarranted increase in the basis of his property. [ Footnote 8 ] The Commissioner's interpretation
of § 1001(b) in this fashion cannot be said to be unreasonable. C The Commissioner, in fact, has applied this rule even when the
fair market value of the property falls below the amount of the
nonrecourse obligation. Treas.Reg. § 1.1001-2(b), 26 CFR §
1.1001-2(b) (1982); [ Footnote
9 ] Rev.Rul. 76-111, 1976-1 Cum.Bull. 214. Because the theory on
which the rule is based applies equally in this situation, see
Millar v. Commissioner, 67 T.C. 656, 660 (1977), aff'd on
this issue, 577 F.2d 212, 215-216 (CA3), cert.
denied, 439 U.S. 1046 (1978); [ Footnote 10 ] Mendham Corp. v. Commissioner, 9
T.C. 320, 323-324 (1947); Lutz & Schramm Co. v.
Commissioner, 1 T.C. 682, 688-689 (1943), we have no reason,
after Crane, to question this treatment. [ Footnote 11 ] Page 461 U. S. 311 Respondents received a mortgage loan with the concomitant
obligation to repay by the year 2012. The only difference between
that mortgage and one on which the borrower Page 461 U. S. 312 is personally liable is that the mortgagee's remedy is limited
to foreclosing on the securing property. This difference does not
alter the nature of the obligation; its only effect is to shift
from the borrower to the lender any potential loss caused by
devaluation of the property. [ Footnote 12 ] If the fair market value of the property
falls below the amount of the outstanding obligation, the
mortgagee's ability to protect its interests is impaired, for the
mortgagor is free to abandon the property to the mortgagee and be
relieved of his obligation.
This, however, does not erase the fact that the mortgagor
received the loan proceeds tax-free, and included them in his basis
on the understanding that he had an obligation to repay the full
amount. See Woodsam Associates, Inc. v. Commissioner, 198
F.2d 357, 359 (CA2 1952); Bittker, supra, n 7, at 284. When the obligation is canceled,
the mortgagor is relieved of his responsibility to repay the sum he
originally received, and thus realizes value to that extent within
the meaning of § 1001(b). From the mortgagor's point of view, when
his obligation is assumed by a third party who purchases the
encumbered property, it is as if the mortgagor first had been paid
with cash borrowed by the third party from the mortgagee on a
nonrecourse basis, and then had used the cash to satisfy his
obligation to the mortgagee.
Moreover, this approach avoids the absurdity the Court
recognized in Crane. Because of the remedy accompanying
the mortgage in the nonrecourse situation, the depreciation Page 461 U. S. 313 in the fair market value of the property is relevant
economically only to the mortgagee, who, by lending on a
nonrecourse basis, remains at risk. To permit the taxpayer to limit
his realization to the fair market value of the property would be
to recognize a tax loss for which he has suffered no corresponding
economic loss. [ Footnote 13 ]
Such a result would be to construe "one section of the Act . . . so
as . . . to defeat the intention of another or to frustrate the Act
as a whole." 331 U.S. at 331 U. S. 13 .
In the specific circumstances of Crane, the economic
benefit theory did support the Commissioner's treatment of the
nonrecourse mortgage as a personal obligation. The footnote in Crane acknowledged the limitations of that theory when
applied to a different set of facts. Crane also stands for
the broader proposition, however, that a nonrecourse loan should be
treated as a true loan. We therefore hold that a taxpayer must
account for the proceeds of obligations he has received tax-free
and included in basis. Nothing in either § 1001(b) or in the
Court's prior decisions requires the Commissioner to permit a
taxpayer to treat a sale of encumbered property asymmetrically, by
including the proceeds of the nonrecourse obligation in basis but
not accounting for the proceeds upon transfer of the encumbered
property. See Page 461 U. S. 314 Estate of Levine v. Commissioner, 634 F.2d 12, 15 (CA2
1980). III Relying on the Code's § 752(c), 26 U.S.C. § 752(c), however,
respondents argue that Congress has provided for precisely this
type of asymmetrical treatment in the sale or disposition of
partnership property. Section 752 prescribes the tax treatment of
certain partnership transactions, [ Footnote 14 ] and § 752(c) provides that,
"[f]or purposes of this section, a liability to which property
is subject shall, to the extent of the fair market value of such
property, be considered as a liability of the owner of the
property."
Section 752(c) could be read to apply to a sale or disposition
of partnership property, and thus to limit the amount realized to
the fair market value of the property transferred. Inconsistent
with this interpretation, however, is the language of § 752(d),
which specifically mandates that partnership liabilities be treated
"in the same manner as liabilities in connection with the sale or
exchange Page 461 U. S. 315 of property not associated with partnerships." The apparent
conflict of these subsections renders the facial meaning of the
statute ambiguous, and therefore we must look to the statute's
structure and legislative history.
Subsections (a) and (b) of § 752 prescribe rules for the
treatment of liabilities in transactions between a partner and his
partnership, and thus for determining the partner's adjusted basis
in his partnership interest. Under § 704(d), a partner's
distributive share of partnership losses is limited to the adjusted
basis of his partnership interest. 26 U.S.C. § 704(d) (1976 ed.,
Supp. V); see Perry, Limited Partnerships and Tax
Shelters: The Crane Rule Goes Public, 27 Tax L.Rev. 525,
543 (1972). When partnership liabilities are increased or when a
partner takes on the liabilities of the partnership, § 752(a)
treats the amount of the increase or the amount assumed as a
contribution by the partner to the partnership. This treatment
results in an increase in the adjusted basis of the partner's
interest and a concomitant increase in the § 704(d) limit on his
distributive share of any partnership loss. Conversely, under §
752(b), a decrease in partnership liabilities or the assumption of
a partner's liabilities by the partnership has the effect of a
distribution, thereby reducing the limit on the partner's
distributive share of the partnership's losses. When property
encumbered by liabilities is contributed to or distributed from the
partnership, § 752(c) prescribes that the liability shall be
considered to be assumed by the transferee only to the extent of
the property's fair market value. Treas.Reg. § 1.752-1(c), 26 CFR §
1.752-1(c) (1982).
The legislative history indicates that Congress contemplated
this application of § 752(c). Mention of the fair market value
limitation occurs only in the context of transactions under
subsections (a) and (b). [ Footnote 15 ] The sole reference to subsection Page 461 U. S. 316 (d) does not discuss the limitation. [ Footnote 16 ] While the legislative history is
certainly not conclusive, it indicates that the fair market value
limitation of § 752(c) was directed to transactions between a
partner and his partnership. [ Footnote 17 ] 1 A. Willis, J. Pennell, & P.
Postlewaite, Partnership Taxation § 44.03, p. 44-3 (3d ed.1981);
Simmons, Tufts v. Commissioner: Amount Realized Limited to
Fair Market Value, 15 U.C.D.L.Rev. 577, 611-613 (1982).
By placing a fair market value limitation on liabilities
connected with property contributions to and distributions from
partnerships under subsections (a) and (b), Congress apparently
intended § 752(c) to prevent a partner from inflating the basis of
his partnership interest. Otherwise, a partner with no additional
capital at risk in the partnership could raise the § 704(d) limit
on his distributive share of partnership losses or could reduce his
taxable gain upon disposition of his partnership Page 461 U. S. 317 interest. See Newman, The Resurgence of Footnote 37: Tufts v. Commissioner, 18 Wake Forest L.Rev. 1, 16, n. 116
(1982). There is no potential for similar abuse in the context of §
752(d) sales of partnership interests to unrelated third parties.
In light of the above, we interpret subsection (c) to apply only to
§ 752(a) and (b) transactions, and not to limit the amount realized
in a sale or exchange of a partnership interest under § 752(d). IV When a taxpayer sells or disposes of property encumbered by a
nonrecourse obligation, the Commissioner properly requires him to
include among the assets realized the outstanding amount of the
obligation. The fair market value of the property is irrelevant to
this calculation. We find this interpretation to be consistent with Crane v. Commissioner, 331 U. S. 1 (1947),
and to implement the statutory mandate in a reasonable manner. National Muffler Dealers Assn. v. United States, 440 U. S. 472 , 440 U. S. 476 (1979).
The judgment of the Court of Appeals is therefore reversed. It is so ordered. [ Footnote 1 ]
The loss was the difference between the adjusted basis,
$1,455,740, and the fair market value of the property, $1,400,000.
On their individual tax returns, the partners did not claim
deductions for their respective shares of this loss. In their
petitions to the Tax Court, however, the partners did claim the
loss.
[ Footnote 2 ]
The Commissioner determined the partnership's gain on the sale
by subtracting the adjusted basis, $1,455,740, from the liability
assumed by Bayles, $1,851,500. Of the resulting figure, $395,760,
the Commissioner treated $348,661 as capital gain, pursuant to §
741 of the Internal Revenue Code of 1954, 26 U.S.C. § 741, and
$47,099 as ordinary gain under the recapture provisions of § 1250
of the Code. The application of § 1250 in determining the character
of the gain is not at issue here.
[ Footnote 3 ]
Section 113(a)(5) defined the basis of "property . . . acquired
by . . . devise . . . or by the decedent's estate from the
decedent" as "the fair market value of such property at the time of
such acquisition." The Court interpreted the term "property" to
refer to the physical land and buildings owned by Crane or the
aggregate of her rights to control and dispose of them. 331 U.S. at 331 U. S. 6 .
[ Footnote 4 ]
Crane also argued that, even if the statute required the
inclusion of the amount of the nonrecourse debt, that amount was
not Sixteenth Amendment income because the overall transaction had
been "by all dictates of common sense . . . a ruinous disaster."
Brief for Petitioner in Crane v. Commissioner, O.T. 1946,
No. 68, p. 51. The Court noted, however, that Crane had been
entitled to and actually took depreciation deductions for nearly
seven years. To allow her to exclude sums on which those deductions
were based from the calculation of her taxable gain would permit
her "a double deduction . . . on the same loss of assets." The
Sixteenth Amendment, it was said, did not require that result. 331
U.S. at 331 U. S.
15 -16.
[ Footnote 5 ]
The Commissioner might have adopted the theory, implicit in
Crane's contentions, that a nonrecourse mortgage is not true debt,
but, instead, is a form of joint investment by the mortgagor and
the mortgagee. On this approach, nonrecourse debt would be
considered a contingent liability, under which the mortgagor's
payments on the debt gradually increase his interest in the
property while decreasing that of the mortgagee. Note, Federal
Income Tax Treatment of Nonrecourse Debt, 82 Colum.L.Rev. 1498,
1514 (1982); Lurie, Mortgagor's Gain on Mortgaging Property for
More than Cost Without Personal Liability, 6 Tax L.Rev. 319, 323
(1951); cf. Brief for Respondents 16 (nonrecourse debt
resembles preferred stock). Because the taxpayer's investment in
the property would not include the nonrecourse debt, the taxpayer
would not be permitted to include that debt in basis. Note, 82
Colum.L.Rev. at 1515; cf. Gibson Products Co. v. United
States, 637 F.2d 1041, 1047-1048 (CA5 1981) (contingent nature
of obligation prevents inclusion in basis of oil and gas leases of
nonrecourse debt secured by leases, drilling equipment, and
percentage of future production).
We express no view as to whether such an approach would be
consistent with the statutory structure and, if so, and Crane were not on the books, whether that approach would
be preferred over Crane's analysis. We note only that the Crane Court's resolution of the basis issue presumed that,
when property is purchased with proceeds from a nonrecourse
mortgage, the purchaser becomes the sole owner of the property. 331
U.S. at 331 U. S. 6 . Under
the Crane approach, the mortgagee is entitled to no
portion of the basis. Id. at 331 U. S. 10 , n.
28. The nonrecourse mortgage is part of the mortgagor's investment
in the property, and does not constitute a coinvestment by the
mortgagee. But see Note, 82 Colum.L.Rev. at 1513 (treating
nonrecourse mortgage as coinvestment by mortgagee and critically
concluding that Crane departed from traditional analysis
that basis is taxpayer's investment in property).
[ Footnote 6 ]
In this case, respondents received the face value of their note
as loan proceeds. If respondents initially had given their note at
a discount, the amount realized on the sale of the securing
property might be limited to the funds actually received. See
Commissioner v. Rail Joint Co., 61 F.2d 751, 752 (CA2 1932)
(cancellation of indebtedness); Fashion Park, Inc. v.
Commissioner, 21 T.C. 600, 606 (1954) (same). See
generally J. Sneed, The Configurations of Gross Income 319
(1967) ("[I]t appears settled that the reacquisition of bonds at a
discount by the obligor results in gain only to the extent the
issue price, where this is less than par, exceeds the cost of
reacquisition").
[ Footnote 7 ]
The Commissioner's choice in Crane "laid the foundation
stone of most tax shelters," Bittker, Tax Shelters, Nonrecourse
Debt, and the Crane Case, 33 Tax L.Rev. 277, 283 (1978),
by permitting taxpayers who bear no risk to take deductions on
depreciable property. Congress recently has acted to curb this
avoidance device by forbidding a taxpayer to take depreciation
deductions in excess of amounts he has at risk in the investment.
Pub.L. 94-455, § 204(a), 90 Stat. 1531 (1976), 26 U.S.C. § 465;
Pub.L. 95-600, §§ 201-204, 92 Stat. 2814-2817 (1978), 26 U.S.C. §
465(a) (1976 ed., Supp. V). Real estate investments, however, are
exempt from this prohibition. § 465(c)(3)(D) (1976 ed., Supp. V).
Although this congressional action may foreshadow a day when
nonrecourse and recourse debts will be treated differently, neither
Congress nor the Commissioner has sought to alter Crane's rule of including nonrecourse liability in both basis and the
amount realized.
[ Footnote 8 ]
Although the Crane rule has some affinity with the tax
benefit rule, see Bittker, supra, at 282; Del Cotto, Sales
and Other Dispositions of Property Under Section 1001: The Taxable
Event, Amount Realized and Related Problems of Basis, 26 Buffalo
L.Rev. 219, 323-324 (1977), the analysis we adopt is different. Our
analysis applies even in the situation in which no deductions are
taken. It focuses on the obligation to repay and its subsequent
extinguishment, not on the taking and recovery of deductions. See generally Note, 82 Colum.L.Rev. at 1526-1529.
[ Footnote 9 ]
The regulation was promulgated while this case was pending
before the Court of Appeals for the Fifth Circuit. T.D. 7741, 45
Fed.Reg. 81743, 1981-1 Cum.Bull. 430 (1980). It merely formalized
the Commissioner's prior interpretation, however.
[ Footnote 10 ]
The Court of Appeals for the Third Circuit, in Millar, affirmed the Tax Court on the theory that inclusion of nonrecourse
liability in the amount realized was necessary to prevent the
taxpayer from enjoying a double deduction. 577 F.2d at 215; cf. n 4, supra. Because we resolve the question on another ground,
we do not address the validity of the double deduction
rationale.
[ Footnote 11 ]
Professor Wayne G. Barnett, as amicus in the present
case, argues that the liability and property portions of the
transaction should be accounted for separately. Under his view,
there was a transfer of the property for $1.4 million, and there
was a cancellation of the $1.85 million obligation for a payment of
$1.4 million. The former resulted in a capital loss of $50,000, and
the latter in the realization of $450,000 of ordinary income.
Taxation of the ordinary income might be deferred under § 108 by a
reduction of respondents' bases in their partnership interests.
Although this indeed could be a justifiable mode of analysis, it
has not been adopted by the Commissioner. Nor is there anything to
indicate that the Code requires the Commissioner to adopt it. We
note that Professor Barnett's approach does assume that recourse
and nonrecourse debt may be treated identically.
The Commissioner also has chosen not to characterize the
transaction as cancellation of indebtedness. We are not presented
with, and do not decide, the contours of the
cancellation-of-indebtedness doctrine. We note only that our
approach does not fall within certain prior interpretations of that
doctrine. In one view, the doctrine rests on the same initial
premise as our analysis here -- an obligation to repay -- but the
doctrine relies on a freeing-of-assets theory to attribute ordinary
income to the debtor upon cancellation. See Commissioner v.
Jacobson, 336 U. S. 28 , 336 U. S. 38 -40
(1949); United States v. Kirby Lumber Co., 284 U. S.
1 , 284 U. S. 3 (1931). According to that view, when nonrecourse debt is forgiven,
the debtor's basis in the securing property is reduced by the
amount of debt canceled, and realization of income is deferred
until the sale of the property. See Fulton Gold Corp. v.
Commissioner, 31 B.T.A. 519, 520 (1934). Because that
interpretation attributes income only when assets are freed,
however, an insolvent debtor realizes income just to the extent his
assets exceed his liabilities after the cancellation. Lakeland
Grocery Co. v. Commissioner, 36 B.T.A. 289, 292 (1937).
Similarly, if the nonrecourse indebtedness exceeds the value of the
securing property, the taxpayer never realizes the full amount of
the obligation canceled, because the tax law has not recognized
negative basis.
Although the economic benefit prong of Crane also
relies on a freeing-of-assets theory, that theory is irrelevant to
our broader approach. In the context of a sale or disposition of
property under § 1001, the extinguishment of the obligation to
repay is not ordinary income; instead, the amount of the canceled
debt is included in the amount realized, and enters into the
computation of gain or loss on the disposition of property.
According to Crane, this treatment is no different when
the obligation is nonrecourse: the basis is not reduced as in the
cancellation-of-indebtedness context, and the full value of the
outstanding liability is included in the amount realized. Thus, the
problem of negative basis is avoided.
[ Footnote 12 ]
In his opinion for the Court of Appeals in Crane, Judge
Learned Hand observed:
"[The mortgagor] has all the income from the property; he
manages it; he may sell it; any increase in its value goes to him;
any decrease falls on him, until the value goes below the amount of
the lien. . . . When, therefore, upon a sale, the mortgagor makes
an allowance to the vendee of the amount of the lien, he secures a
release from a charge upon his property quite as though the vendee
had paid him the full price on condition that, before he took
title, the lien should be cleared. . . ."
153 F.2d 504, 506 (CA2 1945).
[ Footnote 13 ]
In the present case, the Government bore the ultimate loss. The
nonrecourse mortgage was extended to respondents only after the
planned complex was endorsed for mortgage insurance under §§ 221(b)
and (d)(4) of the National Housing Act, 12 U.S.C. §§ 17151(b) and
(d)(4) (1976 ed. and Supp. V). After acquiring the complex from
respondents, Bayles operated it for a few years, but was unable to
make it profitable. In 1974, F&H foreclosed, and the Department
of Housing and Urban Development paid off the lender to obtain
title. In 1976, the Department sold the complex to another
developer for $1,502,000. The sale was financed by the Department's
taking back a note for $1,314,800 and a nonrecourse mortgage. To
fail to recognize the value of the nonrecourse loan in the amount
realized, therefore, would permit respondents to compound the
Government's loss by claiming the tax benefits of that loss for
themselves.
[ Footnote 14 ]
Section 752 provides:
"(a) Increase in partner's liabilities"
"Any increase in a partner's share of the liabilities of a
partnership, or any increase in a partner's individual liabilities
by reason of the assumption by such partner of partnership
liabilities, shall be considered as a contribution of money by such
partner to the partnership."
"(b) Decrease in partner's liabilities"
"Any decrease in a partner's share of the liabilities of a
partnership, or any decrease in a partner's individual liabilities
by reason of the assumption by the partnership of such individual
liabilities, shall be considered as a distribution of money to the
partner by the partnership."
"(c) Liability to which property is subject"
"For purposes of this section, a liability to which property is
subject shall, to the extent of the fair market value of such
property, be considered as a liability of the owner of the
property."
"(d) Sale or exchange of an interest"
"In the case of a sale or exchange of an interest in a
partnership, liabilities shall be treated in the same manner as
liabilities in connection with the sale or exchange of property not
associated with partnerships."
[ Footnote 15 ]
"The transfer of property subject to a liability by a partner to
a partnership, or by the partnership to a partner, shall, to the
extent of the fair market value of such property, be considered a
transfer of the amount of the liability along with the
property."
H.R.Rep. No. 1337, 83d Cong., 2d Sess., A236 (1954); S.Rep. No.
1622, 83d Cong., 2d Sess., 405 (1954).
[ Footnote 16 ]
"When a partnership interest is sold or exchanged, the general
rule for the treatment of the sale or exchange of property subject
to liabilities will be applied."
H.R.Rep. No. 1337, at A236-A237; S.Rep. No. 1622 at 405. These
Reports then set out an example of subsection (d)'s application,
which does not indicate whether the debt is recourse or
nonrecourse.
[ Footnote 17 ]
The Treasury Regulations support this view. The Regulations
interpreting § 752(c) state:
"Where property subject to a liability is contributed by a
partner to a partnership, or distributed by a partnership to a
partner, the amount of the liability, to an extent not exceeding
the fair market value of the property at the time of the
contribution or distribution, shall be considered as a liability
assumed by the transferee."
§ 1.752-1(c), 26 CFR § 1.752-1(c) (1982). The Regulations also
contain an example applying the fair market limitation to a
contribution of encumbered property by a partner to a partnership. Ibid. The Regulations interpreting § 752(d) make no
mention of the fair market limitation. § 752-1(d). Both Regulations
were issued contemporaneously with the passage of the statute, T.
D. 6175, 1956-1 Cum.Bull. 211, and are entitled to deference as an
administrative interpretation of the statute. See Commissioner
v. South Texas Lumber Co., 333 U. S. 496 , 333 U. S. 501 (1948).
JUSTICE O'CONNOR, concurring.
I concur in the opinion of the Court, accepting the view of the
Commissioner. I do not, however, endorse the Commissioner's view.
Indeed, were we writing on a slate clean except for the decision in Crane v. Commissioner, 331 U. S. 1 (1947),
I would take quite a different approach -- that urged upon us by
Professor Barnett as amicus. Crane established that a taxpayer could treat property
as entirely his own, in spite of the "coinvestment" provided by his
mortgagee in the form of a nonrecourse loan. That is, the full
basis of the property, with all its tax consequences, belongs to
the mortgagor. That rule alone, though, does not in any way tie
nonrecourse debt to the cost of property or to the proceeds upon
disposition. I see no reason to treat the Page 461 U. S. 318 purchase, ownership, and eventual disposition of property
differently because the taxpayer also takes out a mortgage, an
independent transaction. In this case, the taxpayer purchased
property, using nonrecourse financing, and sold it after it
declined in value to a buyer who assumed the mortgage. There is no
economic difference between the events in this case and a case in
which the taxpayer buys property with cash; later obtains a
nonrecourse loan by pledging the property as security; still later,
using cash on hand, buys off the mortgage for the market value of
the devalued property; and finally sells the property to a third
party for its market value.
The logical way to treat both this case and the hypothesized
case is to separate the two aspects of these events and to
consider, first, the ownership and sale of the property, and,
second, the arrangement and retirement of the loan. Under Crane, the fair market value of the property on the date
of acquisition -- the purchase price -- represents the taxpayer's
basis in the property, and the fair market value on the date of
disposition represents the proceeds on sale. The benefit received
by the taxpayer in return for the property is the cancellation of a
mortgage that is worth no more than the fair market value of the
property, for that is all the mortgagee can expect to collect on
the mortgage. His gain or loss on the disposition of the property
equals the difference between the proceeds and the cost of
acquisition. Thus, the taxation of the transaction in property
reflects the economic fate of the property. If the property has
declined in value, as was the case here, the taxpayer recognizes a
loss on the disposition of the property. The new purchaser then
takes as his basis the fair market value as of the date of the
sale. See, e.g., United States v. Davis, 370 U. S.
65 , 370 U. S. 72 (1962); Gibson Products Co. v. United States, 637 F.2d
1041, 1046, n. 8 (CA5 1981) (dictum); see generally Treas.Reg. § 1.10012(a)(3), 26 CFR § 1.1001-2(a)(3) (1982); 2 B.
Bittker, Federal Taxation of Income, Estates and Gifts 41.2.2., pp.
41-10 - 41-11 (1981). Page 461 U. S. 319 In the separate borrowing transaction, the taxpayer acquires
cash from the mortgagee. He need not recognize income at that time,
of course, because he also incurs an obligation to repay the money.
Later, though, when he is able to satisfy the debt by surrendering
property that is worth less than the face amount of the debt, we
have a classic situation of cancellation of indebtedness, requiring
the taxpayer to recognize income in the amount of the difference
between the proceeds of the loan and the amount for which he is
able to satisfy his creditor. 26 U.S.C. § 61(a)(12). The taxation
of the financing transaction then reflects the economic fate of the
loan.
The reason that separation of the two aspects of the events in
this case is important is, of course, that the Code treats
different sorts of income differently. A gain on the sale of the
property may qualify for capital gains treatment, §§ 1202, 1221
(1976 ed. and Supp. V), while the cancellation of indebtedness is
ordinary income, but income that the taxpayer may be able to defer.
§§ 108, 1017 (1976 ed., Supp. V). Not only does Professor Barnett's
theory permit us to accord appropriate treatment to each of the two
types of income or loss present in these sorts of transactions, it
also restores continuity to the system by making the
taxpayer-seller's proceeds on the disposition of property equal to
the purchaser's basis in the property. Further, and most important,
it allows us to tax the events in this case in the same way that we
tax the economically identical hypothesized transaction.
Persuaded though I am by the logical coherence and internal
consistency of this approach, I agree with the Court's decision not
to adopt it judicially. We do not write on a slate marked only by Crane. The Commissioner's longstanding position, Rev.Rul.
76-111, 1976-1 Cum.Bull. 214, is now reflected in the regulations.
Treas.Reg. § 1.1001-2, 26 CFR § 1.1001-2 (1982). In the light of
the numerous cases in the lower courts including the amount of the
unrepaid proceeds of the mortgage in the proceeds on sale or
disposition, see, Page 461 U. S. 320 e.g., Estate of Levine v. Commissioner, 634 F.2d 12, 15
(CA2 1980); Millar v. Commissioner, 577 F.2d 212 (CA3), cert. denied, 439 U.S. 1046 (1978); Estate of Delman
v. Commissioner, 73 T.C. 15, 28-30 (1979); Peninsula
Properties Co., Ltd. v. Commissioner, 47 B.T.A. 84, 92 (1942),
it is difficult to conclude that the Commissioner's interpretation
of the statute exceeds the bounds of his discretion. As the Court's
opinion demonstrates, his interpretation is defensible. One can
reasonably read § 1001(b)'s reference to "the amount realized from the sale or other disposition of property" (emphasis
added) to permit the Commissioner to collapse the two aspects of
the transaction. As long as his view is a reasonable reading of §
1001(b), we should defer to the regulations promulgated by the
agency charged with interpretation of the statute. National
Muffler Dealers Assn. v. United States, 440 U.
S. 472 , 440 U. S.
488 -489 (1979); United States v. Correll, 389 U. S. 299 , 389 U. S. 307 (1967); see also Fulman v. United States, 434 U.
S. 528 , 434 U. S. 534 (1978). Accordingly, I concur. | Here is a summary of the Supreme Court case Commissioner v. Tufts (1983):
Issue: Whether a taxpayer who sells property encumbered by a nonrecourse loan, where the loan exceeds the property's fair market value, must include the outstanding loan amount in the "amount realized" for tax purposes.
Holding: The Court held that the taxpayer must include the full amount of the nonrecourse loan in the "amount realized" when calculating gain or loss on the sale or disposition of the property. The fair market value of the property is irrelevant to this calculation.
Reasoning: When a mortgagor's loan is canceled, they are relieved of their repayment obligation and thus realize value within the meaning of the Internal Revenue Code (IRC) § 1001(b). Including the full loan amount in the "amount realized" prevents taxpayers from claiming tax losses without corresponding economic losses. The Court interpreted the IRC's reference to "amount realized from the sale or other disposition of property" as allowing the Commissioner to consider the loan amount in the calculation. |
Taxes | Walz v. Tax Commission of City of New York | https://supreme.justia.com/cases/federal/us/397/664/ | U.S. Supreme Court Walz v. Tax Comm'n of City of New
York, 397
U.S. 664 (1970) Walz v. Tax Comm'n of the City of
New York No. 135 Argued November 19,
1969 Decided May 4, 1970 397
U.S. 664 APPEAL FROM THE COURT OF APPEALS OF
THE STATE OF NEW YORK Syllabus Appellant property owner unsuccessfully sought an injunction in
the New York courts to prevent the New York City Tax Commission
from granting property tax exemptions to religious organizations
for properties used solely for religious worship, as authorized by
the state constitution and the implementing statute providing for
tax exemptions for property used exclusively for religious,
educational, or charitable purposes. Appellant contended that the
exemptions, as applied to religious bodies, violated provisions
prohibiting establishment of religion under the First and
Fourteenth Amendments. Held: 1. The First Amendment tolerates neither governmentally
established religion nor governmental interference with religion.
Pp. 397 U. S.
667 -672.
2. The legislative purpose of tax exemptions is not aimed at
establishing, sponsoring, or supporting religion, and New York's
legislation simply spares the exercise of religion from the burden
of property taxation levied on private profit institutions. Pp. 397 U. S.
672 -674.
3. The tax exemption creates only a minimal and remote
involvement between church and state, far less than taxation of
churches would entail, and it restricts the fiscal relationship
between them, thus tending to complement and reinforce the desired
separation insulating each from the other. Pp. 397 U. S.
674 -676.
4. Freedom from taxation for two centuries has not led to an
established church or religion, and, on the contrary, has helped to
guarantee the free exercise of all forms of religious belief. Pp. 397 U. S.
676 -680.
24 N.Y.2d 30, 246 N.E.2d 517, affirmed. Page 397 U. S. 666 MR. CHIEF JUSTICE BURGER delivered the opinion of the Court.
Appellant, owner of real estate in Richmond County, New York,
sought an injunction in the New York courts to prevent the New York
City Tax Commission from granting property tax exemptions to
religious organizations for religious properties used solely for
religious worship. The exemption from state taxes is authorized by
Art. 16, § 1, of the New York Constitution, which provides in
relevant part:
"Exemptions from taxation may be granted only by general laws.
Exemptions may be altered or repealed except those exempting real
or personal property used exclusively for religious, educational
or Page 397 U. S. 667 charitable purposes as defined by law and owned by any
corporation or association organized or conducted exclusively for
one or more of such purposes and not operating for profit.
[ Footnote 1 ]"
The essence of appellant's contention was that the New York City
Tax Commission's grant of an exemption to church property
indirectly requires the appellant to make a contribution to
religious bodies, and thereby violates provisions prohibiting
establishment of religion under the First Amendment which, under
the Fourteenth Amendment, is binding on the States. [ Footnote 2 ]
Appellee's motion for summary judgment was granted, and the
Appellate Division of the New York Supreme Court, and the New York
Court of Appeals affirmed. We noted probable jurisdiction, 395 U.S.
957 (1969), and affirm. I Prior opinions of this Court have discussed the development and
historical background of the First Amendment in detail. See
Everson v. Board of Education, 330 U. S.
1 (1947); Engel v. Vitale, 370 U.
S. 421 (1962). It would therefore serve no useful
purpose to review in detail the background of the Establishment and
Free Page 397 U. S. 668 Exercise Clauses of the First Amendment or to restate what the
Court's opinions have reflected over the years.
It is sufficient to note that, for the men who wrote the
Religion Clauses of the First Amendment, the "establishment" of a
religion connoted sponsorship, financial support, and active
involvement of the sovereign in religious activity. In England, and
in some Colonies at the time of the separation in 1776, the Church
of England was sponsored and supported by the Crown as a state, or
established, church; in other countries, "establishment" meant
sponsorship by the sovereign of the Lutheran or Catholic Church. See Engel v. Vitale, 370 U.S. at 370 U. S. 428 n. 10. See generally C. Antieau, A. Downey, & E.
Roberts, Freedom from Federal Establishment (1964). The exclusivity
of established churches in the 17th and 18th centuries, of course,
was often carried to prohibition of other forms of worship. See
Everson v. Board of Education, 330 U.S. at 330 U. S. 9 -11; L.
Pfeffer, Church, State and Freedom 71 et seq. (1967).
The Establishment and Free Exercise Clauses of the First
Amendment are not the most precisely drawn portions of the
Constitution. The sweep of the absolute prohibitions in the
Religion Clauses may have been calculated, but the purpose was to
state an objective, not to write a statute. In attempting to
articulate the scope of the two Religion Clauses, the Court's
opinions reflect the limitations inherent in formulating general
principles on a case by-case basis. The considerable internal
inconsistency in the opinions of the Court derives from what, in
retrospect, may have been too sweeping utterances on aspects of
these clauses that seemed clear in relation to the particular
cases, but have limited meaning as general principles.
The Court has struggled to find a neutral course between the two
Religion Clauses, both of which are cast in absolute terms, and
either of which, if expanded to a Page 397 U. S. 669 logical extreme, would tend to clash with the other. For
example, in Zorach v. Clauson, 343 U.
S. 306 (1952), MR. JUSTICE DOUGLAS, writing for the
Court, noted:
"The First Amendment, however, does not say that, in every and
all respects, there shall be a separation of Church and State." Id. at 343 U. S.
312 .
"We sponsor an attitude on the part of government that shows no
partiality to any one group, and that lets each flourish according
to the zeal of its adherents and the appeal of its dogma." Id. at 343 U. S.
313 .
MR. JUSTICE HARLAN expressed something of this in his dissent in Sherbert v. Verner, 374 U. S. 398 (1963), saying that the constitutional neutrality imposed on us
"is not so narrow a channel that the slightest deviation from an
absolutely straight course leads to condemnation." Id. at 374 U. S.
422 .
The course of constitutional neutrality in this area cannot be
an absolutely straight line; rigidity could well defeat the basic
purpose of these provisions, which is to insure that no religion be
sponsored or favored, none commanded, and none inhibited. The
general principle deducible from the First Amendment and all that
has been said by the Court is this: that we will not tolerate
either governmentally established religion or governmental
interference with religion. Short of those expressly proscribed
governmental acts, there is room for play in the joints productive
of a benevolent neutrality which will permit religious exercise to
exist without sponsorship and without interference.
Each value judgment under the Religion Clauses must therefore
turn on whether particular acts in question are intended to
establish or interfere with religious beliefs and practices or have
the effect of doing so. Adherence to the policy of neutrality that
derives from an accommodation of the Establishment and Free
Exercise Clauses Page 397 U. S. 670 has prevented the kind of involvement that would tip the balance
toward government control of churches or governmental restraint on
religious practice.
Adherents of particular faiths and individual churches
frequently take strong positions on public issues, including, as
this case reveals in the several briefs amici, vigorous
advocacy of legal or constitutional positions. Of course, churches,
as much as secular bodies and private citizens, have that right. No
perfect or absolute separation is really possible; the very
existence of the Religion Clauses is an involvement of sorts -- one
that seeks to mark boundaries to avoid excessive entanglement.
The hazards of placing too much weight on a few words or phrases
of the Court is abundantly illustrated within the pages of the
Court's opinion in Everson. MR. JUSTICE BLACK, writing for
the Court s majority, said the First Amendment
"means at least this: neither a state nor the Federal Government
can . . . pass laws which aid one religion, aid all religions, or
prefer one religion over another."
330 U.S. at 330 U. S. 15 . Yet
he had no difficulty in holding that:
"Measured by these standards, we cannot say that the First
Amendment prohibits New Jersey from spending tax raised funds to
pay the bus fares of parochial school pupils as a part of a general
program under which it pays the fares of pupils attending public
and other schools. It is undoubtedly true that children are
helped to get to church schools. There is even a possibility that
some of the children might not be sent to the church schools if the
parents were compelled to pay their children's bus fares out of
their own pockets. . . ." Id. at 330 U. S. 17 .
(Emphasis added.) Page 397 U. S. 671 The Court did not regard such "aid" to schools teaching a
particular religious faith as any more a violation of the
Establishment Clause than providing "state-paid policemen, detailed
to protect children . . . [at the schools] from the very real
hazards of traffic. . . ." Ibid. Mr. Justice Jackson, in perplexed dissent in Everson, noted that
"the undertones of the opinion, advocating complete and
uncompromising separation . . . seem utterly discordant with its
conclusion. . . ." Id. at 330 U. S. 19 .
Perhaps so. One can sympathize with Mr. Justice Jackson's
logical analysis but agree with the Court's eminently sensible and
realistic application of the language of the Establishment Clause.
In Everson, the Court declined to construe the Religion
Clauses with a literalness that would undermine the ultimate
constitutional objective as illuminated by history. Surely, bus
transportation and police protection to pupils who receive
religious instruction "aid" that particular religion to maintain
schools that plainly tend to assure future adherents to a
particular faith by having control of their total education at an
early age. No religious body that maintains schools would deny this
as an affirmative, if not dominant, policy of church schools. But
if, as in Everson, buses can be provided to carry and
policemen to protect church school pupils, we fail to see how a
broader range of police and fire protection given equally to all
churches, along with nonprofit hospitals, art galleries, and
libraries receiving the same tax exemption, is different for
purposes of the Religion Clauses.
Similarly, making textbooks available to pupils in parochial
schools in common with public schools was surely an "aid" to the
sponsoring churches, because it relieved those churches of an
enormous aggregate cost Page 397 U. S. 672 for those books. Supplying of costly teaching materials was not
seen either as manifesting a legislative purpose to aid or as
having a primary effect of aid contravening the First Amendment. Board of Education v. Allen, 392 U.
S. 236 (1968). In so holding, the Court was heeding both
its own prior decisions and our religious tradition. MR. JUSTICE
DOUGLAS, in Zorach v. Clauson, supra, after recalling that
we "are a religious people whose institutions presuppose a Supreme
Being," went on to say:
"We make room for as wide a variety of beliefs and creeds as the
spiritual needs of man deem necessary. . . . When the state
encourages religious instruction . . . it follows the best of our
traditions. For it then respects the religious nature of our
people and accommodates the public service to their spiritual
needs."
343 U.S. at 343 U. S.
313 -314. (Emphasis added.)
With all the risks inherent in programs that bring about
administrative relationships between public education bodies and
church-sponsored schools, we have been able to chart a course that
preserved the autonomy and freedom of religious bodies while
avoiding any semblance of established religion. This is a
"tightrope," and one we have successfully traversed. II The legislative purpose of the property tax exemption is neither
the advancement nor the inhibition of religion; it is neither
sponsorship nor hostility. New York, in common with the other
States, has determined that certain entities that exist in a
harmonious relationship to the community at large, and that foster
its "moral or mental improvement," should not be inhibited in their
activities by property taxation or the hazard of loss of those
properties for nonpayment of taxes. It Page 397 U. S. 673 has not singled out one particular church or religious group, or
even churches as such; rather, it has granted exemption to all
houses of religious worship within a broad class of property owned
by nonprofit, quasi -public corporations which include
hospitals, libraries, playgrounds, scientific, professional,
historical, and patriotic groups. The State has an affirmative
policy that considers these groups as beneficial and stabilizing
influences in community life and finds this classification useful,
desirable, and in the public interest. Qualification for tax
exemption is not perpetual or immutable; some tax exempt groups
lose that status when their activities take them outside the
classification and new entities can come into being and qualify for
exemption.
Governments have not always been tolerant of religious activity,
and hostility toward religion has taken many shapes and forms
economic, political, and sometimes harshly oppressive. Grants of
exemption historically reflect the concern of authors of
constitutions and statutes as to the latent dangers inherent in the
imposition of property taxes; exemption constitutes a reasonable
and balanced attempt to guard against those dangers. The limits of
permissible state accommodation to religion are by no means
coextensive with the noninterference mandated by the Free Exercise
Clause. To equate the two would be to deny a national heritage with
roots in the Revolution itself. See Sherbert v. Verner, 374 U. S. 398 , 374 U. S. 423 (1963) (HARLAN, J., dissenting); Braunfeld v. Brown, 366 U. S. 599 , 366 U. S. 608 (1961). See generally Kauper, The Constitutionality of Tax
Exemptions for Religious Activities in The Wall Between Church and
State 95 (D. Oaks ed.1963). We cannot read New York's statute as
attempting to establish religion; it is simply sparing the exercise
of religion from the burden of property taxation levied on private
profit institutions. Page 397 U. S. 674 We find it unnecessary to justify the tax exemption on the
social welfare services or "good works" that some churches perform
for parishioners and others -- family counseling, aid to the
elderly and the infirm, and to children. Churches vary
substantially in the scope of such services; programs expand or
contract according to resources and need. As public-sponsored
programs enlarge, private aid from the church sector may diminish.
The extent of social services may vary, depending on whether the
church serves an urban or rural, a rich or poor constituency. To
give emphasis to so variable an aspect of the work of religious
bodies would introduce an element of governmental evaluation and
standards as to the worth of particular social welfare programs,
thus producing a kind of continuing day-to-day relationship which
the policy of neutrality seeks to minimize. Hence, the use of a
social welfare yardstick as a significant element to qualify for
tax exemption could conceivably give rise to confrontations that
could escalate to constitutional dimensions.
Determining that the legislative purpose of tax exemption is not
aimed at establishing, sponsoring, or supporting religion does not
end the inquiry, however. We must also be sure that the end result
-- the effect -- is not an excessive government entanglement with
religion. The test is inescapably one of degree. Either course,
taxation of churches or exemption, occasions some degree of
involvement with religion. Elimination of exemption would tend to
expand the involvement of government by giving rise to tax
valuation of church property, tax liens, tax foreclosures, and the
direct confrontations and conflicts that follow in the train of
those legal processes.
Granting tax exemptions to churches necessarily operates to
afford an indirect economic benefit, and also gives rise to some,
but yet a lesser, involvement than taxing Page 397 U. S. 675 them. In analyzing either alternative, the questions are whether
the involvement is excessive and whether it is a continuing one
calling for official and continuing surveillance leading to an
impermissible degree of entanglement. Obviously a direct money
subsidy would be a relationship pregnant with involvement and, as
with most governmental grant programs, could encompass sustained
and detailed administrative relationships for enforcement of
statutory or administrative standards, but that is not this case.
The hazards of churches supporting government are hardly less in
their potential than the hazards of government supporting churches;
[ Footnote 3 ] each relationship
carries some involvement, rather than the desired insulation and
separation. We cannot ignore the instances in history when church
support of government led to the kind of involvement we seek to
avoid.
The grant of a tax exemption is not sponsorship, since the
government does not transfer part of its revenue to churches, but
simply abstains from demanding that the church support the state.
No one has ever suggested that tax exemption has converted
libraries, art galleries, or hospitals into arms of the state or
put employees "on the public payroll." There is no genuine nexus
between tax exemption and establishment of religion. As Mr. Justice
Holmes commented in a related context, "a page of Page 397 U. S. 676 history is worth a volume of logic." New York Trust Co. v.
Eisner, 256 U. S. 345 , 256 U. S. 349 (1921). The exemption creates only a minimal and remote involvement
between church and state, and far less than taxation of churches.
It restricts the fiscal relationship between church and state, and
tends to complement and reinforce the desired separation insulating
each from the other.
Separation in this context cannot mean absence of all contact;
the complexities of modern life inevitably produce some contact,
and the fire and police protection received by houses of religious
worship are no more than incidental benefits accorded all persons
or institutions within a State's boundaries, along with many other
exempt organizations. The appellant has not established even an
arguable quantitative correlation between the payment of an ad
valorem property tax and the receipt of these municipal
benefits.
All of the 50 States provide for tax exemption of places of
worship, most of them doing so by constitutional guarantees. For so
long as federal income taxes have had any potential impact on
churches -- over 75 years -- religious organizations have been
expressly exempt from the tax. [ Footnote 4 ] Such treatment is an "aid" to churches no more
and no less in principle than the real estate tax exemption granted
by States. Few concepts are more deeply embedded in the fabric of
our national life, beginning with pre-Revolutionary colonial times,
than for the government to exercise at the very least this kind of
benevolent neutrality toward churches and religious exercise Page 397 U. S. 677 generally so long a none was favored over others and none
suffered interference.
It is significant that Congress, from its earliest days, has
viewed the Religion Clauses of the Constitution as authorizing
statutory real estate tax exemption to religious bodies. In 1802,
the 7th Congress enacted a taxing statute for the County of
Alexandria, adopting the 1800 Virginia statutory pattern which
provided tax exemptions for churches. 2 Stat. 194. [ Footnote 5 ] As early as 1813, the 12th
Congress refunded import duties paid by religious societies on the
importation of religious articles. [ Footnote 6 ] During this period, the City Council of
Washington, D.C., acting under congressional authority, Act of
Incorporation, § 7, 2 Stat. 197 (May 3, 1802), enacted a series of
real and personal property assessments that uniformly exempted
church property. [ Footnote 7 ]
In 1870, the Congress specifically exempted all churches in the
District of Columbia Page 397 U. S. 678 and appurtenant grounds and property "from any and all taxes or
assessments, national, municipal, or county." Act of June 17, 1870,
16 Stat. 153. [ Footnote 8 ]
It is obviously correct that no one acquires a vested or
protected right in violation of the Constitution by long use, even
when that span of time covers our entire national existence, and
indeed predates it. Yet an unbroken practice of according the
exemption to churches, openly and by affirmative state action, not
covertly or by state inaction, is not something to be lightly cast
aside. Nearly 50 years ago, Mr. Justice Holmes stated:
"If a thing has been practised for two hundred years by common
consent, it will need a strong case for the Fourteenth Amendment to
affect it. . . ." Jackman v. Rosenbaum Co., 260 U. S.
22 , 260 U. S. 31 (1922).
Nothing in this national attitude toward religious tolerance and
two centuries of uninterrupted freedom from taxation has given the
remotest sign of leading to an established church or religion, and,
on the contrary, it has operated affirmatively to help guarantee
the free exercise of all forms of religious belief. Thus, it is
hardly useful to suggest that tax exemption is but the "foot in the
door" or the "nose of the camel in the tent" leading to an
established church. If tax exemption can be seen as this first step
toward "establishment" of religion, as MR. JUSTICE DOUGLAS fears,
the second step has been long in coming. Any move that
realistically "establishes" a church or tends to do so can be dealt
with "while this Court sits."
Mr. Justice Cardozo commented in The Nature of the Judicial
Process 51 (1921) on the "tendency of a principle Page 397 U. S. 679 to expand itself to the limit of its logic"; such expansion must
always be contained by the historical frame of reference of the
principle's purpose, and there is no lack of vigilance on this
score by those who fear religious entanglement in government.
The argument that making "fine distinctions" between what is and
what is not absolute under the Constitution is to render us a
government of men, not laws, gives too little weight to the fact
that it is an essential part of adjudication to draw distinctions,
including fine ones, in the process of interpreting the
Constitution. We must frequently decide, for example, what are
"reasonable" searches and seizures under the Fourth Amendment.
Determining what acts of government tend to establish or interfere
with religion falls well within what courts have long been called
upon to do in sensitive areas.
It is interesting to note that, while the precise question we
now decide has not been directly before the Court previously, the
broad question was discussed by the Court in relation to real
estate taxes assessed nearly a century ago on land owned by and
adjacent to a church in Washington, D.C. [ Footnote 9 ] At that time, Congress granted real estate
tax exemptions to buildings devoted to art, to institutions of
public charity, libraries, cemeteries, and "church buildings, and
grounds actually occupied by such buildings." In denying tax
exemption as to land owned by but not used for the church, but
rather to produce income, the Court concluded:
"In the exercise of this [taxing] power, Congress, like any
State legislature unrestricted by constitutional provisions, may,
at its discretion, wholly exempt certain classes of property from
taxation, or Page 397 U. S. 680 may tax them at a lower rate than other property." Gibbons v. District of Columbia 116 U.
S. 404 , 116 U. S. 408 (1886).
It appears that, at least up to 1885, this Court, reflecting
more than a century of our history and uninterrupted practice,
accepted without discussion the proposition that federal or state
grants of tax exemption to churches were not a violation of the
Religion Clauses of the First Amendment. As to the New York
statute, we now confirm that view. Affirmed. [ Footnote 1 ]
Art. 16, § 1, of the New York State Constitution is implemented
by § 420, subd. 1, of the New York Real Property Tax Law, which
states in pertinent part:
"Real property owned by a corporation or association organized
exclusively for the moral or mental improvement of men and women,
or for religious, bible, tract, charitable, benevolent, missionary,
hospital, infirmary, educational, public playground, scientific,
literary, bar association, medical society, library, patriotic,
historical or cemetery purposes . . . and used exclusively for
carrying out thereupon one or more of such purposes . . . shall be
exempt from taxation as provided in this section."
[ Footnote 2 ]
The First Amendment to the United States Constitution provides
in part that "Congress shall make no law respecting an
establishment of religion, or prohibiting the free exercise
thereof. . . ."
[ Footnote 3 ]
The support of religion with direct allocation of public revenue
was a common colonial practice. See C. Antieau, A. Downey,
& E. Roberts, Freedom from Federal Establishment cc. 1 and 2
(1964). A general assessment proposed in the Virginia Legislature
in 1784 prompted the writing of James Madison's Remonstrance. See opinion of MR. JUSTICE DOUGLAS dissenting, post at 397 U. S.
704 -706; 397 U. S.
716 -727. Governmental support of religion is common in
many countries. See e.g., R. Murray, A Brief History of
the Church of Sweden 75 (1961); G. Codding, The Federal Government
of Switzerland 53-54 (1961); M. Scehic, Zbirka Propisa o
Doprinosima i Porezima Gradjana 357 (Yugoslavia) (1968).
[ Footnote 4 ]
Act of August 27, 1894, § 32, 28 Stat. 556. Following passage of
the Sixteenth Amendment, federal income tax acts have consistently
exempted corporations and associations organized and operated
exclusively for religious purposes, along with eleemosynary groups,
from payment of the tax. Act of Oct. 3, 1913, § IIG(a), 38 Stat.
172. See Int.Rev.Code of 1954, § 501 et seq., 26
U.S.C. § 501 et seq. [ Footnote 5 ]
In 1798, Congress passed an Act to provide for the valuation of
lands and dwelling houses. All existing state exemptions were
expressly excluded from the aforesaid valuation and enumeration.
Act of July 9, 1798, § 8, 1 Stat. 585. Subsequent levies of direct
taxes expressly or impliedly incorporated existing state
exemptions. Act of July 14, 1798, § 2, 1 Stat. 598 (express
incorporation of state exemption). See Act of Aug. 2,
1813, § 4, 3 Stat. 71; Act of Jan. 9, 1815, § 5, 3 Stat. 166
(express incorporation of state exemptions).
[ Footnote 6 ] See 6 Stat. 116 (1813), relating to plates for printing
Bibles. See also 6 Stat. 346 (1826) relating to church
vestments, furniture, and paintings; 6 Stat. 162 (1816), Bible
plates; 6 Stat. 600 (1834), and 6 Stat. 675 (1836), church
bells.
[ Footnote 7 ] See, e.g., Acts of the Corporation of the City of
Washington, First Council, c. V, approved Oct. 6, 1802, p. 13; Acts
of the Corporation of the City of Washington, Second Council, § 1,
approved Sept. 12, 1803, p. 13; Acts of the Corporation of the City
of Washington, Third Council. § 1, approved Sept. 5, 1804, p. 13.
Succeeding Acts of the Corporation impliedly renewed the exemption
in subsequent assessments. See, e.g., Acts of the
Corporation of the City of Washington, Thirteenth Council, c. 19, §
2, approved July 27, 1815, p.24.
[ Footnote 8 ]
Subsequent Acts of Congress carried over the substance of the
exemption. Act of July 12, 1876, § 8, 19 Stat. 85; Act of March 3,
1877, § 8, 19 Stat. 399; Act of August 15, 1916, 39 Stat. 514;
D.C.Code Ann. § 47-801a (1967).
[ Footnote 9 ] Gibbons v. District of Columbia, 116 U.
S. 404 (1886). Cf. Washington Ethical Society v.
District of Columbia, 101 U.S. App.D.C. 371, 249 F.2d 127
(1957).
MR. JUSTICE BRENNAN, concurring.
I concur for reasons expressed in my opinion in Abington
School Dist. v. Schempp, 374 U. S. 203 , 374 U. S. 230 (1963). I adhere to the view there stated that, to give concrete
meaning to the Establishment Clause,
"the line we must draw between the permissible and the
impermissible is one which accords with history and faithfully
reflects the understanding of the Founding Fathers. It is a line
which the Court has consistently sought to mark in its decisions
expounding the religious guarantees of the First Amendment. What
the Framers meant to foreclose, and what our decisions under the
Establishment Clause have forbidden, are those involvements of
religious with secular institutions which (a) serve the essentially
religious activities of religious institutions; (b) employ the
organs of government for essentially religious purposes; or (c) use
essentially religious means to serve governmental ends, where
secular means would suffice. When the secular and religious
institutions become involved in such a manner, there inhere in the
relationship precisely those Page 397 U. S. 681 dangers -- as much to church as to state -- which the Framers
feared would subvert religious liberty and the strength of a system
of secular government. On the other hand, there may be myriad forms
of involvements of government with religion which do not import
such dangers, and therefore should not, in my judgment, be deemed
to violate the Establishment Clause." Id. at 374 U. S.
294 -295. Thus, in my view, the history, purpose, and
operation of real property tax exemptions for religious
organizations must be examined to determine whether the
Establishment Clause is breached by such exemptions. See
id. at 374 U. S.
293 . I The existence from the beginning of the Nation's life of a
practice, such as tax exemptions for religious organizations, is
not conclusive of its constitutionality. But such practice is a
fact of considerable import in the interpretation of abstract
constitutional language. On its face, the Establishment Clause is
reasonably susceptible of different interpretations regarding the
exemptions. This Court's interpretation of the clause, accordingly,
is appropriately influenced by the reading it has received in the
practices of the Nation. As Mr. Justice Holmes observed in an
analogous context, in resolving such questions of interpretation,
"a page of history is worth a volume of logic." New York Trust
Co. v. Eisner, 256 U. S. 345 , 256 U. S. 349 (1921). The more longstanding and widely accepted a practice, the
greater its impact upon constitutional interpretation. History is
particularly compelling in the present case because of the
undeviating acceptance given religious tax exemptions from our
earliest days as a Nation. Rarely if ever has this Court considered
the constitutionality of a practice for which the historical
support is so overwhelming. Page 397 U. S. 682 The Establishment Clause, along with the other provisions of the
Bill of Rights, was ratified by the States in 1791. Religious tax
exemptions were not an issue in the petitions calling for the Bill
of Rights, in the pertinent congressional debates, or in the
debates preceding ratification by the States. [ Footnote 2/1 ] The absence of concern about the
exemptions could not have resulted from failure to foresee the
possibility of their existence, for they were widespread during
colonial days. [ Footnote 2/2 ]
Rather, it seems clear that the exemptions were not among the evils
that the Framers and Ratifiers of the Establishment Clause sought
to avoid. Significantly, within a decade after ratification, at
least four States passed statutes exempting the property of
religious organizations from taxation. [ Footnote 2/3 ]
Although the First Amendment may not have applied to the States
during this period, practice in Virginia at the time is nonetheless
instructive. The Commonwealth's efforts to separate church and
state provided the direct antecedents of the First Amendment, see McGowan v. Maryland, 366 U. S. 420 , 366 U. S.
437 -440 (1961); Abington School Dist. v. Schempp,
supra, at 374 U. S.
233 -234 Page 397 U. S. 683 (BRENNAN, J., concurring); Everson v. Board of
Education, 330 U. S. 1 , 330 U. S. 33 -38
(1947) (Rutledge, J., dissenting), and Virginia remained unusually
sensitive to the proper relation between church and state during
the years immediately following ratification of the Establishment
Clause. Virginia's protracted movement to disestablish the
Episcopal Church culminated in the passage on January 24, 1799, of
"An ACT to repeal certain acts, and to declare the construction of
the [Virginia] bill of rights and constitution, concerning
religion." The 1799 Act stated that the Virginia Bill of Rights
had
"excepted from the powers given to the [civil] government the
power of reviving any species of ecclesiastical or church
government . . . by referring the subject of religion to
conscience,"
and that the repealed measures had "bestowed property upon [the
Anglican] church," had "asserted a legislative right to establish
any religious sect," and had
"incorporated religious sects, all of which is inconsistent with
the principles of the constitution, and of religious freedom, and
manifestly tends to the reestablishment of a national church."
2 Va. Statutes at Large of 1792-1806 (Shepherd) 149. Yet, just
one year after the passage of this Act, Virginia reenacted a
measure exempting from taxation property belonging to "any . . .
college, houses for divine worship, or seminary of learning." Id. at 200. This exemption dated at least from 1777, and
had been reaffirmed immediately before and after ratification of
the First Amendment. See 9 Va.Statutes at Large
(1775-1778, Hening), at 351; 13 Va.Statutes at Large (1789-1792,
Hening), at 112, 241, 336337. It may reasonably be inferred that
the Virginians did not view the exemption for "houses of divine
worship" as an establishment of religion.
Similarly, in 1784, the New York Legislature repealed colonial
acts establishing the Episcopal Church in several counties of the
State. See N.Y.Laws of 1777-1784, Page 397 U. S. 684 c. 38, p. 661. Yet, in 1799, the legislature provided that
"no house or land belonging to . . . any church or place of
public worship, . . . nor any college or incorporated academy, nor
any school house, . . . alms house or property belonging to any
incorporated library, shall be taxed by virtue of this act."
N.Y.Laws of 1797-1800, c. 72, at 414. And early practice in the
District of Columbia -- governed from the outset by the First
Amendment -- mirrored that in the States. In 1802, the Corporation
of the City of Washington, under authority delegated by Congress,
exempted "houses for public worship" from real property taxes. Acts
of the Corporation of the City of Washington, First Council, c. V,
approved Oct. 6, 1802, p. 13. See also the congressional
Acts cited in the Court's opinion, ante at 397 U. S.
677 -678.
Thomas Jefferson was President when tax exemption was first
given Washington churches, and James Madison sat in sessions of the
Virginia General Assembly that voted exemptions for churches in
that Commonwealth. [ Footnote 2/4 ] I
have found no record of their personal views on the respective
Acts. [ Footnote 2/5 ] The absence of
such a record is itself Page 397 U. S. 685 significant. It is unlikely that two men so concerned with the
separation of church and state would have remained silent had they
thought the exemptions established religion. And if they had not
either approved the exemptions or been mild in their opposition, it
is probable that their views would be known to us today. Both
Jefferson and Madison wrote prolifically about issues they felt
important, and their opinions were well known to contemporary
chroniclers. See, for example, the record preserved of
Madison's battle in 1784-1785 against the proposal in the Virginia
Assembly to levy a general tax to support "Teachers of the
Christian Religion," in the dissenting opinion of MR. JUSTICE
DOUGLAS, post at 397 U. S.
704 -706, 397 U. S.
719 -727. Much the same can be said of the other Framers
and Ratifiers of the Bill of Rights who remained active in public
affairs during the late 18th and early 19th centuries. The adoption
of the early exemptions without controversy, in other words,
strongly suggests that they were not thought incompatible with
constitutional prohibitions against involvements of church and
state.
The exemptions have continued uninterrupted to the present day.
They are in force in all 50 States. No judicial decision, state or
federal, has ever held that they violate the Establishment Clause.
In 1886, for example, this Court, in Gibbons v. District of
Columbia, 116 U. S. 404 ,
rejected on statutory grounds a church's claim for the exemption of
certain of its land under congressional statutes exempting
Washington churches and appurtenant ground from real property
taxes. But the Court Page 397 U. S. 686 gave not the slightest hint that it ruled against the church
because, under the First Amendment, any exemption would have been
unconstitutional. To the contrary, the Court's opinion implied that
nothing in the Amendment precludes exemption of church
property:
"We are not disposed to deny that grounds left open around a
church, not merely to admit light and air but also to add to its
beauty and attractiveness, may, if not used or intended to be used
for any other purpose, be exempt from taxation under these
statutes." Id. at 116 U. S. 407 .
[ Footnote 2/6 ]
Mr. Justice Holmes said that
"[i]f a thing has been practised for two hundred years by common
consent, it will need a strong case for the Fourteenth Amendment to
affect it. . . ." Jackman v. Rosenbaum Co., 260 U. S.
22 , 260 U. S. 31 (1922). For almost 200 years, the view expressed in the actions of
legislatures and courts has been that tax exemptions for churches
do not threaten "those consequences which the Framers deeply
feared" or "tend to promote that type of interdependence between
religion and state which the First Amendment was designed to
prevent." Schempp, supra, at 374 U. S. 236 (BRENNAN, J., concurring). An examination both of the governmental
purposes for granting the exemptions and of the type of Page 397 U. S. 687 church-state relationship that has resulted from their existence
makes clear that no "strong case" exists for holding
unconstitutional this historic practice. [ Footnote 2/7 ] II Government has two basic secular purposes for granting real
property tax exemptions to religious organizations. [ Footnote 2/8 ] First, these organizations
are exempted because they, among a range of other private,
nonprofit organizations, contribute to the wellbeing of the
community in a variety of nonreligious ways, and thereby bear
burdens that would otherwise either have to be met by general
taxation or be left undone, to the detriment of the community. See, for example, 1938 N.Y. Constitutional Convention,
Report of the Committee on Taxation, Doc. No. 2, p. 2. Thus, New
York exempts
"[r]eal property owned by a corporation or association Page 397 U. S. 688 organized exclusively for the moral or mental improvement of men
and women, or for religious, bible, tract, charitable, benevolent,
missionary, hospital, infirmary, educational, public playground,
scientific, literary, bar association, medical society, library,
patriotic, historical or cemetery purposes, for the enforcement of
laws relating to children or animals, or for two or more such
purposes. . . ."
N.Y.Real Prop.Tax Law § 420, subd. 1 (Supp. 1969-1970).
Appellant seeks to avoid the force of this secular purpose of
the exemptions by limiting his challenge to "exemptions from real
property taxation to religious organizations on real property used
exclusively for religious purposes." Appellant assumes, apparently,
that church-owned property is used for exclusively religious
purposes if it does not house a hospital, orphanage, weekday
school, or the like. Any assumption that a church building itself
is used for exclusively religious activities, however, rests on a
simplistic view of ordinary church operations. As the appellee's
brief cogently observes,
"the public welfare activities and the sectarian activities of
religious institutions are . . . intertwined. . . . Often, a
particular church will use the same personnel, facilities and
source of funds to carry out both its secular and religious
activities."
Thus, the same people who gather in church facilities for
religious worship and study may return to these facilities to
participate in Boy Scout activities, to promote anti-poverty
causes, to discuss public issues, or to listen to chamber music.
Accordingly, the funds used to maintain the facilities as a place
for religious worship and study also maintain them as a place for
secular activities beneficial to the community as a whole. Even
during formal worship services, churches frequently collect the
funds used to finance Page 397 U. S. 689 their secular operations and make decisions regarding their
nature.
Second, government grants exemptions to religious organizations
because they uniquely contribute to the pluralism of American
society by their religious activities. Government may properly
include religious institutions among the variety of private,
nonprofit groups that receive tax exemptions, for each group
contributes to the diversity of association, viewpoint, and
enterprise essential to a vigorous, pluralistic society. See
Washington Ethical Society v. District of Columbia, 101
U.S.App.D.C. 371, 373, 249 F.2d 127, 129 (1957). To this end, New
York extends its exemptions not only to religious and social
service organizations, but also to scientific, literary, bar,
library, patriotic, and historical groups, and generally to
institutions "organized exclusively for the moral or mental
improvement of men and women." The very breadth of this scheme of
exemptions negates any suggestion that the State intends to single
out religious organizations for special preference. The scheme is
not designed to inject any religious activity into a nonreligious
context, as was the case with school prayers. No particular
activity of a religious organization -- for example, the
propagation of its beliefs -- is specially promoted by the
exemptions. They merely facilitate the existence of a broad range
of private, nonprofit organizations, among them religious groups,
by leaving each free to come into existence, then to flourish or
wither, without being burdened by real property taxes. III Although governmental purposes for granting religious exemptions
may be wholly secular, exemptions can nonetheless violate the
Establishment Clause if they result in Page 397 U. S. 690 extensive state involvement with religion. Accordingly, those
who urge the exemptions' unconstitutionality argue that exemptions
are the equivalent of governmental subsidy of churches. General
subsidies of religious activities would, of course, constitute
impermissible state involvement with religion.
Tax exemptions and general subsidies, however, are qualitatively
different. Though both provide economic assistance, [ Footnote 2/9 ] they do so in fundamentally
different ways. A subsidy involves the direct transfer of public
monies to the subsidized enterprise, and uses resources exacted
from taxpayers as a whole. An exemption, on the other hand,
involves no such transfer. [ Footnote
2/10 ] It assists the exempted enterprise only passively, by
relieving a privately funded venture of the burden of paying taxes.
In other words, Page 397 U. S. 691 "[i]n the case of direct subsidy, the state forcibly diverts the
income of both believers and nonbelievers to churches," while,
"[i]n the case of an exemption, the state merely refrains from
diverting to its own uses income independently generated by the
churches through voluntary contributions."
Giannella, Religious Liberty, Nonestablishment, and Doctrinal
Development, pt. II, 81 Harv.L.Rev. 513, 553 (1968). Thus,
"the symbolism of tax exemption is significant as a
manifestation that organized religion is not expected to support
the state; by the same token, the state is not expected to support
the church."
Freund, Public Aid to Parochial Schools, 82 Harv.L.Rev. 1680,
1687 n. 16 (1969). Tax exemptions, accordingly, constitute mere
passive state involvement with religion, and not the affirmative
involvement characteristic of outright governmental subsidy.
[ Footnote 2/11 ]
Even though exemptions produce only passive state involvement
with religion, nonetheless some argue that their termination would
be desirable as a means of reducing the level of church-state
contact. But it cannot realistically be said that termination of
religious tax exemptions would quantitatively lessen the extent of
state involvement with religion. Appellee contends that,
"[a]s a practical matter, the public welfare activities and the
sectarian activities of religious institutions are so intertwined
that they cannot be separated for the purpose of determining
eligibility for tax exemptions."
If not impossible, the separation would certainly involve
extensive state investigation into church operations and finances.
Moreover, the termination of exemptions would give rise, as the
Court says, to the necessity for
"tax valuation of church property, tax liens, tax foreclosures,
and the direct confrontations and conflicts that follow in the
train of those legal processes." Ante Page 397 U. S. 692 at 397 U. S. 674 .
Taxation, further, would bear unequally on different churches,
having its most disruptive effect on those with the least ability
to meet the annual levies assessed against them. And taxation would
surely influence the allocation of church resources. By diverting
funds otherwise available for religious or public service purposes
to the support of the Government, taxation would necessarily affect
the extent of church support for the enterprises that they now
promote. In many instances, the public service activities would
bear the brunt of the reallocation, as churches looked first to
maintain their places and programs of worship. In short, the
cessation of exemptions would have a significant impact on
religious organizations. Whether Government grants or withholds the
exemptions, it is going to be involved with religion. [ Footnote 2/12 ] IV Against the background of this survey of the history, purpose,
and operation of religious tax exemptions, I must conclude that the
exemptions do not "serve the essentially religious activities of
religious institutions." Their principal effect is to carry out
secular purposes -- the encouragement of public service activities
and of a pluralistic society. During their ordinary operations,
most churches engage in activities of a secular nature Page 397 U. S. 693 that benefit the community, and all churches, by their
existence, contribute to the diversity of association, viewpoint,
and enterprise so highly valued by all of us.
Nor do I find that the exemptions "employ the organs of
government for essentially religious purposes." To the extent that
the exemptions further secular ends, they do not advance
"essentially religious purposes." To the extent that purely
religious activities are benefited by the exemptions, the benefit
is passive. Government does not affirmatively foster these
activities by exempting religious organizations from taxes, as it
would were it to subsidize them. The exemption simply leaves
untouched that which adherents of the organization bring into being
and maintain.
Finally, 1 do not think that the exemptions "use essentially
religious means to serve governmental ends, where secular means
would suffice." The means churches use to carry on their public
service activities are not "essentially religious" in nature. They
are the same means used by any purely secular organization --
money, human time and skills, physical facilities. It is true that
each church contributes to the pluralism of our society through its
purely religious activities, but the state encourages these
activities not because it champions religion per se, but
because it values religion among a variety of private, nonprofit
enterprises that contribute to the diversity of the Nation. Viewed
in this light, there is no nonreligious substitute for religion as
an element in our societal mosaic, just as there is no nonliterary
substitute for literary groups.
As I said in Schempp, the First Amendment does not
invalidate
"the propriety of certain tax . . . exemptions which
incidentally benefit churches and religious institutions, along
with many secular charities and nonprofit organizations. . . .
[R]eligious institutions simply share benefits which government
makes generally available Page 397 U. S. 694 to educational, charitable, and eleemosynary groups. There is no
indication that taxing authorities have used such benefits in any
way to subsidize worship or foster belief in God."
374 U.S. at 374 U. S.
301 .
[ Footnote 2/1 ]
In fact, it does not appear that the exemptions were even
discussed. See, e.g., C. Antieau, p. Carroll, & T.
Burke, Religion Under the State Constitutions 122 (1965):
"As far as anyone has been able to discover, the topic was never
mentioned in the debates which took place prior to the adoption of
the First Amendment."
[ Footnote 2/2 ] See, e.g., C. Antieau, A. Downey, & E. Roberts,
Freedom from Federal Establishment 20-21, 73-74, 175 (1964); cf. 3 A. Stokes, Church and State in the United States 419
(1950).
[ Footnote 2/3 ]
2 Del.Laws of 1700-1797, p. 1247 (Act of Feb. 9, 1796); 2
Md.Laws (1785-1799, Kilty), c. 89 (Act of Jan. 20, 1798); N.Y.Laws
of 1797-1800, c. 72, at 414 (Act of April 1, 1799); 2 Va.Statutes
at Large of 1792-1806 (Shepherd) 200 (Act of Jan. 23, 1800). See also 16 Penn.Statutes at Large of 1682-1801, at 379
(Act of April 11, 1799). For practice in other States, see the accounts in Antieau, Carroll, & Burke, supra, 397
U.S. 664 fn2/1|>n. 1, at 123-169; Antieau, Downey, &
Roberts, supra, 397
U.S. 664 fn2/2|>n. 2, at 73-74; C. Zollmann, American Civil
Church Law 238-242 (1917).
[ Footnote 2/4 ] See, e.g., E. Swem & J. Williams, A Register of the
General Assembly of Virginia, 1776-1918, p. 53 (1918); Journal of
the House of Delegates of the Commonwealth of Virginia 94, 98
(1799-1800).
[ Footnote 2/5 ]
In an essay written after he had left the presidency, Madison
did argue against tax exemptions for churches, the incorporation of
ecclesiastical bodies with the power of acquiring and holding
property in perpetuity, the right of the Houses of Congress to
choose chaplains who are paid out of public funds, the provision of
chaplains in the Army and Navy, and presidential proclamations of
days of thanksgiving or prayer -- though he admitted proclaiming
several such days at congressional request. See Fleet,
Madison's "Detatched Memoranda," 3 Wm. & Mary Q. (3d ser.) 534,
555-562 (1946). These arguments were advanced long after the
passage of the Virginia exemption discussed in the text, supra, and even longer after the adoption of the
Establishment Clause. They represent, at most, an extreme view of
church-state relations which Madison himself may have reached only
late in life. He certainly expressed no such understanding of
Establishment during the debates on the First Amendment. See 1 Annals of Cong. 434, 730-731, 755 (1789). And even
if he privately held these views at that time, there is no evidence
that they were shared by others among the Framers and Ratifiers of
the Bill of Rights.
[ Footnote 2/6 ] See also, e.g., Bell's Gap R. Co. v. Pennsylvania, 134 U. S. 232 , 134 U. S. 237 (1890), where the Court stated:
"The provision in the Fourteenth Amendment that no State shall
deny to any person within its jurisdiction the equal protection of
the laws was not intended to prevent a State from adjusting its
system of taxation in all proper and reasonable ways. It may, if it
chooses, exempt certain classes of property from any taxation at
all, such as churches, libraries and the property of charitable
institutions."
Indeed, the Court seems always to have viewed attacks upon the
constitutionality of the exemptions as wholly frivolous. See,
e.g., Lundbe v. County of Alameda, 46 Cal. 2d
644 , 298 P.2d 1, appeal dismissed sub nom. Heisey v. County
of Alameda, 352 U.S. 921 (1956); General Finance Corp. v.
Archetto, 93 R.I. 392, 176
A.2d 73 (1961), appeal dismissed, 369 U.
S. 423 (1962).
[ Footnote 2/7 ] Compare the very different situation regarding prayers
in public schools. The practice was not widespread at the time of
the adoption of the First Amendment. Legislative authorization for
the prayers came much later, and then only in a relatively small
number of States. Moreover, courts began to question the
constitutionality of the practice by the late 19th century. The
prayers were found unconstitutional by courts in six States and by
state attorneys general in several others. See 374 U.S. at 374 U. S. 270 , 374 U. S.
274 -275.
[ Footnote 2/8 ]
The only governmental purposes germane to the present inquiry,
of course, are those that now exist. As I said in Schempp, "In the Sunday Law Cases, we found in state laws
compelling a uniform day of rest from worldly labor no violation of
the Establishment Clause. . . . The basic ground of our decision
was that, granted the Sunday Laws were first enacted for religious
ends, they were continued in force for reasons wholly secular,
namely, to provide a universal day of rest and ensure the health
and tranquillity of the community. In other words, government may
originally have decreed a Sunday day of rest for the impermissible
purpose of supporting religion. but abandoned that purpose and
retained the laws for the permissible purpose of furthering
overwhelmingly secular ends."
374 U.S. at 374 U. S.
263 -264.
[ Footnote 2/9 ]
In certain circumstances, of course, the economic value of a
subsidy exceeds that of an exemption. If the only state assistance
received by a religious organization is a real property tax
exemption, the church must raise privately every cent that it
spends. If, on the other hand, the only state aid to a church is a
general subsidy, the church is relieved of the need to support
itself to the extent that its subsidy payments from the State
exceed its tax payments to the State. Thus, to take the extreme
case, a lightly taxed religious organization that received a large,
general subsidy could purchase property, construct buildings and
maintain its program wholly at public expense. Such dependence on
state support is impossible when the only aid provided is a real
property tax exemption.
[ Footnote 2/10 ]
A real property tax exemption cannot be viewed as the free
provision by the State of certain basic services fire, police,
water, and the like. As the Court, ante at 397 U. S. 676 ,
points out,
"the fire and police protection received by houses of religious
worship are no more than incidental benefits accorded all persons
or institutions within a State's boundaries, along with many other
exempt organizations. The appellant has not established even an
arguable quantitative correlation between the payment of an ad
valorem property tax and the receipt of these municipal
benefits." See generally Bittker, Churches, Taxes and the
Constitution, 78 Yale L.J. 1285, 1304-1310 (1969).
[ Footnote 2/11 ] See also, e.g., Bittker, supra, 397
U.S. 664 fn2/10|>n. 10, at 1285-1304.
[ Footnote 2/12 ]
The state involvement with religion that would be occasioned by
any cessation of exemptions might conflict with the demands of the
Free Exercise Clause. Cf. Presbyterian Church v. Mary Eliz.
Blue Hull Church, 393 U. S. 440 (1969); Maryland & Virginia Eldership of the Churches of
God v. Church of God at Sharpsburg, Inc., 396 U.
S. 367 , 396 U. S.
368 -370 (1970) (BRENNAN, J., concurring). It is
unnecessary to reach any questions of free exercise in the present
case, however. And while I believe that
"hostility, not neutrality, would characterize the refusal to
provide [the exemptions] . . . , I do not say that government must
provide [them], or that the courts should intercede if it fails to
do so."
374 U.S. at 374 U. S.
299 .
Opinion of MR. JUSTICE HARLAN.
While I entirely subscribe to the result reached today, and find
myself in basic agreement with what THE CHIEF JUSTICE has written,
I deem it appropriate, in view of the radiations of the issues
involved, to state those considerations that are, for me,
controlling in this case, and lead me to conclude that New York's
constitutional provision, as implemented by its real property law,
does not offend the Establishment Clause. Preliminarily, I think it
relevant to face up to the fact that it is far easier to agree on
the purpose that underlies the First Amendment's Establishment and
Free Exercise Clauses than to obtain agreement on the standards
that should govern their application. What is at stake as a matter
of policy is preventing that kind and degree of government
involvement in religious life that, as history teaches us, is apt
to lead to strife and frequently strain a political system to the
breaking point. I Two requirements frequently articulated and applied in our cases
for achieving this goal are "neutrality" and "voluntarism." E.g., see Abington School Dist. v. Schempp, 374 U.
S. 203 , 374 U. S. 305 (1963) (concurring opinion of Mr. Justice Goldberg); Engel v.
Vitale, 370 U. S. 421 (1962). These related and mutually reinforcing concepts are
short-form for saying that the Government must neither legislate to
accord benefits that favor religion over nonreligion, nor sponsor a
particular sect, nor try to encourage participation in or
abnegation of religion. Mr. Justice Goldberg's concurring opinion
in Page 397 U. S. 695 Abington, which I joined, set forth these
principles:
"The fullest realization of true religious liberty requires that
government neither engage in nor compel religious practices, that
it effect no favoritism among sects or between religion and
nonreligion, and that it work deterrence of no religious
belief."
374 U.S. at 374 U. S. 305 .
The Court's holding in Torcaso v. Watkins, 367 U.
S. 488 , 367 U. S. 495 (1961), is to the same effect: the State cannot
"constitutionally pass laws or impose requirements which aid all
religions as against nonbelievers, and neither can [it] aid those
religions based on a belief in the existence of God as against
those religions founded on different beliefs."
In the vast majority of cases, the inquiry, albeit an elusive
one, can end at this point. Neutrality and voluntarism stand as
barriers against the most egregious, and hence divisive, kinds of
state involvement in religious matters.
While these concepts are at the "core" of the Religion Clauses,
they may not suffice, by themselves, to achieve in all cases the
purposes of the First Amendment. As Professor Freund has only
recently pointed out in Public Aid to Parochial Schools, 82
Harv.L.Rev. 1680 (1969), governmental involvement, while neutral,
may be so direct or in such degree as to engender a risk of
politicizing religion. Thus, as the opinion of THE CHIEF JUSTICE
notes, religious groups inevitably represent certain points of
view, and not infrequently assert them in the political arena, as
evidenced by the continuing debate respecting birth control and
abortion laws. Yet history cautions that political fragmentation on
sectarian lines must be guarded against. Although the very fact of
neutrality may limit the intensity of involvement, government
participation in certain programs, whose very nature is apt to
entangle the state in details of administration and planning, may
escalate to the point of inviting undue fragmentation. See my concurring Page 397 U. S. 696 opinion in Board of Education v. Allen, 392 U.
S. 236 , 392 U. S. 249 (1968), and the concurring opinion of Mr. Justice Goldberg in Abington School Dist. v. Schempp, supra, at 374 U. S.
307 . II This legislation neither encourages nor discourages
participation in religious life, and thus satisfies the voluntarism
requirement of the First Amendment. Unlike the instances of school
prayers, Abington School Dist. v. Schempp, supra, and Engel v. Vitale, supra, or "released time" programs, Zorach v. Clauson, 343 U. S. 306 (1952), and McCollum v. Board of Education, 333 U.
S. 203 (1948), the State is not "utilizing the prestige,
power, and influence" of a public institution to bring religion
into the lives of citizens. 374 U.S. at 374 U. S. 307 (Goldberg, J., concurring).
The statute also satisfies the requirement of neutrality.
Neutrality in its application requires an equal protection mode of
analysis. The Court must survey meticulously the circumstances of
governmental categories to eliminate, as it were, religious
gerrymanders. In any particular case, the critical question is
whether the circumference of legislation encircles a class so broad
that it can be fairly concluded that religious institutions could
be thought to fall within the natural perimeter.
The statute that implements New York's constitutional provision
for tax exemptions to religious organizations has defined a class
of nontaxable entities whose common denominator is their nonprofit
pursuit of activities devoted to cultural and moral improvement and
the doing of "good works" by performing certain social services in
the community that might otherwise have to be assumed by
government. Included are such broad and divergent groups as
historical and literary societies and, more generally, associations
"for the moral or mental Page 397 U. S. 697 improvement of men." The statute, by its terms, grants this
exemption in furtherance of moral and intellectual diversity, and
would appear not to omit any organization that could be reasonably
thought to contribute to that goal.
To the extent that religious institutions sponsor the secular
activities that this legislation is designed to promote, it is
consistent with neutrality to grant them an exemption just as other
organizations devoting resources to these projects receive
exemptions. I think, moreover, in the context of a statute so broad
as the one before us, churches may properly receive an exemption
even though they do not themselves sponsor the secular-type
activities mentioned in the statute, but exist merely for the
convenience of their interested members. As long as the breadth of
exemption includes groups that pursue cultural, moral, or spiritual
improvement in multifarious secular ways, including, I would
suppose, groups whose avowed tenets may be anti-theological,
atheistic, or agnostic, I can see no lack of neutrality in
extending the benefit of the exemption to organized religious
groups. [ Footnote 3/1 ] Page 397 U. S. 698 III Whether the present exemption entails that degree of involvement
with government that presents threat of fragmentation along
religious lines involves, for me, a more subtle question than
deciding simply whether neutrality has been violated. Unlike the
subsidy that my Brother DOUGLAS foresees as the next step down the
road, tax exemptions to nonprofit organizations are an institution
in themselves, so much so that they are, as THE CHIEF JUSTICE
points out, expected and accepted as a matter of course. See Freund, Public Aid to Parochial Schools, supra. In the instant case noninvolvement is further
assured by the neutrality and breadth of the exemption. In the
context of an exemption so sweeping as the one before us here, its
administration need not entangle government in difficult
classifications of what is or is not religious, for any
organization -- although not religious in a customary sense --
would qualify under the pervasive rubric of a group dedicated to
the moral and cultural improvement of men. Obviously the more
discriminating and complicated the basis of classification for an
exemption -- even Page 397 U. S. 699 a neutral one -- the greater the potential for state involvement
in evaluating the character of the organizations. Cf.
Presbyterian Church v. Mary Eliz. Blue Hull Church, 393 U. S. 440 (1969).
I agree with my Brother DOUGLAS that exemptions do not differ
from subsidies as an economic matter. Aside from the longstanding
tradition behind exemptions, there are other differences, however.
Subsidies, unlike exemptions, must be passed on periodically, and
thus invite more political controversy than exemptions. Moreover,
subsidies or direct aid, as a general rule, are granted on the
basis of enumerated and more complicated qualifications, and
frequently involve the state in administration to a higher degree,
though, to be sure, this is not necessarily the case.
Whether direct aid or subsidies entail that degree of
involvement that is prohibited by the Constitution is a question
that must be reserved for a later case upon a record that fully
develops all the pertinent considerations, [ Footnote 3/2 ] such as the significance and character of
subsidies in our political system and the role of the government in
administering the subsidy in relation to the particular program
aided. It may also be that the States, while bound to observe
strict neutrality, should be freer to experiment with involvement
-- on a neutral basis -- than the Federal Government. Cf.,
e.g., my separate opinion in Roth v. United States, 354 U. S. 476 , 354 U. S. 496 (1957).
I recognize that, for those who seek inflexible solutions, this
tripartite analysis provides little comfort. It is always possible
to shrink from a first step lest the momentum will plunge the law
into pitfalls that lie in the trail ahead. I, for one, however, do
not believe Page 397 U. S. 700 that a "slippery slope" is necessarily without a constitutional
toehold. Like THE CHIEF JUSTICE, I am of the view that it is the
task of this tribunal to "draw distinctions, including fine ones,
in the process of interpreting the Constitution." Ante at 397 U. S. 679 .
The prospect of difficult questions of judgment in constitutional
law should not be the basis for prohibiting legislative action that
is constitutionally permissible. I think this one is, and, on the
foregoing premises, join with the Court in upholding this New York
statute.
[ Footnote 3/1 ]
While I would suppose most churches devote part of their
resources to secular community projects and conventional charitable
activities, it is a question of fact, a fact that would only be
relevant if we had before us a statute framed more narrowly to
include only "charities" or a limited class of organizations, and
churches. In such a case, depending on the administration of the
exemption, it might be that the granting of an exemption to
religion would turn out to be improper. This would depend, I
believe, on what activities the church in fact sponsored. It would
also depend, I think, on whether or to what extent the exemption
were accorded to secular social organizations, conceived to benefit
their own membership, but also engaged in incidental general
philanthropic or cultural undertakings. It might also depend on
whether, if church-sponsored programs were not open to all without
charge, the exemption were extended to private clubs and
organizations promoting activities on a contributory basis. These
would all be questions of fact to be determined by the revenue
authorities and the courts. While such determinations necessarily
involve government in the religious institutions, they do not
offend the First Amendment. That an evaluation of the scope of
charitable activities in proportion to doctrinal pursuits may be
difficult does not render it undue interference with religion, cf. Presbyterian Church v. Mary Eliz. Blue Hull Church, 393 U. S. 440 (1969), for it does not entail judicial inquiry into dogma and
belief. Indeed, such an inquiry may be inescapable in the context
of a statute of less breadth than the one before us.
I would hold the present exemption neutral because New York has
created a general class so broad that it would be difficult to
conclude that religious organizations cannot properly be included
in it.
[ Footnote 3/2 ]
The dimension of the problem would also require consideration of
what kind of pluralistic society is compatible with the political
concept and traditions embodied in our Constitution.
MR. JUSTICE DOUGLAS, dissenting.
Petitioner is the owner of real property in New York, and is a
Christian. But he is not a member of any of the religious
organizations, "rejecting them as hostile." The New York statute
exempts from taxation real property "owned by a corporation or
association organized exclusively for . . . religious . . .
purposes" and used "exclusively for carrying out" such purposes.
[ Footnote 4/1 ] Yet nonbelievers who
own realty are taxed at the usual rate. The question in the case
therefore is whether believers -- organized in church groups -- can
be made exempt from real estate taxes merely because they are
believers, while nonbelievers, whether organized or not, must pay
the real estate taxes.
My Brother HARLAN says he "would suppose" that the tax exemption
extends to "groups whose avowed tenets may be anti-theological,
atheistic, or agnostic." Ante at 397 U. S. 697 .
If it does, then the line between believers and nonbelievers has
not been drawn. But, with all respect, there is not even a
suggestion in the present record that the statute covers property
used exclusively by organizations for "anti-theological purposes,"
"atheistic purposes," or "agnostic purposes."
In Torcaso v. Watkins, 367 U.
S. 488 , we held that Page 397 U. S. 701 a State could not bar an atheist from public office in light of
the freedom of belief and religion guaranteed by the First and
Fourteenth Amendments. Neither the State nor the Federal
Government, we said,
"can constitutionally pass laws or impose requirements which aid
all religions as against nonbelievers, and neither can aid those
religions based on a belief in the existence of God as against
those religions founded on different beliefs." Id. at 367 U. S.
495 .
That principle should govern this case.
There is a line between what a State may do in encouraging
"religious" activities, Zorach v. Clauson, 343 U.
S. 306 , and what a State may not do by using its
resources to promote "religious" activities, McCollum v. Board
of Education, 333 U. S. 203 , or
bestowing benefits because of them. Yet that line may not always be
clear. Closing public schools on Sunday is in the former category;
subsidizing churches, in my view, is in the latter. Indeed, I would
suppose that, in common understanding, one of the best ways to
"establish" one or more religions is to subsidize them, which a tax
exemption does. The State may not do that any more than it may
prefer "those who believe in no religion over those who do
believe." Zorach v. Clauson, supra, at 343 U. S.
314 .
In affirming this judgment, the Court largely overlooks the
revolution initiated by the adoption of the Fourteenth Amendment.
That revolution involved the imposition of new and far-reaching
constitutional restraints on the States. Nationalization of many
civil liberties has been the consequence of the Fourteenth
Amendment, reversing the historic position that the foundations of
those liberties rested largely in state law.
The process of the "selective incorporation" of various
provisions of the Bill of Rights into the Fourteenth Amendment,
although often provoking lively disagreement Page 397 U. S. 702 at large as well as among the members of this Court, has been a
steady one. It started in 1897 with Chicago, B. & Q. R. Co.
v. Chicago, 166 U. S. 226 , in
which the Court held that the Fourteenth Amendment precluded a
State from taking private property for public use without payment
of just compensation, as provided in the Fifth Amendment. The first
direct holding as to the incorporation of the First Amendment into
the Fourteenth occurred in 1931, in Stromberg v.
California, 283 U. S. 359 , a
case involving the right of free speech, although that holding in Stromberg had been foreshadowed in 1925 by the Court's
opinion in Gitlow v. New York, 268 U.
S. 652 . As regards the religious guarantees of the First
Amendment, the Free Exercise Clause was expressly deemed
incorporated into the Fourteenth Amendment in 1940 in Cantwell
v. Connecticut, 310 U. S. 296 ,
although that holding had been foreshadowed in 1923 and 1934 by the
Court's dicta in Meyer v. Nebraska, 262 U.
S. 390 , 262 U. S. 399 ,
and Hamilton v. Regents, 293 U. S. 245 , 293 U. S. 262 .
The Establishment Clause was not incorporated in the Fourteenth
Amendment until Everson v. Board of Education, 330 U. S. 1 , was
decided in 1947.
Those developments in the last 30 years have had unsettling
effects. It was, for example, not until 1962 that state-sponsored,
sectarian prayers were held to violate the Establishment Clause. Engel v. Vitale, 370 U. S. 421 .
That decision brought many protests, for the habit of putting one
sect's prayer in public schools had long been practiced. Yet if the
Catholics, controlling one school board, could put their prayer
into one group of public schools, the Mormons, Baptists, Moslems,
Presbyterians, and others could do the same once they got control.
And so the seeds of Establishment would grow, and a secular
institution would be used to serve a sectarian end. Page 397 U. S. 703 Engel was as disruptive of traditional state practices
as was Stromberg. Prior to Stromberg, a State
could arrest an unpopular person who made a rousing speech on the
charge of disorderly conduct. Since Stromberg, that has
been unconstitutional. And so the revolution occasioned by the
Fourteenth Amendment has progressed as Article after Article in the
Bill of Rights has been incorporated in it and made applicable to
the States.
Hence, the question in the present case makes irrelevant the
"two centuries of uninterrupted freedom from taxation," referred to
by the Court. Ante at 397 U. S. 678 .
If history be our guide, then tax exemption of church property in
this country is indeed highly suspect, as it arose in the early
days when the church was an agency of the state. See W.
Torpey, Judicial Doctrines of Religious Rights in America 171
(1948). The question here, though, concerns the meaning of the
Establishment Clause and the Free Exercise Clause made applicable
to the States for only a few decades, at best.
With all due respect, the governing principle is not controlled
by Everson v. Board of Education, supra. Everson involved the use of public funds to bus children to parochial as
well as to public schools. Parochial schools teach religion, yet
they are also educational institutions offering courses competitive
with public schools. They prepare students for the professions and
for activities in all walks of life. Education in the secular sense
was combined with religious indoctrination at the parochial schools
involved in Everson. Even so, the Everson decision was five to four, and, though one of the five, I have
since had grave doubts about it, because I have become convinced
that grants to institutions teaching a sectarian creed violate the
Establishment Clause. See Engel v. Vitale, supra, at 370 U. S.
443 -444 (Douglas, J., concurring). Page 397 U. S. 704 This case, however, is quite different. Education is not
involved. The financial support rendered here is to the church, the
place of worship. A tax exemption is a subsidy. Is my Brother
BRENNAN correct in saying that we would hold that state or federal
grants to churches, say, to construct the edifice itself would be
unconstitutional? What is the difference between that kind of
subsidy and the present subsidy? [ Footnote 4/2 ]
The problem takes us back where Madison was in 1784 and 1785,
when he battled the Assessment Bill [ Footnote 4/3 ] in Virginia. That bill levied a tax for
the support of Christian churches, leaving to each taxpayer the
choice as to "what society of Christians" he wanted the tax paid,
and, absent such designation, the tax was to go for education. Even
so, Madison was unrelenting in his opposition. As stated by Mr.
Justice Rutledge:
"The modified Assessment Bill passed second reading in December,
1784, and was all but enacted. Page 397 U. S. 705 Madison and his followers, however, maneuvered deferment of
final consideration until November, 1785. And before the Assembly
reconvened in the fall, he issued his historic Memorial and
Remonstrance." Everson v. Board of Education, supra, at 330 U. S. 37 (dissenting opinion).
The Remonstrance [ Footnote 4/4 ]
stirred up such a storm of popular protest that the Assessment Bill
was defeated. [ Footnote 4/5 ]
The Remonstrance covers some aspects of the present subsidy,
including Madison's protest in paragraph 3 to a requirement that
any person be compelled to contribute even "three pence" to support
a church. All men, he maintained in paragraph 4, enter society "on
equal conditions," including the right to free exercise of
religion:
"Whilst we assert for ourselves a freedom to embrace, to profess
and to observe the Religion which we believe to be of divine
origin, we cannot deny an equal freedom to those whose minds have
not yet yielded to the evidence which has convinced us. If this
freedom be abused, it is an offence against God, not against man:
To God, therefore, not to men, must an account of it be rendered.
As the Bill violates equality by subjecting some to peculiar
burdens, so it violates the same principle, by granting to others
peculiar exemptions."
Madison's assault on the Assessment Bill was, in fact, an
assault based on both the concepts of "free exercise" and
"establishment" of religion later embodied in the First Amendment.
Madison, whom we recently called "the leading architect of the
religion clauses of the First Amendment," Flast v. Cohen, 392 U. S. 83 , 392 U. S.
103 , Page 397 U. S. 706 was indeed their author and chief promoter. [ Footnote 4/6 ] As Mr. Justice Rutledge said:
"All the great instruments of the Virginia struggle for
religious liberty thus became warp and woof of our constitutional
tradition, not simply by the course of history, but by the common
unifying force of Madison's life, thought and sponsorship. He
epitomized the whole of that tradition in the Amendment's compact,
but nonetheless comprehensive, phrasing." Everson v. Board of Education, supra, at 330 U. S. 39 .
The Court seeks to avoid this historic argument as to the
meaning of "establishment" and "free exercise" by relying on the
long practice of the States in granting the subsidies challenged
here.
Certainly government may not lay a tax on either worshiping or
preaching. In Murdock v. Pennsylvania, 319 U.
S. 105 , we ruled on a state license tax levied on
religious colporteurs as a condition to pursuit of their
activities. In holding the tax unconstitutional, we said:
"The power to tax the exercise of a privilege is the power to
control or suppress its enjoyment. Magnano Co. v.
Hamilton, 292 U. S. 40 , 292 U. S.
44 -45, and cases cited. Those who can tax the exercise
of this religious practice can make its exercise so costly as to
deprive it of the resources necessary for its maintenance. Those
who can tax the privilege of engaging in this form of missionary
evangelism can close its doors to all those who do not have a full
purse. Spreading religious beliefs in this ancient and honorable
manner would thus be denied the needy. Those who can deprive
religious groups of their colporteurs can take from them a part
of Page 397 U. S. 707 the vital power of the press which has survived from the
Reformation." Id. at 319 U. S.
112 .
Churches, like newspapers also enjoying First Amendment rights,
have no constitutional immunity from all taxes. As we said in Murdock: "We do not mean to say that religious groups and the press are
free from all financial burdens of government. See Grosjean v.
American Press Co., 297 U. S. 233 , 297 U. S.
250 . We have here something quite different, for
example, from a tax on the income of one who engages in religious
activities or a tax on property used or employed in connection with
those activities. It is one thing to impose a tax on the income or
property of a preacher. It is quite another thing to exact a tax
from him for the privilege of delivering a sermon." Ibid. State aid to places of worship, whether, in the form of direct
grants or tax exemption, takes us back to the Assessment Bill and
the Remonstrance. The church qua church would not be
entitled to that support from believers and from nonbelievers
alike. Yet the church qua nonprofit charitable institution
is one of many that receive a form of subsidy through tax
exemption. To be sure, the New York statute [ Footnote 4/7 ] does not single out the church for grant
or favor. It includes churches in a long list of nonprofit
organizations: for the moral or mental improvement of men and women
(§ 420); for charitable, hospital, or educational purposes
( ibid. ); for playgrounds ( ibid. ); for scientific
or literary objects ( ibid. ); for bar associations, medical
societies, or libraries ( ibid. ); for patriotic and
historical purposes ( ibid. ); for cemeteries
( ibid. ); for the enforcement of laws relating to children
or animals ( ibid. ); for opera Page 397 U. S. 708 houses (§ 426); for fraternal organizations (§ 428); for
academies of music (§ 434); for veterans' organizations (§ 452);
for pharmaceutical societies (§ 472), and for dental societies (§
474). While the beneficiaries cover a wide range, "atheistic,"
"agnostic," or "anti-theological" groups do not seem to be
included.
Churches perform some functions that a State would
constitutionally be empowered to perform. I refer to nonsectarian
social welfare operations such as the care of orphaned children and
the destitute and people who are sick. A tax exemption to agencies
performing those functions would therefore be as constitutionally
proper as the grant of direct subsidies to them. Under the First
Amendment, a State may not, however, provide worship if private
groups fail to do so. As Mr. Justice Jackson said:
"[A State] may socialize utilities and economic enterprises and
make taxpayers' business out of what conventionally had been
private business. It may make public business of individual
welfare, health, education, entertainment or security. But it
cannot make public business of religious worship or instruction, or
of attendance at religious institutions of any character. . . .
That is a difference which the Constitution sets up between
religion and almost every other subject matter of legislation, a
difference which goes to the very root of religious freedom and
which the Court is overlooking today." Everson v. Board of Education, supra, at 330 U. S. 26 (dissenting opinion).
That is a major difference between churches, on the one hand,
and the rest of the nonprofit organizations, on the other.
Government could provide or finance operas, hospitals, historical
societies, and all the rest because they represent social welfare
programs within Page 397 U. S. 709 the reach of the police power. In contrast, government may not
provide or finance worship because of the Establishment Clause any
more than it may single out "atheistic" or "agnostic" centers or
groups and create or finance them.
The Brookings Institution, writing in 1933, before the
application of the Establishment Clause of the First Amendment to
the States, said about tax exemptions of religious groups:
[ Footnote 4/8 ]
"Tax exemption, no matter what its form, is essentially a
government grant or subsidy. Such grants would seem to be justified
only if the purpose for which they are made is one for which the
legislative body would be equally willing to make a direct
appropriation from public funds equal to the amount of the
exemption. This test would not be met except in the case where the
exemption is granted to encourage certain activities of private
interests which, if not thus performed, would have to be assumed by
the government at an expenditure at least as great as the value of
the exemption."
(Emphasis added.)
Since 1947, when the Establishment Clause was made applicable to
the States, that report would have to state that the exemption
would be justified only where "the legislative body could make" an
appropriation for the cause.
On the record of this case, the church qua nonprofit,
charitable organization is intertwined with the church qua church. A church may use the same facilities, resources, and
personnel in carrying out both its secular and its sectarian
activities. The two are unitary, and, on the present record, have
not been separated one from Page 397 U. S. 710 the other. The state has a public policy of encouraging private
public welfare organizations, which it desires to encourage through
tax exemption. Why may it not do so and include churches qua welfare organizations on a nondiscriminatory basis?
That avoids, it is argued, a discrimination against churches, and,
in a real sense, maintains neutrality toward religion which the
First Amendment was designed to foster. Welfare services, whether
performed by churches or by nonreligious groups, may well serve the
public welfare.
Whether a particular church seeking an exemption for its welfare
work could constitutionally pass muster would depend on the special
facts. The assumption is that the church is a purely private
institution, promoting a sectarian cause. The creed, teaching, and
beliefs of one may be undesirable or even repulsive to others. Its
sectarian faith sets it apart from all others, and makes it
difficult to equate its constituency with the general public. The
extent that its facilities are open to all may only indicate the
nature of its proselytism. Yet, though a church covers up its
religious symbols in welfare work, its welfare activities may
merely be a phase of sectarian activity. I have said enough to
indicate the nature of this tax exemption problem.
Direct financial aid to churches or tax exemptions to the church qua church is not, in my view, even arguably permitted.
Sectarian causes are certainly not anti-public, and many would rate
their own church, or perhaps all churches, as the highest form of
welfare. The difficulty is that sectarian causes must remain in the
private domain, not subject to public control or subsidy. That
seems to me to be the requirement of the Establishment Clause. As
Edmond Cahn said:
"In America, Madison submitted most astutely, the rights of
conscience must be kept not only free, but equal, as well. And in
view of the endless variations Page 397 U. S. 711 -- not only among the numerous sects but also among the
organized activities they pursued and the relative emotional values
they attached to their activities -- how could any species of
government assistance be considered genuinely equal from sect to
sect? If, for example, a state should attempt to subsidize all
sectarian schools without discrimination, it would necessarily
violate the principle of equality because certain sects felt
impelled to conduct a large number of such schools, others few,
others none. [ Footnote 4/9 ] How
could the officers of government begin to measure the intangible
factors that a true equality of treatment would involve, i.e., the relative intensity of religious attachment to
parochial education that the respective groups required of their
lay and clerical members? It would be presumptuous even to inquire.
Thus, just as, in matters of race, our belated recognition of
intangible factors has finally led us to the maxim 'separate,
therefore unequal,' so, in matters of religion, Madison's immediate
recognition of intangible factors led us promptly to the maxim
'equal, therefore separate.' Equality was out of the question
without total separation."
Confronting Injustice 186-187 (1967).
The exemptions provided here insofar as welfare projects are
concerned may have the ring of neutrality. But subsidies, either
through direct grant or tax exemption for sectarian causes, whether
carried on by church qua church or by church qua welfare agency, must be treated differently lest we in time allow
the church qua church to be on the public payroll, which,
I fear, is imminent. Page 397 U. S. 712 As stated by my Brother BRENNAN in Abington School Dist. v.
Schempp, 374 U. S. 203 , 374 U. S. 259 (concurring opinion),
"It is not only the nonbeliever who fears the injection of
sectarian doctrines and controversies into the civil polity, but,
in as high degree, it is the devout believer who fears the
secularization of a creed which becomes too deeply involved with
and dependent upon the government."
Madison, as President, vetoed a bill incorporating the
Protestant Episcopal Church in Alexandria, Virginia, as being a
violation of the Establishment Clause. He said, inter
alia: [ Footnote 4/10 ]
"[T]he bill vests in the said incorporated church an authority
to provide for the support of the poor and the education of poor
children of the same, an authority which, being altogether
superfluous if the provision is to be the result of pious charity,
would be a precedent for giving to religious societies as such a
legal agency in carrying into effect a public and civil duty."
He also vetoed a bill that reserved a parcel of federal land
"for the use" of the Baptist Church as violating the Establishment
Clause. [ Footnote 4/11 ]
What Madison would have thought of the present state subsidy to
churches -- a tax exemption, as distinguished from an outright
grant -- no one can say with certainty. The fact that Virginia
early granted church tax exemptions cannot be credited to Madison.
Certainly he seems to have been opposed. In his paper Monopolies,
Perpetuities, Corporations, Ecclesiastical Endowments, he wrote:
[ Footnote 4/12 ]
"Strongly guarded as is the separation between Religion &
Govt in the Constitution of the United Page 397 U. S. 713 States the danger of encroachment by Ecclesiastical Bodies, may
be illustrated by precedents already furnished in their short
history."
And he referred, inter alia, to the "attempt in
Kentucky for example, where it was proposed to exempt Houses of
Worship from taxes." From these three statements, Madison, it
seems, opposed all state subsidies to churches. Cf. D.
Robertson, Should Churches Be Taxed? 661 (1968).
We should adhere to what we said in Torcaso v. Watkins, 367 U.S. at 367 U. S. 495 ,
that neither a State nor the Federal Government
"can constitutionally pass laws or impose requirements which
aid all religions as against nonbelievers, and neither can aid
those religions based on a belief in the existence of God as
against those religions founded on different beliefs."
(Emphasis added.)
Unless we adhere to that principle, we do not give full support
either to the Free Exercise Clause or to the Establishment
Clause.
If a church can be exempted from paying real estate taxes, why
may not it be made exempt from paying special assessments? The
benefits in the two cases differ only in degree, and the burden on
nonbelievers is likewise no different in kind. [ Footnote 4/13 ] Page 397 U. S. 714 The religiously used real estate of the churches today
constitutes a vast domain. See M. Larson & C. Lowell,
The Churches: Their Riches, Revenues, and Immunities (1969). Their
assets total over $141 billion, and their annual income at least
$22 billion. Id. at 232. And the extent to which they are
feeding from the public trough in a variety of forms is alarming. Id., c. 10.
We are advised that, since 1968, at least five States have
undertaken to give subsidies to parochial and other private schools
[ Footnote 4/14 ] -- Pennsylvania,
Ohio, New York, Connecticut, and Rhode Island. And it is reported
that, under two federal Acts, the Elementary and Secondary
Education Act of 1965, 79 Stat. 27, and the Higher Education Act of
1965, 79 Stat. 1219, billions of dollars have been granted
to parochial and other private schools.
The federal grants to elementary and secondary schools under 79
Stat. 27 were made to the States, which in turn made advances to
elementary and secondary schools. Those figures are not
available.
But the federal grants to private institutions of higher
education are revealed in Department of Health, Education, and
Welfare (HEW), Digest of Educational Statistics 16 (1969). These
show in billions of dollars the following: [ Footnote 4/15 ]
19666. . . . . . . . $1-4
1966-67. . . . . . . $1.6
1967-68. . . . . . . $1.7
1968-69. . . . . . . $1.9
1969-70. . . . . . . $2.1 Page 397 U. S. 715 It is an old, old problem. Madison adverted to it: [ Footnote 4/16 ]
"Are there not already examples in the U.S. of ecclesiastical
wealth equally beyond its object and the foresight of those who
laid the foundation of it? In the U.S., there is a double motive
for fixing limits in this case, because wealth may increase not
only from additional gifts, but from exorbitant advances in the
value of the primitive one. In grants of vacant lands, and of lands
in the vicinity of growing towns & cities, the increase of
value is often such as, if foreseen, would essentially controul the
liberality confirming them. The people of the U.S. owe their
Independence & their liberty to the wisdom of descrying in the
minute tax of 3 pence on tea the magnitude of the evil comprized in
the precedent. Let them exert the same wisdom in watching agst
every evil lurking under plausible disguises, and growing up from
small beginnings. [ Footnote 4/17 ]
" Page 397 U. S. 716 If believers are entitled to public financial support, so are
nonbelievers. A believer and nonbeliever under the present law are
treated differently because of the articles of their faith.
Believers are doubtless comforted that the cause of religion is
being fostered by this legislation. Yet one of the mandates of the
First Amendment is to promote a viable, pluralistic society and to
keep government neutral, not only between sects, but also between
believers and nonbelievers. The present involvement of government
in religion may seem de minimis. But it is, I fear, a long
step down the Establishment path. Perhaps I have been misinformed.
But as I have read the Constitution and its philosophy, I gathered
that independence was the price of liberty.
I conclude that this tax exemption is unconstitutional.
| 397
U.S. 664 app1| APPENDIX I TO OPINION OF DOUGLAS, J., DISSENTING Assessment Bill. The December 24, 1784, print reproduced in the
Supplemental Appendix to the dissenting opinion of Rutledge, J., in Everson v. Board of Education, 330 U. S.
1 , 330 U. S. 72 :
" A BILL ESTABLISHING A PROVISION" " FOR TEACHERS OF THE" " CHRISTIAN RELIGION" "Whereas the general diffusion of Christian knowledge hath a
natural tendency to correct the morals of men, restrain their
vices, and preserve the peace of society; Page 397 U. S. 717 which cannot be effected without a competent provision for
learned teachers, who may be thereby enabled to devote their time
and attention to the duty of instructing such citizens, as from
their circumstances and want of education, cannot otherwise attain
such knowledge, and it is judged that such provision may be made by
the Legislature, without counteracting the liberal principle
heretofore adopted and intended to be preserved by abolishing all
distinctions of preeminence amongst the different societies or
communities of Christians;"
" Be it therefore enacted by the General Assembly, That
for the support of Christian teachers, ___ percentum on the amount,
or ___ in the pound on the sum payable for tax on the property
within this Commonwealth, is hereby assessed, and shall be paid by
every person chargeable with the said tax at the time the same
shall become due, and the Sheriffs of the several Counties shall
have power to levy and collect the same in the same manner and
under the like restrictions and limitations, as are or may be
prescribed by the laws for raising the Revenues of this State."
" And be it enacted, That for every sum so paid, the
Sheriff or Collector shall give a receipt, expressing therein to
what society of Christians the person from whom he may receive the
same shall direct the money to be paid, keeping a distinct account
thereof in his books. The Sheriff of every County, shall, on or
before the ___ day of ___ in every year, return to the Court, upon
oath, two alphabetical lists of the payments to him made,
distinguishing in columns opposite to the names of the persons who
shall have paid the same, the society to which the money so paid
was by them appropriated, and one column for the names where no
appropriation shall be made. One of which lists, after being
recorded in a book to be kept for that purpose, shall be filed by
the Clerk in his office; the other shall by the Sheriff Page 397 U. S. 718 be fixed up in the Court-house, there to remain for the
inspection of all concerned. And the Sheriff, after deducting five
percentum for the collection, shall forthwith pay to such person or
persons as shall be appointed to receive the same by the Vestry,
Elders, or Directors, however denominated of each such society, the
sum so stated to be due to that society; or in default thereof,
upon the motion of such person or persons to the next or any
succeeding Court, execution shall be awarded for the same against
the Sheriff and his security, his and their executors or
administrators; provided that ten days previous notice be given of
such motion. And upon every such execution, the Officer serving the
same shall proceed to immediate sale of the estate taken, and shall
not accept of security for payment at the end of three months, nor
to have the goods forthcoming at the day of sale; for his better
direction wherein, the Clerk shall endorse upon every such
execution that no security of any kind shall be taken."
" And be it further enacted, That the money to be raised
by virtue of this Act, shall be by the Vestries, Elders, or
Directors of each religious society, appropriated to a provision
for a Minister or Teacher of the Gospel of their denomination, or
the providing places of divine worship, and to none other use
whatsoever; except in the denominations of Quakers and Menonists,
who may receive what is collected from their members, and place it
in their general fund, to be disposed of in a manner which they
shall think best calculated to promote their particular mode of
worship."
" And be it enacted, That all sums which at the time of
payment to the Sheriff or Collector may not be appropriated by the
person paying the same, shall be accounted for with the Court in
manner as by this Act is directed, and after deducting for his
collection, the Sheriff shall pay the amount thereof (upon account
certified Page 397 U. S. 719 by the Court to the Auditors of Public Accounts, and by them to
the Treasurer) into the public Treasury, to be disposed of under
the direction of the General Assembly, for the encouragement of
seminaries of learning within the Counties whence such sums shall
arise, and to no other use or purpose whatsoever."
"THIS Act shall commence, and be in force, from and after the
___ day of ___ in the year ___."
" A Copy from the Engrossed Bill. "
JOHN BECKLEY, C.H.D.
| 397
U.S. 664 app2| APPENDIX II TO OPINION OF DOUGLAS, J., DISSENTING [ Footnote 4/18 ] Memorial and Remonstrance Against Religious Assessments, as
reproduced in the Appendix to the dissenting opinion of Rutledge,
J., in Everson v. Board of Education, 330 U. S.
1 , 330 U. S. 63 (2
The Writings of James Madison 183-191 (G. Hunt ed.1901)):
"We, the subscribers, citizens of the said Commonwealth, having
taken into serious consideration a Bill printed by order of the
last Session of General Assembly, entitled 'A Bill establishing a
provision for Teachers of the Christian Religion,' and conceiving
that the same, if finally armed with the sanctions of a law, will
be a dangerous abuse of power, are bound, as faithful members of a
free State, to remonstrate against it, and to declare the reasons
by which we are determined. We remonstrate against the said
Bill,"
"1. Because we hold it for a fundamental and undeniable truth
'that Religion, or the duty which we owe to our Creator and the
Manner of discharging it, can be directed only by reason and
conviction, not by force or violence.' The Religion, then, of every
man must be left to the conviction and conscience of every Page 397 U. S. 720 man, and it is the right of every man to exercise it as these
may dictate. This right is, in its nature, an unalienable right. It
is unalienable because the opinions of men, depending only on the
evidence contemplated by their own minds, cannot follow the
dictates of other men. It is unalienable also because what is here
a right towards men is a duty towards the Creator. It is the duty
of every man to render to the Creator such homage, and such only,
as he believes to be acceptable to him. This duty is precedent both
in order of time and degree of obligation to the claims of Civil
Society. Before any man can be considered as a member of Civil
Society, he must be considered as a subject of the Governor of the
Universe. And if a member of Civil Society who enters into any
subordinate Association must always do it with a reservation of his
duty to the general authority, much more must every man who becomes
a member of any particular Civil Society do it with a saving of his
allegiance to the Universal Sovereign. We maintain therefore that,
in matters of Religion, no man's right is abridged by the
institution of Civil Society, and that Religion is wholly exempt
from its cognizance. True it is that no other rule exists by which
any question which may divide a Society can be ultimately
determined but the will of the majority; but it is also true that
the majority may trespass on the rights of the minority."
"2. Because, if religion be exempt from the authority of the
Society at large, still less can it be subject to that of the
Legislative Body. The latter are but the creatures and vicegerents
of the former. Their jurisdiction is both derivative and limited:
it is limited with regard to the coordinate departments; more
necessarily is it limited with regard to the constituents. The
preservation of a free government requires not merely that the
metes and bounds which separate each department Page 397 U. S. 721 of power may be invariably maintained, but, more especially,
that neither of them be suffered to overleap the great Barrier
which defends the rights of the people. The Rulers who are guilty
of such an encroachment exceed the commission from which they
derive their authority, and are Tyrants. The People who submit to
it are governed by laws made neither by themselves nor by an
authority derived from them, and are slaves."
"3. Because it is proper to take alarm at the first experiment
on our liberties. We hold this prudent jealousy to be the first
duty of citizens, and one of [the] noblest characteristic of the
late Revolution. The freemen of America did not wait till usurped
power had strengthened itself by exercise and entangled the
question in precedents. They saw all the consequences in the
principle, and they avoided the consequences by denying the
principle. We revere this lesson too much soon to forget it. Who
does not see that the same authority which can establish
Christianity, in exclusion of all other Religions, may establish
with the same ease any particular sect of Christians in exclusion
of all other Sects? That the same authority which can force a
citizen to contribute three pence only of his property for the
support of any one establishment may force him to conform to any
other establishment in all cases whatsoever?"
"4. Because, the bill violates that equality which ought to be
the basis of every law, and which is more indispensable in
proportion as the validity or expediency of any law is more liable
to be impeached. If 'all men are by nature equally free and
independent,' all men are to be considered as entering into Society
on equal conditions; as relinquishing no more, and therefore
retaining no less, one than another, of their natural rights. Above
all are they to be considered as retaining an ' equal title
to the free exercise of Religion according to the dictates Page 397 U. S. 722 of conscience.' Whilst we assert for ourselves a freedom to
embrace, to profess and to observe the Religion which we believe to
be of divine origin, we cannot deny an equal freedom to those whose
minds have not yet yielded to the evidence which has convinced us.
If this freedom be abused, it is an offence against God, not
against man. To God, therefore, not to men, must an account of it
be rendered. As the Bill violates equality by subjecting some to
peculiar burdens, so it violates the same principle by granting to
others peculiar exemptions. Are the Quakers and Menonists the only
sects who think a compulsive support of their religions unnecessary
and unwarrantable? Can their piety alone be intrusted with the care
of public worship? Ought their Religions to be endowed above all
others with extraordinary privileges by which proselytes may be
enticed from all others? We think too favorably of the justice and
good sense of these denominations to believe that they either covet
preeminencies over their fellow citizens or that they will be
seduced by them from the common opposition to the measure."
"5. Because the bill implies either that the Civil Magistrate is
a competent Judge of Religious truth or that he may employ Religion
as an engine of Civil policy. The first is an arrogant pretension
falsified by the contradictory opinions of Rulers in all ages, and
throughout the world, the second, an unhallowed perversion of the
means of salvation."
"6. Because the establishment proposed by the Bill is not
requisite for the support of the Christian Religion. To say that it
is is a contradiction to the Christian Religion itself, for every
page of it disavows a dependence on the powers of this world; it is
a contradiction to fact, for it is known that this Religion both
existed and flourished not only without the support of human laws,
but in spite of every opposition from them, and not only Page 397 U. S. 723 during the period of miraculous aid, but long after it had been
left to its own evidence and the ordinary care of Providence. Nay,
it is a contradiction in terms, for a Religion not invented by
human policy must have preexisted and been supported before it was
established by human policy. It is, moreover, to weaken in those
who profess this Religion a pious confidence in its innate
excellence and the patronage of its Author, and to foster in those
who still reject it a suspicion that its friends are too conscious
of its fallacies to trust it to its own merits."
"7. Because experience witnesseth that ecclesiastical
establishments, instead of maintaining the purity and efficacy of
Religion, have had a contrary operation. During almost fifteen
centuries has the legal establishment of Christianity been on
trial. What have been its fruits? More or less in all places, pride
and indolence in the Clergy; ignorance and servility in the laity;
in both, superstition, bigotry and persecution. Enquire of the
Teachers of Christianity for the ages in which it appeared in its
greatest lustre; those of every sect point to the ages prior to its
incorporation with Civil policy. Propose a restoration of this
primitive state in which its Teachers depended on the voluntary
rewards of their flocks; many of them predict its downfall. On
which side ought their testimony to have greatest weight, when for
or when against their interest?"
"8. Because the establishment in question is not necessary for
the support of Civil Government. If it be urged as necessary for
the support of Civil Government only as it is a means of supporting
Religion, and it be not necessary for the latter purpose, it cannot
be necessary for the former. If Religion be not within [the]
cognizance of Civil Government, how can its legal establishment be
said to be necessary to civil Government? What influence, in fact,
have ecclesiastical establishments Page 397 U. S. 724 had on Civil Society? In some instances, they have been seen to
erect a spiritual tyranny on the ruins of Civil authority; in many
instances, they have been seen upholding the thrones of political
tyranny; in no instance have they been seen the guardians of the
liberties of the people. Rulers who wished to subvert the public
liberty may have found an established clergy convenient
auxiliaries. A just government, instituted to secure &
perpetuate it, needs them not. Such a government will be best
supported by protecting every citizen in the enjoyment of his
Religion with the same equal hand which protects his person and his
property, by neither invading the equal rights of any Sect nor
suffering any Sect to invade those of another."
"9. Because the proposed establishment is a departure from that
generous policy which, offering an asylum to the persecuted and
oppressed of every Nation and Religion, promised a lustre to our
country and an accession to the number of its citizens. What a
melancholy mark is the Bill of sudden degeneracy? Instead of
holding forth an asylum to the persecuted, it is itself a signal of
persecution. It degrades from the equal rank of Citizens all those
whose opinions in Religion do not bend to those of the Legislative
authority. Distant as it may be in its present form from the
Inquisition, it differs from it only in degree. The one is the
first step, the other the last, in the career of intolerance. The
magnanimous sufferer under this cruel scourge in foreign Regions
must view the Bill as a Beacon on our Coast, warning him to seek
some other haven where liberty and philanthropy in their due extent
may offer a more certain repose from his troubles."
"10. Because it will have a like tendency to banish our
Citizens. The allurements presented by other situations are every
day thinning their number. To superadd a fresh motive to
emigration, by revoking the liberty Page 397 U. S. 725 which they now enjoy would be the same species of folly which
has dishonoured and depopulated flourishing kingdoms."
"11. Because it will destroy that moderation and harmony which
the forbearance of our laws to intermeddle with Religion has
produced amongst its several sects. Torrents of blood have been
spilt in the old world by vain attempts of the secular arm to
extinguish Religious discord by proscribing all difference in
Religious opinions. Time has at length revealed the true remedy.
Every relaxation of narrow and rigorous policy, wherever it has
been tried, has been found to assuage the disease. The American
Theatre has exhibited proofs that equal and compleat liberty, if it
does not wholly eradicate it, sufficiently destroys its malignant
influence on the health and prosperity of the State. If, with the
salutary effects of this system under our own eyes, we begin to
contract the bonds of Religious freedom, we know no name that will
too severely reproach our folly. At least let warning be taken at
the first fruits of the threatened innovation. The very appearance
of the Bill has transformed that 'Christian forbearance, love and
charity' which of late mutually prevailed into animosities and
jealousies which may not soon be appeased. What mischiefs may not
be dreaded should this enemy to the public quiet be armed with the
force of a law?"
"12. Because the policy of the bill is adverse to the diffusion
of the light of Christianity. The first wish of those who enjoy
this precious gift ought to be that it may be imparted to the whole
race of mankind. Compare the number of those who have as yet
received it with the number still remaining under the dominion of
false Religions, and how small is the former. Does the policy of
the Bill tend to lessen the disproportion? No; it at once
discourages those who are strangers to the light of [revelation]
from coming into the Region Page 397 U. S. 726 of it, and countenances by example the nations who continue in
darkness in shutting out those who might convey it to them. Instead
of leveling as far as possible every obstacle to the victorious
progress of truth, the Bill, with an ignoble and unchristian
timidity, would circumscribe it with a wall of defence against the
encroachments of error."
"13. Because attempts to enforce by legal sanctions acts
obnoxious to so great a proportion of Citizens tend to enervate the
laws in general, and to slacken the bands of Society. If it be
difficult to execute any law which is not generally deemed
necessary or salutary, what must be the case where it is deemed
invalid and dangerous? and what may be the effect of so striking an
example of impotency in the Government, on its general
authority."
"14. Because a measure of such singular magnitude and delicacy
ought not to be imposed without the clearest evidence that it is
called for by a majority of citizens, and no satisfactory method is
yet proposed by which the voice of the majority in this case may be
determined, or its influence secured. 'The people of the respective
counties are indeed requested to signify their opinion respecting
the adoption of the Bill to the next Session of Assembly.' But the
representation must be made equal before the voice either of the
Representatives or of the Counties will be that of the people. Our
hope is that neither of the former will, after due consideration,
espouse the dangerous principle of the Bill. Should the event
disappoint us, it will still leave us in full confidence that a
fair appeal to the latter will reverse the sentence against our
liberties."
"15. Because, finally, 'the equal right of every citizen to the
free exercise of his Religion according to the dictates of
conscience' is held by the same tenure with all our other rights.
If we recur to its origin, it is equally the gift of nature; if we
weigh its importance, it cannot Page 397 U. S. 727 be less dear to us; if we consult the Declaration of those
rights which pertain to the good people of Virginia as the 'basis
and foundation of Government,' it is enumerated with equal
solemnity, or rather studied emphasis. Either, then, we must say,
that the will of the Legislature is the only measure of their
authority, and that, in the plenitude of this authority, they may
sweep away all our fundamental rights, or that they are bound to
leave this particular right untouched and sacred. Either we must
say that they may controul the freedom of the press, may abolish
the trial by jury, may swallow up the Executive and Judiciary
Powers of the State; nay, that they may despoil us of our very
right to suffrage, and erect themselves into an independent and
hereditary assembly, or we must say that they have no authority to
enact into law the Bill under consideration. We the subscribers say
that the General Assembly of this Commonwealth have no such
authority. And, that no effort may be omitted on our part against
so dangerous an usurpation, we oppose to it this remonstrance,
earnestly praying, as we are in duty bound, that the Supreme
Lawgiver of the Universe, by illuminating those to whom it is
addressed, may, on the one hand, turn their councils from every act
which would affront his holy prerogative or violate the trust
committed to them, and, on the other, guide them into every measure
which may be worthy of his [blessing, may re]dound to their own
praise, and may establish more firmly the liberties, the
prosperity, and the Happiness of the Commonwealth."
[ Footnote 4/1 ]
N.Y.Real Prop.Tax Law § 420, subd. 1 (Supp. 1969-1970).
[ Footnote 4/2 ]
In the oral argument in McCollum v. Board of Education, 333 U. S. 203 , the
following colloquy took place between MR. JUSTICE BLACK and counsel
John L. Franklin:
"MR. JUSTICE BLACK. Do I understand you to take the position
that, if the State of Illinois wanted to contribute five million
dollars a year to religion, they could do so, so long as they
provided the same to every faith?"
"MR. FRANKLIN. Yes, and the State of Illinois does contribute
five million dollars annually to religious faiths, equally, and
more than five million dollars, and has during its entire
history."
"MR. JUSTICE BLACK. How does it do it?"
"MR. FRANKLIN. By tax exemptions specifically granted to
religious organizations."
"MR. JUSTICE BLACK. Your position is that they could grant five
million dollars a year to religion, if they wanted to, out of the
taxpayer's money, so long as they treated all faiths the same?"
"MR. FRANKLIN. Yes, Your Honor. That is our interpretation of
the meaning of the first clause of the First Amendment."
J. O'Neill, Religion and Education under the Constitution 225
(1949).
[ Footnote 4/3 ] See Appendix I to this dissent, post, p. 397 U. S.
716 .
[ Footnote 4/4 ] See Appendix II to this dissent, post, p. 397 U. S.
719 .
[ Footnote 4/5 ] See H. Eckenrode, Separation of Church and State in
Virginia, c. V (1910).
[ Footnote 4/6 ]
Annals of Cong. 434, 729-1.
[ Footnote 4/7 ] 397
U.S. 664 fn4/1|>N. 1, supra. [ Footnote 4/8 ]
The Brookings Institution, Report on a Survey of Administration
in Iowa: The Revenue System 33 (1933).
[ Footnote 4/9 ]
This inequality, some argue, is pronounced when it comes to aid
to parochial schools, now run mainly by the Catholic Church. See G. Cogdell, What Price Parochiaid? 670 (1970).
[ Footnote 4/10 ]
H.R. Misc. Doc. No. 210, pt. 1, 53d Cong., 2d Sess.,
489-490.
[ Footnote 4/11 ] Id. at 490
[ Footnote 4/12 ]
Fleet, Madison's "Detatched Memoranda," 3 Wm. & Mary Q. (3d
ser.) 534, 551, 555 (1946).
[ Footnote 4/13 ] See Zollmann, Tax Exemptions of American Church
Property, 14 Mich.L.Rev. 646, 655-656 (1916).
The New York Supreme Court in In re Mayor of New York, 11 Johns. 77, 81, said:
"As the church property is not, nor is likely soon to be, either
appropriated to renting or exposed to sale, but is devoted
exclusively to religious purposes, the benefit resulting to it, by
the improvement of Nassau-street, must be small in comparison with
that of other property, and it, therefore, ought not to contribute
in the like proportion. It may be considered, possibly, as
benefited by rendering the access to the churches more convenient,
and the places more pleasant and salubrious by the freer
circulation of the air. This may have some influence on the pew
rents, and the ground may become permanently more valuable. These,
however, appear to be small and remote benefits to property so
circumstanced, and to charge the churches equally with adjoining
private property is unreasonable and extravagant, and, on this
point, the report ought to be sent back to the commissioner for
revisal and correction."
[ Footnote 4/14 ]
U.S. News & World Report, May 4, 1970, p. 34.
[ Footnote 4/15 ]
These total include all types of federal aid -- physical plants,
dormitory construction, laboratories, libraries, lunch programs,
fellowships and scholarships, etc.
Of the total federal outlays for education, only two-fifths are
for programs administered by the Office of Education; other parts
of the Department of HEW account for one-fifth. The rest of the
outlays are distributed among 24 federal departments and agencies,
of which the largest shares are accounted for by the Department of
Defense, the Veterans Administration, the National Science
Foundation, and the Office of Economic Opportunity. U.S. Bureau of
the Budget, Special Analysis, Federal Education Program, 1971
Budget, Special Analysis I, pt. 2, p. 115 (Feb.1970).
[ Footnote 4/16 ]
Fleet, supra, 397
U.S. 664 fn4/12|>n. 12, at 557-558.
[ Footnote 4/17 ]
In 1875, President Grant, in his State of the Union Message,
referred to the vast amounts of untaxed church property:
"In 1850, I believe, the church property of the United States
which paid no tax, municipal or State, amounted to about
$83,000,000. In 1860, the amount had doubled; in 1875, it is about
$1,000,000,000. By 1900, without check, it is safe to say this
property will reach a sum exceeding $3,000,000,000. So vast a sum,
receiving all the protection and benefits of Government without
bearing its proportion of the burdens and expenses of the same,
will not be looked upon acquiescently by those who have to pay the
taxes. In a growing country, where real estate enhances so rapidly
with time, as in the United States, there is scarcely a limit to
the wealth that may be acquired by corporations, religious or
otherwise, if allowed to retain real estate without taxation. The
contemplation of so vast a property as here alluded to, without
taxation, may lead to sequestration, without constitutional
authority and through blood."
"I would suggest the taxation of all property equally, whether
church or corporation, exempting only the last resting place of the
dead and possibly, with proper restrictions, church edifices."
9 Messages and Papers of the Presidents 4288-4289 (1897).
[ Footnote 4/18 ]
Footnote omitted. | The Supreme Court upheld New York's property tax exemption for religious organizations, finding that it did not violate the Establishment Clause of the First Amendment. The Court reasoned that the tax exemption did not establish or support religion but instead ensured the free exercise of religion by relieving religious organizations from the burden of property taxation. The Court also noted that the exemption created only a minimal and remote involvement between church and state, reinforcing the separation between the two. |
Taxes | Commissioner v. Brown | https://supreme.justia.com/cases/federal/us/380/563/ | U.S. Supreme Court Commissioner v. Brown, 380
U.S. 563 (1965) Commissioner of Internal Revenue v.
Brown No. 63 Argued March 3, 1965 Decided April 27,
1965 380
U.S. 563 CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE NINTH
CIRCUIT Syllabus Respondent Brown, members of his family and three others, who
owned substantially all the stock of a lumber milling company, of
which Brown was president, sold their stock to a tax-exempt
charitable organization (Institute) for $1,300,000. Institute paid
$5,000 down from the company's assets. Concomitantly with the
transfer, Institute liquidated the company and leased its assets
for five years to a new corporation (Fortuna), formed and wholly
owned by respondents' attorneys, which agreed to pay Institute 80%
of the operating profits before taxes and depreciation, Institute
to apply 90% of such payments (amounting to 72% of the net profits
of the business) to a $1,300,000 noninterest-bearing note Institute
gave the respondents which was secured by mortgages and assignments
of the assets leased to Fortuna. The entire balance of the note was
payable if payments thereon failed to total $250,000 over any
consecutive two years. The foregoing transaction, consummated in
February, 1953, was effected pursuant to agreement between
respondents, Institute, and other interested parties. Fortuna
operated the business with practically the same personnel
(including Brown as general manager up to his resignation over a
year and a half later) until 1957, when Fortuna's operations ended
with a severe decline in the lumber market. Respondents did not
repossess under their mortgages, but agreed that the properties be
sold, with Institute receiving 10% of the $300,000 proceeds and the
respondents the balance. In their federal income tax returns,
respondents showed the payments remitted to them out of the profits
of the business as capital gains. Petitioner asserted that such
payments were taxable as ordinary income under the Internal Revenue
Code. The Tax Court upheld respondents' position, concluding that
the transfer to the Institute of respondents' stock was a bona
fide sale. The Court of Appeals affirmed. Held: 1. The transaction constituted a bona fide sale under
local law, the Institute having acquired title to the company
stock, and, by Page 380 U. S. 564 liquidation, to all the assets in return for its promise to pay
over money from the operating profits. P. 380 U. S.
569 .
2. The transaction also constituted a sale within the meaning of
§1222 (3) of the Internal Revenue Code, defining a capital gain as
gain from the sale of a capital asset. Pp. 380 U. S.
570 -573.
(a) The fact that payment was made from business earnings did
not divest the transaction of its status as a sale, which is a
transfer of property for a fixed monetary price or its equivalent.
Pp. 380 U. S.
570 -572.
(b) The sales price in the arm's length transaction between
respondents and the Institute, as the Tax Court found, was within a
reasonable range in light of the company's earnings history and the
adjusted net worth of its assets. P. 380 U. S.
572 .
(c) There had been an appreciation in value of the company's
property accruing over a period of years which respondents could
have realized at capital gains rates on a cash sale of their stock.
Pp. 380 U. S.
572 -573.
3. It does not follow from the fact that there was no
risk-shifting from seller to buyer that the transaction constituted
not a sale, but a device to collect future earnings at capital
gains rates for which the price set was excessive. Pp. 380 U. S.
573 -577.
(a) The Tax Court did not find the price excessive. P. 380 U. S.
573 .
(b) The petitioner offered no evidence to show that an excessive
price resulted from the lack of risk-shifting. Pp. 380 U. S.
573 -574.
(c) Accelerated payment of the purchase price resulted from the
deductibility of the rents payable by Fortuna which were not
taxable to the Institute, thus constituting an advantage to the
seller desiring the balance of the purchase price paid off rapidly.
P. 380 U. S.
574 .
(d) Risk-shifting has not previously been deemed essential to
the concept of sale for tax purposes. Pp. 380 U. S.
574 -575.
(e) The transaction here is not analogous to cases involving a
transfer of mineral deposits in exchange for a royalty from the
minerals produced, the mineral-extracting business being viewed as
an income-producing operation, and not as a conversion of capital
investment. Thomas v. Perkins, 301 U.
S. 655 , distinguished. Pp. 380 U. S.
575 -577.
4. The Treasury Department itself has noted the availability of
capital gains treatment on the sale of capital assets where the
seller Page 380 U. S. 565 retained an interest in the income produced by the assets. Pp. 380 U. S.
578 -579.
325 F.2d 313 affirmed.
MR. JUSTICE WHITE delivered the opinion of the Court.
In 1950, when Congress addressed itself to the problem of the
direct or indirect acquisition and operation of going businesses by
charities or other tax-exempt entities, it was recognized that, in
many of the typical sale and lease-back transactions, the exempt
organization was trading on, and perhaps selling part of, its
exemption. H.R.Rep. No. 2319, 81st Cong., 2d Sess., pp. 38-39;
S.Rep. No. 2375, 81st Cong., 2d Sess., pp. 31-32. For this and
other reasons, the Internal Revenue Code was accordingly amended in
several respects, of principal importance for our purposes by
taxing as "unrelated business income" the profits earned by a
charity in the operation of a business, as well as the income from
long-term leases of the business. [ Footnote 1 ] The short-term lease, however, of five years
or Page 380 U. S. 566 less, was not affected, and this fact has moulded many of the
transactions in this field since that time, including the one
involved in this case. [ Footnote
2 ]
The Commissioner, however, in 1954, announced that, when an
exempt organization purchased a business and leased it for five
years to another corporation, not investing its own funds but
paying off the purchase price with rental income, the purchasing
organization was in danger of losing its exemption; that, in any
event, the rental income would be taxable income; that the charity
might be unreasonably accumulating income; and, finally and most
important for this case, that the payments received by the seller
would not be entitled to capital gains treatment. Rev.Rul. 54-420,
1954-2 Cum.Bull. 128.
This case is one of the many in the course of which the
Commissioner has questioned the sale of a business concern to an
exempt organization. [ Footnote
3 ] The basic facts are undisputed. Page 380 U. S. 567 Clay Brown, members of his family and three other persons owned
substantially all of the stock in Clay Brown & Company, with
sawmills and lumber interests near Fortuna, California. Clay Brown,
the president of the company and spokesman for the group, was
approached by a representative of California Institute for Cancer
Research in 1952, and, after considerable negotiation, the
stockholders agreed to sell their stock to the Institute for
$1,300,000, payable $5,000 down from the assets of the company and
the balance within 10 years from the earnings of the company's
assets. It was provided that, simultaneously with the transfer of
the stock, the Institute would liquidate the company and lease its
assets for five years to a new corporation, Fortuna Sawmills, Inc.,
formed and wholly owned by the attorneys for the sellers. [ Footnote 4 ] Fortuna would pay to the
Institute 80% of its operating profit without allowance for
depreciation or taxes, and 90% of such payments would be paid over
by the Institute to the selling stockholders to apply on the
$1,300,000 note. This note was noninterest bearing, the Institute
had no obligation to pay it except from the rental income, and it
was secured by mortgages and assignments of the assets transferred
or leased to Fortuna. If the payments on the note failed to total
$250,000 over any two consecutive years, the sellers could declare
the entire balance of the note due and payable. The sellers were
neither stockholders nor directors of Fortuna, but it was provided
that Clay Brown was to have a management contract Page 380 U. S. 568 with Fortuna at an annual salary and the right to name any
successor manager if he himself resigned. [ Footnote 5 ]
The transaction was closed on February 4, 1953. Fortuna
immediately took over operations of the business under its lease,
on the same premises and with practically the same personnel which
had been employed by Clay Brown & Company. Effective October
31, 1954, Clay Brown resigned as general manager of Fortuna and
waived his right to name his successor. In 1957, because of a
rapidly declining lumber market, Fortuna suffered severe reverses,
and its operations were terminated. Respondent sellers did not
repossess the properties under their mortgages, but agreed they
should be sold by the Institute, with the latter retaining 10% of
the proceeds. Accordingly, the property was sold by the Institute
for $300,000. The payments on the note from rentals and from the
sale of the properties totaled $936,131.85. Respondents returned
the payments received from rentals as the gain from the sale of
capital assets. The Commissioner, however, asserted the payments
were taxable as ordinary income, and were not capital gain within
the meaning of I.R.C.1939, § 117(a)(4) and I.R.C.1954, § 1222(3).
These sections provide that "[t]he term long-term capital gain'
means gain from the sale or exchange of a capital asset held for
more than 6 months. . . ." In the Tax Court, the Commissioner asserted that the transaction
was a sham, and that, in any event, respondents retained such an
economic interest in and control over the property sold that the
transaction could not be treated as a sale resulting in a long-term
capital gain. A divided Tax Court, 37 T.C. 461, found that there
had Page 380 U. S. 569 been considerable good faith bargaining at arm's length between
the Brown family and the Institute, that the price agreed upon was
within a reasonable range in the light of the earnings history of
the corporation and the adjusted net worth of its assets, that the
primary motivation for the Institute was the prospect of ending up
with the assets of the business free and clear after the purchase
price had been fully paid, which would then permit the Institute to
convert the property and the money for use in cancer research, and
that there had been a real change of economic benefit in the
transaction. [ Footnote 6 ] Its
conclusion was that the transfer of respondents' stock in Clay
Brown & Company to the Institute was a bona fide sale
arrived at in an arm's length transaction, and that the amounts
received by respondents were proceeds from the sale of stock, and
entitled to long-term capital gains treatment under the Internal
Revenue Code. The Court of Appeals affirmed, 325 F.2d 313, and we
granted certiorari, 377 U.S. 962.
Having abandoned in the Court of Appeals the argument that this
transaction was a sham, the Commissioner now admits that there was
real substance in what occurred between the Institute and the Brown
family. The transaction was a sale under local law. The Institute
acquired title to the stock of Clay Brown & Company and, by
liquidation, to all of the assets of that company, in return for
its promise to pay over money from the operating profits of the
company. If the stipulated price was paid, the Brown family would
forever lose all rights to the income and properties of the
company. Prior to the transfer, these respondents had access to all
of the income of the company; after the transfer, 28% of the income
remained with Fortuna and the Institute. Respondents Page 380 U. S. 570 had no interest in the Institute, nor were they stockholders or
directors of the operating company. Any rights to control the
management were limited to the management contract between Clay
Brown and Fortuna, which was relinquished in 1954.
Whatever substance the transaction might have had, however, the
Commissioner claims that it did not have the substance of a sale
within the meaning of § 1222(3). His argument is that, since the
Institute invested nothing, assumed no independent liability for
the purchase price, and promised only to pay over a percentage of
the earnings of the company, the entire risk of the transaction
remained on the sellers. Apparently, to qualify as a sale, a
transfer of property for money or the promise of money must be to a
financially responsible buyer who undertakes to pay the purchase
price other than from the earnings or the assets themselves, or
there must be a substantial down payment which shifts at least part
of the risk to the buyer and furnishes some cushion against loss to
the seller.
To say that there is no sale because there is no risk-shifting,
and that there is no risk-shifting because the price to be paid is
payable only from the income produced by the business sold, is very
little different from saying that, because business earnings are
usually taxable as ordinary income, they are subject to the same
tax when paid over as the purchase price of property. This argument
has rationality, but it places an unwarranted construction on the
term "sale," is contrary to the policy of the capital gains
provisions of the Internal Revenue Code, and has no support in the
cases. We reject it.
"Capital gain" and "capital asset" are creatures of the tax law,
and the Court has been inclined to give these terms a narrow,
rather than a broad, construction. Corn Products Co. v.
Commissioner, 350 U. S. 46 , 350 U. S. 52 . A
"sale," however, is a common event in the non-tax world, and Page 380 U. S. 571 since it is used in the Code without limiting definition and
without legislative history indicating a contrary result, its
common and ordinary meaning should at least be persuasive of its
meaning as used in the Internal Revenue Code.
"Generally speaking, the language in the Revenue Act, just as in
any statute, is to be given its ordinary meaning, and the words
'sale' and 'exchange' are not to be read any differently." Helvering v. William Flaccus Oak Leather Co., 313 U. S. 247 , 313 U. S. 249 ; Hanover Bank v. Commissioner, 369 U.
S. 672 , 369 U. S. 687 ; Commissioner v. Korell, 339 U. S. 619 , 339 U. S.
627 -628; Crane v. Commissioner, 331 U. S.
1 , 331 U. S. 6 ; Lang v. Commissioner, 289 U. S. 109 , 289 U. S. 111 ; Old Colony R. Co. v. Commissioner, 284 U.
S. 552 , 284 U. S.
560 .
"A sale, in the ordinary sense of the word, is a transfer of
property for a fixed price in money or its equivalent," Iowa v.
McFarland, 110 U. S. 471 , 110 U. S. 478 ;
it is a contract "to pass rights of property for money -- which the
buyer pays or promises to pay to the seller . . . ," Williamson v.
Berry , 8 How. 495, 49 U. S. 544 . Compare the definition of "sale" in § 1(2) of the Uniform
Sales Act and in § 2-106(1) of the Uniform Commercial Code. The
transaction which occurred in this case was obviously a transfer of
property for a fixed price payable in money.
Unquestionably, the courts, in interpreting a statute, have
some
"scope for adopting a restricted, rather than a literal or
usual, meaning of its words where acceptance of that meaning would
lead to absurd results . . . or would thwart the obvious purpose of
the statute." Helvering v. Hammel, 311 U. S. 504 , 311 U. S.
510 -511; cf. Commissioner v. Gillette Motor
Transport, Inc., 364 U. S. 130 , 364 U. S. 134 ;
and Commissioner v. P. G. Lake, Inc., 356 U.
S. 260 , 356 U. S. 265 .
But it is otherwise "where no such consequences [would] follow and
where . . . it appears to be consonant with the purposes of the
Act. . . ." Helvering v. Hammel, supra, at 311 U. S. 511 ; Takao Ozawa v. United States, 260 U.
S. 178 , 260 U. S. 194 .
We find nothing in this case indicating that the Tax Court or
the Page 380 U. S. 572 Court of Appeals construed the term "sale" too broadly or in a
manner contrary to the purpose or policy of capital gains
provisions of the Code.
Congress intended to afford capital gains treatment only in
situations
"typically involving the realization of appreciation in value
accrued over a substantial period of time, and thus to ameliorate
the hardship of taxation of the entire gain in one year." Commissioner v. Gillette Motor Transport, Inc., 364 U. S. 130 , 364 U. S. 134 .
It was to "relieve the taxpayer from . . . excessive tax burdens on
gains resulting from a conversion of capital investments" that
capital gains were taxed differently by Congress. Burnet v.
Harmel, 287 U. S. 103 , 287 U. S. 106 ; Commissioner v. P. G. Lake, Inc., 356 U.
S. 260 , 356 U. S.
265 .
As of January 31, 1953, the adjusted net worth of Clay Brown
& Company as revealed by its books was $619,457.63. This figure
included accumulated earnings of $448,471.63, paid in surplus,
capital stock, and notes payable to the Brown family. The appraised
value as of that date, however, relied upon by the Institute and
the sellers, was.$1,064,877, without figuring interest on deferred
balances. Under a deferred payment plan with a 6% interest figure,
the sale value was placed at $1,301,989. The Tax Court found the
sale price agreed upon was arrived at in an arm's length
transaction, was the result of real negotiating, and was "within a
reasonable range in light of the earnings history of the
corporation and the adjusted net worth of the corporate assets." 37
T.C. 461, 486.
Obviously, on these facts, there had been an appreciation in
value accruing over a period of years, Commissioner v. Gillette
Motor Transport, Inc., supra, and an "increase in the value of
the income-producing property." Commissioner v. P. G. Lake,
Inc., supra, at 356 U. S. 266 .
This increase taxpayers were entitled to realize at capital gains
rates on a cash sale of their stock; and likewise if they sold on a
deferred payment Page 380 U. S. 573 plan taking an installment note and a mortgage as security.
Further, if the down payment was less than 30% (the 1954 Code
requires no down payment at all) and the transaction otherwise
satisfied I.R.C.1939, § 44, the gain itself could be reported on
the installment basis.
In the actual transaction, the stock was transferred for a price
payable on the installment basis, but payable from the earnings of
the company. Eventually, $936,131.85 was realized by respondents.
This transaction, we think, is a sale, and so treating it is wholly
consistent with the purposes of the Code to allow capital gains
treatment for realization upon the enhanced value of a capital
asset.
The Commissioner, however, embellishes his risk-shifting
argument. Purporting to probe the economic realities of the
transaction, he reasons that, if the seller continues to bear all
the risk and the buyer none, the seller must be collecting a price
for his risk-bearing in the form of an interest in future earnings
over and above what would be a fair market value of the property.
Since the seller bears the risk, the so-called purchase price must
be excessive, and must be simply a device to collect future
earnings at capital gains rates.
We would hesitate to discount unduly the power of pure reason,
and the argument is not without force. But it does present
difficulties. In the first place, it denies what the tax court
expressly found -- that the price paid was within reasonable limits
based on the earnings and net worth of the company; and there is
evidence in the record to support this finding. We do not have,
therefore, a case where the price has been found excessive.
Secondly, if an excessive price is such an inevitable result of
the lack of risk-shifting, it would seem that it would not be an
impossible task for the Commissioner to demonstrate the fact.
However, in this case, he offered no evidence whatsoever to this
effect; and in a good many other cases involving similar
transactions, in some of which Page 380 U. S. 574 the reasonableness of the price paid by a charity was actually
contested, the Tax Court has found the sale price to be within
reasonable limits, as it did in this case. [ Footnote 7 ]
Thirdly, the Commissioner ignores as well the fact that, if the
rents payable by Fortuna were deductible by it, and not taxable to
the Institute, the Institute could pay off the purchase price at a
considerably faster rate than the ordinary corporate buyer subject
to income taxes, a matter of considerable importance to a seller
who wants the balance of his purchase price paid as rapidly as he
can get it. The fact is that, by April 30, 1955, a little over two
years after closing this transaction, $412,595.77 had been paid on
the note, and, within another year, the sellers had collected
another $238,498.80, for a total of $651,094.57.
Furthermore, risk-shifting of the kind insisted on by the
Commissioner has not heretofore been considered an essential
ingredient of a sale for tax purposes. In LeTulle v.
Scofield, 308 U. S. 415 , one
corporation transferred properties to another for cash and bonds
secured by the properties transferred. The Court held that there
was
"a sale or exchange upon which gain or loss must be reckoned in
accordance with the provisions of the revenue act dealing with the
recognition of gain or loss upon a sale or exchange," id. at 308 U. S. 421 ,
since the seller retained only Page 380 U. S. 575 a creditor's interest, rather than a proprietary one.
"[T]hat the bonds were secured solely by the assets transferred
and that upon default, the bondholder would retake only the
property sold [did not change] his status from that of a creditor
to one having a proprietary stake." Ibid. Compare Marr v. United States, 268 U. S. 536 . To
require a sale for tax purposes to be to a financially responsible
buyer who undertakes to pay the purchase price from sources other
than the earnings of the assets sold or to make a substantial down
payment seems to us at odds with commercial practice and common
understanding of what constitutes a sale. The term "sale" is used a
great many times in the Internal Revenue Code, and a wide variety
of tax results hinge on the occurrence of a "sale." To accept the
Commissioner's definition of sale would have wide ramifications
which we are not prepared to visit upon taxpayers absent
congressional guidance in this direction.
The Commissioner relies heavily upon the cases involving a
transfer of mineral interests, the transferor receiving a bonus and
retaining a royalty or other interest in the mineral production. Burnet v. Harmel, 287 U. S. 103 ; Palmer v. Bender, 287 U. S. 551 ; Thomas v. Perkins, 301 U. S. 655 ; Kirby Petroleum Co. v. Commissioner, 326 U.
S. 599 ; Burton-Sutton Oil Co. v. Commissioner, 328 U. S. 25 ; Commissioner v. Southwest Exploration Co., 350 U.
S. 308 . Thomas v. Perkins is deemed
particularly pertinent. There, a leasehold interest was transferred
for a sum certain payable in oil as produced and it was held that
the amounts paid to the transferor were not includable in the
income of the transferee, but were income of the transferor. We do
not, however, deem either Thomas v. Perkins or the other
cases controlling.
First, "Congress . . . has recognized the peculiar character of
the business of extracting natural resources," Burton-Sutton
Oil Co. v. Commissioner, 328 U. S. 25 , 328 U. S.
33 ; Page 380 U. S. 576 see Stratton's Independence Ltd. v. Howbert, 231 U. S. 399 , 231 U. S.
413 -414, which is viewed as an income-producing
operation, and not as a conversion of capital investment, Anderson v. Helvering, 310 U. S. 404 at 301 U. S. 407 ,
but one which has its own built-in method of allowing through
depletion "a tax-free return of the capital consumed in the
production of gross income through severance," Anderson v.
Helvering, supra, at 310 U. S. 408 ,
which is independent of cost and depends solely on production, Burton-Sutton, at 328 U. S. 34 . Percentage depletion allows an arbitrary
deduction to compensate for exhaustion of the asset, regardless of
cost incurred or any investment which the taxpayer may have made.
The Commissioner, however, would assess to respondents as ordinary
income the entire amount of all rental payments made by the
Institute, regardless of the accumulated values in the corporation
which the payments reflected and without regard for the present
policy of the tax law to allow the taxpayer to realize on
appreciated values at the capital gains rates.
Second, Thomas v. Perkins does not have unlimited
sweep. The Court in Anderson v. Helvering, supra, pointed
out that it was still possible for the owner of a working interest
to divest himself finally and completely of his mineral interest by
effecting a sale. In that case, the owner of royalty interest, fee
interest and deferred oil payments contracted to convey them for
$160,000 payable $50,000 down and the balance from one-half the
proceeds which might be derived from the oil and gas produced and
from the sale of the fee title to any of the lands conveyed. The
Court refused to extend Thomas v. Perkins beyond the oil
payment transaction involved in that case. Since the transferor in Anderson had provided for payment of the purchase price
from the sale of fee interest as well as from the production of oil
and gas,
"the reservation of this additional type of security for the
deferred payments serve[d] to distinguish this case from Page 380 U. S. 577 Thomas v. Perkins. It is similar to the reservation in
a lease of oil payment rights together with a personal guarantee by
the lessee that such payments shall at all events equal the
specified sum." Anderson v. Helvering, supra, at 310 U. S.
412 -413. Hence, there was held to be an outright sale of
the properties, all of the oil income therefrom being taxable to
the transferee notwithstanding the fact of payment of part of it to
the seller. The respondents in this case, of course, not only had
rights against income, but, if the income failed to amount to
$250,000 in any two consecutive years, the entire amount could be
declared due, which was secured by a lien on the real and personal
properties of the company. [ Footnote 8 ] Page 380 U. S. 578 There is another reason for us not to disturb the ruling of the
Tax Court and the Court of Appeals. In 1963, the Treasury
Department, in the course of hearings before the Congress, noted
the availability of capital gains treatment on the sale of capital
assets even though the seller retained an interest in the income
produced by the assets. The Department proposed a change in the law
which would have taxed as ordinary income the payments on the sale
of a capital asset which were deferred over more than five years
and were contingent on future income. Payments, though contingent
on income, required to be made within five years would not have
lost capital gains status nor would payments not contingent on
income even though accompanied by payments which were. Hearings
before the House Committee on Ways and Means, 88th Cong., 1st
Sess., Feb. 6, 7, 8 and 18, 1963, Pt. I (rev.), on the President's
1963 Tax Message, pp. 154-156.
Congress did not adopt the suggested change, [ Footnote 9 ] but it is significant for our
purposes that the proposed amendment did not deny the fact or
occurrence of a sale, but would have taxed as ordinary income those
income-contingent Page 380 U. S. 579 payments deferred for more than five years. If a purchaser could
pay the purchase price out of a earnings within five years the
seller would have capital gain, rather than ordinary income. The
approach was consistent with allowing appreciated values to be
treated as capital gain but with appropriate safeguards against
reserving additional rights to future income. In comparison, the
Commissioner's position here is a clear case of "overkill" if aimed
at preventing the involvement of tax-exempt entities in the
purchase and operation of business enterprises. There are more
precise approaches to this problem as well as to the question of
the possibly excessive price paid by the charity or foundation. And
if the Commissioner's approach is intended as a limitation upon the
tax treatment of sales generally, it represents a considerable
invasion of current capital gains policy, a matter which we think
is the business of Congress, not ours.
The problems involved in the purchase of a going business by a
tax-exempt organization have been considered and dealt with by the
Congress. Likewise, it was given its attention to various kinds of
transactions involving the payment of the agreed purchase price for
property from the future earnings of the property itself. In both
situations, it has responded, if at all, with precise provisions of
narrow application. We consequently deem it wise to "leave to the
Congress the fashioning of a rule which, in any event, must have
wide ramifications." American Automobile Ass'n v. United
States, 367 U. S. 687 , 367 U. S.
697 . Affirmed. [ Footnote 1 ]
The Revenue Act of 1950, c. 994, 64 Stat. 906, amended § 101 of
the Internal Revenue Code of 1939 and added §§ 421 through 424,
3813 and 3814. These sections are now §§ 501 through 504 and 511
through 515 of the Internal Revenue Code of 1954.
[ Footnote 2 ]
The sale and leaseback transaction has been much examined.
Lanning, Tax Erosion and the "Bootstrap Sale" of a Business-I, 108
U.Pa.L.Rev. 623 (1960); Moore and Dohan, Sales, Churches, and
Monkeyshines, 11 Tax L.Rev. 87 (1956); MacCracken, Selling a
Business to a Charitable Foundation, 1954 U.So.Cal.Tax Inst. 205;
Comment, The Three-Party Sale and Lease-Back, 61 Mich.L.Rev. 1140
(1963); Alexander, The Use of Foundations in Business, 15 N.Y.U.Tax
Inst. 591 (1957); New Developments in Tax-exempt Institutions, 19
J.Taxation 302(1963). See also Stern, The Great Treasury
Raid, p. 245 (1964).
[ Footnote 3 ] Union Bank v. United States, 285 F.2d 126, 152 Ct.Cl.
426; Commissioner v. Johnson, 267 F.2d 382, aff'g
Estate of Howes v. Commissioner, 30 T.C. 909; Kolkey v.
Commissioner, 254 F.2d 51; Knapp Bros. Shoe Mfg. Corp. v.
United States, 142 F. Supp. 899, 135 Ct.Cl. 797; Oscar C.
Stahl, P-H 1963 T.C.Mem.Dec. � 63,201; Isis Windows,
Inc., P-H 1963 T.C.Mem.Dec. � 63,176; Ralph M.
Singer, P-H 1963 T.C.Mem.Dec. � 63,158; Brekke v.
Commissioner, 40 T.C. 789; Royal Farms Dairy Co. v.
Commissioner, 40 T.C. 172; Anderson Dairy, Inc. v.
Commissioner, 39 T.C. 1027; Estate of Hawthorne, P-H
1960 T.C.Mem.Dec. � 60,146; Estate of Hawley, P-H 1961
T.C.Mem.Dec. � 61,038; Ohio Furnace Co. v. Commissioner, 25 T.C. 179; Truschel v. Commissioner, 29 T.C. 433. Some
of these cases are now pending on appeal in one or more of the
courts of appeals.
[ Footnote 4 ]
The net current assets subject to liabilities were sold by the
Institute to Fortuna for a promissory note which was assigned to
sellers. The lease covered the remaining assets of Clay Brown &
Company. Fortuna was capitalized at $25,000, its capital being paid
in by its stockholders from their own funds.
[ Footnote 5 ]
Clay Brown's personal liability for some of the indebtedness of
Clay Brown & Company, assumed by Fortuna, was continued. He
also personally guaranteed some additional indebtedness incurred by
Fortuna.
[ Footnote 6 ]
The Tax Court found nothing to indicate that the arrangement
between the stockholders and the Institute contemplated the Brown
family's being free at any time to take back and operate the
business.
[ Footnote 7 ]
In all but four of the cases listed in note 3 supra, there was a finding that the
price was within permissible limits. The exceptions are: Kolkey
v. Commissioner, where the price was considered grossly
excessive and the transaction a sham; Union Bank v. United
States, in which the Court of Claims referred to the evidence
of excessive price but nevertheless held a sale had taken place; Brekke v. Commissioner, where the seller was not before
the court, the price was said to be twice the fair market value,
and the issue was the deductibility of the rent paid by the
operating company to the exempt organization; and Estate of
Hawley, in which there was no express treatment of the sale
price, but the transaction was found to be a bona fide sale.
[ Footnote 8 ]
Respondents place considerable reliance on the rule applicable
where patents are sold or assigned, the seller or assignor
reserving an income interest. In Rev.Rul. 58-353, 1958-2 Cum.Bull.
408, the Service announced its acquiescence in various Tax Court
cases holding that the consideration received by the owner of a
patent for the assignment of a patent or the granting of an
exclusive license to such patent may be treated as the proceeds of
a sale of property for income tax purposes, even though the
consideration received by the transferor is measured by production,
use, or sale of the patented article. The Government now says that
the Revenue Ruling amounts only to a decision to cease litigating
the question at least temporarily, and that the cases on which the
rule is based are wrong in principle and inconsistent with the
cases dealing with the taxation of mineral interests. We note,
however, that in Rev.Rul. 60-226, 1960-1 Cum.Bull. 26, the Service
extended the same treatment to the copyright field. Furthermore,
the Secretary of the Treasury in 1963 recognized the present law to
the that "the sale of a patent by the inventor may be treated as
the sale of a capital asset," Hearings before the House Committee
on Ways and Means, 88th Cong., 1st Sess., Feb. 6, 7, 8 and 18,
1963, Pt. I (rev.), on the President's 1963 Tax Message, p. 150,
and the Congress failed to enact the changes in the law which the
Department recommended.
These developments in the patent field obviously do not help the
position of the Commissioner. Nor does I.R.C.1954, § 1235, which
expressly permits specified patent sales to be treated as sales of
capital assets entitled to capital gains treatment. We need not,
however, decide here whether the extraction and patent cases are
irreconcilable or whether, instead, each situation has its own
peculiar characteristics justifying discrete treatment under the
sale and exchange language of § 1222. Whether the patent cases are
correct or not, absent § 1235, the fact remains that this case
involves the transfer of corporate stock which has substantially
appreciated in value and a purchase price payable from income which
has been held to reflect the fair market value of the assets which
the stock represents.
[ Footnote 9 ]
It did, however, accept and enact another suggestion made by the
Treasury Department. Section 483, which was added to the Code,
provided for treating a part of the purchase price as interest in
installment sales transactions where no interest was specified. The
provision was to apply as well when the payments provided for were
indefinite as to their size, as for example "where the payments are
in part at least dependent upon future income derived from the
property." S.Rep. No. 830, 88th Cong., 2d Sess., p. 103, U.S.Code
Congressional and Administrative News 1964, p. 1776. This section
would apparently now apply to a transaction such as occurred in
this case.
MR. JUSTICE HARLAN, concurring.
Were it not for the tax laws, the respondents' transaction with
the Institute would make no sense, except as one arising from a
charitable impulse. However, the tax laws exist as an economic
reality in the businessman's world, much like the existence of a
competitor. Businessmen Page 380 U. S. 580 plan their affairs around both, and a tax dollar is just as real
as one derived from any other source. The Code gives the Institute
a tax exemption which makes it capable of taking a greater
after-tax return from a business than could a non-tax-exempt
individual or corporation. Respondents traded a residual interest
in their business for a faster payout apparently made possible by
the Institute's exemption. The respondents gave something up; they
received something substantially different in return. If words are
to have meaning, there was a "sale or exchange."
Obviously the Institute traded on its tax exemption. The
Government would deny that there was an exchange, essentially on
the theory that the Institute did not put anything at risk; since
its exemption is unlimited, like the magic purse that always
contains another penny, the Institute gave up nothing by trading on
it.
One may observe preliminarily that the Government's remedy for
the so-called "bootstrap" sale -- defining sale or exchange so as
to require the shifting of some business risks -- would accomplish
little by way of closing off such sales in the future. It would be
neither difficult nor burdensome for future users of the bootstrap
technique to arrange for some shift of risks. If such sales are
considered a serious abuse, ineffective judicial correctives will
only postpone the day when Congress is moved to deal with the
problem comprehensively. Furthermore, one may ask why, if the
Government does not like the tax consequences of such sales, the
proper course is not to attack the exemption, rather than to deny
the existence of a "real" sale or exchange.
The force underlying the Government's position is that the
respondents did clearly retain some risk-bearing interest in the
business. Instead of leaping from this premise to the conclusion
that there was no sale or exchange, the Government might more
profitably have Page 380 U. S. 581 broken the transaction into components and attempted to
distinguish between the interest which respondents retained and the
interest which they exchanged. The worth of a business depends upon
its ability to produce income over time. What respondents gave up
was not the entire business, but only their interest in the
business' ability to produce income in excess of that which was
necessary to pay them off under the terms of the transaction. The
value of such a residual interest is a function of the risk element
of the business and the amount of income it is capable of producing
per year, and will necessarily be substantially less than the value
of the total business. Had the Government argued that it was that
interest which respondents exchanged, and only to that extent
should they have received capital gains treatment, we would perhaps
have had a different case.
I mean neither to accept nor reject this approach, or any other
which falls short of the all-or-nothing theory specifically argued
by the petitioner, specifically opposed by the respondents, and
accepted by the Court as the premise for its decision. On a highly
complex issue with as wide ramifications as the one before us, it
is vitally important to have had the illumination provided by
briefing and argument directly on point before any particular path
is irrevocably taken. Where the definition of "sale or exchange" is
concerned, the Court can afford to proceed slowly and by stages.
The illumination which has been provided in the present case
convinces me that the position taken by the Government is unsound,
and does not warrant reversal of the judgment below. Therefore, I
concur in the judgment to affirm.
MR. JUSTICE GOLDBERG, with whom THE CHIEF JUSTICE and MR.
JUSTICE BLACK join, dissenting.
The essential facts of this case, which are undisputed,
illuminate the basic nature of the transaction at issue. Page 380 U. S. 582 Respondents conveyed their stock in Clay Brown & Co., a
corporation owned almost entirely by Clay Brown and the members of
his immediate family, to the California Institute for Cancer
Research, a tax-exempt foundation. The Institute liquidated the
corporation and transferred its assets under a five-year lease to a
new corporation, Fortuna, which was managed by respondent Clay
Brown, and the shares of which were in the name of Clay Brown's
attorneys, who also served as Fortuna's directors. The business
thus continued under a new name with no essential change in control
of its operations. Fortuna agreed to pay 80% of its pretax profits
to the Institute as rent under the lease, and the Institute agreed
to pay 90% of this amount to respondents in payment for their
shares until the respondents received $1,300,000 at which time
their interest would terminate and the Institute would own the
complete beneficial interest, as well as all legal interest, in the
business. If remittances to respondents were less than $250,000 in
any two consecutive years or any other provision in the agreements
was violated, they could recover the property. The Institute had no
personal liability. In essence, respondents conveyed their interest
in the business to the Institute in return for 72% of the profits
of the business and the right to recover the business assets if
payments fell behind schedule.
At first glance, it might appear odd that the sellers would
enter into this transaction, for, prior to the sale, they had a
right to 100% of the corporation's income, but, after the sale,
they had a right to only 72% of that income and would lose the
business after 10 years, to boot. This transaction, however,
afforded the sellers several advantages. The principal advantage
sought by the sellers was capital gain, rather than ordinary
income, treatment for that share of the business profits which they
received. Further, because of the Tax Code's charitable exemption
[ Footnote 2/1 ] Page 380 U. S. 583 and the lease arrangement with Fortuna, [ Footnote 2/2 ] the Institute believed that neither it nor
Fortuna would have to pay income tax on the earnings of the
business. Thus, the sellers would receive free of corporate
taxation, and subject only to personal taxation at capital gains
rates, 72% of the business earnings until they were paid
$1,300,000. Without the sale, they would receive only 48% of the
business earnings, the rest going to the Government in corporate
taxes, and this 48% would be subject to personal taxation at
ordinary rates. In effect, the Institute sold the respondents the
use of its tax exemption, enabling the respondents to collect
$1,300,000 from the business more quickly than they otherwise
could, and to pay taxes on this amount at capital gains rates. In
return, the Institute received a nominal amount of the profits
while the $1,300,000 was being paid, and it was to receive the
whole business after this debt had been paid off. In any realistic
sense, the Government's grant of a tax exemption was used by the
Institute as part of an arrangement that allowed it to buy a
business that, in fact, cost it nothing. I cannot believe that
Congress intended such a result.
The Court today legitimates this bootstrap transaction and
permits respondents the tax advantage which the parties sought. The
fact that respondent Brown, as a Page 380 U. S. 584 result of the Court's holding, escapes payment of about $60,000
in taxes may not seem intrinsically important -- although every
failure to pay the proper amount of taxes under a progressive
income tax system impairs the integrity of that system. But this
case in fact has very broad implications. We are told by the
parties and by interested amici that this is a test case.
The outcome of this case will determine whether this bootstrap
scheme for the conversion of ordinary income into capital gain,
which has already been employed on a number of occasions, will
become even more widespread. [ Footnote
2/3 ] It is quite clear that the Court's decision approving this
tax device will give additional momentum to its speedy
proliferation. In my view, Congress did not sanction the use of
this scheme under the present revenue laws to obtain the tax
advantages which the Court authorizes. Moreover, I believe that the
Court's holding not only deviates from the intent of Congress, but
also departs from this Court's prior decisions.
The purpose of the capital gains provisions of the Internal
Revenue Code of 1954, § 1201 et seq., is to prevent gains
which accrue over a long period of time from being taxed in the
year of their realization through a sale at high rates resulting
from their inclusion in the higher tax brackets. Burnet v.
Harmel, 287 U. S. 103 , 287 U. S. 106 .
These provisions are not designed, however, to allow capital gains
treatment for the recurrent receipt of commercial or business
income. In light of these purposes, this Court has held that a
"sale" for capital gains purposes is not produced by the mere
transfer of legal title. Burnet v. Harmel, supra; Palmer v.
Bender, 287 U. S. 551 .
Rather at the very least, there must be a meaningful economic
transfer in addition to a change in legal title. See Corliss v.
Bowers, 281 U. S. 376 .
Thus, the question posed here is not whether this transaction
constitutes a sale within the Page 380 U. S. 585 terms of the Uniform Commercial Code or the Uniform Sales Act --
we may assume it does -- but, rather, the question is whether at
the time legal title was transferred, there was also an economic
transfer sufficient to convert ordinary income into capital gain by
treating this transaction as a "sale" within the terms of I.R.C. §
1222(3).
In dealing with what constitutes a sale for capital gains
purposes, this Court has been careful to look through formal legal
arrangements to the underlying economic realities. Income produced
in the mineral extraction business, which "resemble[s] a
manufacturing business carried on by the use of the soil," Burnet v. Harmel, supra, at 287 U. S. 107 ,
is taxed to the person who retains an economic interest in the oil.
Thus, while an outright sale of mineral interests qualifies for
capital gains treatment, a purported sale of mineral interests in
exchange for a royalty from the minerals produced is treated only
as a transfer with a retained economic interest, and the royalty
payments are fully taxable as ordinary income. Burnet v.
Harmel, supra. See Palmer v. Bender, supra. In Thomas v. Perkins, 301 U. S. 655 , an
owner of oil interests transferred them in return for an "oil
production payment," an amount which is payable only out of the
proceeds of later commercial sales of the oil transferred. The
Court held that this transfer, which constituted a sale under state
law, did not constitute a sale for tax purposes because there was
not a sufficient shift of economic risk. The transferor would be
paid only if oil was later produced and sold; if it was not
produced, he would not be paid. The risks run by the transferor of
making or losing money from the oil were shifted so slightly by the
transfer that no § 1222(3) sale existed, notwithstanding the fact
that the transaction conveyed title as a matter of state law, and,
once the payout was complete, full ownership of the minerals was to
vest in the purchaser. Page 380 U. S. 586 I believe that the sellers here retained an economic interest in
the business fully as great as that retained by the seller of oil
interests in Thomas v. Perkins. The sellers were to be
paid only out of the proceeds of the business. If the business made
money, they would be paid; if it did not, they would not be paid.
In the latter event, of course, they could recover the business,
but a secured interest in a business which was losing money would
be of dubious value. There was no other security. The Institute was
not bound to pay any sum whatsoever. The Institute, in fact,
promised only to channel to the sellers a portion of the income it
received from Fortuna.
Moreover, in numerous cases, this Court has refused to transfer
the incidents of taxation along with a transfer of legal title when
the transferor retains considerable control over the
income-producing asset transferred. See, e.g., Commissioner v.
Sunnen, 333 U. S. 591 ; Helvering v. Clifford, 309 U. S. 331 ; Corliss v. Bowers, supra. Control of the business did not,
in fact, shift in the transaction here considered. Clay Brown, by
the terms of the purchase agreement and the lease was to manage
Fortuna. Clay Brown was given power to hire and arrange for the
terms of employment of all other employees of the corporation. The
lease provided that
"if for any reason Clay Brown is unable or unwilling to so act,
the person or persons holding a majority interest in the principal
note described in the Purchase Agreement shall have the right to
approve his successor to act as general manager of Lessee
company."
Thus, the shareholders of Clay Brown & Co. assured
themselves of effective control over the management of Fortuna.
Furthermore, Brown's attorneys were the named shareholders of
Fortuna and its Board of Directors. The Institute had no control
over the business.
I would conclude that, on these facts, there was not a
sufficient shift of economic risk or control of the business Page 380 U. S. 587 to warrant treating this transaction as a "sale" for tax
purposes. Brown retained full control over the operations of the
business; the risk of loss and the opportunity to profit from gain
during the normal operation of the business shifted but slightly.
If the operation lost money, Brown stood to lose; if it gained
money, Brown stood to gain, for he would be paid off faster.
Moreover, the entire purchase price was to be paid out of the
ordinary income of the corporation, which was to be received by
Brown on a recurrent basis as he had received it during the period
he owned the corporation. I do not believe that Congress intended
this recurrent receipt of ordinary business income to be taxed at
capital gains rates merely because the business was to be
transferred to a tax-exempt entity at some future date. For this
reason, I would apply here the established rule that, despite
formal legal arrangements, a sale does not take place until there
has been a significant economic change such as a shift in risk or
in control of the business. [ Footnote
2/4 ]
To hold, as the Court does, that this transaction constitutes a
"sale" within the terms of I.R.C. § 1222(3), thereby giving rise to
capital gain for the income received, legitimates considerable tax
evasion. Even if the Court restricts its holding, allowing only
those transactions to be § 1222(3) sales in which the price is not
excessive, its decision allows considerable latitude for the
unwarranted conversion of ordinary income into capital gain.
Valuation of a closed corporation is notoriously difficult. The Tax
Court in the present case did not determine that the price for
which the corporation was sold represented its true value; it
simply stated that the price "was the result Page 380 U. S. 588 of real negotiating" and "within a reasonable range in light of
the earnings history of the corporation and the adjusted net worth
of the corporate assets." 37 T.C. at 486. The Tax Court, however,
also said that
"[i]t may be . . . that petitioner [Clay Brown] would have been
unable to sell the stock at as favorable a price to anyone other
than a tax-exempt organization."
37 T.C. at 485. Indeed, this latter supposition is highly
likely, for the Institute was selling its tax exemption, and this
is not the sort of asset which is limited in quantity. Though the
Institute might have negotiated in order to receive beneficial
ownership of the corporation as soon as possible, the Institute, at
no cost to itself, could increase the price to produce an offer too
attractive for the seller to decline. Thus, it is natural to
anticipate sales such as this taking place at prices on the upper
boundary of what courts will hold to be a reasonable price -- at
prices which will often be considerably greater than what the
owners of a closed corporation could have received in a sale to
buyers who were not selling their tax exemptions. Unless Congress
repairs the damage done by the Court's holding, I should think that
charities will soon own a considerable number of closed
corporations, the owners of which will see no good reason to
continue paying taxes at ordinary income rates. It should not be
necessary, however, for Congress to address itself to this
loophole, for I believe that, under the present laws, it is clear
that Congress did not intend to accord capital gains treatment to
the proceeds of the type of sale present here.
Although the Court implies that it will hold to be "sales" only
those transactions in which the price is reasonable, I do not
believe that the logic of the Court's opinion will justify so
restricting its holding. If this transaction is a sale under the
Internal Revenue Code, entitling its proceeds to capital gains
treatment because it was arrived at after hard negotiating, title
in a conveyancing Page 380 U. S. 589 sense passed, and the beneficial ownership was expected to pass
at a later date, then the question recurs, which the Court does not
answer, why a similar transaction would cease to be a sale if hard
negotiating produced a purchase price much greater than actual
value. The Court relies upon Kolkey v. Commissioner, 254
F.2d 51 (C.A.7th Cir.), as authority holding that a bootstrap
transaction will be struck down where the price is excessive. In Kolkey, however, the price to be paid was so much greater
than the worth of the corporation in terms of its anticipated
income that it was highly unlikely that the price would in fact
ever be paid; consequently it was improbable that the sellers'
interest in the business would ever be extinguished. Therefore, in Kolkey, the court, viewing the case as one involving "thin
capitalization," treated the notes held by the sellers as equity in
the new corporation and payments on them as dividends. Those who
fashion "bootstrap" purchases have become considerably more
sophisticated since Kolkey; vastly excessive prices are
unlikely to be found, and transactions are fashioned so that the
"thin capitalization" argument is conceptually inapplicable. Thus,
I do not see what rationale the Court might use to strike down
price transactions which, though excessive, do not reach Kolkey's dimensions, when it upholds the one here under
consideration. Such transactions would have the same degree of
risk-shifting, there would be no less a transfer of ownership, and
consideration supplied by the buyer need be no less than here.
Further, a bootstrap tax avoidance scheme can easily be
structured under which the holder of any income-earning asset
"sells" his asset to a tax-exempt buyer for a promise to pay him
the income produced for a period of years. The buyer in such a
transaction would do nothing whatsoever; the seller would be
delighted to lose his asset at the end of, say, 30 years in return
for capital gains treatment Page 380 U. S. 590 of all income earned during that period. It is difficult to see,
on the Court's rationale, why such a scheme is not a sale. And, if
I am wrong in my reading of the Court's opinion, and if the Court
would strike down such a scheme on the ground that there is no
economic shifting of risk or control, it is difficult to see why
the Court upholds the sale presently before it, in which control
does not change and any shifting of risk is nominal.
I believe that the Court's overly conceptual approach has led to
a holding which will produce serious erosion of our progressive
taxing system, resulting in greater tax burdens upon all taxpayers.
The tax avoidance routes opened by the Court's opinion will surely
be used to advantage by the owners of closed corporations and other
income-producing assets in order to evade ordinary income taxes and
pay at capital gains rates, with a resultant large-scale ownership
of private businesses by tax-exempt organizations. [ Footnote 2/5 ] While the Court justifies its result
in the name of conceptual purity, [ Footnote 2/6 ] it simultaneously violates longstanding
congressional tax policies that capital gains treatment is to be
given to significant economic transfers of investment-type assets,
but not to ordinary commercial or business income, and that
transactions are to be judged on their entire substance, rather
than their naked form. Though turning tax consequences on form
alone might produce greater certainty of the tax results of any
transaction, this stability exacts as its price the certainty that
tax evasion will be produced. In Commissioner v.
P.G. Page 380 U. S. 591 Lake, Inc., 356 U. S. 260 , 356 U. S. 265 ,
this Court recognized that the purpose of the capital gains
provisions of the Internal Revenue Code is
"'to relieve the taxpayer from . . . excessive tax burdens on
gains resulting from a conversion of capital investments, and to
remove the deterrent effect of those burdens on such conversions.'
. . . And this exception has always been narrowly construed so as
to protect the revenue against artful devices."
I would hold in keeping with this purpose and in order to
prevent serious erosion of the ordinary income tax provisions of
the Code, that the bootstrap transaction revealed by the facts here
considered is not a "sale" within the meaning of the capital gains
provisions of the Code, but that it obviously is an "artful
device," which this Court ought not to legitimate. The Court
justifies the untoward result of this case as permitted tax
avoidance; I believe it to be a plain and simple case of
unwarranted tax evasion.
[ Footnote 2/1 ] See I.R.C.1954, § 501(c)(3).
[ Footnote 2/2 ]
This lease arrangement was designed to permit the Institute to
take advantage of its charitable exemption to avoid taxes on
payment of Fortuna's profits to it, with Fortuna receiving a
deduction for the rental payments as an ordinary and necessary
business expense, thus avoiding taxes to both. Though unrelated
business income is usually taxable when received by charities, an
exception is made for income received from the lease of real and
personal property of less than five years. See I.R.C. §
514; Lanning, Tax Erosion and the "Bootstrap Sale" of a Business --
I, 108 Pa.L.Rev. 623, 684-689. Though denial of the charity's tax
exemption on rent received from Fortuna would also remove the
economic incentive underlying this bootstrap transaction, there is
no indication in the Court's opinion that such income is not tax
exempt. See the Court's opinion, ante at 380 U. S.
565 -566.
[ Footnote 2/3 ] See the articles cited in the majority opinion, ante, at 380 U. S. 566 ,
n. 2.
[ Footnote 2/4 ]
The fact that respondents were to lose complete control of the
business after the payments were complete was taken into account by
the Commissioner, for he treated the business in respondents' hands
as a wasting asset, see I.R.C.1954, § 167, and allowed
them to offset their basis in the stock against the payments
received.
[ Footnote 2/5 ]
Attorneys for amici have pointed out that tax-exempt
charities which they represent have bought numerous closed
corporations.
[ Footnote 2/6 ]
It should be noted, however, that the Court's holding produces
some rather unusual conceptual results. For example, after the
payout is complete, the Institute presumably would have a basis of
$1,300,000 in a business that, in reality, cost it nothing. If
anyone deserves such a basis, it is the Government, whose grant of
tax exemption is being used by the Institute to acquire the
business. | In Commissioner v. Brown, the US Supreme Court ruled that a transaction involving the sale of stock to a tax-exempt charitable organization was considered a bona fide sale under local law and qualified as a sale within the meaning of the Internal Revenue Code's definition of capital gain. The Court's decision allowed the respondents to treat the payments received from the business's profits as capital gains rather than ordinary income. The transaction's structure, where the charitable organization leased the acquired assets to a new corporation and received payments from its operating profits, was deemed legitimate for tax purposes. However, Justice Harlan's dissenting opinion characterized the arrangement as an "artful device" for tax evasion rather than legitimate tax avoidance. |
Taxes | Frank Lyon Co. v. U.S. | https://supreme.justia.com/cases/federal/us/435/561/ | U.S. Supreme Court Frank Lyon Co. v. United States, 435
U.S. 561 (1978) Frank Lyon Co. v. United
States No. 76-624 Argued November 2,
1977 Decided April 18,
1978 435
U.S. 561 CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE EIGHTH
CIRCUIT Syllabus A state bank, which was a member of the Federal Reserve System,
upon realizing that it was not feasible, because of various state
and federal regulations, for it to finance by conventional mortgage
and other financing a building under construction for its
headquarters and principal banking facility, entered into sale and
lease-back agreements by which petitioner took title to the
building and leased it back to the hank for long-term use,
petitioner obtaining both a construction loan and permanent
mortgage financing. The bank is obligated to pay rent equal to the
principal and interest payments on petitioner's mortgage, and has
an option to repurchase the building at various times at prices
equal to the then unpaid balance of petitioner's mortgage and
initial $500,000 investment. On its federal income tax return for
the year in which the building was completed and the bank took
possession, petitioner accrued rent from the bank and claimed as
deductions depreciation on the building, interest on its
construction loan and mortgage, and other expenses related to the
sale and lease-back transaction. The Commissioner of Internal
Revenue disallowed the deductions on the ground that petitioner was
not the owner of the building for tax purposes, but that the sale
and lease-back arrangement was a financing transaction in which
petitioner loaned the bank $500,000 and acted as a conduit for the
transmission of principal and interest to petitioner's mortgagee.
This resulted in a deficiency in petitioner's income tax, which it
paid. After its claim for a refund was denied, it brought suit in
the District Court to recover the amount so paid. That court held
that the claimed deductions were allowable, but the Court of
Appeals reversed, agreeing with the Commissioner. Held: Petitioner is entitled to the claimed deductions.
Pp. 435 U. S.
572 -584.
(a) Although the rent agreed to be paid by the bank equaled the
amounts due from the petitioner to its mortgagee, the sale and
lease-back transaction is not a simple sham by which petitioner was
but a conduit used to forward the mortgage payments made under the
guise of rent paid by the bank to petitioner, on to the mortgagee,
but the construction loan and mortgage note obligations on which
petitioner paid interest are its obligations alone, and,
accordingly, it is entitled to claim deductions Page 435 U. S. 562 therefor under § 163(a) of the Internal Revenue Code of 1954. Helvering v. Lazarus & Co., 308 U.
S. 252 , distinguished. Pp. 435 U. S.
572 -581.
(b) While it is clear that none of the parties to the sale and
lease-back agreements is the owner of the building in any simple
sense, it is equally clear that petitioner is the one whose capital
was invested in the building, and is therefore the party entitled
to claim depreciation for the consumption of that capital under §
167 of the Code. P. 435 U. S.
581 .
(c) Where, as here, there is a genuine multiple-party
transaction with economic substance that is compelled or encouraged
by business or regulatory realities, that is imbued with
tax-independent considerations, and that is not shaped solely by
tax-avoidance features to which meaningless labels are attached,
the Government should honor the allocation of rights and duties
effectuated by the parties; so long as the lessor retains
significant and genuine attributes of the traditional lessor
status, the form of the transaction adopted by the parties governs
for tax purposes. Pp. 435 U. S.
581 -584.
536 F. d 746, reversed.
BLACKMUN, J., delivered the opinion of the Court, in which
BURGER, C.J., and BRENNAN, STEWART, MARSHALL, POWELL, and
REHNQUIST, JJ., joined. WHITE, J., filed a dissenting statement, post, p. 435 U. S. 584 .
STEVENS, J., filed a dissenting opinion, post, p. 435 U. S.
584 .
MR. JUSTICE BLACKMUN delivered the opinion of the Court.
This case concerns the federal income tax consequences of a sale
and lease-back in which petitioner Frank Lyon Company (Lyon) took
title to a building under construction by Worthen Bank & Trust
Company (Worthen) of Little Rock, Ark., and simultaneously leased
the building back to Worthen for long-term use as its headquarters
and principal banking facility. Page 435 U. S. 563 I The underlying pertinent facts are undisputed. They are
established by stipulations, App. 9, 14, the trial testimony, and
the documentary evidence, and are reflected in the District Court's
findings. A Lyon is a closely held Arkansas corporation engaged in the
distribution of home furnishings, primarily Whirlpool and RCA
electrical products. Worthen, in 1965, was an Arkansas-chartered
bank and a member of the Federal Reserve System. Frank Lyon was
Lyon's majority shareholder and board chairman; he also served on
Worthen's board. Worthen at that time began to plan the
construction of a multistory bank and office building to replace
its existing facility in Little Rock. About the same time,
Worthen's competitor, Union National Bank of Little Rock, also
began to plan a new bank and office building. Adjacent sites on
Capitol Avenue, separated only by Spring Street, were acquired by
the two banks. It became a matter of competition, for both banking
business and tenants, and prestige as to which bank would start and
complete its building first.
Worthen initially hoped to finance, to build, and to own the
proposed facility at a total cost of $9 million for the site,
building, and adjoining parking deck. This was to be accomplished
by selling $4 million in debentures and using the proceeds in the
acquisition of the capital stock of a wholly owned real estate
subsidiary. This subsidiary would have formal title, and would
raise the remaining $5 million by a conventional mortgage loan on
the new premises. Worthen's plan, however, had to be abandoned for
two significant reasons:
1. As a bank chartered under Arkansas law, Worthen legally could
not pay more interest on any debentures it might issue than that
then specified by Arkansas law. But the proposed obligations would
not be marketable at that rate. Page 435 U. S. 564 2. Applicable statutes or regulations of the Arkansas State Bank
Department and the Federal Reserve System required Worthen, as a
state bank subject to their supervision, to obtain prior permission
for the investment in banking premises of any amount (including
that placed in a real estate subsidiary) in excess of the bank's
capital stock or of 40% of its capital stock and surplus. [ Footnote 1 ] See Ark.Stat.Ann.
§ 67-547.1 (Supp. 1977); 12 U.S.C. § 371d (1976 ed.); 12 CFR §
265.2(f)(7) (1977). Worthen, accordingly, was advised by staff
employees of the Federal Reserve System that they would not
recommend approval of the plan by the System's Board of
Governors.
Worthen therefore was forced to seek an alternative solution
that would provide it with the use of the building, satisfy the
state and federal regulators, and attract the necessary capital. In
September, 1967, it proposed a sale and lease-back arrangement. The
State Bank Department and the Federal Reserve System approved this
approach, but the Department required that Worthen possess an
option to purchase the leased property at the end of the 15th year
of the lease at a set price, and the federal regulator required
that the building be owned by an independent third party.
Detailed negotiations ensued with investors that had indicated
interest, namely, Goldman, Sachs & Company; White, Weld &
Co.; Eastman Dillon, Union Securities & Company; and Stephens,
Inc. Certain of these firms made specific proposals.
Worthen then obtained a commitment from New York Life Insurance
Company to provide $7,140,000 in permanent mortgage financing on
the building, conditioned upon its approval of the titleholder. At
this point, Lyon entered the negotiations, and it, too, made a
proposal. Page 435 U. S. 565 Worthen submitted a counterproposal that incorporated the best
features, from its point of view, of the several offers. Lyon
accepted the counterproposal, suggesting, by way of further
inducement, a $21,000 reduction in the annual rent for the first
five years of the building lease. Worthen selected Lyon as the
investor. After further negotiations, resulting in the elimination
of that rent reduction (offset, however, by higher interest Lyon
was to pay Worthen on a subsequent unrelated loan), Lyon, in
November, 1967, was approved as an acceptable borrower by First
National City Bank for the construction financing, and by New York
Life, as the permanent lender. In April, 1968, the approvals of the
state and federal regulators were received.
In the meantime, on September 15, before Lyon was selected,
Worthen itself began construction. B In May, 1968, Worthen, Lyon, City Bank, and New York Life
executed complementary and interlocking agreements under which the
building was sold by Worthen to Lyon as it was constructed, and
Worthen leased the completed building back from Lyon.
1. Agreements between Worthen and Lyon. Worthen and Lyon
executed a ground lease, a sales agreement, and a building
lease.
Under the ground lease dated May 1, 1968, App. 366, Worthen
leased the site to Lyon for 76 years and 7 months through November
30, 2044. The first 19 months were the estimated construction
period. The ground rents payable by Lyon to Worthen were $50 for
the first 26 years and 7 months, and thereafter in quarterly
payments:
12/1/94 through 11/30/99 (5 years) -- $100,000 annually
12/1/99 through 11/30/04 (5 years) -- $150,000 annually
12/1/04 through 11/30/09 (5 years) -- $200,000 annually
12/1/09 through 11/30/34 (25 years) -- $250,000 annually
12/1/34 through 11/30/44 (10 years) -- $10,000 annually. Page 435 U. S. 566 Under the sales agreement dated May 19, 1968, id. at
508, Worthen agreed to sell the building to Lyon, and Lyon agreed
to buy it, piece by piece as it was constructed, for a total price
not to exceed $7,640,000, in reimbursements to Worthen for its
expenditures for the construction of the building. [ Footnote 2 ]
Under the building lease dated May 1, 1968, id. at 376,
Lyon leased the building back to Worthen for a primary term of 25
years from December 1, 1969, with options in Worthen to extend the
lease for eight additional 5-year terms, a total of 65 years.
During the period between the expiration of the building lease (at
the latest, November 30, 2034, if fully extended) and the end of
the ground lease on November 30, 2044, full ownership, use, and
control of the building were Lyon's, unless, of course, the
building had been repurchased by Worthen. Id. at 369.
Worthen was not obligated to pay rent under the building lease
until completion of the building. For the first 11 years of the
lease, that is, until November 30, 1980, the stated quarterly rent
was $145,581.03 ($582,324.12 for the year). For the next 14 years,
the quarterly rent was $153,289.32 ($613,157.28 for the year), and
for the option periods the rent was $300,000 a year, payable
quarterly. Id. at 378-379. The total rent for the building
over the 25-year primary term of the lease thus was $14,989,767.24.
That rent equaled the principal and interest payments that would
amortize the $7,140,000 New York Life mortgage loan over the same
period. When the mortgage was paid off at the end of the primary
term, the annual building rent, if Worthen extended the lease, came
down to the stated $300,000. Lyon's Page 435 U. S. 567 net rentals from the building would be further reduced by the
increase in ground rent Worthen would receive from Lyon during the
extension. [ Footnote 3 ]
The building lease was a "net lease," under which Worthen was
responsible for all expenses usually associated with the
maintenance of an office building, including repairs, taxes,
utility charges, and insurance, and was to keep the premises in
good condition, excluding, however, reasonable wear and tear.
Finally, under the lease, Worthen had the option to repurchase
the building at the following times and prices:
11/30/80 (after 11 years) -- $6,325,169.85
11/30/84 (after 15 years) -- $5,432,607.32
11/30/89 (after 20 years) -- $4,187,328.04
11/30/94 (after 25 years) -- $2,145,935.00
These repurchase option prices were the sum of the unpaid
balance of the New York Life mortgage, Lyon's $500,000 investment,
and 6% interest compounded on that investment.
2. Construction financing agreement. By agreement dated May 14,
1968, id. at 462, City Bank agreed to lend Lyon $7,000,000
for the construction of the building. This loan was secured by a
mortgage on the building and the parking deck, executed by Worthen
as well as by Lyon, and an assignment by Lyon of its interests in
the building lease and in the ground lease.
3. Permanent financing agreement. By Note Purchase Page 435 U. S. 568 Agreement dated May 1, 1968, id. at 443, New York Life
agreed to purchase Lyon's $7,140,000 6 3/4% 25-year secured note to
be issued upon completion of the building. Under this agreement,
Lyon warranted that it would lease the building to Worthen for a
noncancelable term of at least 25 years under a net lease at a rent
at least equal to the mortgage payments on the note. Lyon agreed to
make quarterly payments of principal and interest equal to the
rentals payable by Worthen during the corresponding primary term of
the lease. Id. at 623. The security for the note was a
first deed of trust and Lyon's assignment of its interests in the
building lease and in the ground lease. Id. at 527, 571.
Worthen joined in the deed of trust as the owner of the fee and the
parking deck.
In December, 1969, the building was completed, and Worthen took
possession. At that time, Lyon received the permanent loan from New
York Life, and it discharged the interim loan from City Bank. The
actual cost of constructing the office building and parking complex
(excluding the cost of the land) exceeded $10,000,000. C Lyon filed its federal income tax returns on the accrual and
calendar year basis. On its 1969 return, Lyon accrued rent from
Worthen for December. It asserted as deductions one month's
interest to New York Life; one month's depreciation on the
building; interest on the construction loan from City Bank; and
sums for legal and other expenses incurred in connection with the
transaction.
On audit of Lyon's 1969 return, the Commissioner of Internal
Revenue determined that Lyon was "not the owner for tax purposes of
any portion of the Worthen Building," and ruled that "the income
and expenses related to this building are not allowable . . . for
Federal income tax purposes." App. 304-305, 299. He also added
$2,298.15 to Lyon's 1969 income as "accrued interest income." This
was the computed 1969 portion of a gain, considered the equivalent
of interest income, Page 435 U. S. 569 the realization of which was based on the assumption that
Worthen would exercise its option to buy the building after 11
years, on November 30, 1980, at the price stated in the lease, and
on the additional determination that Lyon had "loaned" $500,000 to
Worthen. In other words, the Commissioner determined that the sale
and lease-back arrangement was a financing transaction in which
Lyon loaned Worthen $500,000 and acted as a conduit for the
transmission of principal and interest from Worthen to New York
Life.
All this resulted in a total increase of $497,219.18 over Lyon's
reported income for 1969, and a deficiency in Lyon's federal income
tax for that year in the amount of $236,596.36. The Commissioner
assessed that amount, together with interest of $43,790.84, for a
total of $280,387.20. [ Footnote
4 ]
Lyon paid the assessment and filed a timely claim for its
refund. The claim was denied, and this suit, to recover the amount
so paid, was instituted in the United States District Court for the
Eastern District of Arkansas within the time allowed by 26 U.S.C. §
6532(a)(1).
After trial without a jury, the District Court, in a memorandum
letter opinion setting forth findings and conclusions, ruled in
Lyon's favor and held that its claimed deductions were allowable.
75-2 USTC � 9545 (1975), 36 AFTR2d � 75-5059 1975); App. 296-311.
It concluded that the legal intent of the parties had been to
create a bona fide sale and lease-back in accordance with the form
and language of the documents evidencing the transactions. It
rejected the argument that Worthen was acquiring an equity in the
building through its rental payments. It found that the rents were
unchallenged and were reasonable throughout the period of the
lease, and that the option prices, negotiated at arm's length
between the parties, represented fair estimates of market value on
the applicable dates. It rejected any negative Page 435 U. S. 570 inference from the fact that the rentals, combined with the
options, were sufficient to amortize the New York Life loan and to
pay Lyon a 6% return on its equity investment. It found that
Worthen would acquire an equity in the building only if it
exercised one of its options to purchase, and that it was highly
unlikely, as a practical matter, that any purchase option would
ever be exercised. It rejected any inference to be drawn from the
fact that the lease was a "net lease." It found that Lyon had mixed
motivations for entering into the transaction, including the need
to diversify as well as the desire to have the benefits of a "tax
shelter." App. 296, 299.
The United States Court of Appeals for the Eighth Circuit
reversed. 536 F.2d 746 (1976). It held that the Commissioner
correctly determined that Lyon was not the true owner of the
building, and therefore was not entitled to the claimed deductions.
It likened ownership for tax purposes to a "bundle of sticks," and
undertook its own evaluation of the facts. It concluded, in
agreement with the Government's contention, that Lyon "totes an
empty bundle" of ownership sticks. Id. at 751. It stressed
the following: (a) the lease agreements circumscribed Lyon's right
to profit from its investment in the building by giving Worthen the
option to purchase for an amount equal to Lyon's $500,000 equity
plus 6% compound interest and the assumption of the unpaid balance
of the New York Life mortgage. [ Footnote 5 ] (b) The option prices did not take into
account possible appreciation of the value of the building or
inflation. [ Footnote 6 ] (c) Any
award realized as a Page 435 U. S. 571 result of destruction or condemnation of the building in excess
of the mortgage balance and the $500,000 would be paid to Worthen,
and not Lyon. [ Footnote 7 ] (d)
The building rental payments during the primary term were exactly
equal to the mortgage payments. [ Footnote 8 ] (e) Worthen retained control over the ultimate
disposition of the building through its various options to
repurchase and to renew the lease, plus its ownership of the site.
[ Footnote 9 ] (f) Worthen
enjoyed all benefits, and bore all burdens, incident to the
operation and ownership of the building, so that, in the Court of
Appeals' view, the only economic advantages accruing to Lyon, in
the event it were considered to be the true owner of the property,
were income tax savings of approximately $1.5 million during the
first 11 Page 435 U. S. 572 years of the arrangement. [ Footnote 10 ] Id. at 752-753. [ Footnote 11 ] The court concluded, id. at 753, that the transaction was "closely akin" to
that in Helvering v. Lazarus Co., 308 U.
S. 252 (1939).
"In sum, the benefits, risks, and burdens which [Lyon] has
incurred with respect to the Worthen building are simply too
insubstantial to establish a claim to the status of owner for tax
purposes. . . . The vice of the present lease is that all of [its]
features have been employed in the same transaction with the
cumulative effect of depriving [Lyon] of any significant ownership
interest."
536 F.2d at 754.
We granted certiorari, 429 U.S. 1089 (1977), because of an
indicated conflict with American Realty Trust v. United
States, 498 F.2d 1194 (CA4 1974). II This Court, almost 50 years ago, observed that
"taxation is not so much concerned with the refinements of title
as it is with actual command over the property taxed -- the actual
benefit for which the tax is paid." Corliss v. Bowers, 281 U. S. 376 , 281 U. S. 378 (1930). In a number of cases, the Court has refused to permit the
transfer of formal legal title to shift the incidence of taxation
attributable to ownership of property where the transferor
continues to retain significant control Page 435 U. S. 573 over the property transferred. E.g., Commissioner v.
Sunnen, 333 U. S. 591 (1948); Helvering v. Clifford, 309 U.
S. 331 (1940). In applying this doctrine of substance
over form, the Court has looked to the objective economic realities
of a transaction rather than to the particular form the parties
employed. The Court has never regarded "the simple expedient of
drawing up papers," Commissioner v. Tower, 327 U.
S. 280 , 327 U. S. 291 (1946), as controlling for tax purposes when the objective economic
realities are to the contrary.
"In the field of taxation, administrators of the laws, and the
courts, are concerned with substance and realities, and formal
written documents are no rigidly binding." Helvering v. Lazarus & Co., 308 U.S. at 308 U. S. 255 . See also Commissioner v. P. G. Lake, Inc., 356 U.
S. 260 , 356 U. S.
266 -267 (1958); Commissioner v. Court Holding
Co., 324 U. S. 331 , 324 U. S. 334 (1945). Nor is the parties' desire to achieve a particular tax
result necessarily relevant. Commissioner v. Duberstein, 363 U. S. 278 , 363 U. S. 286 (1960).
In the light of these general and established principles, the
Government takes the position that the Worthen-Lyon transaction, in
its entirety, should be regarded as a sham. The agreement as a
whole, it is said, was only an elaborate financing scheme designed
to provide economic benefits to Worthen and a guaranteed return to
Lyon. The latter was but a conduit used to forward the mortgage
payments, made under the guise of rent paid by Worthen to Lyon, on
to New York Life as mortgagee. This, the Government claims, is the
true substance of the transaction as viewed under the microscope of
the tax laws. Although the arrangement was cast in sale and
lease-back form, in substance. it was only a financing transaction,
and the terms of the repurchase options and lease renewals so
indicate. It is said that Worthen could reacquire the building
simply by satisfying the mortgage debt and paying Lyon its $500,000
advance plus interest, regardless of the fair market value of the
building at the time; similarly, when the mortgage was paid off,
Worthen could extend the lease at Page 435 U. S. 574 drastically reduced bargain rentals that likewise bore no
relation to fair rental value, but were simply calculated to pay
Lyon its $500,000 plus interest over the extended term. Lyon's
return on the arrangement in no event could exceed 6% compound
interest (although the Government conceded it might well be less,
Tr. of Oral Arg. 32). Furthermore, the favorable option and lease
renewal terms made it highly unlikely that Worthen would abandon
the building after it, in effect, had "paid off" the mortgage. The
Government implies that the arrangement was one of convenience
which, if accepted on its face, would enable Worthen to deduct its
payments to Lyon as rent, and would allow Lyon to claim a deduction
for depreciation, based on the cost of construction ultimately
borne by Worthen, which Lyon could offset against other income, and
to deduct mortgage interest that roughly would offset the inclusion
of Worthen's rental payments in Lyon's income. If, however, the
Government argues, the arrangement was only a financing transaction
under which Worthen was the owner of the building, Worthen's
payments would be deductible only to the extent that they
represented mortgage interest, and Worthen would be entitled to
claim depreciation; Lyon would not be entitled to deductions for
either mortgage interest or depreciation, and it would not have to
include Worthen's "rent" payments in its income, because its
function with respect to those payments was that of a conduit
between Worthen and New York Life.
The Government places great reliance on Helvering v. Lazarus
& Co., supra, and claims it to be precedent that controls
this case. The taxpayer there was a department store. The legal
title of its three buildings was in a bank as trustee for land
trust certificate holders. When the transfer to the trustee was
made, the trustee at the same time leased the buildings back to the
taxpayer for 99 years, with option to renew and purchase. The
Commissioner, in stark contrast to his posture in the present case,
took the position that the Page 435 U. S. 575 statutory right to depreciation followed legal title. The Board
of Tax Appeals, however, concluded that the transaction between the
taxpayer and the bank, in reality, was a mortgage loan, and allowed
the taxpayer depreciation on the buildings. This Court, as had the
Court of Appeals, agreed with that conclusion. and affirmed. It
regarded the "rent" stipulated in the lease-back as a promise to
pay interest on the loan, and a "depreciation fund" required by the
lease as an amortization fund designed to pay off the loan in the
stated period. Thus, said the Court, the Board justifiably
concluded that the transaction, although in written form a transfer
of ownership with a lease-back, was actually a loan secured by the
property involved.
The Lazarus case, we feel, is to be distinguished from
the present one, and is not controlling here. Its transaction was
one involving only two (and not multiple) parties, the taxpayer
department store and the trustee bank. The Court looked closely at
the substance of the agreement between those two parties, and
rightly concluded that depreciation was deductible by the taxpayer
despite the nomenclature of the instrument of conveyance and the
lease-back. See also Sun Oil Co. v. Commissioner, 562 F.2d
258 (CA3 1977) (a two-party case with the added feature that the
second party was a tax-exempt pension trust).
The present case, in contrast, involves three parties, Worthen,
Lyon, and the finance agency. The usual simple two-party
arrangement was legally unavailable to Worthen. Independent
investors were interested in participating in the alternative
available to Worthen, and Lyon itself (also independent from
Worthen) won the privilege. Despite Frank Lyon's presence on
Worthen's board of directors, the transaction, as it ultimately
developed, was not a familial one arranged by Worthen, but one
compelled by the realities of the restrictions imposed upon the
bank. Had Lyon not appeared, another interested investor would have
been selected. Page 435 U. S. 576 The ultimate solution would have been essentially the same.
Thus, the presence of the third party, in our view, significantly
distinguishes this case from Lazarus, and removes the
latter as controlling authority. III It is true, of course, that the transaction took shape according
to Worthen's needs. As the Government points out, Worthen,
throughout the negotiations, regarded the respective proposals of
the independent investors in terms of its own cost of funds. E.g., App. 355. It is also true that both Worthen and the
prospective investors compared the various proposals in terms of
the return anticipated on the investor's equity. But all this is
natural for parties contemplating entering into a transaction of
this kind. Worthen needed a building for its banking operations and
other purposes, and necessarily had to know what its cost would be.
The investors were in business to employ their funds in the most
remunerative way possible. And, as the Court has said in the past,
a transaction must be given its effect in accord with what actually
occurred, and not in accord with what might have occurred. Commissioner v. National Alfalfa Dehydrating & Milling
Co., 417 U. S. 134 , 417 U. S.
148 -149 (1974); Central Tablet Mfg. Co. v. United
States, 417 U. S. 673 , 417 U. S. 690 (1974).
There is no simple device available to peel away the form of
this transaction and to reveal its substance. The effects of the
transaction on all the parties were obviously different from those
that would have resulted had Worthen been able simply to make a
mortgage agreement with New York Life and to receive a $500,000
loan from Lyon. Then Lazarus would apply. Here, however,
and most significantly, it was Lyon alone, and not Worthen, who was
liable on the notes, first to City Bank and then to New York Life.
Despite the facts that Worthen had agreed to pay rent and that this
rent equaled the amounts due from Lyon to New York Life, should
anything go awry in the later years of the lease, Lyon Page 435 U. S. 577 was primarily liable. [ Footnote 12 ] No matter how the transaction could have
been devised otherwise, it remains a fact that, as the agreements
were placed in final form, the obligation on the notes fell
squarely on Lyon. [ Footnote
13 ] Lyon, an ongoing enterprise, exposed its very business
wellbeing to this real and substantial risk.
The effect of this liability on Lyon is not just the abstract
possibility that something will go wrong and that Worthen will not
be able to make its payments. Lyon has disclosed this liability on
its balance sheet for all the world to see. Its financial position
was affected substantially by the presence of this long-term debt,
despite the offsetting presence of the building as an asset. To the
extent that Lyon has used its capital in this transaction, it is
less able to obtain financing for other business needs.
In concluding that there is this distinct element of economic
reality in Lyon's assumption of liability, we are mindful that the
characterization of a transaction for financial accounting
purposes, on the one hand, and for tax purposes, on the other, need
not necessarily be the same. Commissioner v. Lincoln Savings
& Loan Assn., 403 U. S. 345 , 403 U. S. 355 (1971); Old Colony R. Co. v. Commissioner, 284 U.
S. 552 , 284 U. S. 562 (1932). Accounting methods or descriptions, without more, do not
lend substance to that which has no substance. But, in this case,
accepted accounting methods, as understood by the several parties
to the respective agreements and as applied to the transaction by
others, gave the transaction a meaningful character consonant with
the form it was given. [ Footnote
14 ] Worthen Page 435 U. S. 578 was not allowed to enter into the type of transaction which the
Government now urges to be the true substance of the arrangement.
Lyon and Worthen cannot be said to have entered Page 435 U. S. 579 into the transaction intending that the interests involved were
allocated in a way other than that associated with a sale and
lease-back.
Other factors also reveal that the transaction cannot be viewed
as anything more than a mortgage agreement between Worthen and New
York Life and a loan from Lyon to Worthen. There is no legal
obligation between Lyon and Worthen representing the $500,000
"loan" extended under the Government's theory. And the assumed 6%
return on this putative loan -- required by the audit to be
recognized in the taxable year in question -- will be realized only
when and if Worthen exercises its options.
The Court of Appeals acknowledged that the rents alone, due
after the primary term of the lease and after the mortgage has been
paid, do not provide the simple 6% return which, the Government
urges, Lyon is guaranteed, 536 F.2d at 752. Thus, if Worthen
chooses not to exercise its options, Lyon is gambling that the
rental value of the building during the last 10 years of the ground
lease, during which the ground rent is minimal, will be sufficient
to recoup its investment before it must negotiate again with
Worthen regarding the ground lease. There are simply too many
contingencies, including variations in the value of real estate, in
the cost of money, and in the capital structure of Worthen, to
permit the conclusion that the parties intended to enter into the
transaction as Page 435 U. S. 580 structured in the audit, and according to which the Government
now urges they be taxed.
It is not inappropriate to note that the Government is likely to
lose little revenue, if any, as a result of the shape given the
transaction by the parties. No deduction was created that is not
either matched by an item of income or that would not have been
available to one of the parties if the transaction had been
arranged differently. While it is true that Worthen paid Lyon less
to induce it to enter into the transaction because Lyon anticipated
the benefit of the depreciation deductions it would have as the
owner of the building, those deductions would have been equally
available to Worthen had it retained title to the building. The
Government so concedes. Tr. of Oral Arg. 22-23. The fact that
favorable tax consequences were taken into account by Lyon on
entering into the transaction is no reason for disallowing those
consequences. [ Footnote 15 ]
We cannot ignore the reality that the tax laws affect the shape of
nearly every business transaction. See Commissioner v.
Brown, 380 U. S. 563 , 380 U. S.
579 -580 (1965) (Harlan, J., concurring). Lyon is not a
corporation with no purpose other than to hold title to the bank
building. It was not created by Worthen or even financed to any
degree by Worthen.
The conclusion that the transaction is not a simple sham to be
ignored does not, of course, automatically compel the further
conclusion that Lyon is entitled to the items claimed as
deductions. Nevertheless, on the facts, this readily follows. As
has been noted, the obligations on which Lyon paid interest Page 435 U. S. 581 were its obligations alone, and it is entitled to claim
deductions therefor under § 163(a) of the 1954 Code, 26 U.S.C. §
163(a).
As is clear from the facts, none of the parties to this sale and
lease-back was the owner of the building in any simple sense. But
it is equally clear that the facts focus upon Lyon as the one whose
capital was committed to the building and as the party, therefore,
that was entitled to claim depreciation for the consumption of that
capital. The Government has based its contention that Worthen
should be treated as the owner on the assumption that, throughout
the term of the lease, Worthen was acquiring an equity in the
property. In order to establish the presence of that growing
equity, however, the Government is forced to speculate that one of
the options will be exercised, and that, if it is not, this is only
because the rentals for the extended term are a bargain. We cannot
indulge in such speculation in view of the District Court's clear
finding to the contrary. [ Footnote 16 ] We therefore conclude that it is Lyon's
capital that is invested in the building according to the agreement
of the parties, and it is Lyon that is entitled to depreciation
deductions, under § 167 of the 1954 Code, 26 U.S.C. § 167. Cf.
United States v. Chicago B. & Q. R. Co., 412 U.
S. 401 (1973). IV We recognize that the Government's position, and that taken by
the Court of Appeals, is not without superficial appeal. One,
indeed, may theorize that Frank Lyon's presence on the Worthen
board of directors; Lyon's departure from its principal corporate
activity into this unusual venture; the parallel between the
payments under the building lease and the amounts due from Lyon on
the New York Life mortgage; the provisions relating to condemnation
or destruction of the Page 435 U. S. 582 property; the nature and presence of the several options
available to Worthen; and the tax benefits, such as the use of
double declining balance depreciation, that accrue to Lyon during
the initial years of the arrangement, form the basis of an argument
that Worthen should be regarded as the owner of the building and as
the recipient of nothing more from Lyon than a $500,000 loan.
We, however, as did the District Court, find this theorizing
incompatible with the substance and economic realities of the
transaction: the competitive situation as it existed between
Worthen and Union National Bank in 1965 and the years immediately
following; Worthen's undercapitalization; Worthen's consequent
inability, as a matter of legal restraint, to carry its building
plans into effect by a conventional mortgage and other borrowing;
the additional barriers imposed by the state and federal
regulators; the suggestion, forthcoming from the state regulator,
that Worthen possess an option to purchase; the requirement, from
the federal regulator, that the building be owned by an independent
third party; the presence of several finance organizations
seriously interested in participating in the transaction and in the
resolution of Worthen's problem; the submission of formal proposals
by several of those organizations; the bargaining process and
period that ensued; the competitiveness of the bidding; the bona
fide character of the negotiations; the three-party aspect of the
transaction; Lyon's substantiality [ Footnote 17 ] and its independence from Worthen; the fact
that diversification was Lyon's principal motivation; Lyon's being
liable alone on the successive notes to City Bank and New York
Life; the reasonableness, as the District Court found, of the
rentals and of the option prices; the substantiality of the
purchase prices; Page 435 U. S. 583 Lyon's not being engaged generally in the business of financing;
the presence of all building depreciation risks on Lyon; the risk,
borne by Lyon, that Worthen might default or fail, as other banks
have failed; the facts that Worthen could "walk away" from the
relationship at the end of the 25-year primary term, and probably
would do so if the option price were more than the then-current
worth of the building to Worthen; the inescapable fact that, if the
building lease were not extended, Lyon would be the full owner of
the building, free to do with it as it chose; Lyon's liability for
the substantial ground rent if Worthen decides not to exercise any
of its options to extend; the absence of any understanding between
Lyon and Worthen that Worthen would exercise any of the purchase
options; the nonfamily and nonprivate nature of the entire
transaction; and the absence of any differential in tax rates and
of special tax circumstances for one of the parties -- all convince
us that Lyon has far the better of the case. [ Footnote 18 ]
In so concluding, we emphasize that we are not condoning
manipulation by a taxpayer through arbitrary labels and dealings
that have no economic significance. Such, however, has not happened
in this case.
In short, we hold that where, as here, there is a genuine
multiple-party transaction with economic substance which is
compelled or encouraged by business or regulatory realities, is Page 435 U. S. 584 imbued with tax-independent considerations, and is not shaped
solely by tax avoidance features that have meaningless labels
attached, the Government should honor the allocation of rights and
duties effectuated by the parties. Expressed another way, so long
as the lessor retains significant and genuine attributes of the
traditional lessor status, the form of the transaction adopted by
the parties governs for tax purposes. What those attributes are in
any particular case will necessarily depend upon its facts. It
suffices to say that, as here, a sale and lease-back, in and of
itself, does not necessarily operate to deny a taxpayer's claim for
deductions. [ Footnote
19 ]
The judgment of the Court of Appeals, accordingly, is
reversed. It is so ordered. MR. JUSTICE WHITE dissents, and would affirm the judgment
substantially for the reasons stated in the opinion in the Court of
Appeals for the Eighth Circuit. 536 F.2d 746 (1976).
[ Footnote 1 ]
Worthen, as of June 30, 1967, had capital stock of $4 million
and surplus of $5 million. During the period the building was under
construction, Worthen became a national bank subject to the
supervision and control of the Comptroller of the Currency.
[ Footnote 2 ]
This arrangement appeared advisable and was made because
purchases of materials by Worthen (which then had become a national
bank) were not subject to Arkansas sales tax. See Ark.Stat.Ann. § 84-1904(1) (1960); First Agricultural Nat. Bank
v. Tax Comm'n, 392 U. S. 339 (1968). Sales of the building elements to Lyon also were not
subject to state sales tax, since they were sales of real estate. See Ark.Stat.Ann. § 84-1902(c) (Supp. 1977).
[ Footnote 3 ]
This, of course, is on the assumption that Worthen exercises its
option to extend the building lease. If it does not, Lyon remains
liable for the substantial rents prescribed by the ground lease.
This possibility brings into sharp focus the fact that Lyon, in a
very practical sense, is at least the ultimate owner of the
building. If Worthen does not extend, the building lease expires
and Lyon may do with the building as it chooses.
The Government would point out, however, that the net amounts
payable by Worthen to Lyon during the building lease's extended
terms, if all are claimed, would approximate the amount required to
repay Lyon's $500,000 investment at 6% compound interest. Brief for
United States 14.
[ Footnote 4 ]
These figures do not include uncontested adjustments not
involved in this litigation.
[ Footnote 5 ]
Lyon here challenges this assertion on the grounds that it had
the right and opportunities to sell the building at a greater
profit at any time; the return to Lyon was not insubstantial, and
was attractive to a true investor in real estate; the 6% return was
the minimum Lyon would realize if Worthen exercised one of its
options, an event the District Court found highly unlikely; and
Lyon would own the building and realize a greater return than 6% if
Worthen did not exercise an option to purchase.
[ Footnote 6 ]
Lyon challenges this observation by pointing out that the
District Court found the option prices to be the negotiated
estimate of the parties of the fair market value of the building on
the option dates and to be reasonable. App. 303, 299.
[ Footnote 7 ]
Lyon asserts that this statement is true only with respect to
the total destruction or taking of the building on or after
December 1, 1980. Lyon asserts that it, not Worthen, would receive
the excess above the mortgage balance in the event of total
destruction or taking before December 1, 1980, or in the event of
partial damage or taking at any time. Id. at 408=410,
411.
[ Footnote 8 ]
Lyon concedes the accuracy of this statement, but asserts that
it does not justify the conclusion that Lyon served merely as a
conduit by which mortgage payments would be transmitted to New York
Life. It asserts that Lyon was the sole obligor on the New York
Life note, and would remain liable in the event of default by
Worthen. It also asserts that the fact the rent was sufficient to
amortize the loan during the primary term of the lease was a
requirement imposed by New York Life, and is a usual requirement in
most long-term loans secured by a long-term lease.
[ Footnote 9 ]
As to this statement, Lyon asserts that the Court of Appeals
ignored Lyon's right to sell the building to another at any time;
the District Court's finding that the options to purchase were not
likely to be exercised; the uncertainty that Worthen would renew
the lease for 40 years; Lyon's right to lease to anyone at any
price during the last 10 years of the ground lease; and Lyon's
continuing ownership of the building after the expiration of the
ground lease.
[ Footnote 10 ]
In response to this, Lyon asserts that the District Court found
that the benefits of occupancy Worthen will enjoy are common in
most long-term real estate leases, and that the District Court
found that Lyon had motives other than tax savings in entering into
the transaction. It also asserts that the net cash after-tax
benefit would be $312,220, not $1.5 million.
[ Footnote 11 ]
Other factors relied on by the Court of Appeals, 536 F.2d at
752, were the allocation of the investment credit to Worthen, and a
claim that Lyon's ability to sell the building to a third party was
"carefully circumscribed" by the lease agreements. The investment
credit by statute is freely allocable between the parties, § 48(d)
of the 1954 Code, 26 U.S.C. § 48(d), and the Government has not
pressed either of these factors before this Court.
[ Footnote 12 ]
New York Life required Lyon, not Worthen, to submit financial
statements periodically. See Note Purchase Agreement, App.
453-454, 458-459.
[ Footnote 13 ]
It may well be that the remedies available to New York Life
against Lyon would be far greater than any remedy available to it
against Worthen, which, as lessee, is liable to New York Life only
through Lyon's assignment of its interest as lessor.
[ Footnote 14 ]
We are aware that accounting standards have changed
significantly since 1968, and that the propriety of Worthen's and
Lyon's methods of disclosing the transaction in question may be a
matter for debate under these new standards. Compare Accounting Principles Bd. Opinion No. 5, Reporting of Leases in
Financial Statements of Lessee (1964), and Accounting
Principles Bd. Opinion No. 7, Accounting for Leases in Financial
Statements of Lessors (1966), with Financial Accounting
Standards Board, Statement of Financial Accounting Standards No.
13, Accounting for Leases (1976). See also Comptroller of
the Currency, Banking Circular No. 95 (Nov. 11, 1977), instructing
that national banks revise their financial statements in accord
with FASB Standard No. 13. Standard No. 13, however, by its terms,
states, � 78, that there are many instances where tax and financial
accounting treatments diverge. Further, Standard No. 13 is
nonapplicable with respect to a lease executed prior to January 1,
1977 (as was the Lyon-Worthen lease), until January 1, 1981.
Obviously, Banking Circular No. 95 was not in effect in 1968, when
the Lyon-Worthen lease was executed.
Then-existing pronouncements of the Internal Revenue Service
gave Lyon very little against which to measure the transaction. The
most complete statement on the general question of characterization
of leases as sales, Rev.Rul. 55-540, 1955-2 Cum.Bull. 39, by its
terms, dealt only with equipment leases. In that ruling, it was
stated that the Service will look at the intent of the parties at
the time the agreement was executed to determine the proper
characterization of the transaction. Generally, an intent to enter
into a conditional sales agreement will be found to be present if
(a) portions of the rental payments are made specifically
applicable to an equity acquired by the lessee, (b) the lessee will
acquire a title automatically after certain payments have been
made, (c) the rental payments are a disproportionately large amount
in relation to the sum necessary to complete the sale, (d) the
rental payments are above fair rental value, (e) title can be
acquired at a nominal option price, or (f) some portion of the
rental payments are identifiable as interest. See also Rev.Rul. 6122, 1960-1 Cum.Bull. 56; Rev.Rul. 72-543, 1972-2
Cum.Bull. 87.
The Service announced more specific guidelines, indicating under
what circumstances it would answer requests for rulings on leverage
leasing transactions, in Rev.Proc. 75-21, 1975-1 Cum.Bull. 715. In
general, "[u]nless other facts and circumstances indicate a
contrary intent," the Service will not rule that a lessor in a
leveraged lease transaction is to be treated as the owner of the
property in question unless (a) the lessor has incurred and
maintains a minimal investment equal to 20% of the cost of the
property, (b) the lessee has no right to purchase except at fair
market value, (c) no part of the cost of the property is furnished
by the lessee, (d) the lessee has not lent to the lessor or
guaranteed any indebtedness of the lessor, and (e) the lessor must
demonstrate that it expects to receive a profit on the transaction
other than the benefits received solely from the tax treatment.
These guidelines are not intended to be definitive, and it is not
clear that they provide much guidance in assessing real estate
transactions. See Rosenberg & Weinstein,
Sale-leasebacks: An analysis of these transactions after the Lyon decision, 45 J.Tax. 146, 147 n. 1 (1976).
[ Footnote 15 ]
Indeed, it is not inevitable that the transaction, as treated by
Lyon and Worthen, will not result in more revenues to the
Government, rather than less. Lyon is gambling that, in the first
11 years of the lease, it will have income that will be sheltered
by the depreciation deductions, and that it will be able to male
sufficiently good use of the tax dollars preserved thereby to make
up for the income it will recognize and pay taxes on during the
last 14 years of the initial term of the lease, and against which
it will enjoy no sheltering deduction.
[ Footnote 16 ]
The general characterization of a transaction for tax purposes
is a question of law subject to review. The particular facts from
which the characterization is to be made are not so subject. See American Realty Trust v. United States, 498 F.2d 1194,
1198 (CA4 1974).
[ Footnote 17 ]
Lyon's consolidated balance sheet of December 31, 1968, showed
assets of $12,225,612, and total stockholders' equity of
$3,818,671. Of the assets, the sum of $2,674,290 represented its
then investment in the Worthen building. App. 587-588.
[ Footnote 18 ]
Thus, the facts of this case stand in contrast to many others in
which the form of the transaction actually created tax advantages
that, for one reason or another, could not have been enjoyed had
the transaction taken another form. See, e.g., Sun Oil Co. v.
Commissioner, 562 F.2d 258 (CA3 1977) (sale and lease-back of
land between taxpayer and tax-exempt trust enabled the taxpayer to
amortize, through its rental deductions, the cost of acquiring land
not otherwise depreciable). Indeed, the arrangements in this case
can hardly be labeled as tax avoidance techniques in light of the
other arrangements being promoted at the time. See, e.g., Zeitlin, Tax Planning in Equipment Leasing Shelters, 1969
So.Cal.Tax Inst. 621; Marcus, Real Estate Purchase-Leasebacks as
Secured Loans, 2 Real Estate L.J. 664 (1974).
[ Footnote 19 ] See generally Commissioner v. Danielson, 378 F.2d 771
(CA3), cert. denied, 389 U.S. 858 (1967), on
remand, 50 T.C. 782 (1968); Levinson v. Commissioner, 45 T.C. 380 (1966); World Publishing Co. v. Commissioner, 299 F.2d 614 (CA8 1962); Northwest Acceptance Corp. v.
Commissioner, 58 T.C. 836 (1972), aff'd, 500 F.2d
1222 (CA9 1974); Cubic Corp. v. United States, 541 F.2d
829 (CA9 1976).
MR. JUSTICE STEVENS, dissenting.
In my judgment, the controlling issue in this case is the
economic relationship between Worthen and petitioner, and matters
such as the number of parties, their reasons for structuring the
transaction in a particular way, and the tax benefits which may
result are largely irrelevant. The question whether a leasehold has
been created should be answered by examining the character and
value of the purported lessor's reversionary estate.
For a 25-year period, Worthen has the power to acquire full
ownership of the bank building by simply repaying the Page 435 U. S. 585 amounts, plus interest, advanced by the New York Life Insurance
Company and petitioner. During that period, the economic
relationship among the parties parallels exactly the normal
relationship between an owner and two lenders, one secured by a
first mortgage and the other by a second mortgage. [ Footnote 2/1 ] If Worthen repays both loans, it will
have unencumbered ownership of the property. What the character of
this relationship suggests is confirmed by the economic value that
the parties themselves have placed on the reversionary
interest.
All rental payments made during the original 25-year term are
credited against the option repurchase price, which is exactly
equal to the unamortized cost of the financing. The value of the
repurchase option is thus limited to the cost of the financing, and
Worthen's power to exercise the option is cost-free. Conversely,
petitioner, the nominal owner of the reversionary estate, is not
entitled to receive any value for the surrender of its supposed
rights of ownership. [ Footnote 2/2 ]
Nor does Page 435 U. S. 586 it have any power to control Worthen's exercise of the option.
[ Footnote 2/3 ]
"It is fundamental that 'depreciation is not predicated upon
ownership of property but rather upon an investment in
property. ' No such investment exists when payments of the
purchase price in accordance with the design of the parties yield
no equity to the purchaser." Estate of Franklin v. Commssioner, 544 F.2d 1045, 1049
(CA9 1976) (citations omitted; emphasis in original). Here, the
petitioner has, in effect, been guaranteed that it will receive its
original $500,000 plus accrued interest. But that is all. It incurs
neither the risk of depreciation, [ Footnote 2/4 ] nor the benefit of possible appreciation.
Under the terms of the sale-leaseback, it will stand in no better
or worse position after the 11th year of the lease, when Worthen
can first exercise its option to repurchase -- whether the property
has appreciated or depreciated. [ Footnote 2/5 ] And this remains true throughout the rest
of the 25-year period. Page 435 U. S. 587 Petitioner has assumed only two significant risks. First, like
any other lender, it assumed the risk of Worthen's insolvency.
Second, it assumed the risk that Worthen might not exercise its
option to purchase at or before the end of the original 25-year
term. [ Footnote 2/6 ] If Worthen
should exercise that right not to repay, perhaps it would then be
appropriate to characterize petitioner as the owner and Worthen as
the lessee. But speculation as to what might happen in 25 years
cannot justify the present characterization of petitioner as the
owner of the building. Until Worthen has made a commitment either
to exercise or not to exercise its option, [ Footnote 2/7 ] I think the Government is correct in its
view that petitioner is not the owner of the building for tax
purposes. At present, since Worthen has Page 435 U. S. 588 the unrestricted right to control the residual value of the
property for a price which does not exceed the cost of its
unamortized financing, I would hold, as a matter of law, that it is
the owner.
I therefore respectfully dissent.
[ Footnote 2/1 ]
"[W]here a fixed price, as in Frank Lyon Company, is designed
merely to provide the lessor with a predetermined fixed return, the
substantive bargain is more akin to the relationship between a
debtor and creditor than between a lessor and lessee."
Rosenberg & Weinstein, Sale-leasebacks: An analysis of these
transactions after the Lyon decision, 45 J.Tax. 146, 149
(1976).
[ Footnote 2/2 ]
It is worth noting that the proposals submitted by two other
potential investors in the building, see ante at 435 U. S. 564 ,
did contemplate that Worthen would pay a price above the financing
costs for acquisition of the leasehold interest. For instance,
Goldman, Sachs & Company proposed that, at the end of the
lease's primary term, Worthen would have the option to repurchase
the property for either its fair market value or 20% of its
original cost, whichever was the greater. See Brief for
United States 8 n. 7. A repurchase option based on fair market
value, since it acknowledges the lessor's equity interest in the
property, is consistent with a lessor-lessee relationship. See
Breece Veneer & Panel Co. v. Commissioner, 232 F.2d 319
(CA7 1956); LTV Corp. . Commissioner, 63 T.C. 39, 50
(1974); see generally Comment, Sale and Lease-back
Transactions, 52 N.Y.U.L.Rev. 672, 688-689, n. 117 (1977).
[ Footnote 2/3 ]
The situation in this case is thus analogous to that, in Corliss v. Bowers, 281 U. S. 376 ,
where the Court held that the grantor of a trust who retains an
unrestricted cost-free power of revocation remains the owner of the
trust assets for tax purposes. Worthen's power to exercise its
repurchase option is similar; the only restraints upon it are those
normally associated with the repayment of a loan, such as
limitations on the timing of repayment and the amount due at the
stated intervals.
[ Footnote 2/4 ]
Petitioner argues that it bears the risk of depreciation during
the primary term of the lease, because the option price decreases
over time. Brief for Petitioner 230. This is clearly incorrect.
Petitioner will receive $500,000 plus interest, and no more or
less, whether the option is exercised as soon as possible or only
at the end of 25 years. Worthen, on the other hand, does bear the
risk of depreciation, since its opportunity to make a profit from
the exercise of its repurchase option hinges on the value of the
building at the time.
[ Footnote 2/5 ]
After the 11th year of the lease, there are three ways that the
lease might be terminated. The property might be condemned, the
building might be destroyed by act of God, or Worthen might
exercise its option to purchase. In any such event, if the property
had increased in value, the entire benefit would be received by
Worthen, and petitioner would receive only its $500,000 plus
interest. See Reply Brief for Petitioner 8-9, n. 2.
[ Footnote 2/6 ]
The possibility that Worthen might not exercise its option is a
risk for petitioner, because, in that event, petitioner's advance
would be amortized during the ensuing renewal lease terms, totaling
40 years. Yet there is a possibility that Worthen would choose not
to renew for the full 40 years, or that the burdens of owning a
building and paying a ground rental of $10,000 during the years
2034 through 2044 would exceed the benefits of ownership. Ante at 435 U. S.
579 .
[ Footnote 2/7 ]
In this case, the lessee is not "economically compelled" to
exercise its option. See American Realty Trust v. United
States, 498 F.2d 1194 (CA4 1974). Indeed, it may be more
advantageous for Worthen to let its option lapse, since the present
value of the renewal leases is somewhat less than the price of the
option to repurchase. See Brief for United States 40 n.
26. But whether or not Worthen is likely to exercise the option, as
long as it retains its unrestricted cost-free power to do so, it
must be considered the owner of the building. See Sun Oil Co.
v. Commissioner, 562 F.2d 258, 267 (CA3 1977) (repurchase
option enabling lessee to acquire leased premises by repaying
financing costs indicative of lessee's equity interest in those
premises).
In effect, Worthen has an option to "put" the building to
petitioner if it drops in value below $500,000 plus interest. Even
if the "put" appears likely because of bargain lease rates after
the primary terms, that would not justify the present
characterization of petitioner as the owner of the building. | In *Frank Lyon Co. v. United States*, the Supreme Court considered a case involving a state bank's construction of a new building for its headquarters and the subsequent sale and lease-back agreements entered into with the petitioner, Frank Lyon Co. The Court held that the petitioner was entitled to claim tax deductions related to the transaction, including depreciation, interest, and other expenses. While the rent paid by the bank equaled the mortgage payments made by the petitioner, the Court distinguished this case from a simple sham or conduit arrangement. The Court also determined that the petitioner bore the risks and benefits of ownership during the lease period and that the bank's repurchase option did not negate the petitioner's status as the owner of the building for tax purposes. |
Taxes | Commissioner v. Kowalski | https://supreme.justia.com/cases/federal/us/434/77/ | U.S. Supreme Court Commissioner v. Kowalski, 434 U.S.
77 (1977) Commissioner of Internal Revenue v.
Kowalski No. 76-1095 Argued October 12,
1977 Decided November 29,
1977 434 U.S.
77 CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE THIRD
CIRCUIT Syllabus New Jersey provides a cash meal allowance for its state police
troopers, which is paid biweekly in advance in an amount varying
with the trooper's rank and is included, although separately
stated, with his salary and in his gross pay for purposes of
calculating pension benefits. Although troopers are required to
remain on call in their assigned patrol areas during their midshift
break, they are not required to eat lunch at any particular
location, and indeed may eat at home, nor are they required to
spend the meal allowance on food. No reduction in the allowance is
made for periods when a trooper is not on patrol. Respondents, a
trooper and his wife, included only a part of the meal allowances
received by the trooper in their 1970 federal income tax return,
and the Commissioner assessed a deficiency with respect to the
remainder. The respondents argued in the Tax Court that the
allowance was not income within § 61(a) of the Internal Revenue
Code of 1954, which defines gross income as "all income from
whatever source derived, including (but not limited to) . . . (1)
Compensation for services, including fees, commissions, and similar
items." In the alternative, they argued that the allowances were
excludable from § 61 income because of § 119 of the Code, which
creates an exclusion for
"the value of any meals . . . furnished to [an employee] by his
employer for the convenience of the employer, but only if . . . the
meals are furnished on the business premises of the employer,"
and further provides that,
"[in] determining whether meals are furnished . . . for the
convenience of the employer, the provisions of an employment
contract or of a State statute fixing terms of employment shall not
be determinative of whether the meals . . . are intended as
compensation."
The Tax Court rejected both contentions, but the Court of
Appeals reversed. Held: 1. In the absence of a specific exemption, the cash meal
allowance payments are included in gross income under § 61(a),
since they are "undeniabl[y] accessions to wealth, clearly
realized, and over which the [trooper has] complete dominion." Commissioner v. Glenshaw Glass Co., 348 U.
S. 426 , 348 U. S. 431 .
Pp. 434 U. S.
82 -84.
2. The payments are not subject to exclusion from gross income
under Page 434 U. S. 78 § 119, since § 119, by its terms, covers meals furnished by the
employer, and not cash reimbursements for meals. P. 434 U. S.
84 .
3. No specific exemption for the payments can be claimed on the
basis of the once-recognized doctrine that benefits conferred by an
employer on an employee "for the convenience of the employer" are
not income within the meaning of the Internal Revenue Code, since
it appears from the legislative history of § 119 that it was
intended comprehensively to modify the prior law, both expanding
and contracting the exclusion for meals previously provided, and
therefore it must be construed as a replacement for the prior law,
designed to end the confusion that had developed respecting the
"convenience of the employer" doctrine as a determinant of the tax
status of meals. Pp. 434 U. S.
84 -95.
544 F.2d 686, reversed.
BRENNAN, J., delivered the opinion of the Court, in which
STEWART, WHITE, MARSHALL, POWELL, REHNQUIST, and STEVENS, JJ.,
joined. BLACKMUN, J., filed a dissenting opinion, in which BURGER,
C.J., joined, post, p. 434 U. S.
96 .
MR. JUSTICE BRENNAN delivered the opinion of the Court.
This case presents the question whether cash payments to state
police troopers, designated as meal allowances, are included in
gross income under § 61(a) of the Internal Revenue Code of 1954, 26
U.S.C. § 61(a), [ Footnote 1 ]
and, if so, are otherwise excludable under § 119 of the Code, 26
U.S.C. § 119. [ Footnote 2 ] Page 434 U. S. 79 I The pertinent facts are not in dispute. Respondent [ Footnote 3 ] is a state police trooper
employed by the Division of State Police of the Department of Law
and Public Safety of the State of New Jersey. During 1970, the tax
year in question, he received a base salary of $8,739.38, and an
additional $1,697.54 [ Footnote
4 ] designated as an allowance for meals.
The State instituted the cash meal allowance for its state
police officers in July, 1949. Prior to that time, all troopers
were provided with midshift [ Footnote 5 ] meals in kind at various meal stations located
throughout the State. A trooper unable to eat at an official meal
station could, however, eat at a restaurant and obtain
reimbursement. The meal station system proved unsatisfactory to the
State because it required troopers to leave their assigned areas of
patrol unguarded for extended Page 434 U. S. 80 periods of time. As a result, the State closed its meal stations
and instituted a cash allowance system. Under this system, troopers
remain on call in their assigned patrol areas during their midshift
break. Otherwise, troopers are not restricted in any way with
respect to where they may eat in the patrol area and, indeed, may
eat at home if it is located within that area. Troopers may also
bring their midshift meal to the job and eat it in or near their
patrol cars.
The meal allowance is paid biweekly in advance and is included,
although separately stated, with the trooper's salary. The meal
allowance money is also separately accounted for in the State's
accounting system. Funds are never commingled between the salary
and meal allowance accounts. Because of these characteristics of
the meal allowance system, the Tax Court concluded that the "meal
allowance was not intended to represent additional compensation."
65 T.C. 44, 47 (1975).
Notwithstanding this conclusion, it is not disputed that the
meal allowance has many features inconsistent with its
characterization as a simple reimbursement for meals that would
otherwise have been taken at a meal station. For example, troopers
are not required to spend their meal allowances on their midshift
meals, nor are they required to account for the manner in which the
money is spent. With one limited exception not relevant here,
[ Footnote 6 ] no reduction in
the meal allowance is made for periods when a trooper is not on
patrol because, for example, he is assigned to a headquarters
building or is away from active duty on vacation, leave, or sick
leave. In addition, the cash allowance for meals is described on a
state police recruitment brochure as an item of salary to be
received in addition to an officer's base salary and the amount of
the meal allowance is a subject of negotiations between the State
and the police troopers' union. Finally, the amount of an
officer's Page 434 U. S. 81 cash meal allowance varies with his rank, [ Footnote 7 ] and is included in his gross pay for
purposes of calculating pension benefits.
On his 1970 income tax return, respondent reported $9,066 in
wages. That amount included his salary plus $326.45 which
represented cash meal allowances reported by the State on
respondent's Wage and Tax Statement (Form W-2). [ Footnote 8 ] The remaining amount of meal
allowance, $1,371.09, was not reported. On audit, the Commissioner
determined that this amount should have been included in
respondent's 1970 income, and assessed a deficiency.
Respondent sought review in the United States Tax Court, arguing
that the cash meal allowance was not compensatory, but was
furnished for the convenience of the employer, and hence was not
"income" within the meaning of § 61(a), and that, in any case, the
allowance could be excluded under § 119. In a reviewed decision,
the Tax Court, with six dissents, [ Footnote 9 ] held that the cash meal payments were income
within the meaning of § 61 and, further, that such payments were
not excludable under § 119. [ Footnote 10 ] 65 T. C 44 (1975). The Court of Appeals
for Page 434 U. S. 82 the Third Circuit, in a per curiam opinion, held that its
earlier decision in Saunders v. Commissioner, 215 F.2d 768
(1954), which determined that cash payments under the New Jersey
meal allowance program were not taxable, required reversal. 544
F.2d 686 (1976). We granted certiorari to resolve a conflict among
the Courts of Appeals on the question. [ Footnote 11 ] 430 U.S. 944 (1977). We reverse. II A The starting point in the determination of the scope of "gross
income" is the cardinal principle that Congress in creating the
income tax intended "to use the full measure of its taxing power." Helvering v. Clifford, 309 U. S. 331 , 309 U. S. 334 (1940); accord, Helvering v. Midland Mutual Life Ins. Co., 300 U. S. 216 , 300 U. S. 223 (1937); Douglas v. Willcuts, 296 U. S.
1 , 296 U. S. 9 (1935); Irwin v. Gavit, 268 U. S. 161 , 268 U. S. 166 (1925). In applying this principle to the construction of § 22(a)
of the Internal Revenue Code of 1939, [ Footnote 12 ] this Court stated that
"Congress applied no limitations as to the source of taxable
receipts, nor restrictive labels as to their nature[, but intended]
to tax all Page 434 U. S. 83 gains except those specifically exempted." Commissioner v. Glenshaw Glass Co., 348 U.
S. 426 , 348 U. S.
429 -430 (1955), citing Commissioner v.
Jacobson, 336 U. S. 28 , 336 U. S. 49 (1949), and Helvering v. Stockholms Enskilda, Bank, 293 U. S. 84 , 293 U. S. 87 -91
(1934). Although Congress simplified the definition of gross income
in § 61 of the 1954 Code, it did not intend thereby to narrow the
scope of that concept. See Commissioner v. Glenshaw lass Co.,
supra at 348 U. S. 432 ,
and n. 11; H.R.Rep. No. 1337, 83d Cong., 2d Sess., A18 (1954);
S.Rep. No. 1622, 83d Cong., 2d Sess., 168 (1954). [ Footnote 13 ] In the absence of a specific
exemption, therefore, respondent's meal allowance payments are
income within the meaning of § 61 since, like the payments involved
in Glenshaw Glass Co., the payments are "undeniabl[y]
accessions to wealth, clearly realized, and over which the
[respondent has] complete dominion." Commissioner v. Glenshaw
Glass Co., supra at 348 U. S. 431 . See also Commissioner v. LoBue, 351 U.
S. 243 , 351 U. S. 247 (1956); Van Rosen v. Commissioner, 17 T.C. 834, 83
(1951).
Respondent contend,. however, that § 119 can be construed to be
a specific exemption covering the meal allowance payments to New
Jersey troopers. Alternatively, respondent argues that
notwithstanding § 119, a specific exemption may be found in a line
of lower court cases and administrative rulings which recognize
that benefits conferred by an employer on an employee "for the
convenience of the employer" -- at least when such benefits are not
"compensatory" -- are not income within the meaning of the Internal
Revenue Code. In responding to these contentions, we turn first to
§ 119. Since we hold that § 119 does not cover cash payments of any
kind, we then trace the development over several decades of the
"convenience of the employer" doctrine as a determinant Page 434 U. S. 84 of the tax status of meals and lodging, turning finally to the
question whether the doctrine as applied to meals and lodging
survives the enactment of the Internal Revenue Code of 1954. B Section 119 provides that an employee may exclude from
income
"the value of any meals . . . furnished to him by his employer
for the convenience of the employer, but only if . . . the meals
are furnished on the business premises of the employer. . . ."
By its terms, § 119 covers meals furnished by the employer, and
not cash reimbursements for meals. This is not a mere oversight. As
we shall explain at greater length below, the form of § 119 which
Congress enacted originated in the Senate and the Report
accompanying the Senate bill is very clear: "Section 119 applies
only to meals or lodging furnished in kind." S.Rep. No. 1622, 83d
Cong., 2d Sess., 190 (1954). See also Treas.Reg. §
1.119-1(c)(2), 26 CFR § 1.119-1 (1977). Accordingly, respondent's
meal allowance payments are not subject to exclusion under §
119. C The "convenience of the employer" doctrine is not a tidy one.
The phrase "convenience of the employer" first appeared in O. D.
265, 1 Cum.Bull. 71 (1919), in a ruling exempting from the income
tax board and lodging furnished seamen aboard ship. The following
year, T. D. 2992, 2 Cum.Bull. 76 (1920), was issued, and added a
"convenience of the employer" section to Treas.Regs. 45, Art. 33,
the income tax regulations then in effect. [ Footnote 14 ] As modified, Art. 33 stated:
"Art. 33. Compensation paid other than in cash. . . .
When living quarters such as camps are furnished to Page 434 U. S. 85 employees for the convenience of the employer, the ratable value
need not be added to the cash compensation of the employee, but
where a person receives as compensation for services rendered a
salary and in addition thereto living quarters, the value to such
person of the quarters furnished constitutes income subject to tax.
. . ."
While T. D. 2992 extended the "convenience of the employer" test
as a general rule solely to items received in kind, O.D. 514, 2
Cum.Bull. 90 (1920), extended the "convenience of the employer"
doctrine to cash payments for "supper money." [ Footnote 15 ]
The rationale of both T. D. 2992 and O.D. 514 appears to have
been that benefits conferred by an employer on an employee in the
designated circumstances were not compensation for services, and
hence not income. Subsequent rulings equivocate on whether the
noncompensatory character of a benefit could be inferred merely
from its characterization by the employer, or whether there must be
additional evidence that employees are granted a benefit solely
because the employer's business could not function properly unless
an employee was furnished that benefit on the employer's premises.
O.D. 514, for example, focuses only on the employer's
characterization. [ Footnote
16 ] Two rulings issued in 1921, however, Page 434 U. S. 86 dealing respectively with cannery workers [ Footnote 17 ] and hospital employees, [ Footnote 18 ] emphasize the necessity
of the benefits to the functioning of the employer's business, and
this emphasis was made the authoritative interpretation of the
"convenience of the employer" provisions of the regulations in Mim.
5023, 1940-1 Cum.Bull. 14. [ Footnote 19 ]
Adding complexity, however, is Mim. 6472, 1950-1 Cum.Bull. 15,
issued in 1950. This mimeograph states in relevant part:
"The 'convenience of the employer' rule is simply an
administrative test to be applied only in cases in which the
compensatory character of . . . benefits is not otherwise
determinable. It follows that the rule should not be applied in any
case in which it is evident from the other circumstances involved
that the receipt of quarters or meals by the employee represents
compensation for services rendered." Ibid. Page 434 U. S. 87 Mimeograph 6472 expressly modified all previous rulings which
had suggested that meals and lodging could be excluded from income
upon a simple finding that the furnishing of such benefits was
necessary to allow an employee to perform his duties properly.
[ Footnote 20 ] However, the
ruling apparently did not affect O.D. 514, which, as noted above,
creates an exclusion from income based solely on an employer's
characterization of a payment as noncompensatory.
Coexisting with the regulations and administrative
determinations of the Treasury, but independent of them, is a body
of case law also applying the "convenience of the employer" test to
exclude from an employee's statutory income benefits conferred by
his employer.
An early case is Jones v. United States, 60 Ct.Cl. 552
(1925). There, the Court of Claims ruled that neither the value of
quarters provided an Army officer for nine months of a tax year nor
payments in commutation of quarters paid the officer for the
remainder of the year were includable in income. The decision
appears to rest both on a conclusion that public quarters, by
tradition and law, were not "compensation received as such" within
the meaning of § 213 of the Revenue Act of 1921, 42 Stat. 237, and
also on the proposition that "public quarters for the housing of .
. . officers is as much a military necessity as the procurement of
implements of warfare or the training of troops." 60 Ct.Cl. at 569; see id. at 565-568. The Court of Claims, in addition,
rejected the argument that money paid in commutation of quarters
was income on the ground that it was not "gain derived . . . from
labor" within the meaning of Eisner v. Macomber, 252 U. S. 189 (1920), but apparently was, at most, a reimbursement to the officer
for furnishing himself with a necessity of his job in those
instances in which the Government found it convenient to leave the
task of procuring quarters to an individual officer. 60 Ct.Cl. at
574-578. Page 434 U. S. 88 Subsequent judicial development of the "convenience of the
employer" doctrine centered primarily in the Tax Court. In two
reviewed cases decided more than a decade apart, Benagli v.
Commissioner, 36 B.T.A. 838 (1937), and Van Rosen v.
Commissioner, 17 T.C. 834 (1951), that court settled on the
business necessity rationale for excluding food and lodging from an
employee's income. [ Footnote
21 ] Van Rosen's unanimous decision is of particular
interest in interpreting the legislative history of the 1954
recodification of the Internal Revenue Code, since it predates that
recodification by only three years. There, the Tax Court expressly
rejected any reading of Jones, supra, that would make tax
consequences turn on the intent of the employer, even though the
employer in Van Rosen, as in Jones, was the
United States, and, also as in Jones, the subsistence
payments involved in the litigation were provided by military
regulation. [ Footnote 22 ] In
addition, Van Rosen refused to follow Page 434 U. S. 89 the Jones holding with respect to cash allowances,
apparently on the theory that a civilian who receives cash
allowances for expenses otherwise nondeductible has funds he can
"take, appropriate, use and expend," 17 T.C. at 838, in
substantially the same manner as "any other civilian employee whose
employment is such as to permit him to live at home while
performing the duties of his employment." Id. at 836; see id. at 839-840. It is not clear from the opinion
whether the last conclusion is based on notions of equity among
taxpayers or is simply an evidentiary conclusion that, since Van
Rosen was allowed to live at home while performing his duties,
there was no business purpose for the furnishing of food and
lodging.
Two years later, the Tax Court, in an unreviewed decision in Doran v. Commissioner, 21 T.C. 374 (1953), returned in
part to the "employer's characterization" rationale rejected by Van Rosen. In Doran, the taxpayer was furnished
lodging in kind by a state school. State law required the value of
the lodging to be included in the employee's compensation. Although
the court concluded that the lodging was furnished to allow the
taxpayer to be on 24-hour call, a reason normally sufficient to
justify a "convenience of the employer" exclusion, [ Footnote 23 ] it required the value of the
lodging to be included in income on the basis of the
characterization of the lodging as compensation under state law.
The approach taken in Doran is the same as that in Mim.
6472, supra. [ Footnote
24 ] However, the Court of Appeals for the Second Circuit, in Diamond v. Sturr, 221 Page 434 U. S. 90 F.2d 264 (1955), on facts indistinguishable from Doran, reviewed the law prior to 1954 and held that the business necessity
view of the "convenience of the employer"' test, "having persisted
through the interpretations of the Treasury and the Tax Court
throughout years of reenactment of the Internal Revenue Code," was
the sole test to be applied. 221 F.2d at 268. D Even if we assume that respondent's meal allowance payments
could have been excluded from income under the 1939 Code pursuant
to the doctrine we have just sketched, we must nonetheless inquire
whether such an implied exclusion survives the 1954 recodification
of the Internal Revenue Code. Cf. Helvering v. Winmill, 305 U. S. 79 , 305 U. S. 83 (1938. Two provisions of the 1954 Code are relevant to this
inquiry: § 119 and § 120, [ Footnote 25 ] now repealed, [ Footnote 26 ] which allowed police officers to exclude
from income subsistence allowances of up to $5 per day.
In enacting § 119, the Congress was determined to "end the
confusion as to the tax status of meals and lodging furnished an
employee by his employer." H.R.Rep. No. 1337, 83d Cong., 2d Sess.,
18 (19;4); S.Rep. No. 1622, 83d Cong., 2d Sess., 19 (1954).
However, the House and Senate initially Page 434 U. S. 91 differed on the significance that should be given the
"convenience of the employer" doctrine for the purposes of § 119.
As explained in its Report, the House proposed to exclude meals
from gross income
"if they [were] furnished at the place of employment and the
employee [was] required to accept them at the place of employment
as a condition of his employment."
H.R.Rep. No. 1337, supra, at 18; see H.R.
8300, 83d Cong., 2d Sess., § 119 (1954). Since no reference
whatsoever was made to the concept, the House view apparently was
that a statute "designed to end the confusion as to the tax status
of meals and lodging furnished an employee by his employer"
required complete disregard of the "convenience of the employer"
doctrine.
The Senate, however, was of the view that the doctrine had at
least a limited role to play. After noting the existence of the
doctrine and the Tax Court's reliance on state law to refuse to
apply it in Doran v. Commissioner, supra, the Senate
Report states:
"Your committee believes that the House provision is ambiguous
in providing that meals or lodging furnished on the employer's
premises, which the employee is required to accept as a condition
of his employment, are excludable from income whether or not
furnished as compensation. Your committee has provided that the
basic test of exclusion is to be whether the meals or lodging are
furnished primarily for the convenience of the employer (and thus
excludable), or whether they were primarily for the convenience of
the employee (and therefore taxable). However, in deciding whether
they were furnished for the convenience of the employer, the fact
that a State statute or an employment contract fixing the terms of
the employment indicate the meals or lodging are intended as
compensation is not to be determinative. This means that employees
of State institutions who are required to live and eat on the
premises will not be taxed Page 434 U. S. 92 on the value of the meals and lodging even though the State
statute indicates the meals and lodging are part of the employee's
compensation."
S.Rep. No. 1622, supra, at 19. In a technical appendix,
the Senate Report further elaborated:
"Section 119 applies only to meals or lodging furnished in kind.
Therefore, any cash allowances for meals or lodging received by an
employee will continue to be includible in gross income to the
extent that such allowances constitute compensation." Id. at 190-191.
After conference, the House acquiesced in the Senate's version
of § 119. Because of this, respondent urges that § 119, as passed,
did not discard the "convenience of the employer" doctrine, but
indeed endorsed the doctrine shorn of the confusion created by Mim.
6472 and cases like Doran. Respondent further argues that,
by negative implication, the technical appendix to the Senate
Report creates a class of noncompensatory cash meal payments that
are to be excluded from income. We disagree.
The Senate unquestionably intended to overrule Doran and rulings like Mim. 6472. Equally clearly, the Senate refused
completely to abandon the "convenience of the employer" doctrine as
the House wished to do. On the other hand, the Senate did not
propose to leave undisturbed the convenience of the employer
doctrine as it had evolved prior to the promulgation of Mim. 6472.
The language of § 119 [ Footnote
27 ] quite plainly rejects the reasoning behind rulings like
O.D. 514, see n. 15, supra, which rest on the
employer's characterization of the nature of a payment. [ Footnote 28 ] This conclusion is
buttressed Page 434 U. S. 93 by the Senate's choice of a term of art, "convenience of the
employer," in describing one of the conditions for exclusion under
§ 119. In so choosing, the Senate obviously intended to adopt the
meaning of that term as it had developed over time, except, of
course, to the extent § 119 overrules decisions like Doran. As we have noted above, Van Rosen v.
Commissioner, 17 T.C. 834 (1951), provided the controlling
court definition at the time of the 1954 recodification, and it
expressly rejected the Jones theory of "convenience of the
employer" -- and, by implication, the theory of O.D. 514 -- and
adopted as the exclusive rationale the business necessity theory. See 17 T.C. at 838-840. The business necessity theory was
also the controlling administrative interpretation of "convenience
of the employer" prior to Mim. 6472. See supra at 434 U. S. 85 -86,
and n 19. Finally, although
the Senate Report did not expressly define "convenience of the
employer," it did describe those situations in which it wished to
reverse the courts and create an exclusion as those where "an
employee must accept . . . meals or lodging in order properly to
perform his duties." S.Rep. No. 1622, supra, at 19.
As the last step in its restructuring of prior law, the Senate
adopted an additional restriction, created by the House and not
theretofore a part of the law, which required that meals subject to
exclusion had to be taken on the business premises of the employer.
Thus, § 119 comprehensively modified the prior law, both expanding
and contracting the exclusion for meals and lodging previously
provided, and it must therefore be construed as its draftsmen
obviously intended it to be -- as a replacement for the prior law,
designed to "end [its] confusion."
Because § 119 replaces prior law, respondent's further argument
-- that the technical appendix in the Senate Report Page 434 U. S. 94 recognized the existence under § 61 of an exclusion for a class
of noncompensatory cash payments -- is without merit. If cash meal
allowances could be excluded on the mere showing that such payments
served the convenience of the employer, as respondent suggests,
then cash would be more widely excluded from income than meals in
kind, an extraordinary result given the presumptively compensatory
nature of cash payments and the obvious intent of § 119 to narrow
the circumstances in which meals could be excluded. Moreover, there
is no reason to suppose that Congress would have wanted to
recognize a class of excludable cash meal payments. The two
precedents for the exclusion of cash -- O.D. 514 and Jones v.
United States -- both rest on the proposition that the
convenience of the employer can be inferred from the
characterization given the cash payments by the employer, and the
heart of this proposition is undercut by both the language of § 119
and the Senate Report. Jones also rests on Eisner v.
Macomber, 252 U. S. 189 (1920), but Congress had no reason to read Eisner's definition of income into § 61 and, indeed, any assumption that
Congress did is squarely at odds with Commissioner v. Glenshaw
Glass Co., 348 U. S. 426 (1955). [ Footnote 29 ] See id. at 348 U. S.
430 -431. Finally, as petitioner suggests, it is much
more reasonable to assume that the cryptic statement in the
technical appendix -- "cash allowances . . . will continue to be
includable in gross income to the extent that such allowances
constitute compensation" -- was meant to indicate Page 434 U. S. 95 only that meal payments otherwise deductible under § 162(a)(2)
of the 1954 Code [ Footnote
30 ] were not affected by § 119.
Moreover, even if we were to assume with respondent that cash
meal payments made for the convenience of the employer could
qualify for an exclusion notwithstanding the express limitations
upon the doctrine embodied in § 119, there would still be no reason
to allow the meal allowance here to be excluded. Under the pre-1954
"convenience of the employer" doctrine, respondent's allowance is
indistinguishable from that in Van Rosen v. Commissioner,
supra, and hence it is income. Indeed, the form of the meal
allowance involved here has drastically changed from that passed on
in Saunders v. Commissioner, 215 F.2d 768 (CA3 1954),
relied on by the Third Circuit below see supra at 434 U. S. 82 ,
and, in its present form, the allowance is not excludable even
under Saunders' analysis. [ Footnote 31 ] In any case, to avoid the completely
unwarranted result of creating a larger exclusion for cash than
kind, the meal allowances here would have to be demonstrated to be
necessary to allow respondent "properly to perform his duties."
There is not even a suggestion on this record of any such
necessity.
Finally, respondent argues that it is unfair that members of the
military may exclude their subsistence allowances from income,
while respondent cannot. While this may be so, arguments of equity
have little force in construing the boundaries Page 434 U. S. 96 of exclusions and deductions from income many of which, to be
administrable, must be arbitrary. In any case, Congress has already
considered respondent's equity argument and has rejected it in the
repeal of § 120 of the 1954 Code. That provision, as enacted,
allowed state troopers like respondent to exclude from income up to
$5 of subsistence allowance per day. Section 120 was repealed after
only four years, however, because it was
"inequitable, since there are many other individual taxpayers
whose duties also require them to incur subsistence expenditures
regardless of the tax effect. Thus, it appears that certain police
officials, by reason of this exclusion, are placed in a more
favorable position tax-wise than other individual income taxpayers
who incur the same types of expense. . . ."
H.R.Rep. No. 775, 85th Cong., 1st Sess., 7 (1957). Reversed. [ Footnote 1 ]
"§ 61. Gross income defined."
"(a) General definition."
"Except as otherwise provided in this subtitle, gross income
means all income from whatever source derived, including (but not
limited to) the following items:"
"(1) Compensation for services, including fees, commissions, and
similar items. . . ."
[ Footnote 2 ]
"§ 119. Meals or lodging furnished for the convenience of the
employer."
"There shall be excluded from gross income of an employee the
value of any meals or lodging furnished to him by his employer for
the convenience of the employer, but only if -- "
"(1) in the case of meals, the meals are furnished on the
business premises of the employer. . . . "
"In determining whether meals . . . are furnished for the
convenience of the employer, the provisions of an employment
contract or of a State statute fixing terms of employment shall not
be determinative of whether the meals or lodging are intended as
compensation."
[ Footnote 3 ]
References to "respondent" are to Robert J. Kowalski. Nancy A.
Kowalski, also a respondent, is a party solely because she filed a
joint return with her husband for the 1970 tax year.
[ Footnote 4 ]
Respondent was entitled to $1,740 in meal allowances, see n 7, infra, but, for reasons not disclosed by the record,
received the lesser amount.
[ Footnote 5 ]
While on active duty, New Jersey troopers are generally required
to live in barracks. Meals furnished in kind at the barracks before
or after a patrol shift are not involved in this case. Nor is the
meal allowance intended to pay for meals eaten before or after a
shift in those instances in which the trooper is not living in the
barracks. However, because of the duration of some patrols, a
trooper may be required to eat more than one meal per shift while
on the road.
[ Footnote 6 ]
The amount of the allowance is adjusted only when an officer is
on military leave.
[ Footnote 7 ]
Troopers, such as respondent, and other noncommissioned officers
received $1,740 per year; lieutenants and captains received $1,776,
majors $1,848, and the Superintendent $2,136.
[ Footnote 8 ]
On October 1, 1970, the Division of State Police began to
withhold income tax from amounts paid as cash meal allowances. No
claim has been made that the change in the Division's withholding
policy has any relevance for this case.
[ Footnote 9 ]
A seventh judge concurred in the majority opinion with respect
to §§ 61 and 119, but dissented on the ground that the meal
allowance was deductible under § 162(a) of the Code, see n 30, infra, as
"ordinary and necessary expenditures required as a part of
petitioner's duties." 65 T.C. at 63. Since respondent has not made
this contention here, we have no occasion to consider it.
[ Footnote 10 ]
The Tax Court also determined that amounts of meal allowance
attributable to respondent's expenses while "away from home" as
defined in § 162(a)(2) of the Code, see n 30, infra, were properly
deducted from respondent's income as travel expenses. See
United States v. Correll, 389 U. S. 299 (1967). The Commissioner did not appeal from this holding.
[ Footnote 11 ] See Wilson v. United States, 412 F.2d 694 (CA1 1969)
(troopers' subsistence allowance taxable); United States v.
Keeton, 383 F.2d 429 (CA10 1967) (per curiam) (troopers'
subsistence allowance nontaxable); United States v.
Morelan, 356 F.2d 199 (CA8 1966) (same); United States v.
Barrett, 321 F.2d 911 (CA5 1963) (same); Magness v.
Commissioner, 247 F.2d 740 (CA5 1957) (troopers' subsistence
allowance taxable), cert. denied, 355 U.S. 931 (1958); Saunders v. Commissioner, 215 F.2d 768 (CA3 1954)
(troopers' meal allowance nontaxable). See also Ghastin v.
Commissioner, 60 T.C. 264 (1973) (troopers' subsistence
allowance taxable); Hyslope v. Commissioner, 21 T.C. 131
(1953) (troopers' meal allowance taxable).
[ Footnote 12 ]
53 Stat. 9, as amended, ch. 59, 53 Stat. 574. This section
provided:
"(a) GENERAL DEFINITION. -- 'Gross income' includes gains,
profits, and income derived from salaries, wages, or compensation
for personal service, . . . or gains or profits and income
derived from any source whatever. "
(Emphasis added.)
[ Footnote 13 ]
The House and Senate Reports state:
"[Section 61] corresponds to section 22(a) of the 1939 Code.
While the language in existing section 22(a) has been simplified,
the all-inclusive nature of statutory gross income has not been
affected thereby. Section 61(a) is as broad in scope as section
22(a) ."
[ Footnote 14 ]
Substantially identical language appeared in the income tax
regulations on the date of the 1954 recodification of the Internal
Revenue Code. See Treas.Regs. 111, § 29.22(a)-3 (1943);
Treas.Regs. 118, § 39.22(a)-3 (1953) .
[ Footnote 15 ]
"'Supper money' paid by an employer to an employee, who
voluntarily performs extra labor for his employer after regular
business hours, such payment not being considered additional
compensation and not being charged to the salary account, is
considered as being paid for the convenience of the employer. . .
."
(Emphasis added.)
[ Footnote 16 ] See n 15, supra. O.D. 914, 4 Cum.Bull. 85 (1921), is another ruling
that makes tax consequences turn on the intention of the employer.
Under O.D. 914, lodging furnished to employees of the Indian
Service was determined to be income if the Department of the
Interior charged such lodging to the appropriation from which
compensation was normally paid; otherwise, it was not. See
also O.D. 11, 1 Cum.Bull. 66 (1919) ( semble )
("maintenance" paid to Red Cross workers includable in income only
to the extent it exceeds actual living expenses).
[ Footnote 17 ]
"Where, from the location and nature of the work, it is
necessary that employees engaged in fishing and canning be
furnished with lodging and sustenance by the employer, the value of
such lodging and sustenance may be considered as being furnished
for the convenience of the employer and need not, therefore, be
included in computing net income. . . ."
O.D. 814, 4 Cum.Bull. 84, 84-85 (1921).
[ Footnote 18 ]
"Where the employees of a hospital are subject to immediate
service on demand at any time during the twenty-four hours of the
day and on that account are required to accept quarters and meals
at the hospital, the value of such quarters and meals may be
considered as being furnished for the convenience of the hospital
and does not represent additional compensation to the employees. On
the other hand, where the employees . . . could, if they so
desired, obtain meals and lodging elsewhere than in the hospital
and yet perform the duties required of them by such hospital, the
ratable value of the board and lodging furnished is considered
additional compensation."
O.D. 915, 4 Cum.Bull. 85, 85-86 (1921).
[ Footnote 19 ]
"3. As a general rule, the test of 'convenience of the employer'
is satisfied if living quarters or meals are furnished to an
employee who is required to accept such quarters and meals in order
to perform properly his duties."
1941 Cum.Bull., at 15, citing O.D. 915, supra, n.
18.
[ Footnote 20 ] See 1951 Cum.Bull. at 16.
[ Footnote 21 ]
"The better and more accurate statement of the reason for the
exclusion from the employee's income of the value of subsistence
and quarters furnished in kind is found, we think, in Arthur
Benagli, 36 B.T.A. 838, where it was pointed out that, on the
facts, the subsistence and quarters were not supplied by the
employer and received by the employee 'for his personal
convenience[,] comfort or pleasure, but solely because he could not
otherwise perform the services required of him.' In other words,
though there was an element of gain to the employee, in that he
received subsistence and quarters which otherwise he would have had
to supply for himself, he had nothing he could take, appropriate,
use and expend according to his own dictates, but, rather, the ends
of the employer's business dominated and controlled, just as in the
furnishing of a place to work and in the supplying of the tools and
machinery with which to work. The fact that certain personal wants
and needs of the employee were satisfied was plainly secondary and
incidental to the employment." Van Rosen v. Commissioner, 17 T.C. at 838.
[ Footnote 22 ]
Van Rosen was a civilian ship captain employed by the United
States Army Transportation Corps. Id. at 834. In this
capacity, his pay and subsistence allowances were determined by the
Marine Personnel Regulations of the Transportation Corps of the
Army. Id. at 837. His principal argument in the Tax Court
was the factual similarity of his case to Jones v. United
States, 60 Ct.Cl. 552 (1925). See 17 T.C. at 837.
[ Footnote 23 ] See Benaglia v. Commissioner, 36 B.T.A. 838, 839-840
(1937); O.D. 915, supra, n 18.
[ Footnote 24 ] See also Diamond v. Sturr, 116 F. Supp. 28 (NDNY 1953), rev'd, 221 F.2d 264 (CA2 1955) (value of lodgings held
taxable on same facts as Doran ); Romer v.
Commissioner, 28 T.C. 1228 (1957) (following Doran for tax years governed by 1939 Code); Dietz v.
Commissioner, 25 T.C. 1255 (1956) (holding the value of an
apartment to be includable in income under 1939 Code where the
apartment was the only consideration received by the taxpayers for
performing janitorial services).
[ Footnote 25 ]
"Sec. 120. STATUTORY SUBSISTENCE ALLOWANCE RECEIVED BY
POLICE."
"(a) GENERAL RULE. -- Gross income does not include any amount
received as a statutory subsistence allowance by an individual who
is employed as a police official. . . . "
"(b) LIMITATIONS -- "
"(1) Amounts to which subsection (a) applies shall not exceed $5
per day."
"(2) If any individual receives a subsistence allowance to which
subsection (a) applies, no deduction shall be allowed under any
other provision of this chapter for expenses in respect of which he
has received such allowance, except to the extent that such
expenses exceed the amount excludable under subsection (a) and the
excess is otherwise allowable as a deduction under this
chapter."
68A Stat. 39.
[ Footnote 26 ] See Technical Amendments Act of 1958, § 3, 72 Stat.
1607.
[ Footnote 27 ]
"[T]he provisions of an employment contract . . . shall not be
determinative of whether . . . meals . . . are intended as
compensation."
[ Footnote 28 ]
We do not decide today whether, notwithstanding § 119, the
"supper money" exclusion may be justified on other grounds. See, e.g., Treasury Department, Proposed Fringe Benefit
Regulations, 40 Fed.Reg. 41118, 41121 (1975) (example 8). Nor do we
decide whether sporadic meal reimbursements may be excluded from
income. Cf. United States v. Correll, 389 U.
S. 299 (1967).
[ Footnote 29 ]
Moreover, it must be recognized that § 213 of the Revenue Act of
1921, 42 Stat. 237, which was involved in Jones v. United
States, made a distinction by its terms between "gross income"
which included "salaries, wages, or compensation for personal
service" and the "compensation received as such" by an officer of
the United States. See 60 Ct.Cl. at 563. The Court of
Claims assumed that Congress, by so distinguishing, intended to tax
United States officers more narrowly than other taxpayers by
levying the income tax only on amounts expressly characterized by
Congress as compensation. See ibid. For this reason, Jones is of limited value in construing § 61, which
contains no language even remotely similar to § 213.
[ Footnote 30 ]
"§ 162. Trade or business expenses."
"(a) In general. -- There shall be allowed as a deduction all
the ordinary and necessary expenses paid or incurred during the
taxable year in carrying on any trade or business, including --
"
"(1) . . . ;"
"(2) Traveling expenses (including amounts expended for meals
and lodging other than amounts which are lavish or extravagant
under the circumstances) while away from home in the pursuit of a
trade of business . . . ."
[ Footnote 31 ] Compare supra at 434 U. S. 80 -81
and Magness v. Commissioner, 247 F.2d 740 (CA5 1957), with Saunders v. Commissioner. MR. JUSTICE BLACKMUN, with whom THE CHIEF JUSTICE joins,
dissenting.
More than a decade ago, the United States Court of Appeals for
the Eighth Circuit, in United States v. Morelan, 356 F.2d
199 (1966), held that the $3-per-day subsistence allowance paid
Minnesota state highway patrolmen was excludable from gross income
under § 119 of the Internal Revenue Code of 1954, 26 U.S.C. § 119.
It held, alternatively, that, if the allowance were includable in
gross income, it was deductible as an ordinary and necessary meal
cost trade or business expense under § 162(a)(2) of the Code, 26
U.S.C. § 162(a)(2). I sat as a Circuit Judge on that case. I was
happy to join Chief Judge Vogel's opinion because I then felt, and
still do, that it was correct on both grounds. Certainly, despite
the usual persistent Government opposition in as many Courts of
Appeals as were available, the ruling was in line with other
authority at the appellate level at that time. * Page 434 U. S. 97 Two cases, Magness v. Commissioner, 247 F.2d 740 (CA5
1957), cert. denied, 355 U.S. 931 (1958), and Hyslope
v. Commissioner, 21 T.C. 131 (1953), were distinguished. 356
F.2d at 207.
On December 11, 1967, however, this Court, by a 5-3 vote,
decided United States v. Correll, 389 U.
S. 299 , restricting to overnight trips the travel
expense deduction for meal costs under § 162(a)(2). That decision
of course, disapproved Morelan's alternative ground for
decision. I am frank to say that, had I been a Member of this Court
at the time Correll was decided, I would have joined its
dissent, 389 U.S. at 389 U. S. 307 ,
for I fully agree with Mr. Justice Douglas' observation there,
joined by Justices Black and Fortas -- an observation which, for
me, is unanswerable and unanswered -- that the Court, with a bow to
the Government's argument for administrative convenience, and
conceding an element of arbitrariness, id. at 389 U. S. 303 ,
read the word "overnight" into § 162(a)(2), a statute that speaks
only in geographical terms.
The taxpayer in the present case, faced with Correll, understandably does not press the § 162(a)(2) issue, but confines
his defense to §§ 61 and 119.
I have no particular quarrel with the conclusion that the
payments received by the New Jersey troopers constituted income to
them under § 61. I can accept that, but my stance in Morelan leads me to disagree with the Court's conclusion
that the payments are not excludable under § 119. The Court draws
an in-cash or in-kind distinction. This has no appeal or persuasion
for me, because the statute does not speak specifically in such
terms. It does no more than refer to "meals . . . furnished on the
business premises of the employer," and, from those words, the
Court draws the in-kind consequence. I am not so sure. In any
event, for me, as was the case in Morelan, the business
premises of the State of Page 434 U. S. 98 New Jersey, the trooper's employer, are wherever the trooper is
on duty in that State. The employer's premises are statewide.
The Court, in its opinion, makes only passing comment, with a
general reference to fairness, on the ironical difference in tax
treatment it now accords to the paramilitary New Jersey state
trooper structure and the federal military. The distinction must be
embarrassing to the Government in its position here, for the
Internal Revenue Code draws no such distinction. The Commissioner
is forced to find support for it -- support which the Court in its
opinion in this case does not stretch to find -- only from a
regulation, Treas.Reg. § 1.612(b), 26 CFR § 1.61-2(b) (1977),
excluding subsistence allowances granted the military, and the
general references in 37 U.S.C. § 101(25) (1970 ed., Supp. V),
added by Pub.L. 9319, § 1, 88 Stat. 1152, to "regular military
compensation" and "Federal tax advantage accruing to the
aforementioned allowances because they are not subject to Federal
income tax." This, for me, is thin and weak support for recognizing
a substantial benefit for the military and denying it for the New
Jersey state trooper counterpart.
I fear that state troopers the country over, not handsomely paid
to begin with, will never understand today's decision. And I doubt
that their reading of the Court's opinion -- if, indeed, a layman
can be expected to understand its technical wording -- will
convince them that the situation is as clear as the Court purports
to find it.
* Saunders v. Commissioner, 215 F.2d 768 (CA3 1954); United States v. Barrett, 321 F.2d 911 (CA5 1963); Hanson v. Commissioner, 298 F.2d 391 (CA8 1962). As in Morelan, certiorari apparently as not sought in any of
this line of cases up to that time. | The Supreme Court held that cash meal allowance payments to New Jersey state police troopers are taxable income and not exempt under Section 119 of the Internal Revenue Code, which excludes meals furnished by employers for their convenience. The Court distinguished between meals furnished in-kind and cash reimbursements, finding that Section 119 only applies to the former. The dissenting opinion disagreed with this interpretation, arguing that the employer's premises for state troopers are statewide and that the distinction between in-kind and cash reimbursements is not explicitly stated in the statute. |
Taxes | U.S. v. Hughes Properties, Inc. | https://supreme.justia.com/cases/federal/us/476/593/ | U.S. Supreme Court United States v. Hughes Properties,
Inc., 476
U.S. 593 (1986) United States v. Hughes Properties,
Inc. No. 85-554 Argued April 23, 1986 Decided June 3, 1986 476
U.S. 593 CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE FEDERAL CIRCUIT Syllabus Respondent, in its gambling casino in Reno, Nev., operated a
number of "progressive" slot machines. In addition to paying fixed
amounts when certain symbol combinations appear on their reels,
these machines have a "progressive" jackpot that is won only when a
different specified combination appears. The amount of the jackpot
increases as money is gambled on the machine, until the jackpot is
won. A Nevada Gaming Commission regulation prohibits reducing the
indicated payoff without paying the jackpot. Utilizing the accrual
method of accounting, respondent's practice was, at the end of each
fiscal year, to enter the total of the progressive jackpot amounts
as an accrued liability on its books, and from that total to
subtract the corresponding figure for the preceding year to produce
the current tax year's increase in accrued liability. On its
federal income tax returns for certain fiscal years, respondent
claimed this net figure as a deduction under § 162(a) of the
Internal Revenue Code of 1954, as an ordinary and necessary
business expense incurred during the taxable year. The Commissioner
of Internal Revenue (Commissioner) disallowed the deductions on the
ground that, under Treasury Regulations, an expense may not be
deducted until "all the events have occurred which determine the
fact of liability and the amount thereof can be determined with
reasonable accuracy," and that, until a patron actually won a
progressive jackpot, respondent's liability to pay the jackpot was
contingent, and therefore was not a deductible expense.
Accordingly, the Commissioner determined deficiencies in
respondent's income taxes for the years in question. Respondent
paid the deficiencies, and, when its claims for refunds were
denied, brought suit in the Claims Court. The court granted
respondent's motion for summary judgment, holding that respondent's
liability to pay the progressive jackpots was fixed by the Nevada
regulation. The Court of Appeals affirmed. Held: Respondent was entitled to claim the deductions
in question. Pp. 476 U. S.
599 -606.
(a) The "all events" test prescribed by the Treasury Regulations
requires that before an expense can be regarded as "incurred" for
federal income tax purposes, a liability must be fixed and
absolute. Pp. 476 U. S.
600 -601. Page 476 U. S. 594 (b) Here, the effect of the Nevada regulation was to fix
respondent's liability. Identification of the winning players is
irrelevant to respondent, since the obligation to pay exists, and
whether it turns out that the winner is one patron or another makes
no difference as to liability. The event creating liability was the
last play of each progressive slot machine before the end of the
fiscal year, since that play fixed the jackpot amount irrevocably.
That event occurred during the taxable year. Brown v.
Helvering, 291 U. S. 193 ,
distinguished. Pp. 476 U. S.
601 -603.
(c) Granting that the Commissioner has broad discretion to
determine whether a taxpayer's accounting methods clearly reflect
income, that financial accounting does not control for tax
purposes, and that the mere desirability of matching expenses with
income will not necessarily sustain a taxpayer's deduction, the
disallowance of respondent's deductions was not justified. As
noted, the jackpot liabilities were fixed, and only the exact times
of payment and the winners' identity remained uncertain. Pp. 476 U. S.
603 -604.
(d) Nothing in the record indicates that respondent used its
progressive slot machines for tax-avoidance purposes. Pp. 476 U. S.
604 -605.
(e) The potential that a casino operator might go out of
business, or surrender or lose its license, or go into bankruptcy,
with the result that the progressive jackpot would never be paid,
does not prevent accrual of the expense. Pp. 476 U. S.
605 -606.
(f) One of the expenses that necessarily attends the production
of income from a progressive slot machine is the commitment of a
particular portion of the income generated to an irrevocable
jackpot. Cf. United States v. Anderson, 269 U.
S. 422 . Respondent's true income from its progressive
slot machines is only that portion of the money gambled that it is
entitled to keep. P. 476 U. S.
606 .
760 F.2d 1292, affirmed.
BLACKMUN, J., delivered the opinion of the Court, in which
BRENNAN, WHITE, MARSHALL, POWELL, REHNQUIST, and O'CONNOR, JJ.,
joined. STEVENS, J., filed a dissenting opinion, in which BURGER,
C.J., joined, post, p. 476 U. S.
607 . Page 476 U. S. 595 JUSTICE BLACKMUN delivered the opinion of the Court.
This case concerns the deductibility for federal income tax
purposes, by a casino operator utilizing the accrual method of
accounting, of amounts guaranteed for payment on "progressive" slot
machines but not yet won by playing patrons. I A There is no dispute as to the relevant facts; many of them are
stipulated. Respondent Hughes Properties, Inc., is a Nevada
corporation. It owns Harolds Club, a gambling casino, in Reno, Nev.
It keeps its books and files its federal income tax returns under
the accrual method of accounting. During the tax years in question
(the fiscal years that ended June 30 in 1973 to 1977, inclusive),
respondent owned and operated slot machines at its casino. Among
these were a number of what are called "progressive" machines. A
progressive machine, like a regular one, pays fixed amounts when
certain symbol combinations appear on its reels. But a progressive
machine has an additional "progressive" jackpot, which is won only
when a different specified combination appears. The casino sets
this jackpot initially at a minimal amount. The figure increases,
according to a ratio determined by the casino, as money is gambled
on the machine. The amount of the jackpot at any given time is
registered on a "payoff indicator" on the face of the machine. That
amount continues to increase as patrons play the machine until the
jackpot is won or until a maximum, also determined by the casino,
is reached.
The odds of winning a progressive jackpot obviously are a
function of the number of reels on the machine, the number of
positions on each reel, and the number of winning symbols. The odds
are determined by the casino, provided only that Page 476 U. S. 596 there exists a possibility that the winning combination of
symbols can appear. [ Footnote
1 ]
The Nevada Gaming Commission closely regulates the casino
industry in the State, including the operation of progressive slot
machines. In September, 1972, the Commission promulgated § 5.110 of
the Nevada Gaming Regulations. See App. 55. This section
requires a gaming establishment to record at least once a day the
jackpot amount registered on each progressive machine. § 5.110.5.
Furthermore,
"[n]o payoff indicator shall be turned back to a lesser amount,
unless the amount by which the indicator has been turned back is
actually paid to a winning player, or unless the change in the
indicator reading is necessitated through a machine malfunction, in
which case an explanation must be entered on the daily report as
required in subsection 5."
§ 5.110.2; App. 55. The regulation is strictly enforced. Nevada,
by statute, authorizes the Commission to impose severe
administrative sanctions, including license revocation, upon any
casino that wrongfully refuses to pay a winning customer a
guaranteed jackpot. See Nev.Rev.Stat. § 463.310
(1985).
It is respondent's practice to remove the money deposited by
customers in its progressive machines at least twice every week,
and also on the last day of each month. The Commission does not
regulate respondent's use of the funds thus collected, but, since
1977, it has required that a casino maintain a cash reserve
sufficient to provide payment of the guaranteed amounts on all its
progressive machines available to the public. Nev.Gaming Regs. §
5.110(3); App. 56. Page 476 U. S. 597 B At the conclusion of each fiscal year, that is, at midnight on
June 30, respondent entered the total of the progressive jackpot
amounts shown on the payoff indicators as an accrued liability on
its books. From that total, it subtracted the corresponding figure
for the preceding year to produce the current tax year's increase
in accrued liability. On its federal income tax return for each of
its fiscal years 1973, 1974, 1975, and 1977, respondent asserted
this net figure as a deduction under § 162(a) of the Internal
Revenue Code of 1954, as amended, 26 U.S.C. § 162(a), as an
ordinary and necessary expense "paid or incurred during the taxable
year in carrying on any trade or business." [ Footnote 2 ] There is no dispute as to the amounts
so determined, or that a progressive jackpot qualifies for
deduction as a proper expense of running a gambling business. See Tr. of Oral Arg. 7.
On audit, the Commissioner of Internal Revenue disallowed the
deduction. He did so on the ground that, under Treas.Reg. §
1.461-1(a)(2), 26 CFR § 1.461-1(a)(2) (1985), an expense may not be
deducted until
"all the events have occurred which determine the fact of the
liability and the amount thereof can be determined with reasonable
accuracy."
In his view, respondent's obligation to pay a particular
progressive jackpot matures only upon a winning patron's pull of
the handle in the future. According to the Commissioner, until that
event occurs, respondent's liability to pay the jackpot is
contingent, and therefore gives rise to no deductible expense.
Indeed, until then, there is no one who can make a claim for
payment. See Tr. of Oral Arg. 11. Accordingly, the
Commissioner determined deficiencies in respondent's income taxes
for the years in question in the total amount of $433,441.88,
attributable solely to the denial of these progressive Page 476 U. S. 598 jackpot deductions. Respondent paid the asserted deficiencies
and filed timely claims for refund. When the claims were denied,
respondent brought this suit for refunds in the Claims Court. C Each side moved for summary judgment. App. 15, 52. Respondent
contended that the year-end amounts shown on the payoff indicators
of the progressive slot machines were deductible, claiming that
there was a reasonable expectation that payment would be made at
some future date, that the casino's liability was fixed and
irrevocable under Nevada law, that the accrual of those amounts
conformed with generally accepted accounting principles, and that
deductibility effected a timely and realistic matching of revenue
and expenses.
The Claims Court denied the Government's motion for summary
judgment, but granted respondent's motion. 5 Cl.Ct. 641 (1984). It
concluded that, under the Nevada Commission's rule, respondent's
liability to pay the amounts on the progressive jackpot indicators
became "unconditionally fixed," id. at 645, at "midnight
of the last day of the fiscal year," id. at 647. The final
event was
"the last play (successful or not) of the machine before the
close of the fiscal year, that is, the last change in the jackpot
amount before the amount is recorded for accounting purposes." Id. at 645. A contrary result would mismatch
respondent's income and expenses. The court acknowledged that, if
respondent were to go out of business, it would not owe the jackpot
amount to any particular person. Id. at 646. Nevertheless,
the jackpot indicator amount "would still continue to be an incurred liability fixed by state law, for which
[respondent] would continue to be responsible" (emphasis in
original). Id. at 645.
The Claims Court further acknowledged that its ruling was in
conflict with the decision of the Court of Appeals for the Ninth
Circuit in Nightingale v. United States, 684 F.2d 611
(1982), having to do with another Nevada casino, but it
declined Page 476 U. S. 599 to follow that precedent and specifically disavowed its
reasoning. 5 Cl.Ct. at 644-647.
The Court of Appeals for the Federal Circuit affirmed the
judgment "on the basis of the United States Claims Court opinion."
760 F.2d 1292, 1293 (1985). It ruled that, under the accrual method
of accounting, an expense is deductible in the tax year in which
all the events have occurred that determine the fact of liability
and the amount thereof can be determined with reasonable accuracy,
and that liability exists "if there is an obligation to perform an
act and the cost of performance can be measured in money." Ibid. The liability here was not contingent upon the time
of payment or the identity of the jackpot winner. Rather, it was
fixed by the Commission's regulation. The "contrary conclusion" of
the Ninth Circuit in Nightingale was noted. 760 F.2d at
1293.
Because of the clear conflict between the two Circuits, we
granted certiorari. 474 U.S. 1004 (1985). II Section 162(a) of the Internal Revenue Code allows a deduction
for "all the ordinary and necessary expenses paid or incurred
during the taxable year in carrying on any trade or business."
Section 446(a) provides that taxable income "shall be computed
under the method of accounting on the basis of which the taxpayer
regularly computes his income in keeping his books." Under the
"cash receipts and disbursements method," specifically recognized
by § 446(c)(1), a taxpayer is entitled to deduct business expenses
only in the year in which they are paid. Treas.Reg. §§
1.446-1(c)(1)(i) and 1.461-1(a)(1), 26 CFR §§ 1.446-1(c)(1)(i),
1.461-1(a)(1) (1985). The Code also permits a taxpayer to compute
taxable income by the employment of "an accrual method." §
446(c)(2). An accrual-method taxpayer is entitled to deduct an
expense in the year in which it is "incurred," § 162(a), regardless
of when it is actually paid. Page 476 U. S. 600 For a number of years, the standard for determining when an
expense is to be regarded as "incurred" for federal income tax
purposes has been the "all events" test prescribed by the
Regulations. See Treas.Reg. § 1.446-1(c)(1)(ii) (accruals
in general); § 1.451-1(a) (accrual of income); and § 1.461-1(a)(2)
(accrual of deductions). This test appears to have had its origin
in a single phrase that appears in this Court's opinion in United States v. Anderson, 269 U.
S. 422 , 269 U. S. 441 (1926) ("[I]t is also true that, in advance of the assessment of a
tax, all the events may occur which fix the amount of the tax and
determine the liability of the taxpayer to pay it"). Since then,
the Court has described the "all events" test "established" in Anderson as "the touchstone' for determining the year
in which an item of deduction accrues," and as "a fundamental
principle of tax accounting." United States v. Consolidated
Edison Co. of New York, 366 U. S. 380 , 366 U. S. 385 (1961) (citing cases). Under the Regulations, the "all events" test has two elements,
each of which must be satisfied before accrual of an expense is
proper. First, all the events must have occurred which establish
the fact of the liability. Second, the amount must be capable of
being determined "with reasonable accuracy." Treas.Reg. §
1.446-1(c)(1)(ii). This case concerns only the first element, since
the parties agree that the second is fully satisfied. III The Court's cases have emphasized that "a liability does not
accrue as long as it remains contingent." Brown v.
Helvering, 291 U. S. 193 , 291 U. S. 200 (1934); accord, Dixie Pine Products Co. v. Commissioner, 320 U. S. 516 , 320 U. S. 519 (1944). Thus, to satisfy the all-events test, a liability must be
"fixed and definite in amount," Security Flour Mills Co. v.
Commissioner, 321 U. S. 281 , 321 U. S. 287 (1944), must be "fixed and absolute," Brown v. Helvering, 291 U.S. at 291 U. S. 201 ,
and must be "unconditional," Lucas v. North Texas Lumber
Co., 281 U. S. 11 , 281 U. S. 13 (1930). And one may say that "the tax law requires that a deduction
be deferred until all the events' have Page 476 U. S.
601 occurred that will make it fixed and certain." Thor
Power Tool Co. v. Commissioner, 439 U.
S. 522 , 439 U. S. 543 (1979). A The Government argues that respondent's liability for the
progressive jackpots was not "fixed and certain," and was not
"unconditional" or "absolute," by the end of the fiscal year, for
there existed no person who could assert any claim to those funds.
It takes the position, quoting Nightingale v. United
States, 684 F.2d at 614, that the indispensable event "is the
winning of the progressive jackpot by some fortunate gambler." It
says that, because respondent's progressive jackpots had not been
won at the close of the fiscal year, respondent had not yet
incurred liability. Nevada law places no restriction on the odds
set by the casino, as long as a possibility exists that the winning
combination can appear. Thus, according to the Government, by
setting very high odds, respondent can defer indefinitely into the
future the time when it actually will have to pay off the jackpot.
The Government argues that, if a casino were to close its doors and
go out of business, it would not owe the jackpots to anyone.
Similarly, if it were to sell its business, or cease its gaming
operations, or go into bankruptcy, or if patrons were to stop
playing its slot machines, it would have no obligation. B We agree with the Claims Court and with the Federal Circuit, and
disagree with the Government, for the following reasons:
1. The effect of the Nevada Gaming Commission's regulations was
to fix respondent's liability. Section 5.110.2 forbade reducing the
indicated payoff without paying the jackpot, except to correct a
malfunction or to prevent exceeding the limit imposed. App. 55.
Respondent's liability, that is, its obligation to pay the
indicated amount, was not contingent. That an extremely remote and
speculative possibility Page 476 U. S. 602 existed that the jackpot might never be won [ Footnote 3 ] did not change the fact that, as a
matter of state law, respondent had a fixed liability for the
jackpot which it could not escape. The effect of Nevada's law was
equivalent to the situation where state law requires the amounts of
the jackpot indicators to be set aside in escrow pending the
ascertainment of the identity of the winners. The Government
concedes that, in the latter case, the liability has accrued, Tr.
of Oral Arg. 20-21, even though the same possibility would still
exist that the winning pull would never occur.
2. The Government misstates the need for identification of the
winning player. That is, or should be, a matter of no relevance for
the casino operator. The obligation is there, and whether it turns
out that the winner is one patron or another makes no conceivable
difference as to basic liability.
3. The Government's heavy reliance on Brown v.
Helvering, 291 U. S. 193 (1934), in our view, is misplaced. That case concerned an agent's
commissions on sales of insurance policies, and the agent's
obligation to return a proportionate part of the commission in case
a policy was canceled. The agent sought to deduct from gross income
an amount added during the year to his reserve for repayment of
commissions. This Court agreed with the Commissioner's disallowance
of the claimed deduction because the actual event that would create
the liability -- the cancellation of a particular policy in a later
year -- "[did] not occur during the taxable year," id. at 291 U. S. 200 ,
but rather occurred only in the later year in which the policy was
in fact canceled. Here, however, the event creating liability, as
the Claims Court recognized, was the last play of the machine
before the end of the fiscal year, Page 476 U. S. 603 since that play fixed the jackpot amount irrevocably. 5 Cl.Ct.
at 645. That event occurred during the taxable year.
4. The Government's argument that the fact that respondent
treats unpaid jackpots as liabilities for financial accounting
purposes does not justify treating them as liabilities for tax
purposes is unpersuasive. Proper financial accounting and
acceptable tax accounting, to be sure, are not the same. Justice
Brandeis announced this fact well over 50 years ago: "The prudent
business man often sets up reserves to cover contingent
liabilities. But they are not allowable as deductions." Lucas
v. American Code Co., 280 U. S. 445 , 280 U. S. 452 (1930). See also Brown v. Helvering, 291 U.S. at 291 U. S.
201 -202, and Lucas v. Kansas City Structural Steel
Co., 281 U. S. 264 , 281 U. S. 269 (1930). The Court has long recognized "the vastly different
objectives that financial and tax accounting have." Thor Power
Tool Co. v. Commissioner, 439 U.S. at 439 U. S. 542 .
The goal of financial accounting is to provide useful and pertinent
information to management, shareholders, and creditors. On the
other hand, the major responsibility of the Internal Revenue
Service is to protect the public fisc. Ibid. Therefore,
although § 446(c)(2) permits a taxpayer to use an accrual method
for tax purposes if he uses that method to keep his books, § 446(b)
specifically provides that, if the taxpayer's method of accounting
"does not clearly reflect income," the Commissioner may impose a
method that "does clearly reflect income." Thus, the "Commissioner
has broad powers in determining whether accounting methods used by
a taxpayer clearly reflect income." Commissioner v.
Hansen, 360 U. S. 446 , 360 U. S. 467 (1959). See also Thor Power Tool Co. v. Commissioner, 439
U.S. at 439 U. S. 532 ; American Automobile Assn. v. United States, 367 U.
S. 687 , 367 U. S.
697 -698 (1961). The Regulations carry this down
specifically to "the accounting treatment of any item." Treas.Reg.
§ 1.446-1(a)(1).
Granting all this -- that the Commissioner has broad discretion,
that financial accounting does not control for tax purposes, and
that the mere desirability of matching expenses Page 476 U. S. 604 with income will not necessarily sustain a taxpayer's deduction, see American Automobile Assn. v. United States, 367 U.S.
at 367 U. S. 690 ; Thor Power Tool Co. v. Commissioner, 439 U.S. at 439 U. S. 541 -- the Commissioner's disallowance of respondent's deductions was
not justified in this case. As stated above, these jackpot
liabilities were definitely fixed. A part of the machine's intake
was to be paid out, that amount was known, and only the exact time
of payment and the identity of the winner remained for the future.
But the accrual method itself makes irrelevant the timing factor
that controls when a taxpayer uses the cash receipts and
disbursements method. [ Footnote
4 ]
5. The Government suggests that respondent's ability to control
the timing of payouts shows both the contingent nature of the
claimed deductions and a potential for tax avoidance. It speaks of
the time value of money, of respondent's ability to earn additional
income upon the jackpot amounts it retains until a winner comes
along, of respondent's "virtually unrestricted discretion in
setting odds," Brief for United States 31, and of its ability to
transfer amounts from one machine to another with the accompanying
capacity to defer indefinitely into the future the time at which it
must make payment to its customers. All this, the Government says,
unquestionably contains the "potential for tax avoidance." See
Thor Power Tool Co. v. Commissioner, 439 U.S. at 439 U. S. 538 .
And the Government suggests that a casino operator could put extra
machines on the floor on the last day of the tax year with whatever
initial jackpots it specifies and with whatever odds it likes, and
then, on the taxpayer's theory, Page 476 U. S. 605 could take a current deduction for the full amount, even though
payment of the jackpots might not occur for many years, citing Nightingale, 684 F.2d at 615.
None of the components that make up this parade of horribles, of
course, took place here. Nothing in this record even intimates that
respondent used its progressive machines for tax avoidance
purposes. Its income from these machines was less than 1% of its
gross revenue during the tax years in question. See App.
35-36. Respondent's revenue from progressive slot machines depends
on inducing gamblers to play the machines, and, if it sets
unreasonably high odds, customers will refuse to play, and will
gamble elsewhere. Thus, respondent's economic self-interest will
keep it from setting odds likely to defer payoffs too far into the
future. [ Footnote 5 ] Nor, with
Nevada's strictly imposed controls, was any abuse of the kind
hypothesized by the Government likely to happen. In any event, the
Commissioner's ability, under § 446(b) of the Code, 26 U.S.C. §
446(b), to correct any such abuse is the complete practical answer
to the Government's concern. If a casino manipulates its use of
progressive slot machines to avoid taxes, the Commissioner has the
power to find that its accounting does not accurately reflect its
income, and to require it to use a more appropriate accounting
method. Finally, since the casino of course must pay taxes on the
income it earns from the use of as-yet-unwon jackpots, the
Government vastly overestimates the time value of respondent's
deductions.
6. There is always a possibility, of course, that a casino may
go out of business, or surrender or lose its license, or go Page 476 U. S. 606 into bankruptcy, with the result that the amounts shown on the
jackpot indicators would never be won by playing patrons. But this
potential nonpayment of an incurred liability exists for every
business that uses an accrual method, and it does not prevent
accrual. See, e.g., Wien Consolidated Airlines, Inc. v.
Commissioner, 528 F.2d 735 (CA9 1976). "The existence of an
absolute liability is necessary; absolute certainty that it will be
discharged by payment is not." Helvering v. Russian Finance
& Constr. Corp., 77 F.2d 324, 327 (CA2 1935). And if any
of the events hypothesized by the Government should occur, the
deducted amounts would qualify as recaptured income subject to tax.
Treas.Reg. § 1.461-1(a)(2).
7. Finally, the result in United States v. Anderson, 269 U. S. 422 (1926), a case to which the Government makes repeated reference, is
itself instructive. The issue there was the propriety of the
accrual of a federal munitions tax prior to its actual assessment.
The assessment was required before the tax became due. The
Government's position, in contrast to its position in the present
case, was that the tax liability accrued before assessment. The
Court held that the absence of the assessment did not prevent
accrual of the tax. It recognized that the taxpayer's
"true income for the year . . . could not have been determined
without deducting . . . the . . . expenses attributable to the
production of that income during the year." Id. at 269 U. S. 440 .
One of the expenses that necessarily attended the production of
munitions income was the commitment of a particular portion of the
revenue generated to a "reserve for munitions taxes." Ibid. Similarly, one of the expenses that necessarily
attends the production of income from a progressive slot machine is
the commitment of a particular portion of the revenue generated to
an irrevocable jackpot. Respondent's true income from its
progressive slot machines is only that portion of the money gambled
which it is entitled to keep.
The judgment of the Court of Appeals is affirmed. It is so ordered. Page 476 U. S. 607 [ Footnote 1 ]
A 1976 study of the 24 four-reel progressive machines then in
operation at respondent's casino revealed that the average period
between payoffs was approximately 4 1/2 months, although one
machine had been in operation for 13 months, and another for 35
months, without a payoff as of September 1, 1976. The payoff
frequency of the other 22 machines ranged from a high of 14.3
months to a low of 1.9 months.
[ Footnote 2 ]
No deduction was asserted for fiscal 1976 because the aggregate
accrued liability at the end of fiscal 1976 was less than that at
the end of fiscal 1975.
[ Footnote 3 ]
An affidavit of the president of respondent's Harolds Club
Division, submitted in the Claims Court in support of respondent's
motion for summary judgment, states that all the progressive
machine jackpots unpaid as of June 30, 1977, "were subsequently won
and paid to customers." App. 62.
[ Footnote 4 ]
The fact that Congress once briefly adopted statutory provisions
that specifically would have permitted a taxpayer to deduct
anticipated expenses by a reserve mechanism is hardly significant. See §§ 462(a) and (d)(1)(B) of the 1954 Code as originally
adopted, 68A Stat. 158-159, repealed retroactively by the Act of
June 15, 1955, ch. 143, §§ 1 and 3, 69 Stat. 134, 135. But see
Deficit Reduction Act of 1984, § 91(a), 98 Stat. 598.
[ Footnote 5 ]
Respondent also is unlikely to set extremely high initial
jackpots on its machines, since that practice would increase the
casino's risk. The initial progressive jackpot amount is the
casino's money. If a patron gets the winning combination soon after
the machine goes into service, the casino will not have time to
recoup the initial jackpot from money gambled by the public. Thus,
casinos will tend to set rather low initial jackpots, relying on a
percentage of the funds gambled by previous players to contribute
the bulk of the progressive jackpot.
JUSTICE STEVENS, with whom THE CHIEF JUSTICE joins,
dissenting.
Unlike the Court, see ante at 476 U. S.
605 -606, I believe that the distinction between the
nonpayment of an existing obligation and the nonexistence of an
obligation is of controlling importance in this case.
It is common ground that the taxpayer can accrue as a deduction
the jackpots in its progressive slot machines only if "all the
events have . . . occurred which fix the liability." Treas.Reg. §
1.461-1(a)(2), 26 CFR § 1.461-1(a)(2) (1985). See, e.g.,
Security Flour Mills Co. v. Commissioner, 321 U.
S. 281 , 321 U. S. 284 , 321 U. S. 287 (1944); Dixie Pine Products Co. v. Commissioner, 320 U. S. 516 , 320 U. S. 519 (1944); Brown v. Helvering, 291 U.
S. 193 , 291 U. S.
200 -201 (1934). See generally United States v.
Consolidated Edison Co. of New York, 366 U.
S. 380 , 366 U. S.
385 -386 (1961). The question is whether an "obligation"
created by the rules of a state gaming commission and defeasible at
the election of the taxpayer is "fixed" within the meaning of the
Treasury Regulation. To me, the answer is clearly "no."
"Under Nevada law," if the taxpayer in this case
"were to surrender its gaming license, it would no longer be
subject to the gaming laws and regulations, and could thus avoid
the payment of the liability."
App. 23. Thus, "the bankruptcy of the [taxpayer], or the
surrender of its gaming license could relieve it of its
obligation." Id. at 44.
On these facts, the taxpayer has no present liability to accrue.
Rather, the taxpayer's obligation to pay the jackpots in this case
resembles the taxpayer's obligation to pay the cost of overhauling
its aircraft engines and airframes in World Airways, Inc. v.
Commissioner, 62 T.C. 786 (1974), aff'd, 564 F.2d 886
(CA9 1977). In that case, the Tax Court held that the taxpayer, an
airline, did not satisfy the "all events" test, and hence could not
accrue and deduct any portion of these costs, 62 T.C. at 802, 805
-- despite the existence of contracts obligating the taxpayer to
pay, upon the completion of an overhaul, an amount for each hour
of Page 476 U. S. 608 flight time since the previous overhaul, id. at
791-793, and a statutory obligation to overhaul its engines and
airframes after a specified number of flight hours, id. at
803. Of critical importance to the decision before us today, the
court distinguished between the nonpayment of a legal
obligation and the nonexistence of an obligation by
considering the taxpayer's liability in the event of a
bankruptcy:
"The bankruptcy of petitioner [the taxpayer] or the crash or
permanent grounding of an aircraft might conceivably relieve
petitioner of the payment of overhaul costs. The occurrences of any
of these contingencies, however, would not relieve petitioner of an existing obligation to pay any overhaul costs. Rather, the
occurrence would mean that no obligation to pay would ever come
into existence. Petitioner has not shown that its liability for the
accrued overhaul costs was absolutely fixed in the year of accrual.
The contingencies referred to would act to prevent a potential
liability from coming into existence." Id. at 804 (emphasis in original). The court recognized
that the risk of bankruptcy or disaster was remote. But it added
that "there exists another contingency whose occurrence is not
unlikely:"
"Petitioner has sold five piston aircraft and one jet aircraft
since 1965. The five piston aircraft owned by petitioner during
1965 and 1966 were sold prior to the time when major airframe
overhaul was required." Ibid. Here, too, the taxpayer has no obligation that could be
discharged in a bankruptcy court -- a fact that confirms that it
has no present liability to pay the jackpots on its progressive
slot machines. And there likewise exists a contingency under which
it is not at all unlikely that a slot machine owner would elect to
escape its liability. If the gross amount of the accruals on these
machines should ever exceed the net value of the business --
perhaps as a result of shrewd management -- it could liquidate at a
profit without having any liability Page 476 U. S. 609 to anyone for what the Court mistakenly describes as a "fixed
liability." By simply tendering its gaming license, the taxpayer
would avoid its liability on the jackpots. This option is
exercisable in the sole discretion of the taxpayer at any point in
time. My research has revealed no other instance in which the
Commissioner has been forced to allow accrual of a deduction when
the expense deducted may be avoided entirely at the election of the
taxpayer. This feature of the deduction before us unquestionably
contains the "potential for tax avoidance," Thor Power Tool Co.
v. Commissioner, 439 U. S. 522 , 439 U. S. 538 (1979), and I think it lies well within the Commissioner's
authority to interpret the Regulation to forbid it, see Lucas
v. American Code Co., 280 U. S. 445 , 280 U. S. 449 (1930). I respectfully dissent. | The Supreme Court held that Hughes Properties, Inc. was entitled to claim deductions for the progressive jackpot liabilities on its slot machines for federal income tax purposes. The Court found that the "all events" test was satisfied, meaning that the liability was fixed and absolute, as the Nevada regulation prohibited reducing the indicated payoff without paying the jackpot. Therefore, the liability was not contingent on a patron winning the jackpot but was instead determined by the last play of each progressive slot machine before the end of the fiscal year. |
Taxes | Cheek v. U.S. | https://supreme.justia.com/cases/federal/us/498/192/ | U.S. Supreme Court Cheek v. United States, 498
U.S. 192 (1991) Cheek v. United
States No. 89-658 Argued Oct. 3, 1990 Decided Jan. 8, 1991 498
U.S. 192 CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE SEVENTH CIRCUIT Syllabus Petitioner Cheek was charged with six counts of willfully
failing to file a federal income tax return in violation of § 7203
of the Internal Revenue Code (Code) and three counts of willfully
attempting to evade his income taxes in violation of § 7201.
Although admitting that he had not filed his returns, he testified
that he had not acted willfully because he sincerely believed,
based on his indoctrination by a group believing that the federal
tax system is unconstitutional and his own study, that the tax laws
were being unconstitutionally enforced and that his actions were
lawful. In instructing the jury, the court stated that an honest
but unreasonable belief is not a defense, and does not negate
willfulness, and that Cheek's beliefs that wages are not income and
that he was not a taxpayer within the meaning of the Code were not
objectively reasonable. It also instructed the jury that a person's
opinion that the tax laws violate his constitutional rights does
not constitute a good-faith misunderstanding of the law. Cheek was
convicted, and the Court of Appeals affirmed. Held: 1. A good-faith misunderstanding of the law or a good-faith
belief that one is not violating the law negates willfulness,
whether or not the claimed belief or misunderstanding is
objectively reasonable. Statutory willfulness, which protects the
average citizen from prosecution for innocent mistakes made due to
the complexity of the tax laws, United States v. Murdock, 290 U. S. 389 , is
the voluntary, intentional violation of a known legal duty. United States v. Pomponio, 429 U. S.
10 . Thus, if the jury credited Cheek's assertion that he
truly believed that the Code did not treat wages as income, the
Government would not have carried its burden to prove willfulness,
however unreasonable a court might deem such a belief.
Characterizing a belief as objectively unreasonable transforms what
is normally a factual inquiry into a legal one, thus preventing a
jury from considering it. And forbidding a jury to consider
evidence that might negate willfulness would raise a serious
question under the Sixth Amendment's jury trial provision, which
this interpretation of the statute avoids. Of course, in deciding
whether to credit Cheek's claim, the jury is free to consider any
admissible evidence showing that he had knowledge of his legal
duties. Pp. 498 U. S.
199 -204. Page 498 U. S. 193 2. It was proper for the trial court to instruct the jury not to
consider Cheek's claim that the tax laws are unconstitutional,
since a defendant's views about the tax statutes' validity are
irrelevant to the issue of willfulness, and should not be heard by
a jury. Unlike the claims in the Murdock-Pomponio line of
cases, claims that Code provisions are unconstitutional do not
arise from innocent mistakes caused by the Code's complexity.
Rather, they reveal full knowledge of the provisions at issue and a
studied conclusion that those provisions are invalid and
unenforceable. Congress could not have contemplated that a
taxpayer, without risking criminal prosecution, could ignore his
duties under the Code and refuse to utilize the mechanisms Congress
provided to present his invalidity claims to the courts and to
abide by their decisions. Cheek was free to pay the tax, file for a
refund, and, if denied, present his claims to the courts. Also,
without paying the tax, he could have challenged claims of tax
deficiencies in the Tax Court. Pp. 498 U. S.
204 -207.
882 F.2d 1263, (CA7 1989) vacated and remanded.
WHITE, J., delivered the opinion of the Court, in which
REHNQUIST, C.J., and STEVENS, O'CONNOR, and KENNEDY, JJ., joined.
SCALIA, J., filed an opinion concurring in the judgment, post, p. 498 U. S. 207 .
BLACKMUN, J., filed a dissenting opinion, in which MARSHALL, J.,
joined, post, p. 498 U. S. 209 .
SOUTER, J., took no part in the consideration or decision of the
case.
Justice WHITE delivered the opinion of the Court.
Title 26, § 7201 of the United States Code provides that any
person "who willfully attempts in any manner to evade or defeat any
tax imposed by this title or the payment thereof" shall be guilty
of a felony. Under 26 U.S.C. § 7203,
"[a]ny person required under this title . . . or by regulations
made under authority thereof to make a return . . . who willfully
fails to . . . make such return"
shall be guilty of a misdemeanor. Page 498 U. S. 194 This case turns on the meaning of the word "willfully" as used
in §§ 7201 and 7203. I Petitioner John L. Cheek has been a pilot for American Airlines
since 1973. He filed federal income tax returns through 1979, but
thereafter ceased to file returns. [ Footnote 1 ] He also claimed an increasing number of
withholding allowances -- eventually claiming 60 allowances by
mid-1980 -- and for the years 1981 to 1984 indicated on his W-4
forms that he was exempt from federal income taxes. In 1983,
petitioner unsuccessfully sought a refund of all tax withheld by
his employer in 1982. Petitioner's income during this period at all
times far exceeded the minimum necessary to trigger the statutory
filing requirement.
As a result of his activities, petitioner was indicted for 10
violations of federal law. He was charged with six counts of
willfully failing to file a federal income tax return for the years
1980, 1981, and 1983 through 1986, in violation of 26 U.S.C. §
7203. He was further charged with three counts of willfully
attempting to evade his income taxes for the years 1980, 1981, and
1983 in violation of 26 U.S.C. § 7201. In those years, American
Airlines withheld substantially less than the amount of tax
petitioner owed because of the numerous allowances and exempt
status he claimed on his W-4 forms. [ Footnote 2 ] The tax offenses with which petitioner was
charged are specific intent crimes that require the defendant to
have acted willfully.
At trial, the evidence established that, between 1982 and 1986,
petitioner was involved in at least four civil cases that Page 498 U. S. 195 challenged various aspects of the federal income tax system.
[ Footnote 3 ] In all four of
those cases, the plaintiffs were informed by the courts that many
of their arguments, including that they were not taxpayers within
the meaning of the tax laws, that wages are not income, that the
Sixteenth Amendment does not authorize the imposition of an income
tax on individuals, and that the Sixteenth Amendment is
unenforceable, were frivolous or had been repeatedly rejected by
the courts. During this time period, petitioner also attended at
least two criminal trials of persons charged with tax offenses. In
addition, there was evidence that, in 1980 or 1981, an attorney had
advised Cheek that the courts had rejected as frivolous the claim
that wages are not income. [ Footnote 4 ]
Cheek represented himself at trial and testified in his defense.
He admitted that he had not filed personal income tax returns
during the years in question. He testified that, as early as 1978,
he had begun attending seminars sponsored Page 498 U. S. 196 by, and following the advice of, a group that believes, among
other things, that the federal tax system is unconstitutional. Some
of the speakers at these meetings were lawyers who purported to
give professional opinions about the invalidity of the federal
income tax laws. Cheek produced a letter from an attorney stating
that the Sixteenth Amendment did not authorize a tax on wages and
salaries, but only on gain or profit. Petitioner's defense was
that, based on the indoctrination he received from this group and
from his own study, he sincerely believed that the tax laws were
being unconstitutionally enforced and that his actions during the
1980-1986 period were lawful. He therefore argued that he had acted
without the willfulness required for conviction of the various
offenses with which he was charged.
In the course of its instructions, the trial court advised the
jury that, to prove "willfulness," the Government must prove the
voluntary and intentional violation of a known legal duty, a burden
that could not be proved by showing mistake, ignorance, or
negligence. The court further advised the jury that an objectively
reasonable good-faith misunderstanding of the law would negate
willfulness, but mere disagreement with the law would not. The
court described Cheek's beliefs about the income tax system,
[ Footnote 5 ] and instructed the
jury that, if it found that Cheek "honestly and reasonably believed
that Page 498 U. S. 197 he was not required to pay income taxes or to file tax returns,"
App. 81, a not guilty verdict should be returned.
After several hours of deliberation, the jury sent a note to the
judge that stated in part:
"We have a basic disagreement between some of us as to if Mr.
Cheek honestly & reasonably believed that he was not required
to pay income taxes."
" * * * *" "Page 32 [the relevant jury instruction] discusses good faith
misunderstanding & disagreement. Is there any additional
clarification you can give us on this point?" Id. at 85.
The District Judge responded with a supplemental instruction
containing the following statements:
"[A] person's opinion that the tax laws violate his
constitutional rights does not constitute a good Page 498 U. S. 198 faith misunderstanding of the law. Furthermore, a person's
disagreement with the government's tax collection systems and
policies does not constitute a good faith misunderstanding of the
law." Id. at 86.
At the end of the first day of deliberation, the jury sent out
another note saying that it still could not reach a verdict
because
"[w]e are divided on the issue as to if Mr. Cheek honestly &
reasonably believed that he was not required to pay income
tax." Id. at 87. When the jury resumed its deliberations, the
District Judge gave the jury an additional instruction. This
instruction stated in part that "[a]n honest but unreasonable
belief is not a defense, and does not negate willfulness," id. at 88, and that
"[a]dvice or research resulting in the conclusion that wages of
a privately employed person are not income or that the tax laws are
unconstitutional is not objectively reasonable, and cannot serve as
the basis for a good faith misunderstanding of the law
defense." Ibid. The court also instructed the jury that
"[p]ersistent refusal to acknowledge the law does not constitute a
good faith misunderstanding of the law." Ibid. Approximately two hours later, the jury returned a verdict finding
petitioner guilty on all counts. [ Footnote 6 ]
Petitioner appealed his convictions, arguing that the District
Court erred by instructing the jury that only an objectively
reasonable misunderstanding of the law negates the statutory
willfulness requirement. The United States Court of Appeals for the
Seventh Circuit rejected that contention, and affirmed the
convictions. 882 F.2d 1263 (1989). In prior cases, the Seventh
Circuit had made clear that good-faith misunderstanding of the law
negates willfulness only if the defendant's beliefs are objectively
reasonable; in the Seventh Circuit, even actual ignorance is not a
defense unless the defendant's ignorance was itself objectively
reasonable. See, e.g., United States v. Buckner, 830 F.2d
102 (1987). In its opinion in this case, the court noted that
several specified beliefs, including the beliefs that the tax laws
are unconstitutional and that wages are not income, would not be
objectively reasonable. [ Footnote
7 ] Because the Seventh Circuit's Page 498 U. S. 199 interpretation of "willfully" as used in these statutes
conflicts with the decisions of several other Courts of Appeals, see, e.g., United States v. Whiteside, 810 F.2d 1306,
1310-1311 (CA5 1987); United States v. Phillips, 775 F.2d
262, 263-264 (CA10 1985); United States v. Aitken, 755
F.2d 188, 191-193 (CA1 1985), we granted certiorari, 493 U.S. 1068
(1990). II The general rule that ignorance of the law or a mistake of law
is no defense to criminal prosecution is deeply rooted in the
American legal system. See, e.g., 18 U.
S. Smith, 5 Wheat. 153, 18 U. S. 182 (1820) (Livingston, J., dissenting); Barlow v.
United States , 7 Pet. 404, 32 U. S. 411 (1833); Reynolds v. United States, 98 U. S.
145 , 98 U. S. 167 (1879); Shevlin-Carpenter Co. v. Minnesota, 218 U. S.
57 , 218 U. S. 68 (1910); Lambert v. California, 355 U.
S. 225 , 355 U. S. 228 (1957); Liparota v. United States, 471 U.
S. 419 , 471 U. S. 441 (1985) (WHITE, J., dissenting); O. Holmes, The Common Law 47-48
(1881). Based on the notion that the law is definite and knowable,
the common law presumed that every person knew the law. This common
law rule has been applied by the Court in numerous cases construing
criminal statutes. See, e.g., United States v. International
Minerals & Chemical Corp., 402 U.
S. 558 (1971); Hamling v. United States, 418 U. S. 87 , 418 U. S.
119 -124 (1974); Boyce Motor Lines, Inc. v. United
States, 342 U. S. 337 (1952).
The proliferation of statutes and regulations has sometimes made
it difficult for the average citizen to know and comprehend Page 498 U. S. 200 the extent of the duties and obligations imposed by the tax
laws. Congress has accordingly softened the impact of the common
law presumption by making specific intent to violate the law an
element of certain federal criminal tax offenses. Thus, the Court
almost 60 years ago interpreted the statutory term "willfully" as
used in the federal criminal tax statutes as carving out an
exception to the traditional rule. This special treatment of
criminal tax offenses is largely due to the complexity of the tax
laws. In United States v. Murdock, 290 U.
S. 389 (1933), the Court recognized that:
"Congress did not intend that a person, by reason of a bona fide
misunderstanding as to his liability for the tax, as to his duty to
make a return, or as to the adequacy of the records he maintained,
should become a criminal by his mere failure to measure up to the
prescribed standard of conduct." Id. at 290 U. S. 396 .
The Court held that the defendant was entitled to an instruction
with respect to whether he acted in good faith based on his actual
belief. In Murdock, the Court interpreted the term
"willfully" as used in the criminal tax statutes generally to mean
"an act done with a bad purpose," id. at 290 U. S. 394 ,
or with "an evil motive." Id. at 290 U. S.
395 .
Subsequent decisions have refined this proposition. In United States v. Bishop, 412 U. S. 346 (1973), we described the term "willfully" as connoting "a
voluntary, intentional violation of a known legal duty," id. at 412 U. S. 360 ,
and did so with specific reference to the "bad faith or evil
intent" language employed in Murdock. Still later, United States v. Pomponio, 429 U. S.
10 (1976) (per curiam ), addressed a situation in which
several defendants had been charged with willfully filing false tax
returns. The jury was given an instruction on willfulness similar
to the standard set forth in Bishop. In addition, it was
instructed that " [g]ood motive alone is never a defense where
the act done or omitted is a crime.'" Id. at 429 U. S. 11 .
The defendants were convicted, but the Court of Appeals reversed,
concluding that the latter instruction Page 498 U. S. 201 was improper because the statute required a finding of bad
purpose or evil motive. Ibid. We reversed the Court of Appeals, stating that "the Court of
Appeals incorrectly assumed that the reference to an evil
motive' in United States v. Bishop, supra, and prior
cases," ibid., "requires proof of any motive other than an
intentional violation of a known legal duty." Id. at 429 U. S. 12 .
As "the other Courts of Appeals that have considered the question
have recognized, willfulness in this context simply means a
voluntary, intentional violation of a known legal duty." Ibid. We concluded that, after instructing the jury on
willfulness, "[a]n additional instruction on good faith was
unnecessary." Id. at 429 U. S. 13 .
Taken together, Bishop and Pomponio conclusively
establish that the standard for the statutory willfulness
requirement is the "voluntary, intentional violation of a known
legal duty." III Cheek accepts the Pomponio definition of willfulness,
Brief for Petitioner 5, and n. 4, 13, 36; Reply Brief for
Petitioner 4, 6-7, 11, 13, but asserts that the District Court's
instructions and the Court of Appeals' opinion departed from that
definition. In particular, he challenges the ruling that a
good-faith misunderstanding of the law or a good-faith belief that
one is not violating the law, if it is to negate willfulness, must
be objectively reasonable. We agree that the Court of Appeals and
the District Court erred in this respect. A Willfulness, as construed by our prior decisions in criminal tax
cases, requires the Government to prove that the law imposed a duty
on the defendant, that the defendant knew of this duty, and that he
voluntarily and intentionally violated that duty. We deal first
with the case where the issue is whether the defendant knew of the
duty purportedly imposed by the provision of the statute or
regulation he is accused of violating, a case in which there is no
claim that the provision Page 498 U. S. 202 at issue is invalid. In such a case, if the Government proves
actual knowledge of the pertinent legal duty, the prosecution,
without more, has satisfied the knowledge component of the
willfulness requirement. But carrying this burden requires negating
a defendant's claim of ignorance of the law or a claim that,
because of a misunderstanding of the law, he had a good-faith
belief that he was not violating any of the provisions of the tax
laws. This is so because one cannot be aware that the law imposes a
duty upon him and yet be ignorant of it, misunderstand the law, or
believe that the duty does not exist. In the end, the issue is
whether, based on all the evidence, the Government has proved that
the defendant was aware of the duty at issue, which cannot be true
if the jury credits a good-faith misunderstanding and belief
submission, whether or not the claimed belief or misunderstanding
is objectively reasonable.
In this case, if Cheek asserted that he truly believed that the
Internal Revenue Code did not purport to treat wages as income, and
the jury believed him, the Government would not have carried its
burden to prove willfulness, however unreasonable a court might
deem such a belief. Of course, in deciding whether to credit
Cheek's good-faith belief claim, the jury would be free to consider
any admissible evidence from any source showing that Cheek was
aware of his duty to file a return and to treat wages as income,
including evidence showing his awareness of the relevant provisions
of the Code or regulations, of court decisions rejecting his
interpretation of the tax law, of authoritative rulings of the
Internal Revenue Service, or of any contents of the personal income
tax return forms and accompanying instructions that made it plain
that wages should be returned as income. [ Footnote 8 ] Page 498 U. S. 203 We thus disagree with the Court of Appeals' requirement that a
claimed good-faith belief must be objectively reasonable if it is
to be considered as possibly negating the Government's evidence
purporting to show a defendant's awareness of the legal duty at
issue. Knowledge and belief are characteristically questions for
the factfinder, in this case the jury. Characterizing a particular
belief as not objectively reasonable transforms the inquiry into a
legal one, and would prevent the jury from considering it. It would
of course be proper to exclude evidence having no relevance or
probative value with respect to willfulness, but it is not contrary
to common sense, let alone impossible, for a defendant to be
ignorant of his duty based on an irrational belief that he has no
duty, and forbidding the jury to consider evidence that might
negate willfulness would raise a serious question under the Sixth
Amendment's jury trial provision. Cf. Francis v. Franklin, 471 U. S. 307 (1985); Sandstrom v. Montana, 442 U.
S. 510 (1979); Morissette v. United States, 342 U. S. 246 (1952). It is common ground that this Court, where possible,
interprets congressional enactments so as to avoid raising serious
constitutional questions. See, e.g., Edward J. DeBartolo Corp.
v. Florida Gulf Coast Building and Construction Trades
Council, 485 U. S. 568 , 485 U. S. 575 (1988); Crowell v. Benson, 285 U. S.
22 , 285 U. S. 62 ,
and n. 30 (1932); Public Citizen v. United States Dept. of
Justice, 491 U. S. 440 , 491 U. S.
465 -466 (1989).
It was therefore error to instruct the jury to disregard
evidence of Cheek's understanding that, within the meaning of the
tax laws, he was not a person required to file a return or to pay
income taxes and that wages are not taxable income, as incredible
as such misunderstandings of and beliefs about the law might be. Of
course, the more unreasonable the asserted Page 498 U. S. 204 beliefs or misunderstandings are, the more likely the jury will
consider them to be nothing more than simple disagreement with
known legal duties imposed by the tax laws, and will find that the
Government has carried its burden of proving knowledge. B Cheek asserted in the trial court that he should be acquitted
because he believed in good faith that the income tax law is
unconstitutional as applied to him, and thus could not legally
impose any duty upon him of which he should have been aware.
[ Footnote 9 ] Such a submission
is unsound, not because Page 498 U. S. 205 Cheek's constitutional arguments are not objectively reasonable
or frivolous, which they surely are, but because the Murdock-Pomponio line of cases does not support such a
position. Those cases construed the willfulness requirement in the
criminal provisions of the Internal Revenue Code to require proof
of knowledge of the law. This was because in "our complex tax
system, uncertainty often arises even among taxpayers who earnestly
wish to follow the law" and " [i]t is not the purpose of the law
to penalize frank difference of opinion or innocent errors made
despite the exercise of reasonable care.'" United States v.
Bishop, 412 U. S. 346 , 412 U. S.
360 -361 (1973) (quoting Spies v. United States, 317 U. S. 492 , 317 U. S. 496 (1943)). Claims that some of the provisions of the tax code are
unconstitutional are submissions of a different order. [ Footnote 10 ] They do not arise from
innocent mistakes caused by the complexity of the Internal Revenue
Code. Rather, they reveal full knowledge of the provisions at issue
and a studied conclusion, however wrong, that those provisions are
invalid and unenforceable. Page 498 U. S. 206 Thus, in this case, Cheek paid his taxes for years, but after
attending various seminars and based on his own study, he concluded
that the income tax laws could not constitutionally require him to
pay a tax.
We do not believe that Congress contemplated that such a
taxpayer, without risking criminal prosecution, could ignore the
duties imposed upon him by the Internal Revenue Code and refuse to
utilize the mechanisms provided by Congress to present his claims
of invalidity to the courts and to abide by their decisions. There
is no doubt that Cheek, from year to year, was free to pay the tax
that the law purported to require, file for a refund and, if
denied, present his claims of invalidity, constitutional or
otherwise, to the courts. See 26 U.S.C. § 7422. Also,
without paying the tax, he could have challenged claims of tax
deficiencies in the Tax Court, 26 U.S.C. § 6213, with the right to
appeal to a higher court if unsuccessful. § 7482(a)(1). Cheek took
neither course in some years, and, when he did, was unwilling to
accept the outcome. As we see it, he is in no position to claim
that his good-faith belief about the validity of the Internal
Revenue Code negates willfulness or provides a defense to criminal
prosecution under §§ 7201 and 7203. Of course, Cheek was free in
this very case to present his claims of invalidity and have them
adjudicated, but, like defendants in criminal cases in other
contexts who "willfully" refuse to comply with the duties placed
upon them by the law, he must take the risk of being wrong.
We thus hold that, in a case like this, a defendant's views
about the validity of the tax statutes are irrelevant to the issue
of willfulness, need not be heard by the jury, and if they are, an
instruction to disregard them would be proper. For this purpose, it
makes no difference whether the claims of invalidity are frivolous
or have substance. It was therefore not error in this case for the
District Judge to instruct the jury not to consider Cheek's claims
that the tax laws were unconstitutional. However, it was error for
the court to instruct Page 498 U. S. 207 the jury that petitioner's asserted beliefs that wages are not
income and that he was not a taxpayer within the meaning of the
Internal Revenue Code should not be considered by the jury in
determining whether Cheek had acted willfully. [ Footnote 11 ] IV For the reasons set forth in the opinion above, the judgment of
the Court of Appeals is vacated, and the case is remanded for
further proceedings consistent with this opinion. It is so ordered. Justice SOUTER took no part in the consideration or decision of
this case.
[ Footnote 1 ]
Cheek did file what the Court of Appeals described as a
frivolous return in 1982.
[ Footnote 2 ]
Because petitioner filed a refund claim for the entire amount
withheld by his employer in 1982, petitioner was also charged under
18 U.S.C. § 287 with one count of presenting a claim to an agency
of the United States knowing the claim to be false and
fraudulent.
[ Footnote 3 ]
In March, 1982, Cheek and another employee of the company sued
American Airlines to challenge the withholding of federal income
taxes. In April, 1982, Cheek sued the IRS in the United States Tax
Court, asserting that he was not a taxpayer or a person for
purposes of the Internal Revenue Code, that his wages were not
income, and making several other related claims. Cheek and four
others also filed an action against the United States and the CIR
in Federal District Court, claiming that withholding taxes from
their wages violated the Sixteenth Amendment. Finally, in 1985,
Cheek filed claims with the IRS seeking to have refunded the taxes
withheld from his wages in 1983 and 1984. When these claims were
not allowed, he brought suit in the District Court claiming that
the withholding was an unconstitutional taking of his property and
that his wages were not income. In dismissing this action as
frivolous, the District Court imposed costs and attorneys fees of
$1,500 and a sanction under Rule 11 in the amount of $10,000. The
Court of Appeals agreed that Cheek's claims were frivolous, reduced
the District Court sanction to $5,000 and imposed an additional
sanction of $1,500 for bringing a frivolous appeal.
[ Footnote 4 ]
The attorney also advised that, despite the Fifth Amendment, the
filing of a tax return was required and that a person could
challenge the constitutionality of the system by suing for a refund
after the taxes had been withheld, or by putting himself "at risk
of criminal prosecution."
[ Footnote 5 ]
"The defendant has testified as to what he states are his
interpretations of the United States Constitution, court opinions,
common law and other materials he has reviewed. . . . He has also
introduced materials which contain references to quotations from
the United States Constitution, court opinions, statutes, and other
sources."
"He testified he relied on his interpretations and on these
materials in concluding that he was not a person required to file
income tax returns for the year or years charged, was not required
to pay income taxes, and that he could claim exempt status on his
W-4 forms, and that he could claim refunds of all moneys
withheld."
App. 75-76.
"Among other things, Mr. Cheek contends that his wages from a
private employer, American Airlines, does not constitute income
under the Internal Revenue Service laws." Id. at 81.
[ Footnote 6 ]
A note signed by all 12 jurors also informed the judge that,
although the jury found petitioner guilty, several jurors wanted to
express their personal opinions of the case, and that notes from
these individual jurors to the court were "a complaint against the
narrow & hard expression under the constraints of the law." Id. at 90. At least two notes from individual jurors
expressed the opinion that petitioner sincerely believed in his
cause, even though his beliefs might have been unreasonable.
[ Footnote 7 ]
The opinion stated, 882 F.2d 1263, 1268-1269, n. 2 (CA7 1989),
as follows:
"For the record, we note that the following beliefs, which are
stock arguments of the tax protester movement, have not been, nor
ever will be, considered 'objectively reasonable' in this
circuit"
"(1) the belief that the sixteenth amendment to the constitution
was improperly ratified, and therefore never came into being;"
"(2) the belief that the sixteenth amendment is unconstitutional
generally;"
"(3) the belief that the income tax violates the takings clause
of the fifth amendment;"
"(4) the belief that the tax laws are unconstitutional;"
"(5) the belief that wages are not income, and therefore are not
subject to federal income tax laws;"
"(6) the belief that filing a tax return violates the privilege
against self-incrimination; and"
"(7) the belief that Federal Reserve Notes do not constitute
cash or income."
" Miller v. United States, 868 F.2d 236, 239-41 (7th
Cir.1989); Buckner, 830 F.2d at 102; United States v.
Dube, 820 F.2d 886, 891 (7th Cir.1987); Coleman v.
Comm., 791 F.2d 68, 70-71 (7th Cir.1986); Moore, 627
F.2d at 833. We have no doubt that this list will increase with
time."
[ Footnote 8 ]
Cheek recognizes that a "defendant who knows what the law is and
who disagrees with it . . . does not have a bona fide
misunderstanding defense," but asserts that "a defendant who has a
bona fide misunderstanding of [the law] does not know' his
legal duty, and lacks willfulness." Brief for Petitioner 29, and n.
13. The Reply Brief for Petitioner, at 13, states: "We are in no way suggesting that Cheek or anyone else is immune
from criminal prosecution if he knows what the law is, but believes
it should be otherwise, and therefore violates it." See also Tr. of Oral Arg. 9, 11, 12, 15, 17.
[ Footnote 9 ]
In his opening and reply briefs and at oral argument, Cheek
asserts that this case does not present the issue of whether a
claim of unconstitutionality would serve to negate willfulness, and
that we need not address the issue. Brief for Petitioner 13; Reply
Brief for Petitioner 5, 11, 12; Tr. of Oral Arg. 6, 13. Cheek
testified at trial, however, that "[i]t is my belief that the law
is being enforced unconstitutionally." App. 60. He also produced a
letter from counsel advising him that
"Finally you make a valid contention . . . that Congress' power
to tax comes from Article I, Section 8, Clause I of the U.S.
Constitution, and not from the Sixteenth Amendment, and that the
[latter], construed with Article I, Section 2, Clause 3, never
authorized a tax on wages and salaries, but only on gain and
profit." Id. at 57. We note also that the jury asked for "the
portion [of the transcript] wherein Mr. Cheek stated he was
attempting to test the constitutionality of the income tax laws,"
Tr. 1704, and that the trial judge later instructed the jury that
an opinion that the tax laws violate a person's constitutional
rights does not constitute a good faith misunderstanding of the
law. We also note that, at oral argument, Cheek's counsel observed
that "personal belief that a known statute is unconstitutional
smacks of knowledge with existing law, but disagreement with it."
Tr. of Oral Arg. 5. He also opined that:
"If the person believes as a personal belief that known -- law
known to them [ sic ] is unconstitutional, I submit that
that would not be a defense, because what the person is really
saying is I know what the law is, for constitutional reasons I have
made my own determination that it is invalid. I am not suggesting
that that is a defense."
"However, if the person was told by a lawyer or by an accountant
erroneously that the statute is unconstitutional, and it's my
professional advice to you that you don't have to follow it, then
you have got a little different situation. This is not that
case." Id. at 6.
Given this posture of the case, we perceive no reason not to
address the significance of Cheek's constitutional claims to the
issue of willfulness.
[ Footnote 10 ]
In United States v. Murdock, 290 U.
S. 389 (1933), discussed supra, at 498 U. S. 200 ,
the defendant Murdock was summoned to appear before a revenue agent
for examination. Questions were put to him, which he refused to
answer for fear of self-incrimination under state law. He was
indicted for refusing to give testimony and supply information
contrary to the pertinent provisions of the Internal Revenue Code.
This Court affirmed the reversal of Murdock's conviction, holding
that the trial court erred in refusing to give an instruction
directing the jury to consider Murdock's asserted claim of a
good-faith, actual belief that, because of the Fifth Amendment, he
was privileged not to answer the questions put to him. It is thus
the case that Murdock's asserted belief was grounded in the
Constitution, but it was a claim of privilege not to answer, not a
claim that any provision of the tax laws were unconstitutional, and
not a claim for which the tax laws provided procedures to entertain
and resolve. Cheek's position at trial, in contrast, was that the
tax laws were unconstitutional as applied to him.
[ Footnote 11 ]
Cheek argues that applying to him the Court of Appeals' standard
of objective reasonableness violates his rights under the First,
Fifth, and Sixth Amendments of the Constitution. Since we have
invalidated the challenged standard on statutory grounds, we need
not address these submissions.
Justice SCALIA, concurring in the judgment.
I concur in the judgment of Court because our cases have
consistently held that the failure to pay a tax in the good-faith
belief that it is not legally owing is not "willful." I do not join
the Court's opinion because I do not agree with the test for
willfulness that it directs the Court of Appeals to apply on
remand.
As the Court acknowledges, our opinions from the 1930s to the
1970s have interpreted the word "willfully" in the criminal tax
statutes as requiring the "bad purpose" or "evil motive" of
"intentional[ly] violat[ing] a known legal duty." See, e.g.,
United States v. Pomponio, 429 U. S. 10 , 429 U. S. 12 (1976); United States v. Murdock, 290 U.
S. 389 , 290 U. S.
394 -395 (1933). It seems to me that today's opinion
squarely reverses that long-established statutory construction when
it says that a good-faith erroneous belief in the
unconstitutionality of a tax law is no defense. It is quite
impossible to say that a statute which Page 498 U. S. 208 one believes unconstitutional represents a "known legal duty." See Marbury v.
Madison , 1 Cranch 137, 91 Cranch 177177-178
(1803).
Although the facts of the present case involve erroneous
reliance upon the Constitution in ignoring the otherwise "known
legal duty" imposed by the tax statutes, the Court's new
interpretation applies also to erroneous reliance upon a tax
statute in ignoring the otherwise "known legal duty" of a
regulation, and to erroneous reliance upon a regulation in ignoring
the otherwise "known legal duty" of a tax assessment. These
situations as well meet the opinion's crucial test of
"reveal[ing] full knowledge of the provisions at issue and a
studied conclusion, however wrong, that those provisions are
invalid and unenforceable," ante at 498 U. S.
205 -206. There is, moreover, no rational basis for
saying that a "willful" violation is established by full knowledge
of a statutory requirement, but is not established by full
knowledge of a requirement explicitly imposed by regulation or
order. Thus, today's opinion works a revolution in past practice,
subjecting to criminal penalties taxpayers who do not comply with
Treasury Regulations that are in their view contrary to the
Internal Revenue Code, Treasury Rulings that are in their view
contrary to the regulations, and even IRS auditor pronouncements
that are in their view contrary to Treasury Rulings. The law
already provides considerable incentive for taxpayers to be careful
in ignoring any official assertion of tax liability, since it
contains civil penalties that apply even in the event of a
good-faith mistake, see, e.g., 26 U.S.C. §§ 6651, 6653. To
impose in addition criminal penalties for misinterpretation of such
a complex body of law is a startling innovation indeed.
I find it impossible to understand how one can derive from the
lonesome word "willfully" the proposition that belief in the
nonexistence of a textual prohibition excuses liability, but belief
in the invalidity ( i.e., the legal nonexistence) of a
textual prohibition does not. One may say, as the law does Page 498 U. S. 209 in many contexts, that "willfully" refers to consciousness of
the act, but not to consciousness that the act is unlawful. See, e.g., American Surety Co. of New York v. Sullivan, 7
F.2d 605, 606 (CA2 1925) (L. Hand, J.); cf. United States v.
International Minerals and Chemical Co., 402 U.
S. 558 , 402 U. S.
563 -565 (1971). Or alternatively, one may say, as we
have said until today with respect to the tax statutes, that
"willfully" refers to consciousness of both the act and its
illegality. But it seems to me impossible to say that the word
refers to consciousness that some legal text exists, without
consciousness that that legal text is binding, i.e., with
the good-faith belief that it is not a valid law. Perhaps such a
test for criminal liability would make sense (though in a field as
complicated as federal tax law, I doubt it), but some text other
than the mere word "willfully" would have to be employed to
describe it -- and that text is not ours to write.
Because today's opinion abandons clear and long-standing
precedent to impose criminal liability where taxpayers have had no
reason to expect it, because the new contours of criminal liability
have no basis in the statutory text, and because I strongly suspect
that those new contours make no sense even as a policy matter, I
concur only in the judgment of the Court.
Justice BLACKMUN, with whom Justice MARSHALL joins,
dissenting.
It seems to me that we are concerned in this case not with "the
complexity of the tax laws," ante at 498 U. S. 200 ,
but with the income tax law in its most elementary and basic
aspect: Is a wage earner a taxpayer and are wages income?
The Court acknowledges that the conclusively established
standard for willfulness under the applicable statutes is the
"voluntary, intentional violation of a known legal duty." Ante at 498 U. S. 201 . See United States v. Bishop, 412 U.
S. 346 , 412 U. S. 360 (1963), and United States v. Pomponio, 429 U. S.
10 , 429 U. S. 12 (1976). That being so, it is incomprehensible to me how, in this
day, more than 70 years after the institution of our Page 498 U. S. 210 present federal income tax system with the passage of the
Revenue Act of 1913, 38 Stat. 166, any taxpayer of competent
mentality can assert as his defense to charges of statutory
willfulness the proposition that the wage he receives for his labor
is not income, irrespective of a cult that says otherwise and
advises the gullible to resist income tax collections. One might
note in passing that this particular taxpayer, after all, was a
licensed pilot for one of our major commercial airlines; he
presumably was a person of at least minimum intellectual
competence.
The District Court's instruction that an objectively reasonable
and good-faith misunderstanding of the law negates willfulness
lends further, rather than less, protection to this defendant, for
it added an additional hurdle for the prosecution to overcome.
Petitioner should be grateful for this further protection, rather
than be opposed to it.
This Court's opinion today, I fear, will encourage taxpayers to
cling to frivolous views of the law in the hope of convincing a
jury of their sincerity. If that ensues, I suspect we have gone
beyond the limits of common sense.
While I may not agree with every word the Court of Appeals has
enunciated in its opinion, I would affirm its judgment in this
case. I therefore dissent. | Here is a summary of the Supreme Court case Cheek v. United States, 498 U.S. 192 (1991):
Petitioner John Cheek was charged with failing to file income tax returns and attempting to evade income taxes. Cheek admitted to not filing his returns but argued that he did not act willfully as he sincerely believed that the tax laws were being unconstitutionally enforced.
The Supreme Court held that a good-faith misunderstanding or belief that one is not violating the law negates willfulness, regardless of whether the belief is objectively reasonable. The Court stated that statutory willfulness protects citizens from innocent mistakes due to the complexity of tax laws and that willfulness requires a voluntary, intentional violation of a known legal duty.
The trial court's jury instructions, which stated that an honest but unreasonable belief is not a defense, were incorrect. However, the trial court correctly instructed the jury not to consider Cheek's claim that the tax laws are unconstitutional, as those views are irrelevant to the issue of willfulness.
The Court's opinion emphasizes that a good-faith belief, even if unreasonable, can negate willfulness in tax evasion cases. This case sets a precedent for how courts should interpret statutory willfulness and how juries should be instructed in similar cases. |
Taxes | Cottage Savings Ass'n v. Commissioner | https://supreme.justia.com/cases/federal/us/499/554/ | U.S. Supreme Court Cottage Savings Ass'n v. Commissioner, 499
U.S. 554 (1991) Cottage Savings Association v.
Commissioner of Internal Revenue No. 89-1965 Argued Jan. 15, 1991 Decided April 17,
1991 499
U.S. 554 CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE SIXTH CIRCUIT Syllabus Petitioner Cottage Savings Association simultaneously sold
participation interests in 252 mortgages to four savings and loan
associations and purchased from them participation interests in 305
other mortgages. All of the loans were secured by single family
homes. The fair market value of the package of participation
interests exchanged by each side was approximately $4.5 million.
The face value of the participation interests relinquished by
Cottage Savings was $6.9 million. For Federal Home Loan Bank Board
(FHLBB) accounting purposes, Cottage Savings' mortgages were
treated as having been exchanged for "substantially identical" ones
held by the other lenders. On its 1980 federal income tax return,
Cottage Savings claimed a deduction for the adjusted difference
between the face value of the interests it traded and the fair
market value of the interests it received. Following the
Commissioner's disallowance of the deduction, the Tax Court
determined the deduction was permissible. The Court of Appeals
reversed, finding that Cottage Savings had realized its losses
through the transaction, but that it was not entitled to a
deduction because its losses were not actually sustained for
purposes of § 165(a) of the Internal Revenue Code, which allows
deductions only for bona fide losses. Held: 1. Cottage Savings realized a tax-deductible loss because the
properties it exchanged were materially different. Pp. 499 U. S.
559 -567.
(a) In order to avoid the cumbersome, abrasive, and
unpredictable administrative task of valuing assets annually to
determine whether their value has appreciated or depreciated, §
1001(a) of the Code defers the tax consequences of a gain or loss
in property until it is realized through the "sale or disposition
of [the] property." This rule serves administrative convenience
because a change in the investment's form or extent can be easily
detected by a taxpayer or an administrative officer. P. 499 U. S.
559 .
(b) An exchange of property constitutes a "disposition of
property" under § 1001(a) only if the properties exchanged are
materially different. Although the statute and its legislative
history are silent on the subject, Treasury Regulation § 1.1001-1
includes a material difference requirement Page 499 U. S. 555 for realization to occur through a disposition of property.
Treasury Regulation § 1.1001-1 should be given deference as a
reasonable interpretation of § 1001(a). Where, as here, a Treasury
Regulation long continues without substantial change and applies to
a substantially reenacted statute, it is deemed to have
congressional approval. The regulation is also consistent with this
Court's landmark precedents on realization, which make clear that a
taxpayer realizes taxable income only if the properties exchanged
are "materially" or "essentially" different. United States v.
Phellis, 257 U. S. 156 , 257 U. S. 173 ; Weiss v. Stearn, 265 U. S. 242 , 265 U. S.
253 -254; Marr v. United States, 268 U.
S. 536 , 268 U. S.
540 -542. Since these cases were part of the contemporary
legal context in which the substance of § 1001(a) was originally
enacted, and since Congress has left their principles undisturbed
through subsequent reenactments, it can be presumed that Congress
intended to codify these principles in § 1001(a). Pp. 499 U. S.
560 -562.
(c) Properties are materially different if their respective
possessors enjoy legal entitlements that are different in kind or
extent. As long as the property entitlements are not identical,
their exchange will allow both the Commissioner and the transacting
taxpayer to fix the appreciated or depreciated values of the
property relative to their tax bases. There is no support in Phellis, Weiss, or Marr for the Commissioner's
"economic substitute" concept of material difference, under which
differences would be material only when the parties, the relevant
market, and the relevant regulatory body would consider them so.
Moreover, the complexity of the Commissioner's approach both
ill-serves the goal of administrative convenience underlying the
realization requirement and is incompatible with the Code's
structure. Pp. 499 U. S.
562 -566.
(d) Cottage Savings' transactions easily satisfy the material
difference test. Since the participation interests exchanged
derived from loans that were made to different obligors and secured
by different homes, the exchanged interests embodied legally
distinct entitlements. Thus, Cottage Savings realized its losses at
the point of the exchange, at which time both it and the
Commissioner were in a position to determine the change in the
value of its mortgages relative to their tax bases. The mortgages'
status under the FHLBB's criteria has no bearing on this
conclusion, since a mortgage can be "substantially identical" to
the FHLBB and still exhibit "differences" that are "material" for
purposes of the Code. Pp. 499 U. S.
566 -567.
2. Cottage Savings sustained its losses within the meaning of §
165(a) of the Code. The Commissioner's apparent argument that the
losses were not bona fide is rejected, since there is no contention
that the transaction was not conducted at arm's length or that
Cottage Savings Page 499 U. S. 556 retained de facto ownership of the participation
interests it traded. Higgins v. Smith, 308 U.
S. 473 , distinguished. Pp. 499 U. S.
567 -568.
890 F.2d 848 (CA6 1989), reversed and remanded.
MARSHALL, J., delivered the opinion of the Court, in which
REHNQUIST, C.J., and STEVENS, O'CONNOR, SCALIA, KENNEDY, and
SOUTER, JJ., joined. BLACKMUN, J., filed a dissenting opinion, in
which WHITE, J., joined, post, p. 499 U. S.
568 .
JUSTICE MARSHALL delivered the opinion of the Court.
The issue in this case is whether a financial institution
realizes tax-deductible losses when it exchanges its interests in
one group of residential mortgage loans for another lender's
interests in a different group of residential mortgage loans. We
hold that such a transaction does give rise to realized losses. I Petitioner Cottage Savings Association (Cottage Savings) is a
savings and loan association (S & L) formerly regulated by the
Federal Home Loan Bank Board (FHLBB). [ Footnote 1 ] Like many S & L's, Cottage Savings held
numerous long-term, low-interest mortgages that declined in value
when interest rates surged in the late 1970's. These institutions
would have benefited from selling their devalued mortgages in order
to realize tax-deductible losses. However, they were deterred from
doing so by FHLBB accounting regulations, which required them to
record the losses on their books. Page 499 U. S. 557 Reporting these losses consistent with the then-effective FHLBB
accounting regulations would have placed many S & L's at risk
of closure by the FHLBB.
The FHLBB responded to this situation by relaxing its
requirements for the reporting of losses. In a regulatory directive
known as "Memorandum R-49," dated June 27, 1980, the FHLBB
determined that S & L's need not report losses associated with
mortgages that are exchanged for "substantially identical"
mortgages held by other lenders. [ Footnote 2 ] The FHLBB's acknowledged purpose for
Memorandum R-49 was to facilitate transactions that would generate
tax losses but that would not substantially affect the economic
position of the transacting S & L's.
This case involves a typical Memorandum R-49 transaction. On
December 31, 1980, Cottage Savings sold "90 participation" in 252
mortgages to four S & L's. It simultaneously purchased "90
participation interests" in 305 mortgages held by these S &
L's. [ Footnote 3 ] All of the
loans involved Page 499 U. S. 558 in the transaction were secured by single-family homes, most in
the Cincinnati area. The fair market value of the package of
participation interests exchanged by each side was approximately
$4.5 million. The face value of the participation interests Cottage
Savings relinquished in the transaction was approximately $6.9
million. See 90 T.C. 372, 378-382 (1988).
On its 1980 federal income tax return, Cottage Savings claimed a
deduction for $2,447,091, which represented the adjusted difference
between the face value of the participation interests that it
traded and the fair market value of the participation interests
that it received. As permitted by Memorandum R-49, Cottage Savings
did not report these losses to the FHLBB. After the Commissioner of
Internal Revenue disallowed Cottage Savings' claimed deduction,
Cottage Savings sought a redetermination in the Tax Court. The Tax
Court held that the deduction was permissible. See 90 T.C.
372 (1988).
On appeal by the Commissioner, the Court of Appeals reversed.
890 F.2d 848 (CA6 1989). The Court of Appeals agreed with the Tax
Court's determination that Cottage Savings had realized its losses
through the transaction. See id. at 852. However, the
court held that Cottage Savings was not entitled to a deduction
because its losses were not "actually" sustained during the 1980
tax year for purposes of 26 U.S.C. § 165(a). See 890 F.2d
at 855.
Because of the importance of this issue to the S & L
industry and the conflict among the Circuits over whether
Memorandum R-49 exchanges produce deductible tax losses, [ Footnote 4 ] we granted certiorari. 498
U.S. 808. We now reverse. Page 499 U. S. 559 II Rather than assessing tax liability on the basis of annual
fluctuations in the value of a taxpayer's property, the Internal
Revenue Code defers the tax consequences of a gain or loss in
property value until the taxpayer "realizes" the gain or loss. The
realization requirement is implicit in § 1001(a) of the Code, 26
U.S.C. § 1001(a), which defines "[t]he gain [or loss] from the sale
or other disposition of property" as the difference between "the
amount realized" from the sale or disposition of the property and
its "adjusted basis." As this Court has recognized, the concept of
realization is "founded on administrative convenience." Helvering v. Horst, 311 U. S. 112 , 311 U. S. 116 (1940). Under an appreciation-based system of taxation, taxpayers
and the Commissioner would have to undertake the "cumbersome,
abrasive, and unpredictable administrative task" of valuing assets
on an annual basis to determine whether the assets had appreciated
or depreciated in value. See 1 B. Bittker & L. Lokken,
Federal Taxation of Income, Estates and Gifts 115.2, p. 5-16 (2d
ed.1989). In contrast, "[a] change in the form or extent of an
investment is easily detected by a taxpayer or an administrative
officer." R. Magill, Taxable Income 79 (rev. ed.1945).
Section 1001(a)'s language provides a straightforward test for
realization: to realize a gain or loss in the value of property,
the taxpayer must engage in a "sale or other disposition of [the]
property." The parties agree that the exchange of participation
interests in this case cannot be characterized as a "sale" under §
1001(a); the issue before us is whether the transaction constitutes
a "disposition of property." The Commissioner argues that an
exchange of property can be treated as a "disposition" under §
1001(a) only if the properties exchanged are materially different.
The Commissioner further submits that, because the underlying
mortgages Page 499 U. S. 560 were essentially economic substitutes, the participation
interests exchanged by Cottage Savings were not materially
different from those received from the other S & L's. Cottage
Savings, on the other hand, maintains that any exchange of property
is a "disposition of property" under § 1001(a), regardless of
whether the property exchanged is materially different.
Alternatively, Cottage Savings contends that the participation
interests exchanged were materially different because the
underlying loans were secured by different properties.
We must therefore determine whether the realization principle in
§ 1001(a) incorporates a "material difference" requirement. If it
does, we must further decide what that requirement amounts to and
how it applies in this case. We consider these questions in
turn.
Neither the language nor the history of the Code indicates
whether and to what extent property exchanged must differ to count
as a "disposition of property" under § 1001(a). Nonetheless, we
readily agree with the Commissioner that an exchange of property
gives rise to a realization event under § 1001(a) only if the
properties exchanged are "materially different." The Commissioner
himself has, by regulation, construed § 1001(a) to embody a
material difference requirement:
"Except as otherwise provided . . . the gain or loss realized
from the conversion of property into cash, or from the exchange
of property for other property differing materially either in kind
or in extent, is treated as income or as loss sustained."
Treas.Reg. § 1.1001-1, 26 CFR § 1.1001-1 (1990) (emphasis
added). Because Congress has delegated to the Commissioner the
power to promulgate "all needful rules and regulations for the
enforcement of [the Internal Revenue Code]," 26 U.S.C. § 7805(a),
we must defer to his regulatory interpretations Page 499 U. S. 561 of the Code so long as they are reasonable, see National
Muffler Dealers Assn., Inc. v. United States, 440 U.
S. 472 , 440 U. S.
476 -477 (1979).
We conclude that Treasury Regulation § 1.1001-1 is a
reasonable interpretation of § 1001(a). Congress first employed the
language that now comprises § 1001(a) of the Code in § 202(a) of
the Revenue Act of 1924, ch. 234, 43 Stat. 253; that language has
remained essentially unchanged through various reenactments.
[ Footnote 5 ] And since 1934,
the Commissioner has construed the statutory term "disposition of
property" to include a "material difference" requirement. [ Footnote 6 ] As we have recognized,
"'Treasury regulations and interpretations long continued
without substantial change, applying to unamended or substantially
reenacted statutes, are deemed to have received congressional
approval and have the effect of law.'" United States v. Correll, 389 U.
S. 299 , 389 U. S.
305 -306 (1967), quoting Helvering v. Winmill, 305 U. S. 79 , 305 U. S. 83 (1938).
Treasury Regulation § 1.1001-1 is also consistent with our
landmark precedents on realization. In a series of early decisions
involving the tax effects of property exchanges, this Court made
clear that a taxpayer realizes taxable income Page 499 U. S. 562 only if the properties exchanged are "materially" or
"essentially" different. See United States v. Phellis, 257 U. S. 156 , 257 U. S. 173 (1921); Weiss v. Stearn, 265 U. S. 242 , 265 U. S.
253 -254 (1924); Marr v. United States, 268 U. S. 536 , 268 U. S.
540 -542 (1925); see also Eisner v. Macomber, 252 U. S. 189 , 252 U. S.
207 -212 (1920) (recognizing realization requirement).
Because these decisions were part of the "contemporary legal
context" in which Congress enacted § 202(a) of the 1924 Act, see Cannon v. University of Chicago, 441 U.
S. 677 , 441 U. S.
698 -699 (1979), and because Congress has left
undisturbed through subsequent reenactments of the Code the
principles of realization established in these cases, we may
presume that Congress intended to codify these principles in §
1001(a), see Pierce v. Underwood, 487 U.
S. 552 , 487 U. S. 567 (1988); Lorillard v. Pons, 434 U.
S. 575 , 434 U. S.
580 -581 (1978). The Commissioner's construction of the
statutory language to incorporate these principles certainly was
reasonable. B Precisely what constitutes a "material difference" for purposes
of § 1001(a) of the Code is a more complicated question. The
Commissioner argues that properties are "materially different" only
if they differ in economic substance. To determine whether the
participation interests exchanged in this case were "materially
different" in this sense, the Commissioner argues, we should look
to the attitudes of the parties, the evaluation of the interests by
the secondary mortgage market, and the views of the FHLBB. We
conclude that § 1001(a) embodies a much less demanding and less
complex test.
Unlike the question whether § 1001(a) contains a
material difference requirement, the question of what
constitutes a material difference is not one on which we can
defer to the Commissioner. For the Commissioner has not issued an
authoritative, prelitigation interpretation of what property Page 499 U. S. 563 exchanges satisfy this requirement. [ Footnote 7 ] Thus, to give meaning to the material
difference test, we must look to the case law from which the test
derives and which we believe Congress intended to codify in
enacting and reenacting the language that now comprises § 1001(a). See Lorillard v. Pons, supra, at 434 U. S.
580 -581.
We start with the classic treatment of realization in Eisner
v. Macomber, supra. In Macomber, a taxpayer who owned
2,200 shares of stock in a company received another 1,100 shares
from the company as part of a pro rata stock dividend
meant to reflect the company's growth in value. At issue was
whether the stock dividend constituted taxable income. We held that
it did not, because no gain was realized. See id., 252
U.S. at 252 U. S.
207 -212. We reasoned that the stock dividend merely
reflected the increased worth of the taxpayer's stock, see
id. at 252 U. S.
211 -212, and that a taxpayer realizes increased worth of
property only by receiving "something of exchangeable value
proceeding from the property," see id. at 252 U. S.
207 .
In three subsequent decisions -- United States v. Phellis,
supra; Weiss v. Stearn, supra; and Marr v. United States,
supra -- we refined Macomber's conception of
realization in the context of property exchanges. In each case, the
taxpayer owned stock that had appreciated in value since its
acquisition. Page 499 U. S. 564 And in each case, the corporation in which the taxpayer held
stock had reorganized into a new corporation, with the new
corporation assuming the business of the old corporation. While the
corporations in Phellis and Marr both changed
from New Jersey to Delaware corporations, the original and
successor corporations in Weiss both were incorporated in
Ohio. In each case, following the reorganization, the stockholders
of the old corporation received shares in the new corporation equal
to their proportional interest in the old corporation.
The question in these cases was whether the taxpayers realized
the accumulated gain in their shares in the old corporation when
they received in return for those shares stock representing an
equivalent proportional interest in the new corporations. In Phellis and Marr, we held that the transactions
were realization events. We reasoned that, because a company
incorporated in one State has "different rights and powers" from
one incorporated in a different State, the taxpayers in Phellis and Marr acquired through the
transactions property that was "materially different" from what
they previously had. United States v. Phellis, 257 U.S. at 257 U. S.
169 -173; see Marr v. United States, supra, 268
U.S. at 268 U. S.
540 -542 (using phrase "essentially different"). In
contrast, we held that no realization occurred in Weiss. By exchanging stock in the predecessor corporation for stock in the
newly reorganized corporation, the taxpayer did not receive "a
thing really different from what he theretofore had." Weiss v.
Stearn, supra, 265 U.S. at 265 U. S. 254 . As
we explained in Marr, our determination that the
reorganized company in Weiss was not "really different"
from its predecessor turned on the fact that both companies were
incorporated in the same State. See Marr v. United States,
supra, 268 U.S. at 268 U. S.
540 -542 (outlining distinction between these cases).
Obviously, the distinction in Phellis and Marr that made the stock in the successor corporations materially
different from the stock in the predecessors was minimal. Taken
together, Page 499 U. S. 565 Phellis, Marr, and Weiss stand for the
principle that properties are "different" in the sense that is
"material" to the Internal Revenue Code so long as their respective
possessors enjoy legal entitlements that are different in kind or
extent. Thus, separate groups of stock are not materially different
if they confer "the same proportional interest of the same
character in the same corporation." Marr v. United States, 268 U.S. at 268 U. S. 540 .
However, they are materially different if they are issued by
different corporations, id. at 268 U. S. 541 ; United States v. Phellis, supra, 257 U.S. at 257 U. S. 173 ,
or if they confer "differen[t] rights and powers" in the same
corporation, Marr v. United States, supra, 268 U.S. at 268 U. S. 541 .
No more demanding a standard than this is necessary in order to
satisfy the administrative purposes underlying the realization
requirement in § 1001(a). See Helvering v. Horst, 311 U.S.
at 311 U. S. 116 .
For, as long as the property entitlements are not identical, their
exchange will allow both the Commissioner and the transacting
taxpayer easily to fix the appreciated or depreciated values of the
property relative to their tax bases.
In contrast, we find no support for the Commissioner's "economic
substitute" conception of material difference. According to the
Commissioner, differences between properties are material for
purposes of the Code only when it can be said that the parties, the
relevant market (in this case the secondary mortgage market), and
the relevant regulatory body (in this case the FHLBB) would
consider them material. Nothing in Phellis, Weiss, and Marr suggests that exchanges of properties must satisfy
such a subjective test to trigger realization of a gain or
loss.
Moreover, the complexity of the Commissioner's approach
ill-serves the goal of administrative convenience that underlies
the realization requirement. In order to apply the Commissioner's
test in a principled fashion, the Commissioner and the taxpayer
must identify the relevant market, establish whether there is a
regulatory agency whose views should be taken into account, and
then assess how the relevant market Page 499 U. S. 566 participants and the agency would view the transaction. The
Commissioner's failure to explain how these inquiries should be
conducted further calls into question the workability of his
test.
Finally, the Commissioner's test is incompatible with the
structure of the Code. Section 1001(c) of Title 26 provides that a
gain or loss realized under § 1001(a) "shall be recognized" unless
one of the Code's nonrecognition provisions applies. One such
nonrecognition provision withholds recognition of a gain or loss
realized from an exchange of properties that would appear to be
economic substitutes under the Commissioner's material difference
test. This provision, commonly known as the "like kind" exception,
withholds recognition of a gain or loss realized
"on the exchange of property held for productive use in a trade
or business or for investment . . . for property of like kind which
is to be held either for productive use in a trade or business or
for investment."
26 U.S.C. § 1031(a)(1). If Congress had expected that exchanges
of similar properties would not count as realization events under §
1001(a), it would have had no reason to bar recognition of a gain
or loss realized from these transactions. C Under our interpretation of § 1001(a), an exchange of property
gives rise to a realization event so long as the exchanged
properties are "materially different" -- that is, so long as they
embody legally distinct entitlements. Cottage Savings' transactions
at issue here easily satisfy this test. Because the participation
interests exchanged by Cottage Savings and the other S & L's
derived from loans that were made to different obligors and secured
by different homes, the exchanged interests did embody legally
distinct entitlements. Consequently, we conclude that Cottage
Savings realized its losses at the point of the exchange. III The Commissioner contends that it is anomalous to treat
mortgages deemed to be "substantially identical" by the Page 499 U. S. 567 FHLBB as "materially different." The anomaly, however, is merely
semantic; mortgages can be substantially identical for Memorandum
R9 purposes and still exhibit "differences" that are "material" for
purposes of the Internal Revenue Code. Because Cottage Savings
received entitlements different from those it gave up, the exchange
put both Cottage Savings and the Commissioner in a position to
determine the change in the value of Cottage Savings' mortgages
relative to their tax bases. Thus, there is no reason not to treat
the exchange of these interests as a realization event, regardless
of the status of the mortgages under the criteria of Memorandum
R9. III Although the Court of Appeals found that Cottage Savings' losses
were realized, it disallowed them on the ground that they were not
sustained under § 165(a) of the Code, 26 U.S.C. § 165(a). Section
165(a) states that a deduction shall be allowed for "any loss
sustained during the taxable year and not compensated for by
insurance or otherwise." Under the Commissioner's interpretation of
§ 165(a),
"To be allowable as a deduction under section 165(a), a loss
must be evidenced by closed and completed transactions, fixed by
identifiable events, and, except as otherwise provided in section
165(h) and § 1.165-11, relating to disaster losses, actually
sustained during the taxable year. Only a bona fide loss is
allowable. Substance and not mere form shall govern in determining
a deductible loss."
Treas.Reg. § 1.165-1(b), 26 CFR § 1.165-1(b) (1990).
The Commissioner offers a minimal defense of the Court of
Appeals' conclusion. The Commissioner contends that the losses were
not sustained because they lacked "economic substance," by which
the Commissioner seems to mean that the losses were not bona fide.
We say "seems" because the Commissioner states the position in one
sentence in a footnote Page 499 U. S. 568 in his brief, without offering further explanation. See Brief for Respondent 34-35, n. 39. The only authority the
Commissioner cites for this argument is Higgins v. Smith, 308 U. S. 473 (1940). See Brief for United States in No. 89-1926, p. 16,
n. 11.
In Higgins, we held that a taxpayer did not sustain a
loss by selling securities below cost to a corporation in which he
was the sole shareholder. We found that the losses were not bona
fide, because the transaction was not conducted at arm's length and
because the taxpayer retained the benefit of the securities through
his wholly owned corporation. See Higgins v. Smith, supra, at 308 U. S.
475 -476. Because there is no contention that the
transactions in this case were not conducted at arm's length, or
that Cottage Savings retained de facto ownership of the
participation interests it traded to the four reciprocating S &
L's, Higgins is inapposite. In view of the Commissioner's
failure to advance any other arguments in support of the Court of
Appeals' ruling with respect to § 165(a), we conclude that, for
purposes of this case, Cottage Savings sustained its losses within
the meaning of § 165(a). IV For the reasons set forth above, the judgment of the Court of
Appeals is reversed, and the case is remanded for further
proceedings consistent with this opinion. So ordered. [ Footnote 1 ]
Congress abolished the FHLBB in 1989. See § 401 of the
Financial Institutions Reform, Recovery, and Enforcement Act of
1989, Pub.L. 101-73, 103 Stat. 354.
[ Footnote 2 ]
Memorandum R9 listed 10 criteria for classifying mortgages as
substantially identical.
"The loans involved must:"
"1. involve single-family residential mortgages,"
"2. be of similar type ( e.g., conventionals for
conventionals),"
"3. have the same stated terms to maturity ( e.g., 30
years),"
"4. have identical stated interest rates,"
"5. have similar seasoning ( i.e., remaining terms to
maturity),"
"6. have aggregate principal amounts within the lesser of 2 1/2%
or $100,000 (plus or minus) on both sides of the transaction, with
any additional consideration being paid in cash,"
"7. be sold without recourse,"
"8. have similar fair market values,"
"9. have similar loan-to-value ratios at the time of the
reciprocal sale, and"
"10. have all security properties for both sides of the
transaction in the same state."
Record, Exh. 72-BT.
[ Footnote 3 ]
By exchanging merely participation interests, rather than the
loans themselves, each party retained its relationship with the
individual obligors. Consequently, each S & L continued to
service the loans on which it had transferred the participation
interests and made monthly payments to the participation-interest
holders. See 90 T.C. 372, 381 (1988).
[ Footnote 4 ]
The two other Courts of Appeals that have considered the tax
treatment of Memorandum R-49 transactions have found that these
transactions do give rise to deductible losses. See Federal
Nat. Mortgage Assn. v. Commissioner, 283 U.S.App.D.C. 53,
56-58, 896 F.2d 580, 583584 (1990); San Antonio Savings Assn.
v. Commissioner, 887 F.2d 577 (CA5 1989).
[ Footnote 5 ]
Section 202(a) of the 1924 Act provided:
"Except as hereinafter provided in this section, the gain from
the sale or other disposition of property shall be the excess of
the amount realized therefrom over the basis provided in
subdivision (a) or (b) of section 204, and the loss shall be the
excess of such basis over the amount realized."
The essence of this provision was reenacted in § 111(a) of
Revenue Act of 1934, ch. 277, 48 Stat. 703; and then in § 111(a) of
the Internal Revenue Code of 1939, ch. 1, 53 Stat. 37; and finally
in § 1001(a) of the Internal Revenue Code of 1954, Pub.L. 591, 68A
Stat. 295.
[ Footnote 6 ]
What is now Treas.Reg. § 1.1001-1 originated as Treas.Reg. 86,
Art. 111-1, which was promulgated pursuant to the Revenue Act of
1934. That regulation provided:
"Except as otherwise provided, the Act regards as income or as
loss sustained, the gain or loss realized from the conversion of
property into cash, or from the exchange of property for of her
property differing materially either in kind or in
extent. "
(Emphasis added.)
[ Footnote 7 ]
In its brief in United States v. Centennial Savings Bank
FSB, No. 89-1926, the Commissioner cites two Revenue Rulings
that support the position that mortgages exchanged through
reciprocal mortgage sales are not materially different. See Brief for United States 25, n. 21 (citing Rev.Rul.
85-125, 1985-2 Cum.Bull. 180; Rev.Rul. 81-204, 1981-2 Cum.Bull.
157). Perhaps because the two Revenue Rulings postdate the
reciprocal mortgage exchange transaction at issue here and do not
purport to define the "differ materially" language in Treasury
Regulation § 1.1001-1, the Commissioner has not argued that the
position taken in these rulings is entitled to deference. Compare, e.g., National Muffler Dealers Assn., Inc. v. United
States, 440 U. S. 472 , 440 U. S.
483 -484, and nn. 16-19 (1979) (deferring to position
reflected in longstanding series of Revenue Rulings consistently
adhering to same position in a variety of fact patterns). See
generally Udall v. Tallman, 380 U. S. 1 , 380 U. S. 16 -17
(1965) (agency's reasonable interpretation of its own regulations
is entitled to deference).
JUSTICE BLACKMUN, with whom JUSTICE WHITE joins, concurring in
part and dissenting in part in No. 89-1926, and dissenting in No.
89-1965.
I agree that the early withdrawal penalties collected by
Centennial Savings Bank FSB do not constitute "income by reason of
the discharge . . . of indebtedness of the taxpayer," within the
meaning of 26 U.S.C. § 108(a)(1) (1982 ed.), and that the penalty
amounts are not excludable from Centennial's gross income. I
therefore join Part III of the Court's opinion in No. 89-1926. Page 499 U. S. 569 I dissent, however, from the Court's conclusions in these two
cases that Centennial and Cottage Savings Association realized
deductible losses for income tax purposes when each exchanged
partial interests in one group of residential mortgage loans for
partial interests in another like group of residential mortgage
loans. I regard these losses as not recognizable for income tax
purposes because the mortgage packages so exchanged were
substantially identical and were not materially different.
The exchanges, as the Court acknowledges, were occasioned by the
Federal Home Loan Bank Board's (FHLBB) Memorandum R-49 of June
27,1980, and by that Memorandum's relaxation of
theretofore-existing accounting regulations and requirements, a
relaxation effected to avoid placement of "many S & L's at risk
of closure by the FHLBB" without substantially affecting the
"economic position of the transacting S & L's." Aante at 499 U. S. 557 .
But the Memorandum, the Court notes, also had as a purpose "the
facilit[ation of] transactions that would generate tax losses." Ibid. I find it somewhat surprising that an agency not
responsible for tax matters would presume to dictate what is or is
not a deductible loss for federal income tax purposes. I had
thought that that was something within the exclusive province of
the Internal Revenue Service, subject to administrative and
judicial review. Certainly, the Bank Board's opinion in this
respect is entitled to no deference whatsoever. See United
States v. Stewart, 311 U. S. 60 , 311 U. S. 70 (1940); Graff v. Commissioner, 673 F.2d 784, 786 (CA5
1982) (concurring opinion). The Commissioner, of course, took the
opposing position. See Rev.Rul. 85-125, 1985-2 Cum. Bull.
180; Rev.Rul. 81-204, 1981-2 Cum.Bull. 175.
It long has been established that gain or loss in the value of
property is taken into account for income tax purposes only if and
when the gain or loss is "realized," that is, when it is tied to a
realization event, such as the sale, exchange, or other disposition
of the property. Mere variation in value Page 499 U. S. 570 -- the routine ups and downs of the marketplace -- do not in
themselves have income tax consequences. This is fundamental in
income tax law.
In applying the realization requirement to an exchange, the
properties involved must be materially different in kind or in
extent. Treas.Reg. § 1.1001-1(a), 26 CFR § 1.1001-1(a) (1990). This
has been the rule recognized administratively at least since 1935, see Treas.Regs. 86, Art. 111-1, issued under the Revenue
Act of 1934, and by judicial decision. See, e.g., Mutual Loan
& Savings Co. v. Commissioner, 184 F.2d 161 (CA5 1950). See also Marr v. United States, 268 U.
S. 536 , 268 U. S. 541 (1925); Weiss v. Stearn, 265 U. S. 242 , 265 U. S. 254 (1924); United States v. Phellis, 257 U.
S. 156 (1921). This makes economic as well as tax sense,
for the parties obviously regard the exchanged properties as having
equivalent values. In tax law, we should remember, substance,
rather than form, determines tax consequences. Commissioner v.
Court Holding Co., 324 U. S. 331 , 324 U. S. 334 (1945); Gregory v. Helvering, 293 U.
S. 465 , 293 U. S.
469 -470 (1935); Shoenberg v. Commissioner, 77
F.2d 446, 449 (CA8), cert. denied, 296 U.S. 586 (1935).
Thus, the resolution of the exchange issue in these cases turns on
the "materially different" concept. The Court recognizes as much. Ante at 499 U. S.
559 -560.
That the mortgage participation partial interests exchanged in
these cases were "different" is not in dispute. The materiality
prong is the focus. A material difference is one that has the
capacity to influence a decision. See, e.g., Kungys v. United
States, 485 U. S. 759 , 485 U. S.
770 -771 (1988); Basic Inc. v. Levinson, 485 U. S. 224 , 485 U. S. 240 (1988); TSC Industries, Inc. v. Northway, Inc., 426 U. S. 438 , 426 U. S. 449 (1976).
The application of this standard leads, it seems to me, to only
one answer -- that the mortgage participation partial interests
released were not materially different from the mortgage
participation partial interests received. Memorandum R-49, as the
Court notes, ante, at 499 U. S. 557 ,
n. 2, lists 10 factors that, when satisfied, as they were here,
serve to classify Page 499 U. S. 571 the interests as "substantially identical." These factors assure
practical identity; surely, they then also assure that any
difference cannot be of consequence. Indeed, nonmateriality is the
full purpose of the Memorandum's criteria. The "proof of the
pudding" is in the fact of its complete accounting acceptability to
the FHLBB. Indeed, as has been noted, it is difficult to reconcile
substantial identity for financial accounting purposes with a
material difference for tax accounting purposes. See First
Federal Savings & Loan Assn. v. United
States, 694 F.
Supp. 230 , 245 (WD Tex.1988), aff'd, 887 F.2d 593 (CA5
1989), cert. pending No. 891927. Common sense so
dictates.
This should suffice, and be the end of the analysis. Other
facts, however, solidify the conclusion: the retention by the
transferor of 10% interests, enabling it to keep on servicing its
loans; the transferor's continuing to collect the payments due from
the borrowers so that, so far as the latter were concerned, it was
business as usual, exactly as it had been; the obvious lack of
concern or dependence of the transferor with the "differences" upon
which the Court relies (as transferees, the taxpayers made no
credit checks and no appraisals of collateral, see 890
F.2d 848, 849 (CA6 1989)); 90 T.C. 372, 382 (1988); 682 F.
Supp. 1389 , 1392 (ND Tex.1988); the selection of the loans by
computer programmed to match mortgages in accordance with the
Memorandum R-49 criteria; the absence of even the names of the
borrowers in the closing schedules attached to the agreements;
Centennial's receipt of loan files only six years after its
exchange, 682 F.Supp., at 1392, n. 5; the restriction of the
interests exchanged to the same State; the identity of the
respective face and fair market values; and the application by the
parties of common discount factors to each side of the transaction
-- all reveal that any differences that might exist made no
difference whatsoever and were not material. This demonstrates the
real nature of the transactions, including nonmateriality of the
claimed differences. Page 499 U. S. 572 We should be dealing here with realities, and not with
superficial distinctions. As has been said many times, and as noted
above, in income tax law we are to be concerned with substance, and
not with mere form. When we stray from that principle, the new
precedent is likely to be a precarious beacon for the future.
I respectfully dissent on this issue. | Cottage Savings Association sold and purchased participation interests in mortgages to and from other savings and loan associations. The fair market value of the exchanged interests was approximately $4.5 million each, while the face value of Cottage Savings' interests was higher at $6.9 million. Cottage Savings claimed a tax deduction for the difference between the face value and fair market value of the interests on its 1980 income tax return.
The Supreme Court held that Cottage Savings realized a tax-deductible loss because the properties it exchanged were materially different, even though they were treated as "substantially identical" for accounting purposes. The Court deferred to Treasury Regulation § 1.1001-1, which interprets the tax code to require a material difference between exchanged properties for a taxable event to occur. This regulation has continued without substantial change and applies to a substantially reenacted statute, suggesting congressional approval.
The Court's decision focused on the administrative convenience of deferring tax consequences until a gain or loss is realized through the sale or disposition of property and the reasonableness of the Treasury Regulation's interpretation. |
Taxes | Commissioner v. Groetzinger | https://supreme.justia.com/cases/federal/us/480/23/ | U.S. Supreme Court CIR v. Groetzinger, 480 U.S.
23 (1987) Commissioner of Internal Revenue v.
Groetzinger No. 86-1226 Argued Dec. 8, 1986 Decided Feb. 24, 1987 480 U.S.
23 CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE SEVENTH CIRCUIT Syllabus For most of 1978, respondent devoted 60 to 80 hours per week to
parimutuel wagering on dog races with a view to earning a living
from such activity, had no other employment, and gambled solely for
his own account. His efforts generated gross winnings of $70,000 on
bets of $72,032, for a net gambling loss for the year of $2,032.
Although he reported this loss on his 1978 tax return, he did not
utilize it in computing his adjusted gross income or claim it as a
deduction. Upon audit, the Commissioner of Internal Revenue
determined that, under the Internal Revenue Code of 1964 (Code) as
it existed in 1978, respondent was subject to a minimum tax because
part of the gambling loss deduction to which he was entitled was an
"ite[m] of tax preference." Under the Code, such items could be
lessened by certain deductions that were "attributable to a trade
or business carried on by the taxpayer." In redetermining
respondent's tax deficiency, the Tax Court held that he was in the
"trade or business" of gambling, so that no part of his gambling
losses was an item of tax preference subjecting him to a minimum
tax for 1978. The Court of Appeals affirmed. Held: A full-time gambler who makes wagers solely for
his own account is engaged in a "trade or business" within the
meaning of Code §§162(a) and 62(1). Pp. 480 U. S.
27 -36.
771 F.2d 269, affirmed.
BLACKMUN, J., delivered the opinion of the Court, in which
BRENNAN, MARSHALL, POWELL, STEVENS, and O'CONNOR, JJ., joined.
WHITE, J., filed a dissenting opinion, in which REHNQUIST, C. J.,
and SCALIA, J., joined, post, p. 480 U. S.
37 . Page 480 U. S. 24 JUSTICE BLACKMUN delivered the opinion of the Court.
The issue in this case is whether a full-time gambler who makes
wagers solely for his own account is engaged in a "trade or
business," within the meaning of §§162(a) and 62(1) of the Internal
Revenue Code of 1954, as amended, 26 U.S.C. §§162(a) and
62(1) (1976 ed. and Supp. V). [ Footnote 1 ] The tax year with which we here are concerned
is the calendar year 1978; technically, then, we look to the Code
as it read at that time. I There is no dispute as to the facts. The critical ones are
stipulated. See App. 9. Respondent Robert P. Groetzinger
had worked for 20 years in sales and market research for an
Illinois manufacturer when his position was terminated in February,
1978. During the remainder of that year, respondent busied himself
with parimutuel wagering, primarily on greyhound races. He gambled
at tracks in Florida and Colorado. He went to the track 6 days a
week for 48 weeks in 1978. He spent a substantial amount of time
studying racing forms, programs, and other materials. He devoted
from 60 to 80 hours each week to these gambling-related endeavors.
He never placed bets on behalf of any other person, or sold tips,
or collected commissions for placing bets, or functioned as a
bookmaker. He gambled solely for his own account. He had no other
profession or type of employment. [ Footnote 2 ] Page 480 U. S. 25 Respondent kept a detailed accounting of his wagers, and every
day noted his winnings and losses in a record book. In 1978, he had
gross winnings of $70,000, but he bet $72,032; he thus realized a
net gambling loss for the year of $2,032.
Respondent received $6,498 in income from other sources in 1978.
This came from interest, dividends, capital gains, and salary
earned before his job was terminated.
On the federal income tax return he filed for the calendar year
1978, respondent reported as income only the $6,498 realized from
nongambling sources. He did not report any gambling winnings or
deduct any gambling losses. [ Footnote 3 ] He did not itemize deductions. Instead, he
computed his tax liability from the tax tables.
Upon audit, the Commissioner of Internal Revenue determined that
respondent's $70,000 in gambling winnings were to be included in
his gross income, and that, pursuant to §165(d) of the Code, 26
U.S.C. §165(d), a deduction was to be allowed for his gambling
losses to the extent of these gambling gains. But the Commissioner
further determined that, under the law as it was in 1978, a portion
of respondent's $70,000 gambling-loss deduction was an item of tax
preference and operated to subject him to the minimum tax under
§56(a) of the Code, 26 U.S.C. §56(a) (1976 ed.). At that time,
under statutory provisions in effect from 1976 until 1982, "items
of tax preference" were lessened by certain deductions, but not by
deductions not "attributable to a trade or business carried on by
the taxpayer." §§57(a)(1) and (b)(1)(A), and §62(1), 26 U.S.C.
§§57(a)(1) and (b)(1)(A), and §62(1) (1976 ed. and Supp. I).
[ Footnote 4 ] Page 480 U. S. 26 These determinations by the Commissioner produced a § 56(a)
minimum tax of $2,142 and, with certain other adjustments not now
in dispute, resulted in a total asserted tax deficiency of $2,522
for respondent for 1978.
Respondent sought redetermination of the deficiency in the
United States Tax Court. That court, in a reviewed decision, with
only two judges dissenting, held that respondent was in the trade
or business of gambling, and that, as a consequence, no part of his
gambling losses constituted an item of tax preference in
determining any minimum tax for 1978. 82 T.C. 793 (1984). In so
ruling, the court adhered to its earlier court-reviewed decision in Ditunno v. Commissioner, 80 T.C. 362 (1983). The court in Ditunno, id. at 371, had overruled Gentile v.
Commissioner, 65 T.C. 1 (1975), a case where it had rejected
the Commissioner's contention (contrary to his position here) that
a full-time gambler was in a trade or business, and therefore was
subject to self-employment tax.
The United States Court of Appeals for the Seventh Circuit
affirmed. 771 F.2d 269 (1985). Because of a conflict on the issue
among Courts of Appeals, [ Footnote
5 ] we granted certiorari. 475 U.S. 1080 (1986). Page 480 U. S. 27 II The phrase "trade or business" has been in §162(a) and in that
section's predecessors for many years. Indeed, the phrase is common
in the Code, for it appears in over 50 sections and 800 subsections
and in hundreds of places in proposed and final income tax
regulations. The slightly longer phrases, "carrying on a trade or
business" and "engaging in a trade or business," themselves are
used no less than 60 times in the Code. The concept thus has a
well-known and almost constant presence on our tax-law terrain.
Despite this, the Code has never contained a definition of the
words "trade or business" for general application, and no
regulation has been issued expounding its meaning for all purposes.
[ Footnote 6 ] Neither has a
broadly applicable authoritative judicial definition emerged.
[ Footnote 7 ] Our task in this
case is to ascertain the meaning of the phrase as it appears in the
sections of the Code with which we are here concerned. [ Footnote 8 ]
In one of its early tax cases, Flint v. Stone Tracy
Co., 220 U. S. 107 (1911), the Court was concerned with the Corporation Tax imposed by
§ 38 of the Tariff Act of 1909, ch. 6, 36 Stat. 112-117, and the
status of being engaged in business. It said: " Business' is a
very comprehensive term Page 480 U. S.
28 and embraces everything about which a person can be
employed." 220 U.S. at 220 U. S. 171 .
It embraced the Bouvier Dictionary definition: "That which occupies
the time, attention and labor of men for the purpose of a
livelihood or profit." Ibid. See also Helvering v. Horst, 311 U. S. 112 , 311 U. S. 118 (1940). And Justice Frankfurter has observed that "we assume that
Congress uses common words in their popular meaning, as used in the
common speech of men." Frankfurter, Some Reflections on the Reading
of Statutes, 47 Colum.L.Rev. 527, 536 (1947). With these general comments as significant background, we turn
to pertinent cases decided here. Snyder v. Commissioner, 295 U. S. 134 (1935), had to do with margin trading and capital gains, and held,
in that context, that an investor, seeking merely to increase his
holdings, was not engaged in a trade or business. Justice Brandeis,
in his opinion for the Court, noted that the Board of Tax Appeals
theretofore had ruled that a taxpayer who devoted the major portion
of his time to transactions on the stock exchange for the purpose
of making a livelihood could treat losses incurred as having been
sustained in the course of a trade or business. He went on to
observe that no facts were adduced in Snyder to show that
the taxpayer "might properly be characterized as a trader on an
exchange who makes a living in buying and selling securities.'" Id. at 295 U. S. 139 .
These observations, thus, are dicta, but, by their use, the Court
appears to have drawn a distinction between an active trader and an
investor. In Deputy v. Du Pont, 308 U. S. 488 (1940), the Court was concerned with what were "ordinary and
necessary" expenses of a taxpayer's trade or business, within the
meaning of §23(a) of the Revenue Act of 1928, 45 Stat. 799. In
ascertaining whether carrying charges on short sales of stock were
deductible as ordinary and necessary expenses of the taxpayer's
business, the Court assumed that the activities of the
taxpayer in conserving and enhancing his estate constituted a trade
or business, but nevertheless disallowed the Page 480 U. S. 29 claimed deductions because they were not "ordinary" or
"necessary." 308 U.S. at 308 U. S.
493 -497. Justice Frankfurter, in a concurring opinion
joined by Justice Reed, did not join the majority. He took the
position that whether the taxpayer's activities constituted a trade
or business was "open for determination," id. at 308 U. S. 499 ,
and observed:
". . . 'carrying on any trade or business,' within the
contemplation of §23(a), involves holding one's self out to others
as engaged in the selling of goods or services. This the taxpayer
did not do. . . . Without elaborating the reasons for this
construction, and not unmindful of opposing considerations,
including appropriate regard for administrative practice, I prefer
to make the conclusion explicit instead of making the hypothetical
litigation-breeding assumption that this taxpayer's activities, for
which expenses were sought to be deducted, did constitute a 'trade
or business.'" Ibid. Next came Higgins v. Commissioner, 312 U.
S. 212 (1941). There the Court, in a bare and brief
unanimous opinion, ruled that salaries and other expenses incident
to looking after one's own investments in bonds and stocks were not
deductible under § 23(a) of the Revenue Act of 1932, 47 Stat. 179,
as expenses paid or incurred in carrying on a trade or business.
While surely cutting back on Flint's broad approach, the
Court seemed to do little more than announce that, since 1918, "the
present form [of the statute] was fixed and has so continued"; that
"[n]o regulation has ever been promulgated which interprets the
meaning of carrying on a business'"; that the comprehensive
definition of "business" in Flint was "not controlling in
this dissimilar inquiry"; that the facts in each case must be
examined; that not all expenses of every business transaction are
deductible; and that "[n]o matter how large the estate or how continuous or extended
the work required may be, such facts are not sufficient as a matter
of law to permit the courts to reverse the decision of the
Board."
312 U.S. at 312 U. S.
215 -218. The opinion, therefore -- although devoid Page 480 U. S. 30 of analysis and not setting forth what elements, if any, in
addition to profit motive and regularity, were required to render
an activity a trade or business -- must stand for the propositions
that full-time market activity in managing and preserving one's own
estate is not embraced within the phrase "carrying on a business,"
and that salaries and other expenses incident to the operation are
not deductible as having been paid or incurred in a trade or
business. [ Footnote 9 ] See
also United States v. Gilmore, 372 U. S.
39 , 372 U. S. 44 -45
(1963); Whipple v. Commissioner, 373 U.
S. 193 (1963). It is of interest to note that, although
Justice Frankfurter was on the Higgins Court and this time
did not write separately, and although Justice Reed, who had joined
the concurring opinion in Du Pont, was the author of the Higgins opinion, the Court in that case did not even cite Du Pont, and thus paid no heed whatsoever to the content
of Justice Frankfurter's pronouncement in his concurring opinion.
[ Footnote 10 ] Adoption of
the Frankfurter gloss obviously would have disposed of the case in
the Commissioner's favor handily and automatically, but that easy
route was not followed.
Less than three months later, the Court considered the issue of
the deductibility, as business expenses, of estate and trust fees.
In unanimous opinions issued the same day and written by Justice
Black, the Court ruled that the efforts Page 480 U. S. 31 of an estate or trust in asset conservation and maintenance did
not constitute a trade or business. City Bank Farmers Trust Co.
v. Helvering, 313 U. S. 121 (1941); United States v. Pyne, 313 U.
S. 127 (1941). The Higgins case was deemed to
be relevant and controlling. Again, no mention was made of the
Frankfurter concurrence in Du Pont. Yet Justices Reed and
Frankfurter were on the Court. Snow v. Commissioner, 416 U. S. 500 (1974), concerned a taxpayer who had advanced capital to a
partnership formed to develop an invention. On audit of his 1966
return, a claimed deduction under §174(a)(1) of the 1954 Code for
his pro rata share of the partnership's operating loss was
disallowed. The Tax Court and the Sixth Circuit upheld that
disallowance. This Court reversed. Justice Douglas, writing for the
eight Justices who participated, observed:
"Section 174 was enacted in 1954 to dilute some of the
conception of 'ordinary and necessary' business expenses under
§162(a) (then § 23(a)(1) of the Internal Revenue Code of 1939)
adumbrated by Mr. Justice Frankfurter in a concurring opinion in Deputy v. Du Pont . . . where he said that the section in
question . . . 'involves holding one's self out to others as
engaged in the selling of goods or services.'"
416 U.S. at 416 U. S.
502 -503. He went on to state, id. at 416 U. S. 503 ,
that §162(a) "is more narrowly written than is §174.
From these observations and decisions, we conclude (1) that, to
be sure, the statutory words are broad and comprehensive
( Flint ); (2) that, however, expenses incident to caring
for one's own investments, even though that endeavor is full time,
are not deductible as paid or incurred in carrying on a trade or
business ( Higgins; City Bank; Pyne ); (3) that the opposite
conclusion may follow for an active trader (Snyder); (4) that
Justice Frankfurter's attempted gloss upon the decision in Du Pont
was not adopted by the Court in that case; (5) that the Court,
indeed, later characterized it as an "adumbration" (Snow); and (6)
that the Frankfurter observation, specifically or by implication,
never has been accepted Page 480 U. S. 32 as law by a majority opinion of the Court, and more than once
has been totally ignored. We must regard the Frankfurter gloss
merely as a two-Justice pronouncement in a passing moment and,
while entitled to respect, as never having achieved the status of a
Court ruling. One also must acknowledge that Higgins, with
its stress on examining the facts in each case, affords no readily
helpful standard, in the usual sense, with which to decide the
present case and others similar to it. The Court's cases, thus,
give us results, but little general guidance. III Federal and state legislation and court decisions, perhaps
understandably, until recently have not been noticeably favorable
to gambling endeavors, and even have been reluctant to treat
gambling on a parity with more "legitimate" means of making a
living. See, e.g., §4401 et seq. of the Code; Marchetti v. United States, 390 U. S.
39 , 390 U. S. 44 -46,
and nn. 5 and 6 (1968). [ Footnote 11 ] And the confinement of gambling-loss
deductions to the amount of gambling gains, a provision brought
into the income tax law as § 23(g) of the Revenue Act of 1934, 48
Stat. 689, and carried forward into §165(d) of the 1954 Code,
closed the door on suspected abuses, see H.R.Rep. No. 704,
73d Cong., 2d Sess., 22 (1934); S.Rep. No. 558, 73d Cong., 2d
Sess., 25 (1934), but served partially to differentiate genuine
gambling losses from many other types of adverse financial
consequences sustained during the tax year. Gambling winnings,
however, have not been isolated from gambling losses. The Congress
has been realistic enough to recognize that such losses do exist
and do have some effect on income, which is the primary focus of
the federal income tax.
The issue this case presents has "been around" for a long time
and, as indicated above, has not met with consistent treatment in
the Tax Court itself or in the Federal Courts of Page 480 U. S. 33 Appeals. The Seventh Circuit, in the present case, said the
issue "has proven to be most difficult and troublesome over the
years." 771 F.2d at 271. The difficulty has not been ameliorated by
the persistent absence of an all-purpose definition, by statute or
regulation, of the phrase "trade or business" which so frequently
appears in the Code. Of course, this very frequency well may be the
explanation for legislative and administrative reluctance to take a
position as to one use that might affect, with confusion, so many
others.
Be that as it may, this taxpayer's case must be decided and,
from what we have outlined above, must be decided in the face of a
decisional history that is not positive or even fairly indicative,
as we read the cases, of what the result should be. There are,
however, some helpful indicators.
If a taxpayer, as Groetzinger is stipulated to have done in
1978, devotes his full-time activity to gambling, and it is his
intended livelihood source, it would seem that basic concepts of
fairness (if there be much of that in the income tax law) demand
that his activity be regarded as a trade or business just as any
other readily accepted activity, such as being a retail store
proprietor or, to come closer categorically, as being a casino
operator or as being an active trader on the exchanges.
It is argued, however, that a full-time gambler is not offering
goods or his services, within the line of demarcation that Justice
Frankfurter would have drawn in Du Pont. Respondent
replies that he indeed is supplying goods and services, not only to
himself but, as well, to the gambling market; thus, he says, he
comes within the Frankfurter test even if that were to be imposed
as the proper measure. "It takes two to gamble." Brief for
Respondent 3. Surely, one who clearly satisfies the Frankfurter
adumbration usually is in a trade or business. But does it
necessarily follow that one who does not satisfy the Frankfurter
adumbration is not in a trade or business? One might well feel that
a full-time gambler Page 480 U. S. 34 ought to qualify as much as a full-time trader, [ Footnote 12 ] as Justice Brandeis in Snyder implied and as courts have held. [ Footnote 13 ] The Commissioner, indeed,
accepts the trader result. Tr. of Oral Arg. 17. In any event, while
the offering of goods and services usually would qualify the
activity as a trade or business, this factor, it seems to us, is
not an absolute prerequisite.
We are not satisfied that the Frankfurter gloss would add any
helpful dimension to the resolution of cases such as this one, or
that it provides a "sensible test," as the Commissioner urges. See Brief for Petitioner 36. It might assist now and then,
when the answer is obvious and positive, but it surely is capable
of breeding litigation over the meaning of "goods," the meaning of
"services," or the meaning of "holding one's self out." And we
suspect that -- apart from gambling -- almost every activity would
satisfy the gloss. [ Footnote
14 ] A test that everyone passes is not a test at all. We
therefore now formally reject the Frankfurter gloss, which the
Court has never adopted anyway. Page 480 U. S. 35 Of course, not every income-producing and profit-making endeavor
constitutes a trade or business. The income tax law, almost from
the beginning, has distinguished between a business or trade, on
the one hand, and "transactions entered into for profit but not
connected with . . . business or trade," on the other. See Revenue Act of 1916, §5(a), Fifth, 39 Stat. 759. Congress
"distinguished the broad range of income or profit producing
activities from those satisfying the narrow category of trade or
business." Whipple v. Commissioner, 373 U.S. at 373 U. S. 197 .
We accept the fact that, to be engaged in a trade or business, the
taxpayer must be involved in the activity with continuity and
regularity, and that the taxpayer's primary purpose for engaging in
the activity must be for income or profit. A sporadic activity, a
hobby, or an amusement diversion does not qualify.
It is suggested that we should defer to the position taken by
the Commissioner and by the Solicitor General, but, in the absence
of guidance, for over several decades now, through the medium of
definitive statutes or regulations, we see little reason to do so.
We would defer, instead, to the Code's normal focus on what we
regard as a common-sense concept of what is a trade or business.
Otherwise, as here, in the context of a minimum tax, it is not too
extreme to say that the taxpayer is being taxed on his gambling
losses, [ Footnote 15 ] a
result distinctly out of line with the Code's focus on income.
We do not overrule or cut back on the Court's holding in Higgins when we conclude that, if one's gambling activity
is pursued full-time, in good faith, and with regularity, to the
production of income for a livelihood, and is not a mere hobby, it
is a trade or business within the meaning of the statutes with
which we are here concerned. Respondent Page 480 U. S. 36 Groetzinger satisfied that test in 1978. Constant and
large-scale effort on his part was made. Skill was required and was
applied. He did what he did for a livelihood, though with a
less-than-successful result. This was not a hobby or a passing
fancy or an occasional bet for amusement.
We therefore adhere to the general position of the Higgins Court, taken 46 years ago, that resolution of this
issue "requires an examination of the facts in each case." 312 U.S.
at 312 U. S. 217 .
This may be thought by some to be a less-than-satisfactory
solution, for facts vary. See Boyle, What is a Trade or
Business?, 39 Tax Lawyer 737, 767 (1986); Note, The Business of
Betting: Proposals for Reforming the Taxation of Business Gamblers,
38 Tax Lawyer 759 (1985); Lopez, Defining "Trade or Business" Under
the Internal Revenue Code: A Survey of Relevant Cases, 11
Fla.St.U.L.Rev. 949 (1984). Cf. Comment, Continuing
Vitality of the "Goods or Services" Test, 15 U.Balt.L.Rev. 108
(1985). But the difficulty rests in the Code's wide utilization in
various contexts of the term "trade or business," in the absence of
an all-purpose definition by statute or regulation, and in our
concern that an attempt judicially to formulate and impose a test
for all situations would be counterproductive, unhelpful, and even
somewhat precarious for the overall integrity of the Code. We leave
repair or revision, if any be needed, which we doubt, to the
Congress, where we feel, at this late date, the ultimate
responsibility rests. Cf. Flood v. Kuhn, 407 U.
S. 258 , 407 U. S.
269 -285 (1972). [ Footnote 16 ]
The judgment of the Court of Appeals is affirmed. It is so ordered. Page 480 U. S. 37 [ Footnote 1 ]
All references herein to the Internal Revenue Code are to the
1964 Code, not to the Internal Revenue Code of 1986, as it has been
designated by § 2(a) of the Tax Reform Act of 1986, 100 Stat.
2096.
[ Footnote 2 ]
The Tax Court put it this way:
"It is not disputed that petitioner, during 1978, was engaged
full-time in parimutuel wagering on dog races, had no other
employment during that period, gambled solely for his own account,
and devoted an extraordinary amount of time and effort to his
gambling with a view to earning a living from such activity."
82 T.C. 793, 795 (1984).
[ Footnote 3 ]
Respondent, however, did report his net gambling loss of $2,032
in Schedule E (Supplemental Income Schedule) of his return, but he
did not utilize that amount in computing his adjusted gross income
or claim it as an itemized deduction.
[ Footnote 4 ]
This statutory scheme was amended by the Tax Equity and Fiscal
Responsibility Act of 1982, § 201(a), 96 Stat. 411. For tax years
after 1982, gambling loss deductions explicitly are excluded from
the minimum tax base. The Commissioner acknowledges that a taxpayer
like respondent for a year after 1982 would not be subject to
minimum tax liability because of his gambling-loss deduction. Brief
for Petitioner 4, n. 4.
[ Footnote 5 ] Compare Nipper v. Commissioner, 746 F.2d 813 (CA11
1984), aff'g, without opinion, 47 TCM 136, � 83,644 P-H
Memo TC (1983), and the Seventh Circuit's decision in the present
case, with Gajewski v. Commissioner, 723 F.2d 1062 (CA2
1983), cert. denied, 469 U.S. 818 (1984); Estate of
Cull v. Commissioner, 746 F.2d 1148 (CA6 1984), cert.
denied, 472 U.S. 1007 (1985); and Noto v. United
States, 770 F.2d 1073 (CA3 1985), aff'g, without
opinion, 598 F.
Supp. 440 (NJ 1984).
Despite the interim reversals by the Second and Sixth Circuit in Gajewski and Cull, supra, the Tax Court has
adhered to its position that a full-time gambler is engaged in a
trade or business. See, e.g., Meredith v. Commissioner, 49
TCM 318, � 84,651 P-H Memo TC (1984); Barrish v.
Commissioner, 49 TCM 115, � 84,602 P-H Memo TC (1984). It has
drawn no distinction between the gambler and the active market
trader. See also Baxter v. United States, 633 F.
Supp. 912 (Nev. 1986).
[ Footnote 6 ]
Some sections of the Code, however, do define the term for
limited purposes. See § 366(b)(2), 26 U.S.C. § 366(b)(2)
(distribution of stock of controlled corporation); §§602(b) and
613(b), 26 U.S.C. §§602(b) and 613(b) (exempt organizations); and §
7701(a)(26), 26 U.S.C. § 7701(a)(26) (defining the term to include
"the performance of the functions of a public office").
[ Footnote 7 ]
Judge Friendly some time ago observed that
"the courts have properly assumed that the term includes all
means of gaining a livelihood by work, even those which would
scarcely be so characterized in common speech." Trent v. Commissioner, 291 F.2d 669, 671 (CA2
1961).
[ Footnote 8 ]
We caution that in this opinion our interpretation of the phrase
"trade or business" is confined to the specific sections of the
Code at issue here. We do not purport to construe the phrase where
it appears in other places.
[ Footnote 9 ] See, however, § 212 of the 1954 Code, 26 U.S.C. § 212.
This section has its roots in § 23(a)(2) of the 1939 Code, as added
by §121 of the Revenue Act of 1942, 56 Stat. 819. It allows as a
deduction all the ordinary and necessary expenses paid or incurred
"for the management, conservation, or maintenance of property held
for the production of income," and thus overcame the specific
ruling in Higgins that expenses of that kind were not
deductible. The statutory change, of course, does not read directly
on the term "trade or business." Obviously, though, Congress sought
to overcome Higgins and achieved that end.
[ Footnote 10 ] Deputy v. Du Pont, 308 U. S. 488 (1940), however, was cited by the parties in their Higgins briefs
submitted to this Court. See Brief for Petitioner 28, 29,
40, and 61, and Brief for Respondent 17 and 18, in Higgins v.
Commissioner, 0. T. 1940, No. 263.
[ Footnote 11 ]
Today, however, the vast majority of States permit some form of
public gambling. The lottery, bingo, parimutuel betting, jai alai,
casinos, and slot machines easily come to mind.
[ Footnote 12 ]
"It takes a buyer to make a seller and it takes an opposing
gambler to make a bet." Boyle, What is a Trade or Business?, 39 Tax
Lawyer 737, 763 (1986).
[ Footnote 13 ] Levin v. United States, 220 Ct. Cl. 197, 206, 697 F.2d
760; 766 (1979); Commissioner v. Nubar, 186 F.2d 684, 688
(CA4 1960), cert. denied, 341 U.S. 926 (1961); Fuld v.
Commissioner, 139 F.2d 466, 468-469 (CA2 1943). See also
Moller v. United States, 721 F.2d 810 (CA Fed. 1983), cert. denied, 467 U. S. 1261 (1984); Purvis v. Commissioner, 630 F.2d 1332, 1334 (CA9
1976).
[ Footnote 14 ]
Each of the three cases in conflict with the Seventh Circuit's
decision in the present case, see n. 6, supra, was a gambler's case, and adopted the Frankfurter gloss. Because
the same courts, in cases not involving gamblers, have not referred
to the Frankfurter gloss, see Bessenyey v. Commissioner, 379 F.2d 262 (CA2), cert. denied, 389 U.S. 931 (1967); Gestrich v. Commissioner, 681 F.2d 806 (CA3 1982), aff'g, without opinion, 74 T.C. 626 (1980), Main Line
Distributors, Inc. v. Commissioner, 321 F.2d 662 (CA6 1963),
it would appear that these courts in effect were creating a special
class of, and with special rules for, the full-time gambler. We
find no warrant for this in the Code.
[ Footnote 15 ]
"The more he lost, the more minimum tax he had to pay." Boyle,
39 Tax Lawyer, at 754. The Commissioner concedes that application
of the goods-or-services-test here "visits somewhat harsh
consequences" on taxpayer Groetzinger, Brief for Petitioner 36, and
"points to . . . perhaps unfortunate draftsmanship." Ibid. See
also Reply Brief for Petitioner 11.
[ Footnote 16 ]
It is possible, of course, that our conclusion here may subject
the gambler to self-employment tax, see §§1401-1403 of the
Code, and therefore may not be an unmixed blessing for him. Federal
taxes, however, rest where Congress has placed them.
JUSTICE WHITE, with whom THE CHIEF JUSTICE and JUSTICE SCALIA
join, dissenting.
The 1982 amendments to the Tax Code made clear that gambling is
not a trade or business. Under those amendments, the alternative
minimum tax base equals adjusted gross income reduced by specified
amounts, including gambling losses, and increased by items not
relevant here. See 26 U.S.C. §§ 55(b), 55(e)(1)(A), 165(d)
(1982 ed. and Supp. III). [ Footnote
2/1 ] If full-time gambling were a trade or business, a
full-time gambler's gambling losses would be "deductions . . .
attributable to a trade or business carried on by the taxpayer,"
and hence deductible from gross income in computing adjusted gross
income, 26 U.S.C. § 62(1), though only to the extent of gambling
winnings, 26 U.S.C. §165(d). To again subtract gambling losses (to
the extent of gambling winnings) from adjusted gross income when
computing the alternative minimum tax base would be to give the
full-time gambler a double deduction for alternative minimum tax
purposes, which was certainly not Congress' intent. [ Footnote 2/2 ] Thus, when Congress amended
the alternative minimum tax provisions in 1982, it implicitly
accepted the teaching of Gentile v. Commissioner, 65 T.C.
1 (1975), that gambling is not a trade or business. [ Footnote 2/3 ] Groetzinger would have had no
problem under the 1982 amendments.
One could argue, I suppose, that although gambling is not a
trade or business under the 1982 amendments, it was in 1978, the
tax year at issue here. But there is certainly no indication that
Congress intended in 1982 to alter the status of gambling as a
trade or business. Rather, Congress was correcting an inequity that
had arisen because gambling is not a trade or business,
just as, 40 years earlier, Congress had, by enacting the
predecessor to 26 U.S.C. §212, corrected an inequity that became
apparent when this Court held that a full-time investor is not
engaged in a trade or business. See Higgins v.
Commissioner, 312 U. S. 212 (1941). In neither case did Congress attempt to alter the
then-prevailing definition of trade or business, nor do I think
this Court should do so now to avoid a harsh result in this case.
[ Footnote 2/4 ] In any event, the
Court should recognize that its holding is a sport that applies
only to a superseded statute, and not to the tax years governed by
the 1982 amendments. Accordingly, I dissent.
[ Footnote 2/1 ]
All references are to the Code as it stood prior to the 1986
amendments.
[ Footnote 2/2 ]
Consider two single individuals filing for the tax year ending
December 31, 1986: A has $75,000 in nongambling income, and $75,000
in itemized nongambling deductions; B, a full-time gambler, has
$75,000 in gambling winnings, $75,000 in gambling losses, $75,000
in nongambling income, and $75,000 in itemized nongambling
deductions. A's gross income and adjusted gross income are both
$75,000, and so is his alternative minimum tax base. The
alternative minimum tax assessed on A is 20% of the excess of
$75,000 over $30,000, see 26 U.S.C. §§55(a), 55(f)(1)(B),
or $9,000. Assuming that full-time gambling is a trade or business,
B has gross income of $150,000, adjusted gross income of $75,000
(because his gambling losses are attributable to a trade or
business), and an alternative minimum tax base of zero (because
gambling losses are deducted from adjusted gross income in
computing the alternative minimum tax base). Thus, if full-time
gambling were treated as a trade or business, B's gambling losses
would shield him against the $9,000 minimum tax that Congress
clearly intended him to pay.
"The Code should not be interpreted to allow [a taxpayer] 'the
practical equivalent of a double deduction,' Charles Ilfeld Co.
v. Hernandez, 292 U. S. 62 , 292 U. S.
68 (1934), absent a clear declaration of intent by
Congress." United States v. Skelly Oil Co., 394 U.
S. 678 , 394 U. S. 684 (1969). There is no such clear declaration of intent accompanying
the 1982 amendments.
[ Footnote 2/3 ]
The Commissioner had acquiesced in Gentile. See 1980-2
Cum. Bull. 1, 4, n.39.
[ Footnote 2/4 ]
While the consequences of accepting the Commissioner's position
in this case may be harsh to the respondent -- which is no doubt
why Congress amended the relevant Code provisions in 1982 -- I find
the Court's characterization of the result as a tax on gambling
losses, ante at 480 U. S. 35 ,
somewhat misleading. If gambling is not a trade or business, the
practical effect of the minimum tax on tax preference items is to
reduce the deduction allowed for gambling losses from an amount
equal to 100% of gambling winnings to some lesser percentage of
gambling winnings. | The Supreme Court held that a full-time gambler who wagers solely for their own account is engaged in a "trade or business" under the Internal Revenue Code, allowing them to deduct gambling losses from their taxable income. |
Taxes | U.S. v. General Dynamics | https://supreme.justia.com/cases/federal/us/481/239/ | U.S. Supreme Court United States v. General Dynamics, 481
U.S. 239 (1987) United States v. General
Dynamics No. 85-1385 Argued January 13,
1987 Decided April 22,
1987 481
U.S. 239 CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE FEDERAL CIRCUIT Syllabus Under the "all events" test, as embodied in Treasury
Regulations, an accrual-basis taxpayer is entitled to deduct a
business expense for the taxable year in which all events have
occurred which determine the fact of the taxpayer's liability, and
in which the amount of that liability can be determined with
reasonable accuracy. In the year at issue, a consolidated federal
income tax return was filed by General Dynamics Corporation and
several of its wholly owned subsidiaries (hereafter respondent).
Respondent is an accrual-basis taxpayer whose fiscal year is the
calendar year. Beginning in 1972, it became a self-insurer with
regard to its employee medical care plan. To receive medical
payment reimbursements, employees must submit claims forms to
employee benefits personnel, who verify eligibility and forward
worthy claims to the plan's administrators, whose claims processors
review the claims and approve covered expenses for payment. To
account for the delay between the provision of medical services and
the payment of claims, respondent established reserve accounts
reflecting its liability for medical care received, but still not
paid for, as of December 31, 1972. On its amended 1972 tax return,
respondent sought a refund based on its claimed deduction of its
reserve as an accrued expense. The Internal Revenue Service
disallowed the deduction, but the Claims Court sustained it,
holding that "all events" which determined the fact of respondent's
liability had taken place when its employees received covered
services, and that the amount of liability could be determined with
reasonable accuracy. The Court of Appeals affirmed. Held: Where the filing of claims is a condition
precedent to liability, an accrual-basis taxpayer providing medical
benefits to its employees cannot deduct at the close of the taxable
year an estimate of its obligation to pay for medical care obtained
by employees or their qualified dependents during the final quarter
of the year, claims for which have not been reported to the
employer. Pp. 481 U. S.
242 -247.
(a) The proposed deduction fails the "all events" test, because
it depends on a mere estimate of respondent's liability based on
events that had not occurred before the close of the 1972 taxable
year. The last event necessary to fix respondent's liability was
not the receipt of medical Page 481 U. S. 240 care by covered individuals, but the filing of properly
documented claims forms. Such filing is not a mere technicality,
nor is the possibility that some employees might not file claims
after receiving services "extremely remote and speculative." Pp. 481 U. S.
242 -245.
(b) Respondent has not demonstrated that its liability as to any
medical care claims was firmly established as of the close of the
1972 taxable year. Although the parties stipulated that respondent
had not received claims for all services rendered during the year
by the year's end, and that some claims received had not been
processed at that time, respondent failed to show what portion of
the claims had been filed by the end of the year, or even that it
knew of specific claims that had been filed, but not yet processed.
The fact that respondent may have been able to make a reasonably
accurate actuarial estimate of how many claims would be filed for
the last quarter of 1972 cannot justify a deduction. If the "all
events" test permitted such a deduction, Congress would not have
retained 26 U.S.C. § 832(b)(5), which allows insurance companies to
deduct additions to reserves for "incurred but not reported"
claims. Pp. 481 U. S.
245 -247.
773 F.2d 1224, reversed.
MARSHALL, J., delivered the opinion of the Court, in which
REHNQUIST, C.J., and BRENNAN, WHITE, POWELL, and SCALIA, JJ.,
joined. O'CONNOR, J., filed a dissenting opinion, in which BLACKMUN
and STEVENS, JJ., joined, post, p. 481 U. S.
247 .
JUSTICE MARSHALL delivered the opinion of the Court.
The issue in this case is whether an accrual-basis taxpayer
providing medical benefits to its employees may deduct at the close
of the taxable year an estimate of its obligation to pay for
medical care obtained by employees or their qualified dependents
during the final quarter of the year, claims for which have not
been reported to the employer. Page 481 U. S. 241 I Taxpayers, respondents herein, are the General Dynamics
Corporation and several of its wholly owned subsidiaries (General
Dynamics). [ Footnote 1 ] General
Dynamics uses the accrual method of accounting for federal tax
purposes; its fiscal year is the same as the calendar year. From
1962 until October 1, 1972, General Dynamics purchased group
medical insurance for its employees and their qualified dependents
from two private insurance carriers. Beginning in October, 1972,
General Dynamics became a self-insurer with regard to its medical
care plans. Instead of continuing to purchase insurance from
outside carriers, it undertook to pay medical claims out of its own
funds, while continuing to employ private carriers to administer
the medical care plans.
To receive reimbursement of expenses for covered medical
services, respondent's employees submit claims forms to employee
benefits personnel, who verify that the treated persons were
eligible under the applicable plan as of the time of treatment.
Eligible claims are then forwarded to the plan's administrators.
Claims processors review the claims and approve for payment those
expenses that are covered under the plan.
Because the processing of claims takes time, and because
employees do not always file their claims immediately, there is a
delay between the provision of medical services and payment by
General Dynamics. To account for this time lag, General Dynamics
established reserve accounts to reflect its liability for medical
care received, but still not paid for, as of December 31, 1972. It
estimated the amount of those reserves with the assistance of its
former insurance carriers.
Originally, General Dynamics did not deduct any portion of this
reserve in computing its tax for 1972. In 1977, however, Page 481 U. S. 242 after the Internal Revenue Service (IRS) began an audit of its
1972 tax return, General Dynamics filed an amended return, claiming
it was entitled to deduct its reserve as an accrued expense, and
seeking a refund. The IRS disallowed the deduction, and General
Dynamics sought relief in the Claims Court.
The Claims Court sustained the deduction, holding that it
satisfied the "all events" test embodied in Treas.Reg. §
1.4611(a)(2), 26 CFR § 1.461-1(a)(2) (1986), since "all events"
which determined the fact of liability had taken place when the
employees received covered services, and the amount of liability
could be determined with reasonable accuracy. Thus, the court held
that General Dynamics was entitled to a refund. 6 Cl.Ct. 250
(1984). The Court of Appeals for the Federal Circuit affirmed,
largely on the basis of the Claims Court opinion. 773 F.2d 1224,
1226 (1985).
The United States sought review of the question whether all the
events necessary to fix liability had occurred. [ Footnote 2 ] We granted certiorari, 476 U.S.
1181 (1986). We reverse. II As we noted in United States v. Hughes Properties,
Inc., 476 U. S. 593 , 476 U. S. 600 (1986), whether a business expense has been "incurred" so as to
entitle an accrual-basis taxpayer to deduct it under § 162(a) of
the Internal Revenue Code, 26 U.S.C. § 162(a), is governed by the
"all events" test that originated in United States v.
Anderson, 269 U. S. 422 , 269 U. S. 441 (1926). In Anderson, the Court held that a taxpayer was
obliged to deduct from its 1916 income a tax on profits from
munitions sales that took place in 1916. Although the tax would not
be assessed, and therefore would not formally be due until 1917,
all the events which fixed the amount of the tax and determined the
taxpayer's liability to pay it Page 481 U. S. 243 had occurred in 1916. The test is now embodied in Treas.Reg. §
1.461-1(a)(2), 26 CFR § 1.461-1(a)(2) (1986), which provides
that
"[u]nder an accrual method of accounting, an expense is
deductible for the taxable year in which all the events have
occurred which determine the fact of the liability and the amount
thereof can be determined with reasonable accuracy. [ Footnote 3 ]"
It is fundamental to the "all events" test that, although
expenses may be deductible before they have become due and payable,
liability must first be firmly established. This is consistent with
our prior holdings that a taxpayer may not deduct a liability that
is contingent, see Lucas v. American Code Co., 280 U. S. 445 , 280 U. S. 452 (1930), or contested, see Security Flour Mills Co. v.
Commissioner of Internal Revenue, 321 U.
S. 281 , 321 U. S. 284 (1944). Nor may a taxpayer deduct an estimate of an anticipated
expense, no matter how statistically certain, if it is based on
events that have not occurred by the Page 481 U. S. 244 close of the taxable year. Brown v. Helvering, 291 U. S. 193 , 291 U. S. 201 (1934); cf. American Automobile Assn. v. United States, 367 U. S. 687 , 367 U. S. 693 (1961).
We think that this case, like Brown, involves a mere
estimate of liability based on events that had not occurred before
the close of the taxable year, and therefore the proposed deduction
does not pass the "all events" test. We disagree with the legal
conclusion of the courts below that the last event necessary to fix
the taxpayer's liability was the receipt of medical care by covered
individuals. [ Footnote 4 ] A
person covered by a plan could only obtain payment for medical
services by filling out and submitting a health expense benefits
claim form. App. 23. Employees were informed that submission of
satisfactory proof of the charges claimed would be necessary to
obtain payment under the plans. Id. at 58. General
Dynamics was thus liable to pay for covered medical services only
if properly documented claims forms were filed. [ Footnote 5 ] Some covered individuals, through
oversight, procrastination, confusion over the coverage provided,
or fear of disclosure to the employer of the extent or nature of
the services received, might not file claims for reimbursement to
which they are plainly entitled. Such filing is not a mere
technicality. It is crucial to the establishment of liability on
the part of the taxpayer. Nor does the failure to file a claim
represent the type of "extremely remote and speculative
possibility" that we Page 481 U. S. 245 held in Hughes, 476 U.S. at 476 U. S. 601 ,
did not render an otherwise fixed liability contingent. Cf.
Lucas v. North Texas Lumber Co., 281 U. S.
11 , 281 U. S. 13 (1930) (where executory contract of sale was created in 1916 but
papers necessary to effect transfer were not prepared until 1917,
unconditional liability for the purchase price was not created in
1916, and the gain from the sale was therefore not realized until
1917). Mere receipt of services for which, in some instances,
claims will not be submitted does not, in our judgment, constitute
the last link in the chain of events creating liability for
purposes of the "all events" test.
The parties stipulated in this case that, as of December 31,
1972, the taxpayer had not received all claims for medical
treatment services rendered in 1972, and that some claims had been
filed for services rendered in 1972 that had not been processed.
App. 26. The record does not reflect which portion of the claims
against General Dynamics for medical care had been filed but not
yet processed and which portion had not even been filed at the
close of the 1972 tax year. The taxpayer has the burden of proving
its entitlement to a deduction. Helvering v. Taylor, 293 U. S. 507 , 293 U. S. 514 (1935). Here, respondent made no showing that, as of December 31,
1972, it knew of specific claims which had been filed but which it
had not yet processed. Because the taxpayer failed to demonstrate
that any of the deducted reserve represented claims for which its
liability was firmly established as of the close of 1972, all the
events necessary to establish liability were not shown to have
occurred, and therefore no deduction was permissible.
This is not to say that the taxpayer was unable to forecast how
many claims would be filed for medical care received during this
period, and estimate the liability that would arise from those
claims. Based on actuarial data, General Dynamics may have been
able to make a reasonable estimate of how many claims would be
filed for the last quarter of 1972. But that alone does not justify
a deduction. In Brown, supra, Page 481 U. S. 246 the taxpayer, a general agent for insurance companies, sought to
take a deduction for a reserve representing estimated liability for
premiums to be returned on the percentage of insurance policies it
anticipated would be cancelled in future years. The agent may well
have been capable of estimating with a reasonable degree of
accuracy the ratio of cancellation refunds to premiums already
paid, and establishing its reserve accordingly. Despite the "strong
probability that many of the policies written during the taxable
year" would be cancelled, 291 U.S. at 291 U. S. 201 ,
the Court held that
"no liability accrues during the taxable year on account of
cancellations which it is expected may occur in future years, since
the events necessary to create the liability do not occur during
the taxable year." Id. at 291 U. S. 200 .
A reserve based on the proposition that a particular set of events
is likely to occur in the future may be an appropriate conservative
accounting measure, but does not warrant a tax deduction. See
American Automobile Assn. v. United States, supra, at 367 U. S. 692 ; Lucas v. American Code Co., 280 U.S. at 280 U. S.
452 .
That these estimated claims were not intended to fall within the
"all events" test is further demonstrated by the fact that the
Internal Revenue Code specifically permits insurance companies to
deduct additions to reserves for such "incurred but not reported"
(IBNR) claims. See 26 U.S.C. § 832(b)(5) (providing that
an insurance company may treat as losses incurred "all unpaid
losses outstanding at the end of the taxable year"); § 832(c)(4)
(permitting deduction of losses incurred as defined in §
832(b)(5)). [ Footnote 6 ] If the
"all events" test permitted the deduction of an estimated reserve
representing claims that were actuarially likely but not yet
reported, Congress would not have needed to maintain an Page 481 U. S. 247 explicit provision that insurance companies could deduct such
reserves. [ Footnote 7 ]
General Dynamics did not show that its liability as to any
medical care claims was firmly established as of the close of the
1972 tax year, and is therefore entitled to no deduction. The
judgment of the Court of Appeals is Reversed. [ Footnote 1 ]
Respondents filed a consolidated federal income tax return for
1972, the year at issue here. We therefore treat them as a single
entity.
[ Footnote 2 ]
The United States did not seek review of whether the amount of
liability in this case could be determined with reasonable
accuracy. See Pet. for Cert. 13, n. 2.
[ Footnote 3 ]
The regulation in force in 1972 was identical to the present
version. See 26 CFR § 1.461-1(a)(2) (1972).
The "all events" test has been incorporated into the Internal
Revenue Code by the Deficit Reduction Act of 1984, Pub.L. 98-369,
98 Stat 598, 607, 26 U.S.C. § 461(h)(4) (1982 ed., Supp. III).
Section 461(h) imposed limits on the application of the test,
providing that,
"in determining whether an amount has been incurred with respect
to any item during any taxable year, the all events test shall not
be treated as met any earlier than when economic performance with
respect to such item occurs."
§ 461(h)(1). The pertinent portions of the 1984 amendments were
retained in the Tax Reform Act of 1986.
Section 461(h) does not apply in this case. It became effective
as of July 18, 1984, the date of the enactment of the Deficit
Reduction Act. See § 91(g)(1)(A), 26 U.S.C. § 461 note
(1982 ed., Supp. III). While that statute permits a taxpayer to
elect the application of § 461(h) to amounts incurred on or before
July 18, 1984, see § 91(g)(2), there is no indication that
the taxpayer here has done so. We do not address how this case
would be decided under § 461(h), but note that the legislative
history of the Act indicates that,
"[i]n the case of . . . employee benefit liabilities, which
require a payment by the taxpayer to another person, economic
performance occurs as the payments to such person are made."
H.R.Rep. No. 98-432, pt. 2, p. 1255 (1984); see also H.Conf.Rep. No. 98-861, p. 872 (1984).
[ Footnote 4 ]
We do not challenge the Claims Court's factual conclusion that
the processing of the claims was "routine," "clerical," and
"ministerial in nature," 6 Cl.Ct. 250, 254 (1984). The Claims Court
did not, however, make any factual findings with respect to the filing of claims. We conclude that, as a matter of law,
the filing of a claim was necessary to create liability.
[ Footnote 5 ]
General Dynamics could not avoid its obligation to pay for
services after they were received by, for example, discharging the
employee. If an employee were terminated after receiving covered
services but before filing a claim, the taxpayer would still be
obliged to reimburse that employee, App. 22 -- but only in the
event that the employee filed a claim form. The filing of the
claim is thus a true condition precedent to liability on the part
of the taxpayer.
[ Footnote 6 ]
During the time that private insurance carriers provided
insurance coverage for General Dynamics employees, the insurers
maintained reserves for IBNR claims and deducted those reserves in
the tax year in which the services were received. 6 Cl.Ct. at
262.
[ Footnote 7 ]
Respondent has never sought to be treated as an insurance
company entitled to take IBNR deductions under the provisions of
Subchapter L.
JUSTICE O'CONNOR, with whom JUSTICE BLACKMUN and JUSTICE STEVENS
join, dissenting.
Section 446(a) of the Internal Revenue Code of 1954 provides
that taxable income
"shall be computed under the method of accounting on the basis
of which the taxpayer regularly computes his income in keeping his
books."
The Code specifically recognizes the use of "an accrual method,"
26 U.S.C. § 446(c)(2), under which a taxpayer is permitted to
deduct an expense in the year in which it is "incurred," regardless
of when it is actually paid. § 162(a). Under the "all events" test,
long applied by this Court and the Internal Revenue Service, an
expense may be accrued and deducted when all the events that
determine the fact of liability have occurred, and the amount of
the liability can be determined with reasonable accuracy.
Treas.Reg. § 1.461-1, 26 CFR § 1.461-1(a)(2) (1986). Because the
Court today applies a rigid version of the "all events" test that
retreats from our most recent application of that test, and
unnecessarily drives a greater wedge between tax and financial
accounting methods, I respectfully dissent.
This case calls for the Court to revisit the issue addressed
only last Term in United States v. Hughes Properties,
Inc., 476 U. S. 593 (1986). At issue in Hughes Properties was whether a casino
operator utilizing the accrual method of accounting could deduct
amounts guaranteed for payment on "progressive" slot machines, but
not yet won by a playing Page 481 U. S. 248 patron. A progressive slot machine has a jackpot whose size
increases as money is gambled on the machine. Under Nevada law, a
casino operator is prohibited from reducing the amount of the
progressive jackpot. We concluded, therefore, that all the events
had occurred that determine the fact of the casino operator's
liability, despite the fact that the jackpot might not be won for
as long as four years. We rejected the argument made by the United
States that the casino operator's obligation to pay the jackpot
arose only upon a winning patron's pull of the handle, even though
it was conceivable that the jackpot might never be won:
"There is always a possibility, of course, that a casino may go
out of business, or surrender or lose its license, or go into
bankruptcy, with the result that the amounts shown on the jackpot
indicators would never be won by playing patrons. But this
potential nonpayment of an incurred liability exists for every
business that uses an accrual method, and it does not prevent
accrual. See, e.g., Wien Consolidated Airlines, Inc. v.
Commissioner, 528 F.2d 735 (CA9 1976). 'The existence of an
absolute liability is necessary; absolute certainty that it will be
discharged by payment is not.' Helvering v. Russian Finance
& Constr. Corp., 77 F.2d 324, 327 (CA2 1935)." United States v. Hughes Properties, Inc., supra, at 476 U. S.
605 -606.
In my view, the circumstances of this case differ little from
those in Hughes Properties. The taxpayer here is seeking
to deduct the amounts reserved to pay for medical services that are
determined to have been provided to employees in the taxable year,
whether or not the employees' claims for benefits have been
received. The taxpayer's various medical benefits plans provided
schedules for the medical and hospital benefits, and created a
contractual obligation by the taxpayer to pay for the covered
services upon presentation of a claim. The courts below found that
the obligation to pay became fixed once the covered medical
services were received Page 481 U. S. 249 by the employee. See App. 25. Once the medical services
were rendered to an employee while the relevant benefit plan was in
effect, General Dynamics could not avoid liability by terminating
the plan prior to the filing of a claim. Id. at 133-134.
Neither could General Dynamics extinguish its liability by firing
an employee before the employee filed a claim for benefits. Id. at 87.
It is true, of course, that it was theoretically possible that
some employees might not file claim forms. In my view, however,
this speculative possibility of nonpayment differs not at all from
the speculation in Hughes Properties that a jackpot might
never be paid by a casino. As we observed in Hughes
Properties, the potential of nonpayment of a liability always
exists, and it alone does not prevent accrual. The beneficiary of a
liability always has the option of waiving payment, but a taxpayer
is still unquestionably entitled to deduct the liability. An
injured employee entitled absolutely to reimbursement for medical
services under a workers' compensation statute, for example, may
fail to utilize the medical services. The employer, however, has
been held to be entitled to deduct the expected medical expenses,
because the workers' compensation law creates liability. See
Wien Consolidated Airlines, Inc. v. Commissioner, 528 F.2d 735
(CA9 1976) (holding that accrual basis taxpayer may deduct expected
workers' compensation payments in year of injury even though
injured workers may not utilize medical benefits). Similarly, any
business liability could ultimately be discharged in bankruptcy, or
a check might never be cashed by its recipient. There can be no
doubt, however, that these remote possibilities alone cannot defeat
an accrual basis taxpayer's right to deduct the liability when
incurred.
The Claims Court found that the processing of the employees'
claims was "routine," and "ministerial in nature," 6 Cl.Ct. 250,
254 (1984), and the majority does not question that finding. Ante at 481 U. S. 244 ,
n. 4. Instead, the majority holds that "as a matter of law, the
filing of a claim was necessary Page 481 U. S. 250 to create liability." Ibid. Even if, in a technical
sense, the Court is correct that the filing of a claim is a
necessary precondition to liability as a matter of law, the failure
to file a claim is, at most, a "merely formal contingenc[y], or
[one] highly improbable under the known facts," that this Court has
viewed as insufficient to preclude accrual and deductability. 2 J.
Mertens, Law of Federal Income Taxation § 12.62, p. 241 (M.
Weinstein, R. Donovan, P. Gaveras, H. Piech, & R. Neeld
rev.1985). Indeed, in the very case that first announced the "all
events" test, United States v. Anderson, 269 U.
S. 422 (1926), this Court concluded that a taxpayer
should deduct a federal munitions tax before the year in which the
tax was even assessed -- in effect before the Government had made a
claim for the tax. The Court recognized that, "[i]n a technical
legal sense, it may be argued that a tax does not accrue until it
has been assessed and becomes due," but concluded that otherwise
all the events that determined the liability for the munitions tax
had occurred. Id. at 269 U. S. 441 .
Similarly, in Continental Tie & Lumber Co. v. United
States, 286 U. S. 290 (1932), the Court held that an accrual basis taxpayer should
immediately include as income a federal payment to railroads
created by statute, but neither claimed by the taxpayer nor awarded
by the Federal Government until years later. The Court explained
that, although no railroad had any vested right to payments under
the statute until a claim was made by the railroad and awarded by
the Interstate Commerce Commission,
"[t]he right to the award was fixed by the passage of the
Transportation Act. What remained was mere administrative procedure
to ascertain the amount to be paid." Id. at 286 U. S. 295 .
Clearly, the right to reimbursement for medical benefits under any
of the medical benefits plans at issue in this case arises once
medical services are rendered; the filing and processing of a claim
is purely routine and ministerial, and in the nature of a formal
contingency, as correctly perceived by the courts below. Page 481 U. S. 251 The holding of the Court today unnecessarily burdens taxpayers
by further expanding the difference between tax and business
accounting methods without a compelling reason to do so. Obviously,
tax accounting principles must often differ from those of business
accounting. The goal of business accounting "is to provide useful
and pertinent information to management, shareholders, and
creditors," while "the responsibility of the Internal Revenue
Service is to protect the public fisc." United States v. Hughes
Properties, Inc., 476 U.S. at 476 U. S. 603 .
Therefore, while prudent businesses will accrue expenses that are
merely reasonably foreseeable, for tax purposes, the liability must
be fixed. But Congress has expressly permitted taxpayers to use the
accrual method of accounting, and from its inception in United
States v. Anderson, supra, the "all events" test has been a
practical adjustment of the competing interests in permitting
accrual accounting and protecting the public fisc. Unfortunately,
the Court today ignores the pragmatic roots of the "all events"
test, and instead applies it in an essentially mechanistic and
wholly unrealistic manner. Because the liability in this case was
fixed with no less certainty than the range of expenses both
routinely accrued by accrual method taxpayers and approved as
deductible for tax purposes by this Court and other courts in a
variety of circumstances, I respectfully dissent. | In United States v. General Dynamics (1987), the US Supreme Court ruled that an accrual-basis taxpayer providing medical benefits to employees cannot deduct an estimate of its obligation to pay for medical care obtained by employees in the final quarter of the tax year if claims have not been reported. The Court applied the "all events" test, which states that a taxpayer can deduct a business expense when all events determining the fact of liability have occurred and the amount of liability can be determined with reasonable accuracy. In this case, the last event necessary to fix the liability was the filing of properly documented claims forms by employees, and the possibility of employees not filing claims was not remote or speculative. |
Taxes | Bob Jones Univ. v. U.S. | https://supreme.justia.com/cases/federal/us/461/574/ | U.S. Supreme Court Bob Jones Univ. v. United States, 461
U.S. 574 (1983) Bob Jones University v. United
States No. 81-3 Argued October 12,
1982 Decided May 24, 1983 461
U.S. 574 ast|>* 461
U.S. 574 CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE FOURTH CIRCUIT Syllabus Section 501(c)(3) of the Internal Revenue Code of 1954 (IRC)
provides that "[c]orporations . . . organized and operated
exclusively for religious, charitable . . . or educational
purposes" are entitled to tax exemption. Until 1970, the Internal
Revenue Service (IRS) granted tax-exempt status under § 501(c)(3)
to private schools, independent of racial admissions policies, and
granted charitable deductions for contributions to such schools
under § 170 of the IRC. But in 1970, the IRS concluded that it
could no longer justify allowing tax-exempt status under §
501(c)(3) to private schools that practiced racial discrimination,
and in 1971 issued Revenue Ruling 71-447 providing that a private
school not having a racially nondiscriminatory policy as to
students is not "charitable" within the common law concepts
reflected in §§ 170 and 501(c)(3). In No. 81-3, petitioner Bob
Jones University, while permitting unmarried Negroes to enroll as
students, denies admission to applicants engaged in an interracial
marriage or known to advocate interracial marriage or dating.
Because of this admissions policy, the IRS revoked the University's
tax-exempt status. After paying a portion of the federal
unemployment taxes for a certain taxable year, the University filed
a refund action in Federal District Court, and the Government
counterclaimed for unpaid taxes for that and other taxable years.
Holding that the IRS exceeded its powers in revoking the
University's tax-exempt status and violated the University's rights
under the Religion Clauses of the First Amendment, the District
Court ordered the IRS to refund the taxes paid and rejected the
counterclaim. The Court of Appeals reversed. In No. 81-1,
petitioner Goldsboro Christian Schools maintains a racially
discriminatory admissions policy based upon its interpretation of
the Bible, accepting for the most part only Caucasian students. The
IRS determined that Goldsboro was not an organization described in
§ 501(c)(3), and hence was required to pay federal social security
and unemployment taxes. After paying a portion of such taxes for
certain years, Goldsboro filed a refund suit in Federal District
Court, and the IRS counterclaimed for unpaid taxes. The District
Court entered summary judgment for Page 461 U. S. 575 the IRS, rejecting Goldsboro's claim to tax-exempt status under
§ 501(c) (3) and also its claim that the denial of such status
violated the Religion Clauses of the First Amendment. The Court of
Appeals affirmed. Held: Neither petitioner qualifies as a tax-exempt
organization under § 501(c)(3). Pp. 461 U. S.
585 -605.
(a) An examination of the IRC's framework and the background of
congressional purposes reveals unmistakable evidence that,
underlying all relevant parts of the IRC, is the intent that
entitlement to tax exemption depends on meeting certain common law
standards of charity -- namely, that an institution seeking
tax-exempt status must serve a public purpose and not be contrary
to established public policy. Thus, to warrant exemption under §
501(c)(3), an institution must fall within a category specified in
that section, and must demonstrably serve and be in harmony with
the public interest, and the institution's purpose must not be so
at odds with the common community conscience as to undermine any
public benefit that might otherwise be conferred. Pp. 461 U. S.
585 -592.
(b) The IRS's 1970 interpretation of § 501(c)(3) was correct. It
would be wholly incompatible with the concepts underlying tax
exemption to grant tax-exempt status to racially discriminatory
private educational entities. Whatever may be the rationale for
such private schools' policies, racial discrimination in education
is contrary to public policy. Racially discriminatory educational
institutions cannot be viewed as conferring a public benefit within
the above "charitable" concept or within the congressional intent
underlying § 501(c)(3). Pp. 461 U. S.
592 -596.
(c) The IRS did not exceed its authority when it announced its
interpretation of § 501(c)(3) in 1970 and 1971. Such interpretation
is wholly consistent with what Congress, the Executive, and the
courts had previously declared. And the actions of Congress since
1970 leave no doubt that the IRS reached the correct conclusion in
exercising its authority. Pp. 461 U. S.
596 -62.
(d) The Government's fundamental, overriding interest in
eradicating racial discrimination in education substantially
outweighs whatever burden denial of tax benefits places on
petitioners' exercise of their religious beliefs. Petitioners'
asserted interests cannot be accommodated with that compelling
governmental interest, and no less restrictive means are available
to achieve the governmental interest. Pp. 461 U. S.
602 -604.
(e) The IRS properly applied its policy to both petitioners.
Goldsboro admits that it maintains racially discriminatory
policies, and, contrary to Bob Jones University's contention that
it is not racially discriminatory, discrimination on the basis of
racial affiliation and association is a form of racial
discrimination. P. 461 U. S.
605 .
No. 81-1, 644 F.2d 879, and No. 81-3, 639 F.2d 147,
affirmed. Page 461 U. S. 576 BURGER, C.J., delivered the opinion of the Court, in which
BRENNAN, WHITE, MARSHALL, BLACKMUN, STEVENS, and O'CONNOR, JJ.,
joined, and in Part III of which POWELL, J., joined. POWELL, J.,
filed an opinion concurring in part and concurring in the judgment, post, p. 461 U. S. 606 .
REHNQUIST, J., filed a dissenting opinion, post, p. 461 U. S.
612 . Page 461 U. S. 577 CHIEF JUSTICE BURGER delivered the opinion of the Court.
We granted certiorari to decide whether petitioners, nonprofit
private schools that prescribe and enforce racially discriminatory
admissions standards on the basis of religious doctrine, qualify as
tax-exempt organizations under § 501(c)(3) of the Internal Revenue
Code of 1954. I A Until 1970, the Internal Revenue Service granted tax-exempt
status to private schools, without regard to their racial
admissions policies, under § 501(c)(3) of the Internal Revenue
Code, 26 U.S.C. § 501(c)(3), [ Footnote 1 ] and granted charitable Page 461 U. S. 578 deductions for contributions to such schools under § 170 of the
Code, 26 U.S.C. § 170. [ Footnote
2 ]
On January 12, 1970, a three-judge District Court for the
District of Columbia issued a preliminary injunction prohibiting
the IRS from according tax-exempt status to private schools in
Mississippi that discriminated as to admissions on the basis of
race. Green v. Kennedy, 309
F. Supp. 1127 , appeal dism'd sub nom. Cannon v. Green, 398 U.S. 956 (1970). Thereafter, in July, 1970, the IRS concluded
that it could "no longer legally justify allowing tax-exempt status
[under § 501(c)(3)] to private schools which practice racial
discrimination." IRS News Release, July 7, 1970, reprinted in App.
in No. 81-3, p. A235. At the same time, the IRS announced that it
could not "treat gifts to such schools as charitable deductions for
income tax purposes [under § 170]." Ibid. By letter dated
November 30, 1970, the IRS formally notified private schools,
including those involved in this litigation, of this change in
policy, "applicable to all private schools in the United States at
all levels of education." See id. at A232.
On June 30, 1971, the three-judge District Court issued its
opinion on the merits of the Mississippi challenge. Green v.
Connally, 330
F. Supp. 1150 , summarily aff'd sub nom. Coit v. Green, 404 U.S. 997 (1971). That court approved the IRS's amended
construction of the Tax Code. The court also held that racially
discriminatory private schools were not entitled to exemption under
§ 501(c)(3) and that donors were not entitled to deductions for
contributions to such schools under § 170. The court permanently
enjoined the Commissioner of Page 461 U. S. 579 Internal Revenue from approving tax-exempt status for any school
in Mississippi that did not publicly maintain a policy of
nondiscrimination.
The revised policy on discrimination was formalized in Revenue
Ruling 71-447, 1971-2 Cum.Bull. 230:
"Both the courts and the Internal Revenue Service have long
recognized that the statutory requirement of being 'organized and
operated exclusively for religious, charitable, . . . or
educational purposes' was intended to express the basic common law
concept [of 'charity']. . . . All charitable trusts, educational or
otherwise, are subject to the requirement that the purpose of the
trust may not be illegal or contrary to public policy."
Based on the "national policy to discourage racial
discrimination in education," the IRS ruled that
"a [private] school not having a racially nondiscriminatory
policy as to students is not 'charitable' within the common law
concepts reflected in sections 170 and 501(c)(3) of the Code." Id. at 231. [ Footnote
3 ]
The application of the IRS construction of these provisions to
petitioners, two private schools with racially discriminatory
admissions policies, is now before us. B No. 81-3, Bob Jones University v. United
States Bob Jones University is a nonprofit corporation located in
Greenville, S.C. [ Footnote 4 ]
Its purpose is "to conduct an institution Page 461 U. S. 580 of learning . . giving special emphasis to the Christian
religion and the ethics revealed in the Holy Scriptures."
Certificate of Incorporation, Bob Jones University, Inc., of
Greenville, S.C. reprinted in App. in No. 81-3, p. A119. The
corporation operates a school with an enrollment of approximately
5,000 students, from kindergarten through college and graduate
school. Bob Jones University is not affiliated with any religious
denomination, but is dedicated to the teaching and propagation of
its fundamentalist Christian religious beliefs. It is both a
religious and educational institution. Its teachers are required to
be devout Christians, and all courses at the University are taught
according to the Bible. Entering students are screened as to their
religious beliefs, and their public and private conduct is strictly
regulated by standards promulgated by University authorities.
The sponsors of the University genuinely believe that the Bible
forbids interracial dating and marriage. To effectuate these views,
Negroes were completely excluded until 1971. From 1971 to May,
1975, the University accepted no applications from unmarried
Negroes, [ Footnote 5 ] but did
accept applications from Negroes married within their race.
Following the decision of the United States Court of Appeals for
the Fourth Circuit in McCrary v. Runyon, 515 F.2d 1082
(1975), aff'd, 427 U. S. 160 (1976), prohibiting racial exclusion from private schools, the
University revised its policy. Since May 29, 1975, the University
has permitted unmarried Negroes to enroll; but a disciplinary rule
prohibits interracial dating and marriage. That rule reads:
" There is to be no interracial dating. "
"1. Students who are partners in an interracial marriage will be
expelled. " Page 461 U. S. 581 "2. Students who are members of or affiliated with any group or
organization which holds as one of its goals or advocates
interracial marriage will be expelled."
"3. Students who date outside of their own race will be
expelled."
"4. Students who espouse, promote, or encourage others to
violate the University's dating rules and regulations will be
expelled."
App. in No. 81-3, p. A197. The University continues to deny
admission to applicants engaged in an interracial marriage or known
to advocate interracial marriage or dating. Id. at
A277.
Until 1970, the IRS extended tax-exempt status to Bob Jones
University under § 501(c)(3). By the letter of November 30, 1970,
that followed the injunction issued in Green v.
Kennedy, 309 F.
Supp. 1127 (DC 1970), the IRS formally notified the University
of the change in IRS policy, and announced its intention to
challenge the tax-exempt status of private schools practicing
racial discrimination in their admissions policies.
After failing to obtain an assurance of tax exemption through
administrative means, the University instituted an action in 1971
seeking to enjoin the IRS from revoking the school's tax-exempt
status. That suit culminated in Bob Jones University v.
Simon, 416 U. S. 725 (1974), in which this Court held that the Anti-Injunction Act of
the Internal Revenue Code, 26 U.S.C. § 7421(a), prohibited the
University from obtaining judicial review by way of injunctive
action before the assessment or collection of any tax.
Thereafter, on April 16, 1975, the IRS notified the University
of the proposed revocation of its tax-exempt status. On January 19,
1976, the IRS officially revoked the University's tax-exempt
status, effective as of December 1, 1970, the day after the
University was formally notified of the change in IRS policy. The
University subsequently filed returns under the Federal
Unemployment Tax Act for the period from December 1, 1970, to
December 31, 1975, and paid a tax Page 461 U. S. 582 totalling $21 on one employee for the calendar year of 1975.
After its request for a refund was denied, the University
instituted the present action, seeking to recover the $21 it had
paid to the IRS. The Government counterclaimed for unpaid federal
unemployment taxes for the taxable years 1971 through 1975, in the
amount of $489,675.59, plus interest.
The United States District Court for the District of South
Carolina held that revocation of the University's tax-exempt status
exceeded the delegated powers of the IRS, was improper under the
IRS rulings and procedures, and violated the University's rights
under the Religion Clauses of the First Amendment. 468 F.
Supp. 890 , 907 (1978). The court accordingly ordered the IRS to pay the University
the $21 refund it claimed and rejected the IRS's counterclaim.
The Court of Appeals for the Fourth Circuit, in a divided
opinion, reversed. 639 F.2d 147 (1980). Citing Green v.
Connally, 330 F.
Supp. 1150 (DC 1971), with approval, the Court of Appeals
concluded that § 501(c)(3) must be read against the background of
charitable trust law. To be eligible for an exemption under that
section, an institution must be "charitable" in the common law
sense, and therefore must not be contrary to public policy. In the
court's view, Bob Jones University did not meet this requirement,
since its
"racial policies violated the clearly defined public policy,
rooted in our Constitution, condemning racial discrimination and,
more specifically, the government policy against subsidizing racial
discrimination in education, public or private."
639 F.2d at 151. The court held that the IRS acted within its
statutory authority in revoking the University's tax-exempt status.
Finally, the Court of Appeals rejected petitioner's arguments that
the revocation of the tax exemption violated the Free Exercise and
Establishment Clauses of the First Amendment. The case was remanded
to the District Court with instructions to dismiss the University's
claim for a refund and to reinstate the IRS's counterclaim. Page 461 U. S. 583 C No. 81-1, Goldsboro Christian Schools, Inc. v. United
States Goldsboro Christian Schools is a nonprofit corporation located
in Goldsboro, N.C. Like Bob Jones University, it was
established
"to conduct an institution or institutions of learning . . .
giving special emphasis to the Christian religion and the ethics
revealed in the Holy scriptures."
Articles of Incorporation � 3(a); see Complaint � 6,
reprinted in App. in No. 81-1, pp. 5-6. The school offers classes
from kindergarten through high school, and, since at least 1969,
has satisfied the State of North Carolina's requirements for
secular education in private schools. The school requires its high
school students to take Bible-related courses, and begins each
class with prayer.
Since its incorporation in 1963, Goldsboro Christian Schools has
maintained a racially discriminatory admissions policy based upon
its interpretation of the Bible. [ Footnote 6 ] Goldsboro has for the most part accepted only
Caucasians. On occasion, however, the school has accepted children
from racially mixed marriages in which one of the parents is
Caucasian.
Goldsboro never received a determination by the IRS that it was
an organization entitled to tax exemption under § 501(c)(3). Upon
audit of Goldsboro's records for the years 1969 through 1972, the
IRS determined that Goldsboro was not an organization described in
§ 501(c)(3), and therefore was required to pay taxes under the
Federal Insurance Contribution Act and the Federal Unemployment Tax
Act. Page 461 U. S. 584 Goldsboro paid the IRS $3,459.93 in withholding, social
security, and unemployment taxes with respect to one employee for
the years 1969 through 1972. Thereafter, Goldsboro filed a suit
seeking refund of that payment, claiming that the school had been
improperly denied § 501(c)(3) exempt status. [ Footnote 7 ] The IRS counterclaimed for $160,073.96
in unpaid social security and unemployment taxes for the years 1969
through 1972, including interest and penalties. [ Footnote 8 ]
The District Court for the Eastern District of North Carolina
decided the action on cross-motions for summary judgment. 436 F.
Supp. 1314 (1977). In addressing the motions for summary
judgment, the court assumed that Goldsboro's racially
discriminatory admissions policy was based upon a sincerely held
religious belief. The court nevertheless rejected Goldsboro's claim
to tax-exempt status under § 501(c) (3), finding that
"private schools maintaining racially discriminatory admissions
policies violate clearly declared federal policy, and therefore
must be denied the federal tax benefits flowing from qualification
under Section 501(c)(3)." Id. at 1318. The court also rejected Goldsboro's
arguments that denial of tax-exempt status violated the Free
Exercise and Establishment Clauses of the First Amendment.
Accordingly, the court entered summary judgment for the IRS on its
counterclaim.
The Court of Appeals for the Fourth Circuit affirmed, 644 F.2d
879 (1981) (per curiam). That court found an "identity for present
purposes" between the Goldsboro case and the Bob Jones
University case, which had been decided shortly Page 461 U. S. 585 before by another panel of that court, and affirmed for the
reasons set forth in Bob Jones University. We granted certiorari in both cases, 454 U.S. 892 (1981),
[ Footnote 9 ] and we affirm in
each. II A In Revenue Ruling 71-447, the IRS formalized the policy, first
announced in 1970, that § 170 and § 501(c)(3) embrace the common
law "charity" concept. Under that view, to qualify for a tax
exemption pursuant to § 501(c)(3), an institution must show, first,
that it falls within one of the eight categories expressly set
forth in that section, and second, that its activity is not
contrary to settled public policy.
Section 501(c)(3) provides that "[c]orporations . . . organized
and operated exclusively for religious, charitable . . . or
educational purposes" are entitled to tax exemption. Petitioners
argue that the plain language of the statute guarantees them
tax-exempt status. They emphasize the absence of any language in
the statute expressly requiring all exempt organizations to be
"charitable" in the common law sense, and they contend that the
disjunctive "or" separating the categories in § 501(c)(3) precludes
such a reading. Instead, they argue that, if an institution falls
within one or more of Page 461 U. S. 586 the specified categories it is automatically entitled to
exemption, without regard to whether it also qualifies as
"charitable." The Court of Appeals rejected that contention and
concluded that petitioners' interpretation of the statute "tears
section 501(c)(3) from its roots." 639 F.2d at 151.
It is a well-established canon of statutory construction that a
court should go beyond the literal language of a statute if
reliance on that language would defeat the plain purpose of the
statute:
"The general words used in the clause . . . , taken by
themselves, and literally construed, without regard to the object
in view, would seem to sanction the claim of the plaintiff. But
this mode of expounding a statute has never been adopted by any
enlightened tribunal -- because it is evident that, in many cases,
it would defeat the object which the Legislature intended to
accomplish. And it is well-settled that, in interpreting a statute,
the court will not look merely to a particular clause in which
general words may be used, but will take in connection with it
the whole statute . . . and the objects and policy of the law. . .
. " Brown v.
Duchesne , 19 How. 183, 60 U. S. 194 (1857) (emphasis added).
Section 501(c)(3) therefore must be.analyzed and construed
within the framework of the Internal Revenue Code and against the
background of the congressional purposes. Such an examination
reveals unmistakable evidence that, underlying all relevant parts
of the Code, is the intent that entitlement to tax exemption
depends on meeting certain common law standards of charity --
namely, that an institution seeking tax-exempt status must serve a
public purpose and not be contrary to established public
policy.
This "charitable" concept appears explicitly in § 170 of the
Code. That section contains a list of organizations virtually
identical to that contained in § 501(c)(3). It is apparent that
Congress intended that list to have the same meaning in both Page 461 U. S. 587 sections. [ Footnote 10 ]
In § 170, Congress used the list of organizations in defining the
term "charitable contributions." On its face, therefore, § 170
reveals that Congress' intention was to provide tax benefits to
organizations serving charitable purposes. [ Footnote 11 ] The form of § 170 simply makes
plain what common sense and history tell us: in enacting both § 170
and Page 461 U. S. 588 § 501(c)(3), Congress sought to provide tax benefits to
charitable organizations, to encourage the development of private
institutions that serve a useful public purpose or supplement or
take the place of public institutions of the same kind.
Tax exemptions for certain institutions thought beneficial to
the social order of the country as a whole, or to a particular
community, are deeply rooted in our history, as in that of England.
The origins of such exemptions lie in the special privileges that
have long been extended to charitable trusts. [ Footnote 12 ]
More than a century ago, this Court announced the caveat that is
critical in this case:
"[I]t has now become an established principle of American law
that courts of chancery will sustain and protect . . . a gift . . .
to public charitable uses, provided the same is consistent with
local laws and public policy. . . . " Perin v.
Carey , 24 How. 465, 65 U. S. 501 (1861) (emphasis added). Soon after that, in 1877, the Court
commented:
"A charitable use, where neither law nor public policy
forbids, may be applied to almost any thing that tends to
promote the well-doing and well-being of social man. " Ould v. Washington Hospital for Foundlings, 95 U. S. 303 , 95 U. S. 311 (emphasis added). Page 461 U. S. 589 See also e.g., Jackson v. Phillips, 96 Mass. 539, 556
(1867). In 1891, in a restatement of the English law of charity
[ Footnote 13 ] which has long
been recognized as a leading authority in this country, Lord
MacNaghten stated:
"'Charity,' in its legal sense, comprises four principal
divisions: trusts for the relief of poverty; trusts for the
advancement of education; trusts for the advancement of
religion; and trusts for other purposes beneficial to the
community, not falling under any of the preceding heads." Commissioners v. Pemsel, [1891] A. C. 531, 583
(emphasis added). See, e.g., 4 A. Scott, Law of Trusts §
368, pp. 2853-2854 (3d ed.1967) (hereinafter Scott). These
statements clearly reveal the legal background against which
Congress enacted the first charitable exemption statute in 1894:
[ Footnote 14 ] charities were
to be given preferential treatment because they provide a benefit
to society.
What little floor debate occurred on the charitable exemption
provision of the 1894 Act and similar sections of later statutes
leaves no doubt that Congress deemed the specified organizations
entitled to tax benefits because they served desirable public
purposes. See, e.g., 26 Cong.Rec. 585-586 Page 461 U. S. 590 (1894); id. at 1727. In floor debate on a similar
provision in 1917, for example, Senator Hollis articulated the
rationale:
"For every dollar that a man contributes for these public
charities, educational, scientific, or otherwise, the public gets
100 per cent."
55 Cong.Rec. 6728. See also e.g., 44 Cong.Rec. 4150
(1909); 50 Cong.Rec. 1305-1306 (1913). In 1924, this Court restated
the common understanding of the charitable exemption provision:
"Evidently, the exemption is made in recognition of the benefit
which the public derives from corporate activities of the class
named, and is intended to aid them when not conducted for private
gain." Trinidad v. Sagrada Orden, 263 U.
S. 578 , 263 U. S. 581 .
[ Footnote 15 ]
In enacting the Revenue Act of 1938, ch. 289, 52 Stat. 447,
Congress expressly reconfirmed this view with respect to the
charitable deduction provision:
"The exemption from taxation of money or property devoted to
charitable and other purposes is based upon the theory that the
Government is compensated for the loss of revenue by its relief
from financial burdens which would otherwise have to be met by
appropriations from other public funds, and by the benefits
resulting from the promotion of the general welfare."
H.R.Rep. No. 1860, 75th Cong., 3d Sess., 19 (1938). [ Footnote 16 ] Page 461 U. S. 591 A corollary to the public benefit principle is the requirement,
long recognized in the law of trusts, that the purpose of a
charitable trust may not be illegal or violate established public
policy. In 1861, this Court stated that a public charitable use
must be "consistent with local laws and public policy," Perin
v. Carey, 24 How. at 65 U. S. 501 .
Modern commentators and courts have echoed that view. See,
e.g., Restatement (Second) of Trusts § 377, Comment c (1959); 4 Scott § 377, and cases cited therein; Bogert § 378, at
191-192. [ Footnote 17 ]
When the Government grants exemptions or allows deductions all
taxpayers are affected; the very fact of the exemption or deduction
for the donor means that other taxpayers can be said to be indirect
and vicarious "donors." Charitable exemptions are justified on the
basis that the exempt entity confers a public benefit -- a benefit
which the society or the community may not itself choose or be able
to provide, or which supplements and advances the work of public
institutions already supported by tax revenues. [ Footnote 18 ] History buttresses Page 461 U. S. 592 logic to make clear that, to warrant exemption under §
501(c)(3), an institution must fall within a category specified in
that section and must demonstrably serve and be in harmony with the
public interest. [ Footnote
19 ] The institution's purpose must not be so at odds with the
common community conscience as to undermine any public benefit that
might otherwise be conferred. B We are bound to approach these questions with full awareness
that determinations of public benefit and public policy are
sensitive matters with serious implications for the institutions
affected; a declaration that a given institution is not
"charitable" should be made only where there can be no doubt that
the activity involved is contrary to a fundamental public policy.
But there can no longer be any doubt that racial discrimination in
education violates deeply and widely accepted views of elementary
justice. Prior to 1954, public education in many places still was
conducted under the pall of Page 461 U. S. 593 Plessy v. Ferguson, 163 U. S. 537 (1896); racial segregation in primary and secondary education
prevailed in many parts of the country. See, e.g., Segregation and the Fourteenth Amendment in the States (B. Reams
& P. Wilson eds.1975). [ Footnote 20 ] This Court's decision in Brown v. Board
of Education, 347 U. S. 483 (1954), signalled an end to that era. Over the past quarter of a
century, every pronouncement of this Court and myriad Acts of
Congress and Executive Orders attest a firm national policy to
prohibit racial segregation and discrimination in public
education.
An unbroken line of cases following Brown v. Board of
Education establishes beyond doubt this Court's view that
racial discrimination in education violates a most fundamental
national public policy, as well as rights of individuals.
"The right of a student not to be segregated on racial grounds
in schools . . . is indeed so fundamental and pervasive that it is
embraced in the concept of due process of law." Cooper v. Aaron, 358 U. S. 1 , 358 U. S. 19 (1958). In Norwood v. Harrison, 413 U.
S. 455 , 413 U. S.
468 -469 (1973), we dealt with a nonpublic
institution:
"[A] private school -- even one that discriminates -- fulfills
an important educational function; however, . . . [that]
legitimate educational function cannot be isolated from Page 461 U. S. 594 discriminatory practices. . . . [D]iscriminatory treatment
exerts a pervasive influence on the entire educational
process. "
(Emphasis added.) See also Runyon v. McCrary, 427 U. S. 160 (1976); Griffin v. County School Board, 377 U.
S. 218 (1964).
Congress, in Titles IV and VI of the Civil Rights Act of 1964,
Pub.L. 88-352, 78 Stat. 241, 42 U.S.C. §§ 2000c, 2000c-6, 2000d,
clearly expressed its agreement that racial discrimination in
education violates a fundamental public policy. Other sections of
that Act, and numerous enactments since then, testify to the public
policy against racial discrimination. See, e.g., the
Voting Rights Act of 1965, Pub.L. 89-110, 79 Stat. 437, 42 U.S.C. §
1973 et seq. (1976 ed. and Supp. V); Title VIII of the
Civil Rights Act of 1968, Pub.L. 90-284, 82 Stat. 81, 42 U.S.C. §
3601 et seq. (1976 ed. and Supp. V); the Emergency School
Aid Act of 1972, Pub.L. 92-318, 86 Stat. 354 (repealed effective
Sept. 30, 1979; replaced by similar provisions in the Emergency
School Aid Act of 1978, Pub.L. 95-561, 92 Stat. 2252, 20 U.S.C. §§
3191-3207 (1976 ed., Supp. V)).
The Executive Branch has consistently placed its support behind
eradication of racial discrimination. Several years before this
Court's decision in Brown v. Board of Education, supra, President Truman issued Executive Orders prohibiting racial
discrimination in federal employment decisions, Exec.Order No.
9980, 3 CFR 720 (1943-1948 Comp.), and in classifications for the
Selective Service, Exec.Order No. 9988, 3 CFR 726, 729 (1943-1948
Comp.). In 1957, President Eisenhower employed military forces to
ensure compliance with federal standards in school desegregation
programs. Exec.Order No. 10730, 3 CFR 389 (1954-1958 Comp.). And in
1962, President Kennedy announced:
"[T]he granting of Federal assistance for . . . housing and
related facilities from which Americans are excluded because of
their race, color, creed, or national origin is unfair, unjust, and
inconsistent with the public policy of Page 461 U. S. 595 the United States as manifested in its Constitution and
laws."
Exec.Order No. 11063, 3 CFR 652 (1959-1963 Comp.). These are but
a few of numerous Executive Orders over the past three decades
demonstrating the commitment of the Executive Branch to the
fundamental policy of eliminating racial discrimination. See,
e.g., Exec.Order No. 11197, 3 CFR 278 (1964-1965 Comp.);
Exec.Order No. 11478, 3 CFR 803 (1966-1970 Comp.); Exec.Order No.
11764, 3 CFR 849 (1971-1975 Comp.); Exec.Order No. 12250, 3 CFR 298
(1981).
Few social or political issues in our history have been more
vigorously debated and more extensively ventilated than the issue
of racial discrimination, particularly in education. Given the
stress and anguish of the history of efforts to escape from the
shackles of the "separate but equal" doctrine of Plessy v.
Ferguson, 163 U. S. 537 (1896), it cannot be said that educational institutions that, for
whatever reasons, practice racial discrimination, are institutions
exercising "beneficial and stabilizing influences in community
life," Walz v. Tax Comm'n, 397 U.
S. 664 , 397 U. S. 673 (1970), or should be encouraged by having all taxpayers share in
their support by way of special tax status.
There can thus be no question that the interpretation of § 170
and § 501(c)(3) announced by the IRS in 1970 was correct. That it
may be seen as belated does not undermine its soundness. It would
be wholly incompatible with the concepts underlying tax exemption
to grant the benefit of tax-exempt status to racially
discriminatory educational entities, which "exer[t] a pervasive
influence on the entire educational process." Norwood v.
Harrison, supra, at 413 U. S. 469 .
Whatever may be the rationale for such private schools' policies,
and however sincere the rationale may be, racial discrimination in
education is contrary to public policy. Racially discriminatory
educational institutions cannot be viewed as conferring a public
benefit within the "charitable" concept discussed earlier, Page 461 U. S. 596 or within the congressional intent underlying § 170 and §
501(c)(3). [ Footnote 21 ] C Petitioners contend that, regardless of whether the IRS properly
concluded that racially discriminatory private schools violate
public policy, only Congress can alter the scope of § 170 and §
501(c)(3). Petitioners accordingly argue that the IRS overstepped
its lawful bounds in issuing its 1970 and 1971 rulings.
Yet ever since the inception of the Tax Code, Congress has seen
fit to vest in those administering the tax laws very broad
authority to interpret those laws. In an area as complex as the tax
system, the agency Congress vests with administrative
responsibility must be able to exercise its authority to meet
changing conditions and new problems. Indeed, as early as 1918,
Congress expressly authorized the Commissioner "to make all needful
rules and regulations for the enforcement" of the tax laws. Revenue
Act of 1918, ch. 18, § 1309, 40 Stat. 1143. The same provision, so
essential to efficient and fair administration of the tax laws, has
appeared in Tax Codes ever since, see 26 U.S.C. § 7805(a);
and this Court has long recognized the primary authority of the IRS
and its predecessors in construing the Internal Revenue Code, see, e.g., Commissioner v. Portland Cement Co. of Utah, 450 U. S. 156 , 450 U. S. 169 (1981); United States v. Correll, 389 U.
S. 299 , 389 U. S.
306 -307 (1967); Boske v. Comingore, 177 U. S. 459 , 177 U. S.
469 -470 (1900).
Congress, the source of IRS authority, can modify IRS rulings it
considers improper; and courts exercise review over IRS actions. In
the first instance, however, the responsibility Page 461 U. S. 597 for construing the Code falls to the IRS. Since Congress cannot
be expected to anticipate every conceivable problem that can arise
or to carry out day-to-day oversight, it relies on the
administrators and on the courts to implement the legislative will.
Administrators, like judges, are under oath to do so.
In § 170 and § 501(c)(3), Congress has identified categories of
traditionally exempt institutions and has specified certain
additional requirements for tax exemption. Yet the need for
continuing interpretation of those statutes is unavoidable. For
more than 60 years, the IRS and its predecessors have constantly
been called upon to interpret these and comparable provisions, and
in doing so have referred consistently to principles of charitable
trust law. In Treas.Regs. 45, Art. 517(1) (1921), for example, the
IRS's predecessor denied charitable exemptions on the basis of
proscribed political activity before the Congress itself added such
conduct as a disqualifying element. In other instances, the IRS has
denied charitable exemptions to otherwise qualified entities
because they served too limited a class of people, and thus did not
provide a truly "public" benefit under the common law test. See, e.g., Crellin v. Commissioner, 46 B. T. A. 1152,
1155-1156 (1942); James Sprunt Benevolent Trust v.
Commissioner, 20 B. T. A.19, 24-25 (1930). See also Treas.Reg. § 1.501(c)(3)(d)(1)(ii) (1959). Some years before the
issuance of the rulings challenged in these cases, the IRS also
ruled that contributions to community recreational facilities would
not be deductible, and that the facilities themselves would not be
entitled to tax-exempt status, unless those facilities were open to
all on a racially nondiscriminatory basis. See Rev.Rul.
67-325, 1967-2 Cum.Bull. 113. These rulings reflect the
Commissioner's continuing duty to interpret and apply the Internal
Revenue Code. See also Textile Mills Securities Corp. v.
Commissioner, 314 U. S. 326 , 314 U. S.
337 -338 (1941).
Guided, of course, by the Code, the IRS has the responsibility,
in the first instance, to determine whether a particular Page 461 U. S. 598 entity is "charitable" for purposes of § 170 and § 501(c)(3).
[ Footnote 22 ] This in turn
may necessitate later determinations of whether given activities so
violate public policy that the entities involved cannot be deemed
to provide a public benefit worthy of "charitable" status. We
emphasize, however, that these sensitive determinations should be
made only where there is no doubt that the organization's
activities violate fundamental public policy.
On the record before us, there can be no doubt as to the
national policy. In 1970, when the IRS first issued the ruling
challenged here, the position of all three branches of the Federal
Government was unmistakably clear. The correctness of the
Commissioner's conclusion that a racially discriminatory private
school "is not charitable' within the common law concepts
reflected in . . . the Code," Rev.Rul. 71-447, 1971-2 Cum.Bull., at
231, is wholly consistent with what Congress, the Executive, and
the courts had repeatedly declared before 1970. Indeed, it would be
anomalous for the Executive, Legislative, and Judicial Branches to
reach conclusions that add up to a firm public policy on racial
discrimination, and at the same time have the IRS blissfully ignore
what all three branches of the Federal Government had declared.
[ Footnote 23 ] Clearly an
educational institution engaging in Page 461 U. S.
599 practices affirmatively at odds with this declared position
of the whole Government cannot be seen as exercising a "beneficial
and stabilizing influenc[e] in community life," Walz v. Tax
Comm'n, 397 U.S. at 397 U. S. 673 ,
and is not "charitable," within the meaning of § 170 and §
501(c)(3). We therefore hold that the IRS did not exceed its
authority when it announced its interpretation of § 170 and §
501(c)(3) in 1970 and 1971. [ Footnote 24 ] D The actions of Congress since 1970 leave no doubt that the IRS
reached the correct conclusion in exercising its authority. It is,
of course, not unknown for independent agencies or the Executive
Branch to misconstrue the intent of a statute; Congress can and
often does correct such misconceptions, if the courts have not done
so. Yet, for a dozen years, Congress has been made aware -- acutely
aware -- of the IRS rulings of 1970 and 1971. As we noted earlier,
few issues have been the subject of more vigorous and widespread
debate and discussion in and out of Congress than those related to
racial segregation in education. Sincere adherents advocating
contrary views have ventilated the subject for well over three
decades. Failure of Congress to modify the IRS rulings of 1970 and
1971, of which Congress was, by its own studies and by public
discourse, constantly reminded, and Congress' awareness of the
denial of tax-exempt status for racially discriminatory schools
when enacting other and related legislation make out an unusually
strong case of legislative acquiescence in and ratification by
implication of the 1970 and 1971 rulings. Page 461 U. S. 600 Ordinarily, and quite appropriately, courts are slow to
attribute significance to the failure of Congress to act on
particular legislation. See, e.g., Aaron v. SEC, 446 U. S. 680 , 446 U. S. 694 ,
n. 11 (1980). We have observed that "unsuccessful attempts at
legislation are not the best of guides to legislative intent," Red Lion Broadcasting Co. v. FCC, 395 U.
S. 367 , 395 U. S. 382 ,
n. 11 (1969). Here, however, we do not have an ordinary claim of
legislative acquiescence. Only one month after the IRS announced
its position in 1970, Congress held its first hearings on this
precise issue. Equal Educational Opportunity: Hearings before the
Senate Select Committee on Equal Educational Opportunity, 91st
Cong., 2d Sess., 1991 (1970). Exhaustive hearings have been held on
the issue at various times since then. These include hearings in
February. 1982, after we granted review in this case.
Administration's Change in Federal Policy Regarding the Tax Status
of Racially Discriminatory Private Schools: Hearing before the
House Committee on Ways and Means, 97th Cong., 2d Sess. (1982).
Nonaction by Congress is not often a useful guide, but the
nonaction here is significant. During the past 12 years. there have
been no fewer than 13 bills introduced to overturn the IRS
interpretation of § 501(c)(3). [ Footnote 25 ] Not one of these bills has emerged from any
committee, although Congress has enacted numerous other amendments
to § 501 during this same period, including an amendment to §
501(c)(3) itself. Tax Reform Act of 1976, Pub.L. 94-455, § 1313(a),
90 Stat. 1730. It is hardly conceivable that Congress -- and in
this setting, any Member of Congress -- was not abundantly Page 461 U. S. 601 aware of what was going on. In view of its prolonged and acute
awareness of so important an issue, Congress' failure to act on the
bills proposed on this subject provides added support for
concluding that Congress acquiesced in the IRS rulings of 1970 and
1971. See, e.g., Merrill Lynch, Pierce, Fenner & Smith,
Inc. v. Curran, 456 U. S. 353 , 456 U. S.
379 -382 (1982); Haig v. Agee, 453 U.
S. 280 , 453 U. S.
300 -301 (1981); Herman & MacLean v.
Huddleston, 459 U. S. 375 , 459 U. S.
384 -386 (1983); United States v. Rutherford, 442 U. S. 544 , 442 U. S. 554 ,
n. 10 (1979).
The evidence of congressional approval of the policy embodied in
Revenue Ruling 71-447 goes well beyond the failure of Congress to
act on legislative proposals. Congress affirmatively manifested its
acquiescence in the IRS policy when it enacted the present § 501(i)
of the Code, Act of Oct. 20, 1976, Pub.L. 94-568, 90 Stat. 2697.
That provision denies tax-exempt status to social clubs whose
charters or policy statements provide for "discrimination against
any person on the basis of race, color, or religion." [ Footnote 26 ] Both the House and
Senate Committee Reports on that bill articulated the national
policy against granting tax exemptions to racially discriminatory
private clubs. S.Rep. No. 94-1318, p. 8 (1976); H.R.Rep. No.
94-1353, p. 8 (1976).
Even more significant is the fact that both Reports focus on
this Court's affirmance of Green v.
Connally, 330 F.
Supp. 1150 (DC 1971), as having established that
"discrimination on account of race is inconsistent with an educational institution's tax-exempt status." S.Rep. No.
94-1318, supra, at 7-8, and n. 5; H.R.Rep. No. 94-1353, supra at 7-8, and n. 5 (emphasis added). These references
in congressional Committee Reports on an enactment denying tax
exemptions to racially discriminatory private social clubs cannot
be read Page 461 U. S. 602 other than as indicating approval of the standards applied to
racially discriminatory private schools by the IRS subsequent to
1970, and specifically of Revenue Ruling 71-447. [ Footnote 27 ] III Petitioners contend that, even if the Commissioner's policy is
valid as to nonreligious private schools, that policy cannot
constitutionally be applied to schools that engage in racial
discrimination on the basis of sincerely held religious beliefs.
[ Footnote 28 ] Page 461 U. S. 603 As to such schools, it is argued that the IRS construction of §
170 and § 501(c)(3) violates their free exercise rights under the
Religion Clauses of the First Amendment. This contention presents
claims not heretofore considered by this Court in precisely this
context.
This Court has long held the Free Exercise Clause of the First
Amendment to be an absolute prohibition against governmental
regulation of religious beliefs, Wisconsin v. Yoder, 406 U. S. 205 , 406 U. S. 219 (1972); Sherbert v. Verner, 374 U.
S. 398 , 374 U. S. 402 (1963); Cantwell v. Connecticut, 310 U.
S. 296 , 310 U. S. 303 (1940). As interpreted by this Court, moreover, the Free Exercise
Clause provides substantial protection for lawful conduct grounded
in religious belief, see Wisconsin v. Yoder, supra, at 406 U. S. 220 ; Thomas v. Review Board of Indiana Employment Security
Div., 450 U. S. 707 (1981); Sherbert v. Verner, supra, at 374 U. S.
402 -403. However,
"[n]ot all burdens on religion are unconstitutional. . . . The
state may justify a limitation on religious liberty by showing that
it is essential to accomplish an overriding governmental
interest." United States v. Lee, 455 U. S. 252 , 455 U. S.
257 -258 (1982). See, e.g., McDaniel v. Paty, 435 U. S. 618 , 435 U. S. 628 ,
and n. 8 (1978); Wisconsin v. Yoder, supra, at 406 U. S. 215 ; Gillette v. United States, 401 U.
S. 437 (1971).
On occasion, this Court has found certain governmental interests
so compelling as to allow even regulations prohibiting religiously
based conduct. In Prince v. Massachusetts, 321 U.
S. 158 (1944), for example, the Court held that
neutrally cast child labor laws prohibiting sale of printed
materials on public streets could be applied to prohibit children
from dispensing religious literature. The Court found no
constitutional infirmity in "excluding [Jehovah's Witness children]
from doing there what no other children may do." Id. at 321 U. S. 171 . See also Reynolds v. United States, 98 U. S.
145 (1879); United States v. Lee, supra; Gillette v.
United States, supra. Denial of tax benefits will inevitably
have a substantial Page 461 U. S. 604 impact on the operation of private religious schools, but will
not prevent those schools from observing their religious
tenets.
The governmental interest at stake here is compelling. As
discussed in 461 U. S. supra, the Government has a fundamental, overriding
interest in eradicating racial discrimination in education
[ Footnote 29 ] --
discrimination that prevailed, with official approval, for the
first 165 years of this Nation's constitutional history. That
governmental interest substantially outweighs whatever burden
denial of tax benefits places on petitioners' exercise of their
religious beliefs. The interests asserted by petitioners cannot be
accommodated with that compelling governmental interest, see
United States v. Lee, supra, at 455 U. S.
259 -260; and no "less restrictive means," see Thomas
v. Review Board of Indiana Employment Security Div., supra, at 450 U. S. 718 ,
are available to achieve the governmental interest. [ Footnote 30 ] Page 461 U. S. 605 IV The remaining issue is whether the IRS properly applied its
policy to these petitioners. Petitioner Goldsboro Christian Schools
admits that it "maintain[s] racially discriminatory policies,"
Brief for Petitioner in No. 81-1, p. 10, but seeks to justify those
policies on grounds we have fully discussed. The IRS properly
denied tax-exempt status to Goldsboro Christian Schools.
Petitioner Bob Jones University, however, contends that it is
not racially discriminatory. It emphasizes that it now allows all
races to enroll, subject only to its restrictions on the conduct of
all students, including its prohibitions of association between men
and women of different races, and of interracial marriage.
[ Footnote 31 ] Although a ban
on intermarriage or interracial dating applies to all races,
decisions of this Court firmly establish that discrimination on the
basis of racial affiliation and association is a form of racial
discrimination, see, e.g., Loving v. Virginia, 388 U. S. 1 (1967); McLaughlin v. Florida, 379 U. S. 184 (1964); Tillman v. Wheaton-Haven Recreation Assn., 410 U. S. 431 (1973). We therefore find that the IRS properly applied Revenue
Ruling 71-447 to Bob Jones University. [ Footnote 32 ]
The judgments of the Court of Appeals are, accordingly, Affirmed. Page 461 U. S. 606 * Together with No. 81-1, Goldsboro Christian Schools, Inc.
v. United States, also on certiorari to the same court.
[ Footnote 1 ]
Section 501(c)(3) lists the following organizations, which,
pursuant to § 501(a), are exempt from taxation unless denied tax
exemptions under other specified sections of the Code:
"Corporations, and any community chest, fund, or foundation, organized and operated exclusively for religious,
charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or
international amateur sports competition (but only if no part of
its activities involve the provision of athletic facilities or
equipment), or for the prevention of cruelty to children or
animals, no part of the net earnings of which inures to the benefit
of any private shareholder or individual, no substantial part of
the activities of which is carrying on propaganda, or otherwise
attempting, to influence legislation . . . and which does not
participate in, or intervene in (including the publishing or
distributing of statements), any political campaign on behalf of
any candidate for public office."
(Emphasis added.)
[ Footnote 2 ]
Section 170(a) allows deductions for certain "charitable
contributions." Section 170(c)(2)(B) includes within the definition
of "charitable contribution" a contribution or gift to or for the
use of a corporation "organized and operated exclusively for
religious, charitable, scientific, literary, or educational
purposes. . . ."
[ Footnote 3 ]
Revenue Ruling 71-447, 1971-2 Cum.Bull. 230, defined "racially
nondiscriminatory policy as to students" as meaning that
"the school admits the students of any race to all the rights,
privileges, programs, and activities generally accorded or made
available to students at that school, and that the school does not
discriminate on the basis of race in administration of its
educational policies, admissions policies, scholarship and loan
programs, and athletic and other school-administered programs."
[ Footnote 4 ]
Bob Jones University was founded in Florida in 1927. It moved to
Greenville, S.C., in 1940, and has been incorporated as an
eleemosynary institution in South Carolina since 1952.
[ Footnote 5 ]
Beginning in 1973, Bob Jones University instituted an exception
to this rule, allowing applications from unmarried Negroes who had
been members of the University staff for four years or more.
[ Footnote 6 ]
According to the interpretation espoused by Goldsboro, race is
determined by descendance from one of Noah's three sons -- Ham,
Shem, and Japheth. Based on this interpretation, Orientals and
Negroes are Hamitic, Hebrews are Shemitic, and Caucasians are
Japhethitic. Cultural or biological mixing of the races is regarded
as a violation of God's command. App. in No. 81-1, pp. 40-41.
[ Footnote 7 ]
Goldsboro also asserted that it was not obliged to pay taxes on
lodging furnished to its teachers. It does not ask this Court to
review the rejection of that claim.
[ Footnote 8 ]
By stipulation, the IRS agreed to abate its assessment for 1969
and most of 1970 to reflect the fact that the IRS did not begin
enforcing its policy of denying tax-exempt status to racially
discriminatory private schools until November 30, 1970. As a
result, the amount of the counterclaim was reduced to $116,190.99. Id. at 104, 110.
[ Footnote 9 ]
After the Court granted certiorari, the Government filed a
motion to dismiss, informing the Court that the Department of the
Treasury intended to revoke Revenue Ruling 71-447 and other
pertinent rulings and to recognize § 501(c)(3) exemptions for
petitioners. The Government suggested that these actions were
therefore moot. Before this Court ruled on that motion, however,
the United States Court of Appeals for the District of Columbia
Circuit enjoined the Government from granting § 501(c)(3)
tax-exempt status to any school that discriminates on the basis of
race. Wright v. Regan, No. 80-1124 (Feb. 18, 1982) (per
curiam order). Thereafter, the Government informed the Court that
it would not revoke the Revenue Rulings, and withdrew its request
that the actions be dismissed as moot. The Government continues to
assert that the IRS lacked authority to promulgate Revenue Ruling
71-447, and does not defend that aspect of the rulings below.
[ Footnote 10 ]
The predecessor of § 170 originally was enacted in 1917, as part
of the War Revenue Act of 1917, ch. 63, § 1201(2), 40 Stat. 330,
whereas the predecessor of 501(c)(3) dates back to the income tax
law of 1894, Act of Aug. 27, 1894, ch. 349, 28 Stat. 509, see n 14, infra. There are minor differences between the lists of
organizations in the two sections, see generally Liles
& Blum, Development of the Federal Tax Treatment of Charities,
39 Law & Contemp. Prob. 6, 24-25 (No. 4, 1975) (hereinafter
Liles & Blum). Nevertheless, the two sections are closely
related; both seek to achieve the same basic goal of encouraging
the development of certain organizations through the grant of tax
benefits. The language of the two sections is in most respects
identical, and the Commissioner and the courts consistently have
applied many of the same standards in interpreting those sections. See 5 J. Mertens, Law of Federal Income Taxation § 31.12
(1980); 6 id. §§ 34.01-34.13 (1975); B. Bittker & L.
Stone, Federal Income Taxation 220-222 (5th ed.1980). To the extent
that § 170 "aids in ascertaining the meaning" of § 501(c)(3),
therefore, it is "entitled to great weight," United States v.
Stewart, 311 U. S. 60 , 311 U. S. 64 -65
(1940). See Harris v. Commissioner, 340 U.
S. 106 , 340 U. S. 107 (1950).
[ Footnote 11 ]
The dissent suggests that the Court "quite adeptly avoids the
statute it is construing," post at 461 U. S. 612 ,
and "seeks refuge . . . by turning to § 170," post at 461 U. S. 613 .
This assertion dissolves when one sees that § 501(c)(3) and § 170
are construed together, as they must be. The dissent acknowledges
that the two sections are "mirror" provisions; surely there can be
no doubt that the Court properly looks to § 170 to determine the
meaning of § 501(c)(3). It is also suggested that § 170 is "at best
of little usefulness in finding the meaning of § 501(c)(3)," since
"§ 170(c) simply tracks the requirements set forth in § 501(c)(3)," post at 461 U. S. 614 .
That reading loses sight of the fact that § 170(c) defines the term
"charitable contribution." The plain language of § 170 reveals that
Congress' objective was to employ tax exemptions and deductions to
promote certain charitable purposes. While the eight
categories of institutions specified in the statute are indeed
presumptively charitable in nature, the IRS properly considered
principles of charitable trust law in determining whether the
institutions in question may truly be considered "charitable" for
purposes of entitlement to the tax benefits conferred by § 170 and
§ 501(c)(3).
[ Footnote 12 ]
The form and history of the charitable exemption and deduction
sections of the various income tax Acts reveal that Congress was
guided by the common law of charitable trusts. See Simon,
The Tax-Exempt Status of Racially Discriminatory Religious Schools,
36 Tax L.Rev. 477, 485-489 (1981) (hereinafter Simon). Congress
acknowledged as much in 1969. The House Report on the Tax Reform
Act of 1969, Pub.L. 91-172, 83 Stat. 487, stated that the §
501(c)(3) exemption was available only to institutions that served
"the specified charitable purposes," H.R.Rep. No. 91-413, pt. 1, p.
35 (1969), and described "charitable" as "a term that has been used
in the law of trusts for hundreds of years." Id. at 43. We
need not consider whether Congress intended to incorporate into the
Internal Revenue Code any aspects of charitable trust law other
than the requirements of public benefit and a valid public
purpose.
[ Footnote 13 ]
The draftsmen of the 1894 income tax law, which included the
first charitable exemption provision, relied heavily on English
concepts of taxation, and the list of exempt organizations appears
to have been patterned upon English income tax statutes. See 26 Cong.Rec. 584-588, 6612-6615 (1894)
[ Footnote 14 ]
Act of Aug. 27, 1894, ch. 349, § 32, 28 Stat. 556-557. The
income tax system contained in the 1894 Act was declared
unconstitutional, Pollock v. Farmers' Loan & Trust
Co., 158 U. S. 601 (1895), for reasons unrelated to the charitable exemption
provision. The terms of that exemption were, in substance, included
in the corporate income tax contained in the Payne-Aldrich Tariff
Act of 1909, ch. 6, § 38, 36 Stat. 112. A similar exemption has
been included in every income tax Act since the adoption of the
Sixteenth Amendment, beginning with the Revenue Act of 1913, ch.
16, § II(G), 38 Stat. 172. See generally Reiling, Federal
Taxation: What Is a Charitable Organization?, 44 A.B.A.J. 525
(1958); Liles & Blum.
[ Footnote 15 ]
That same year, the Bureau of Internal Revenue expressed a
similar view of the charitable deduction section of the estate tax
contained in the Revenue Act of 1918, ch. 18, § 403(a)(3), 40 Stat.
1098. The Solicitor of Internal Revenue looked to the common law of
charitable trusts in construing that provision, and noted that
"generally bequests for the benefit and advantage of the general
public are valid as charities." Sol.Op. 159, III-1 Cum.Bull. 480,
482 (1924).
[ Footnote 16 ]
The common law requirement of public benefit is universally
recognized by commentators on the law of trusts. For example, the
Bogerts state:
"In return for the favorable treatment accorded charitable gifts
which imply some disadvantage to the community, the courts must
find in the trust which is to be deemed 'charitable' some real
advantages to the public which more than offset the disadvantages
arising out of special privileges accorded charitable trusts."
G. Bogert & G. Bogert, Law of Trusts and Trustees § 361, p.
3 (rev.2d ed.1977) (hereinafter Bogert). For other statements of
this principle, see, e.g., 4 Scott § 348, at 2770;
Restatement (Second) of Trusts § 368, Comment (1959); E. Fisch, D.
Freed, & E. Schachter, Charities and Charitable Foundations §
256 (1974)
[ Footnote 17 ] Cf. Tank Truck Rentals, Inc. v. Commissioner, 356 U. S. 30 , 356 U. S. 35 (1958), in which this Court referred to "the presumption against
congressional intent to encourage violation of declared public
policy" in upholding the Commissioner's disallowance of deductions
claimed by a trucking company for fines it paid for violations of
state maximum weight laws.
[ Footnote 18 ]
The dissent acknowledges that "Congress intended . . . to offer
a tax benefit to organizations . . . providing a public benefit," post at 461 U. S.
614 -615, but suggests that Congress itself fully defined
what organizations provide a public benefit, through the list of
eight categories of exempt organizations contained in § 170 and §
501(c)(3). Under that view, any nonprofit organization that falls
within one of the specified categories is automatically entitled to
the tax benefits, provided it does not engage in expressly
prohibited lobbying or political activities. Post at 461 U. S. 617 .
The dissent thus would have us conclude, for example, that any
nonprofit organization that does not engage in prohibited lobbying
activities is entitled to tax exemption as an "educational"
institution if it is organized for the " instruction or training
of the individual for the purpose of improving or developing his
capabilities,'" 26 CFR § 1.501(c)(3) - 1(d)(3) (1982). See
post at 461 U. S. 623 .
As Judge Leventhal noted in Green v.
Connally, 330
F. Supp. 1150 , 1160 (DC), summarily aff'd sub nom. Coit v.
Green, 404 U.S. 997 (1971), Fagin's school for educating
English boys in the art of picking pockets would be an
"educational" institution under that definition. Similarly, a band
of former military personnel might well set up a school for
intensive training of subversives for guerrilla warfare and
terrorism in other countries; in the abstract, that "school" would
qualify as an "educational" institution. Surely Congress had no
thought of affording such an unthinking, wooden meaning to § 170
and § 501(c)(3) as to provide tax benefits to "educational"
organizations that do not serve a public, charitable
purpose. [ Footnote 19 ]
The Court's reading of § 501(c)(3) does not render meaningless
Congress' action in specifying the eight categories of
presumptively exempt organizations, as petitioners suggest. See Brief for Petitioner in No. 811, pp. 18-24. To be
entitled to tax-exempt status under § 501(c)(3), an organization
must first fall within one of the categories specified by Congress,
and in addition must serve a valid charitable purpose.
[ Footnote 20 ]
In 1894, when the first charitable exemption provision was
enacted, racially segregated educational institutions would not
have been regarded as against public policy. Yet contemporary
standards must be considered in determining whether given
activities provide a public benefit and are entitled to the
charitable tax exemption. In Walz v. Tax Comm'r, 397 U. S. 664 , 397 U. S. 673 (1970), we observed:
"Qualification for tax exemption is not perpetual or immutable;
some tax-exempt groups lose that status when their activities take
them outside the classification and new entities can come into
being and qualify for exemption."
Charitable trust law also makes clear that the definition of
"charity" depends upon contemporary standards. See, e.g., Restatement (Second) of Trusts § 374, Comment a (1959);
Bogert § 369, at 65-67; 4 Scott § 368, at 2855-2856.
[ Footnote 21 ]
In view of our conclusion that racially discriminatory private
schools violate fundamental public policy and cannot be deemed to
confer a benefit on the public, we need not decide whether an
organization providing a public benefit and otherwise meeting the
requirements of § 501(c)(3) could nevertheless be denied tax-exempt
status if certain of its activities violated a law or public
policy.
[ Footnote 22 ]
In the present case, the IRS issued its rulings denying
exemptions to racially discriminatory schools only after a
three-judge District Court had issued a preliminary injunction. See supra at 461 U. S.
578 -579.
[ Footnote 23 ]
JUSTICE POWELL misreads the Court's opinion when he suggests
that the Court implies that
"the Internal Revenue Service is invested with authority to
decide which public policies are sufficiently 'fundamental' to
require denial of tax exemptions," post at 461 U. S. 611 .
The Court's opinion does not warrant that interpretation. JUSTICE
POWELL concedes that,
"if any national policy is sufficiently fundamental to
constitute such an overriding limitation on the availability of
tax-exempt status under § 501(c)(3), it is the policy against
racial discrimination in education." Post at 461 U. S. 607 .
Since that policy is sufficiently clear to warrant JUSTICE POWELL's
concession and for him to support our finding of longstanding
congressional acquiescence, it should be apparent that his concerns
about the Court's opinion are unfounded.
[ Footnote 24 ]
Many of the amici curiae, including amicus Wiilliam T. Coleman, Jr. (appointed by the Court), argue that
denial of tax-exempt status to racially discriminatory schools is
independently required by the equal protection component of the
Fifth Amendment. In light of our resolution of this litigation, we
do not reach that issue. See, e.g., United States v.
Clark, 445 U. S. 23 , 445 U. S. 27 (190); NLRB v. Catholic Bishop of Chicago, 440 U.
S. 490 , 440 U. S. 504 (1979).
[ Footnote 25 ]
H.R. 1096, 97th Cong., 1st Sess. (1981); H.R. 802, 97th Cong.,
1st Sess. (1981); H.R. 498, 97th Cong., 1st Sess. (1981); H.R. 332,
97th Cong., 1st Sess. (1981); H.R. 95, 97th Cong., 1st Sess.
(1981); S. 995, 96th Cong., 1st Sess. (1979); H.R.1905, 96th Cong.,
1st Sess. (1979); H.R. 96, 96th Cong., 1st Sess. (1979); H.R. 3225,
94th Cong., 1st Sess. (1975); H.R. 1394, 93d Cong., 1st Sess.
(1973); H.R. 5350, 92d Cong., 1st Sess. (1971); H.R. 2352, 92d
Cong., 1st Sess. (1971); H.R. 68, 92d Cong., 1st Sess. (1971).
[ Footnote 26 ]
Prior to the introduction of this legislation, a three-judge
District Court had held that segregated social clubs were entitled
to tax exemptions. McGlotten v. Connally, 338 F.
Supp. 448 (DC 1972). Section 501(i) was enacted primarily in
response to that decision. See S.Rep. No. 94-1318, pp. 7-8
(1976); H.R.Rep. No. 94-1353, p. 8 (1976).
[ Footnote 27 ]
Reliance is placed on scattered statements in floor debate by
Congressmen critical of the IRS's adoption of Revenue Ruling
71-447. See, e.g., Brief for Petitioner in No. 81-1, pp.
27-28. Those views did not prevail. That several Congressmen,
expressing their individual views, argued that the IRS had no
authority to take the action in question is hardly a balance for
the overwhelming evidence of congressional awareness of and
acquiescence in the IRS rulings of 1970 and 1971. Petitioners also
argue that the Ashbrook and Dornan Amendments to the Treasury,
Postal Service, and General Government Appropriations Act of 1980,
Pub.L. 96-74, §§ 103, 614, 615, 93 Stat. 559, 562, 576-577, reflect
congressional opposition to the IRS policy formalized in Revenue
Ruling 71-447. Those amendments, however, are directly concerned
only with limiting more aggressive enforcement procedures proposed
by the IRS in 1978 and 1979 and preventing the adoption of more
stringent substantive standards. The Ashbrook Amendment, § 103 of
the Act, applies only to procedures, guidelines, or measures
adopted after August 22, 1978, and thus in no way affects the
status of Revenue Ruling 71-447. In fact, both Congressman Dornan
and Congressman Ashbrook explicitly stated that their amendments
would have no effect on prior IRS policy, including Revenue Ruling
71-447, see 125 Cong.Rec. 18815 (1979) (Cong. Dornan:
"[M]y amendment will not affect existing IRS rules which IRS has
used to revoke tax exemptions of white segregated academies under
Revenue Ruling 71-447. . . ."); id. at 18446 (Cong.
Ashbrook: "My amendment very clearly indicates on its face that all
the regulations in existence as of August 22, 1978, would not be
touched"). These amendments therefore do not indicate congressional
rejection of Revenue Ruling 71-447 and the standards contained
therein.
[ Footnote 28 ]
The District Court found, on the basis of a full evidentiary
record, that the challenged practices of petitioner Bob Jones
University were based on a genuine belief that the Bible forbids
interracial dating and marriage. 468 F. Supp. at 894. We assume, as
did the District Court, that the same is true with respect to
petitioner Goldsboro Christian Schools. See 436 F. Supp.
at 1317.
[ Footnote 29 ]
We deal here only with religious schools -- not with
churches or other purely religious institutions; here, the
governmental interest is in denying public support to racial
discrimination in education. As noted earlier, racially
discriminatory schools "exer[t] a pervasive influence on the entire
educational process," outweighing any public benefit that they
might otherwise provide, Norwood v. Harrison, 413 U.
S. 455 , 413 U. S. 469 (1973). See generally Simon, 495-496.
[ Footnote 30 ]
Bob Jones University also contends that denial of tax exemption
violates the Establishment Clause by preferring religions whose
tenets do not require racial discrimination over those which
believe racial intermixing is forbidden. It is well settled that
neither a state nor the Federal Government may pass laws which
"prefer one religion over another," Everson v. Board of
Education, 330 U. S. 1 , 330 U. S. 15 (1947), but "[i]t is equally true" that a regulation does not
violate the Establishment Clause merely because it "happens to
coincide or harmonize with the tenets of some or all religions." McGowan v. Maryland, 366 U. S. 420 , 366 U. S. 442 (1961). See Harris v. McRae, 448 U.
S. 297 , 448 U. S.
319 -320 (1980). The IRS policy at issue here is founded
on a "neutral, secular basis," Gillette v. United States, 401 U. S. 437 , 401 U. S. 452 (1971), and does not violate the Establishment Clause. See
generally U.S. Comm'n on Civil Rights, Discriminatory
Religious Schools and Tax Exempt Status 10-17 (1982). In addition,
as the Court of Appeals noted,
"the uniform application of the rule to all religiously operated
schools avoids the necessity for a potentially entangling
inquiry into whether a racially restrictive practice is the result
of sincere religious belief."
639 F.2d 147, 155 (CA4 1980) (emphasis in original). Cf.
NLRB v. Catholic Bishop of Chicago, 440 U.
S. 490 (1979). But see generally Note, 90 Yale
L.J. 350 (1980).
[ Footnote 31 ]
This argument would, in any event, apply only to the final eight
months of the five tax years at issue in this case. Prior to May,
1975, Bob Jones University's admissions policy was racially
discriminatory on its face, since the University excluded unmarried
Negro students while admitting unmarried Caucasians.
[ Footnote 32 ]
Bob Jones University also argues that the IRS policy should not
apply to it, because it is entitled to exemption under § 501(c)(3)
as a "religious" organization, rather than as an "educational"
institution. The record in this case leaves no doubt, however, that
Bob Jones University is both an educational institution and a
religious institution. As discussed previously, the IRS policy
properly extends to all private schools, including religious
schools. See n 29, supra. The IRS policy thus was properly applied to Bob
Jones University.
JUSTICE POWELL, concurring in part and concurring in the
judgment.
I join the Court's judgment, along with 461 U.
S. holding that the denial of tax exemptions to
petitioners does not violate the First Amendment. I write
separately because I am troubled by the broader implications of the
Court's opinion with respect to the authority of the Internal
Revenue Service (IRS) and its construction of §§ 170(c) and
501(c)(3) of the Internal Revenue Code. I Federal taxes are not imposed on organizations "operated
exclusively for religious, charitable, scientific, testing for
public safety, literary, or educational purposes. . . ." 26 U.S.C.
§ 501(c)(3). The Code also permits a tax deduction for
contributions made to these organizations. § 170(c). It is clear
that petitioners, organizations incorporated for educational
purposes, fall within the language of the statute. It also is clear
that the language itself does not mandate refusal of tax-exempt
status to any private school that maintains a racially
discriminatory admissions policy. Accordingly, there is force in
JUSTICE REHNQUIST's argument that §§ 170(c) and 501(c)(3) should be
construed as setting forth the only criteria Congress has
established for qualification as a tax-exempt organization. See
post at 461 U. S.
612 -615 (REHNQUIST, J., dissenting). Indeed, were we
writing prior to the history detailed in the Court's opinion, this
could well be the construction I would adopt. But there has been a
decade of acceptance that is persuasive in the circumstances of
these cases, and I conclude that there are now sufficient reasons
for accepting the IRS's construction of the Code as proscribing Page 461 U. S. 607 tax exemptions for schools that discriminate on the basis of
race as a matter of policy.
I cannot say that this construction of the Code, adopted by the
IRS in 1970 and upheld by the Court of Appeals below, is without
logical support. The statutory terms are not self-defining, and it
is plausible that, in some instances, an organization seeking a tax
exemption might act in a manner so clearly contrary to the purposes
of our laws that it could not be deemed to serve the enumerated
statutory purposes. [ Footnote 2/1 ]
And, as the Court notes, if any national policy is sufficiently
fundamental to constitute such an overriding limitation on the
availability of tax-exempt status under § 501(c)(3), it is the
policy against racial discrimination in education. See
ante at 461 U. S.
595 -596. Finally, and of critical importance for me, the
subsequent actions of Congress present "an unusually strong case of
legislative acquiescence in and ratification by implication of the
[IRS's] 1970 and 1971 rulings" with respect to racially
discriminatory schools. Ante at 461 U. S. 599 .
In particular, Congress' enactment of § 501(i) in 1976 is strong
evidence of agreement with these particular IRS rulings. [ Footnote 2/2 ] Page 461 U. S. 608 II I therefore concur in the Court's judgment that tax-exempt
status under §§ 170(c) and 501(c)(3) is not available to private
schools that concededly are racially discriminatory. I do not
agree, however, with the Court's more general explanation of the
justifications for the tax exemptions provided to charitable
organizations. The Court states:
"Charitable exemptions are justified on the basis that the
exempt entity confers a public benefit -- a benefit which the
society or the community may not itself choose or be able to
provide, or which supplements and advances the work of public
institutions already supported by tax revenues. History buttresses
logic to make clear that, to warrant exemption under § 501(c)(3),
an institution must fall within a category specified in that
section, and must demonstrably serve and be in harmony with the
public interest. The institution's purpose must not be so at odds
with the common community conscience as to undermine any public
benefit that might otherwise be conferred." Ante at 461 U. S.
591 -592 (footnotes omitted). Applying this test to
petitioners, the Court concludes that
"[c]learly an educational institution engaging in practices
affirmatively at odds with [the] declared position of the whole
Government cannot be seen as exercising a 'beneficial and
stabilizing influenc[e] in community life,' . . . and is not
'charitable,' within the meaning of § 170 and § 501(c)(3)." Ante at 461 U. S.
598 -599 (quoting Walz v. Tax Comm'n, 397 U. S. 664 , 397 U. S. 673 (1970)).
With all respect, I am unconvinced that the critical question in
determining tax-exempt status is whether an individual organization
provides a clear "public benefit" as defined by the Court. Over
106,000 organizations filed § 501(c)(3) returns in 1981. Internal
Revenue Service, 1982 Exempt Page 461 U. S. 609 Organization/Business Master File. I find it impossible to
believe that all or even most of those organizations could prove
that they "demonstrably serve and [are] in harmony with the public
interest," or that they are "beneficial and stabilizing influences
in community life." Nor am I prepared to say that petitioners,
because of their racially discriminatory policies, necessarily
contribute nothing of benefit to the community. It is clear from
the substantially secular character of the curricula and degrees
offered that petitioners provide educational benefits.
Even more troubling to me is the element of conformity that
appears to inform the Court's analysis. The Court asserts that an
exempt organization must "demonstrably serve and be in harmony with
the public interest," must have a purpose that comports with "the
common community conscience," and must not act in a manner
"affirmatively at odds with [the] declared position of the whole
Government." Taken together, these passages suggest that the
primary function of a tax-exempt organization is to act on behalf
of the Government in carrying out governmentally approved policies.
In my opinion, such a view of § 501(c)(3) ignores the important
role played by tax exemptions in encouraging diverse, indeed often
sharply conflicting, activities and viewpoints. As JUSTICE BRENNAN
has observed, private, nonprofit groups receive tax exemptions
because "each group contributes to the diversity of association,
viewpoint, and enterprise essential to a vigorous, pluralistic
society." Walz, supra, at 397 U. S. 689 (concurring opinion). Far from representing an effort to reinforce
any perceived "common community conscience," the provision of tax
exemptions to nonprofit groups is one indispensable means of
limiting the influence of governmental orthodoxy on important areas
of community life. [ Footnote
2/3 ] Page 461 U. S. 610 Given the importance of our tradition of pluralism, [ Footnote 2/4 ] "[t]he interest in preserving
an area of untrammeled choice for private philanthropy is very
great." Jackson v. Statler Foundation, 496 F.2d 623, 639
(CA2 1974) (Friendly, J., dissenting from denial of reconsideration
en banc).
I do not suggest that these considerations always are or should
be dispositive. Congress, of course, may find that some
organizations do not warrant tax-exempt status. In these cases, I
agree with the Court that Congress has determined that the policy
against racial discrimination in education should override the
countervailing interest in permitting unorthodox private
behavior. Page 461 U. S. 611 I would emphasize, however, that the balancing of these
substantial interests is for Congress to perform. I am
unwilling to join any suggestion that the Internal Revenue Service
is invested with authority to decide which public policies are
sufficiently "fundamental" to require denial of tax exemptions. Its
business is to administer laws designed to produce revenue for the
Government, not to promote "public policy." As former IRS
Commissioner Kurtz has noted, questions concerning religion and
civil rights "are far afield from the more typical tasks of tax
administrators -- determining taxable income." Kurtz, Difficult
Definitional Problems in Tax Administration: Religion and Race, 23
Catholic Lawyer 301 (1978). This Court often has expressed concern
that the scope of an agency's authorization be limited to those
areas in which the agency fairly may be said to have expertise,
[ Footnote 2/5 ] and this concern
applies with special force when the asserted administrative power
is one to determine the scope of public policy. As JUSTICE BLACKMUN
has noted:
"[W]here the philanthropic organization is concerned, there
appears to be little to circumscribe the almost unfettered power of
the Commissioner. This may be very well so long as one subscribes
to the particular brand of social policy the Commissioner happens
to be advocating Page 461 U. S. 612 at the time . . . , but application of our tax laws should not
operate in so fickle a fashion. Surely, social policy in the first
instance is a matter for legislative concern." Commissioner v. "Americans United" Inc., 416 U.
S. 752 , 416 U. S.
774 -775 (1974) (dissenting opinion). III The Court's decision upholds IRS Revenue Ruling 71-447, and thus
resolves the question whether tax-exempt status is available to
private schools that openly maintain racially discriminatory
admissions policies. There no longer is any justification for
Congress to hesitate -- as it apparently has -- in articulating and
codifying its desired policy as to tax exemptions for
discriminatory organizations. Many questions remain, such as
whether organizations that violate other policies should receive
tax-exempt status under § 501(c)(3). These should be legislative
policy choices. It is not appropriate to leave the IRS "on the
cutting edge of developing national policy." Kurtz, supra, at 308. The contours of public policy should be determined by
Congress, not by judges or the IRS.
[ Footnote 2/1 ]
I note that the Court has construed other provisions of the Code
as containing narrowly defined public policy exceptions. See
Commissioner v. Tellier, 383 U. S. 687 , 383 U. S.
693 -694 (1966); Tank Truck Rentals, Inc. v.
Commissioner, 356 U. S. 30 , 356 U. S. 35 (1958).
[ Footnote 2/2 ]
The District Court for the District of Columbia in Green v.
Connally, 330 F.
Supp. 1150 (three-judge court), summarily aff'd sub nom.
Coit v. Green, 404 U.S. 997 (1971), held that racially
discriminatory private schools were not entitled to tax-exempt
status. The same District Court, however, later ruled that racially
segregated social clubs could receive tax exemptions under §
501(c)(7) of the Code. See McGlotten v.
Connally, 338 F.
Supp. 448 (1972) (three-judge court). Faced with these two
important three-judge court rulings, Congress expressly overturned
the relevant portion of McGlotten by enacting § 501(i),
thus conforming the policy with respect to social clubs to the
prevailing policy with respect to private schools. This affirmative
step is a persuasive indication that Congress has not just silently
acquiesced in the result of Green. Cf. Merrill Lynch, Pierce,
Fenner & Smith, Inc. v. Curran, 456 U.
S. 353 , 456 U. S. 402 (1982) (POWELL, J., dissenting) (rejecting theory "that
congressional intent can be inferred from silence, and that
legislative inaction should achieve the force of law").
[ Footnote 2/3 ]
Certainly § 501(c)(3) has not been applied in the manner
suggested by the Court's analysis. The 1,100-page list of exempt
organizations includes -- among countless examples -- such
organizations as American Friends Service Committee, Inc.,
Committee on the Present Danger, Jehovahs Witnesses in the United
States, Moral Majority Foundation, Inc., Friends of the Earth
Foundation, Inc., Mountain States Legal Foundation, National Right
to Life Educational Foundation, Planned Parenthood Federation of
America, Scientists and Engineers for Secure Energy, Inc., and
Union of Concerned Scientists Fund, Inc. See Internal
Revenue Service, Cumulative List of Organizations Described in
Section 170(C) of the Internal Revenue Code of 1954, Pp. 31, 221,
376, 518, 670, 677, 694, 795, 880, 1001, 1073 (Revised Oct.1981).
It would be difficult indeed to argue that each of these
organizations reflects the views of the "common community
conscience" or "demonstrably . . . [is] in harmony with the public
interest." In identifying these organizations, largely taken at
random from the tens of thousands on the list, I of course do not
imply disapproval of their being exempt from taxation. Rather, they
illustrate the commendable tolerance by our Government of even the
most strongly held divergent views, including views that at least
from time to time are "at odds" with the position of our
Government. We have consistently recognized that such disparate
groups are entitled to share the privilege of tax exemption.
[ Footnote 2/4 ]
"A distinctive feature of America's tradition has been respect
for diversity. This has been characteristic of the peoples from
numerous lands who have built our country. It is the essence of our
democratic system." Mississippi University for Women v. Hogan, 458 U.
S. 718 , 458 U. S. 745 (1982) (POWELL, J., dissenting). Sectarian schools make an
important contribution to this tradition, for they "have provided
an educational alternative for millions of young Americans" and
"often afford wholesome competition with our public schools." Wolman v. Walter, 433 U. S. 229 , 433 U. S. 262 (1977) (POWELL, J., concurring in part, concurring in judgment in
part, and dissenting in part).
[ Footnote 2/5 ] See, e.g., Community Television of Southern California v.
Gottfried, 459 U. S. 498 , 459 U. S.
510 -511, n. 17 (1983) ("[A]n agency's general duty to
enforce the public interest does not require it to assume
responsibility for enforcing legislation that is not directed at
the agency"); Hampton v. Mow Sun Wong, 426 U. S.
88 , 426 U. S. 114 (1976) ("It is the business of the Civil Service Commission to
adopt and enforce regulations which will best promote the
efficiency of the federal civil service. That agency has no
responsibility for foreign affairs, for treaty negotiations, for
establishing immigration quotas or conditions of entry, or for
naturalization policies"); NAACP v. FPC, 425 U.
S. 662 , 425 U. S. 670 (1976) ("The use of the words public interest' in the Gas and
Power Acts is not a directive to the [Federal Power] Commission to
seek to eradicate discrimination, but, rather, is a charge to
promote the orderly production of supplies of electric energy and
natural gas at just and reasonable rates"). JUSTICE REHNQUIST, dissenting.
The Court points out that there is a strong national policy in
this country against racial discrimination. To the extent that the
Court states that Congress, in furtherance of this policy, could
deny tax-exempt status to educational institutions that promote
racial discrimination, I readily agree. But, unlike the Court, I am
convinced that Congress simply has failed to take this action and,
as this Court has said over and over again, regardless of our view
on the propriety of Congress' failure to legislate, we are not
constitutionally empowered to act for it.
In approaching this statutory construction question, the Court
quite adeptly avoids the statute it is construing. This I am sure
is no accident, for there is nothing in the language Page 461 U. S. 613 of § 501(c)(3) that supports the result obtained by the Court.
Section 501(c)(3) provides tax-exempt status for:
"Corporations, and any community chest, fund, or foundation,
organized and operated exclusively for religious, charitable,
scientific, testing for public safety, literary, or educational
purposes, or to foster national or international amateur sports
competition (but only if no part of its activities involve the
provision of athletic facilities or equipment), or for the
prevention of cruelty to children or animals, no part of the net
earnings of which inures to the benefit of any private shareholder
or individual, no substantial part of the activities of which is
carrying on propaganda, or otherwise attempting, to influence
legislation (except as otherwise provided in subsection (h)), and
which does not participate in, or intervene in (including the
publishing or distributing of statements), any political campaign
on behalf of any candidate for public office."
26 U.S.C. § 501(c)(3). With undeniable clarity, Congress has
explicitly defined the requirements for § 501(c)(3) status. An
entity must be (1) a corporation, or community chest, fund, or
foundation, (2) organized for one of the eight enumerated purposes,
(3) operated on a nonprofit basis, and (4) free from involvement in
lobbying activities and political campaigns. Nowhere is there to be
found some additional, undefined public policy requirement.
The Court first seeks refuge from the obvious reading of §
501(c)(3) by turning to § 170 of the Internal Revenue Code, which
provides a tax deduction for contributions made to § 501(c)(3)
organizations. In setting forth the general rule, § 170 states:
"There shall be allowed as a deduction any charitable
contribution (as defined in subsection (c)) payment of which is
made within the taxable year. A charitable contribution shall be
allowable as a deduction only if verified Page 461 U. S. 614 under regulations prescribed by the Secretary."
26 U.S.C. § 170(a)(1). The Court seizes the words "charitable
contribution" and with little discussion concludes that "[o]n its
face, therefore, § 170 reveals that Congress' intention was to
provide tax benefits to organizations serving charitable purposes,"
intimating that this implies some unspecified common law charitable
trust requirement. Ante at 461 U. S.
587 .
The Court would have been well advised to look to subsection (c)
where, as § 170(a)(1) indicates, Congress has defined a "charitable
contribution":
"For purposes of this section, the term 'charitable
contribution' means a contribution or gift to or for the use of . .
. [a] corporation, trust, or community chest, fund, or foundation .
. . organized and operated exclusively for religious, charitable,
scientific, literary, or educational purposes, or to foster
national or international amateur sports competition (but only if
no part of its activities involve the provision of athletic
facilities or equipment), or for the prevention of cruelty to
children or animals; . . . no part of the net earnings of which
inures to the benefit of any private shareholder or individual; and
. . . which is not disqualified for tax exemption under section
501(c) (3) by reason of attempting to influence legislation, and
which does not participate in, or intervene in (including the
publishing or distributing of statements), any political campaign
on behalf of any candidate for public office."
26 U.S.C. § 170(c). Plainly, § 170(c) simply tracks the
requirements set forth in § 501(c)(3). Since § 170 is no more than
a mirror of § 501(c)(3) and, as the Court points out, § 170
followed § 501(c)(3) by more than two decades, ante at 461 U. S. 587 ,
n. 10, it is, at best, of little usefulness in finding the meaning
of § 501(c)(3).
Making a more fruitful inquiry, the Court next turns to the
legislative history of § 501(c)(3) and finds that Congress
intended Page 461 U. S. 615 in that statute to offer a tax benefit to organizations that
Congress believed were providing a public benefit. I certainly
agree. But then the Court leaps to the conclusion that this history
is proof Congress intended that an organization seeking § 501(c)(3)
status "must fall within a category specified in that section and must demonstrably serve and be in harmony with the public
interest. " Ante at 461 U. S. 592 (emphasis added). To the contrary, I think that the legislative
history of § 501(c)(3) unmistakably makes clear that Congress
has decided what organizations are serving a public purpose
and providing a public benefit within the meaning of § 501(c)(3),
and has clearly set forth in § 501(c)(3) the characteristics of
such organizations. In fact, there are few examples which better
illustrate Congress' effort to define and redefine the requirements
of a legislative Act.
The first general income tax law was passed by Congress in the
form of the Tariff Act of 1894. A provision of that Act provided an
exemption for "corporations, companies, or associations organized
and conducted solely for charitable, religious, or educational
purposes." Ch. 349, § 32, 28 Stat. 556 (1894). The income tax
portion of the 1894 Act was held unconstitutional by this Court, see Pollock v. Farmers' Loan & Trust Co., 158 U.
S. 601 (1895), but a similar exemption appeared in the
Tariff Act of 1909 which imposed a tax on corporate income. The
1909 Act provided an exemption for
"any corporation or association organized and operated
exclusively for religious, charitable, or educational purposes, no
part of the net income of which inures to the benefit of any
private stockholder or individual."
Ch. 6, § 38, 36 Stat. 113 (1909).
With the ratification of the Sixteenth Amendment, Congress again
turned its attention to an individual income tax with the Tariff
Act of 1913. And again, in the direct predecessor of § 501(c)(3), a
tax exemption was provided for
"any corporation or association organized and operated
exclusively for religious, charitable, scientific, or educational
purposes, Page 461 U. S. 616 no part of the net income of which inures to the benefit of any
private stockholder or individual."
Ch. 16, §II(G)(a), 38 Stat. 172 (1913). In subsequent Acts,
Congress continued to broaden the list of exempt purposes. The
Revenue Act of 1918 added an exemption for corporations or
associations organized "for the prevention of cruelty to children
or animals." Ch. 18, § 231(6), 40 Stat. 1057, 1076 (1918). The
Revenue Act of 1921 expanded the groups to which the exemption
applied to include "any community chest, fund, or foundation" and
added "literary" endeavors to the list of exempt purposes. Ch. 136,
§ 231(6), 42 Stat. 263 (1921). The exemption remained unchanged in
the Revenue Acts of 1924, 1926, 1928, and 1932. [ Footnote 3/1 ] In the Revenue Act of 1934, Congress
added the requirement that no substantial part of the activities of
any exempt organization can involve the carrying on of "propaganda"
or "attempting to influence legislation." Ch. 277, § 101(6), 48
Stat. 700 (1934). Again, the exemption was left unchanged by the
Revenue Acts of 1936 and 1938. [ Footnote 3/2 ] The tax laws were overhauled by the
Internal Revenue Code of 1939, but this exemption was left
unchanged. Ch. 1, § 101(6), 53 Stat. 33 (1939). When the 1939 Code
was replaced with the Internal Revenue Code of 1954, the exemption
was adopted in full in the present § 501(c)(3) with the addition of
"testing for public safety" as an exempt purpose and an additional
restriction that tax-exempt organizations could not
"participate in, or intervene in (including the publishing or
distributing of statements), any political campaign on behalf of
any candidate for public office."
Ch. 1, § 501(c) (3), 68A Stat. 163 (1954). Then, in 1976, the
statute was again amended adding to the purposes for which an
exemption would be authorized, "to foster national or international
amateur Page 461 U. S. 617 sports competition," provided the activities did not involve the
provision of athletic facilities or equipment. Tax Reform Act of
1976, Pub.L. 94-455, § 1313(a), 90 Stat. 1730 (1976).
One way to read the opinion handed down by the Court today leads
to the conclusion that this long and arduous refining process of §
501(c)(3) was certainly a waste of time, for when enacting the
original 1894 statute, Congress intended to adopt a common law term
of art, and intended that this term of art carry with it all of the
common law baggage which defines it. Such a view, however, leads
also to the unsupportable idea that Congress has spent almost a
century adding illustrations simply to clarify an already defined
common law term.
Another way to read the Court's opinion leads to the conclusion
that, even though Congress has set forth some of the requirements
of a § 501(c)(3) organization, it intended that the IRS
additionally require that organizations meet a higher standard of
public interest, not stated by Congress, but to be determined and
defined by the IRS and the courts. This view I find equally
unsupportable. Almost a century of statutory history proves that
Congress itself intended to decide what § 501(c)(3) requires.
Congress has expressed its decision in the plainest of terms in §
501(c)(3) by providing that tax-exempt status is to be given to any
corporation, or community chest, fund, or foundation that is
organized for one of the eight enumerated purposes, operated on a
nonprofit basis, and uninvolved in lobbying activities or political
campaigns. The IRS certainly is empowered to adopt regulations for
the enforcement of these specified requirements, and the courts
have authority to resolve challenges to the IRS's exercise of this
power, but Congress has left it to neither the IRS nor the courts
to select or add to the requirements of § 501(c)(3).
The Court suggests that, unless its new requirement be added to
§ 501(c)(3), nonprofit organizations formed to teach pickpockets
and terrorists would necessarily acquire tax-exempt Page 461 U. S. 618 status. Ante at 461 U. S. 592 ,
n. 18. Since the Court does not challenge the characterization of petitioners as "educational" institutions within the
meaning of § 501(c)(3), and in fact states several times in the
course of its opinion that petitioners are educational
institutions, see, e.g., ante at 461 U. S. 580 , 461 U. S. 583 , 461 U. S. 604 ,
n. 29, 461 U. S. 606 ,
n. 32, it is difficult to see how this argument advances the
Court's reasoning for disposing of petitioners' cases.
But simply because I reject the Court's heavy-handed creation of
the requirement that an organization seeking 501(c)(3) status must
"serve and be in harmony with the public interest," ante at 461 U. S. 592 ,
does not mean that I would deny to the IRS the usual authority to
adopt regulations further explaining what Congress meant by the
term "educational." The IRS has fully exercised that authority in
Treas.Reg. § 1.501(c)(3) - 1(d)(3), 26 CFR § 1.501(c)(3) - 1(d)(3)
(1982), which provides:
"(3) Educational defined -- (i) In general. The term
'educational,' as used in section 501(c)(3), relates to -- "
"(a) The instruction or training of the individual for the
purpose of improving or developing his capabilities; or"
"(b) The instruction of the public on subjects useful to the
individual and beneficial to the community."
"An organization may be educational even though it advocates a
particular position or viewpoint so long as it presents a
sufficiently full and fair exposition of the pertinent facts as to
permit an individual or the public to form an independent opinion
or conclusion. On the other hand, an organization is not
educational if its principal function is the mere presentation of
unsupported opinion."
"(ii) Examples of educational organizations. The
following are examples of organizations which, if they otherwise
meet the requirements of this section, are educational: " Page 461 U. S. 619 " Example (1). An organization, such as a primary or
secondary school, a college, or a professional or trade school,
which has a regularly scheduled curriculum, a regular faculty, and
a regularly enrolled body of students in attendance at a place
where the educational activities are regularly carried on."
" Example (2). An organization whose activities consist
of presenting public discussion groups, forums, panels, lectures,
or other similar programs. Such programs may be on radio or
television."
" Example (3). An organization which presents a course
of instruction by means of correspondence or through the
utilization of television or radio."
" Example (4). Museums, zoos, planetariums, symphony
orchestras, and other similar organizations."
I have little doubt that neither the "Fagin School for
Pickpockets" nor a school training students for guerrilla warfare
and terrorism in other countries would meet the definitions
contained in the regulations.
Prior to 1970, when the charted course was abruptly changed, the
IRS had continuously interpreted § 501(c)(3) and its predecessors
in accordance with the view I have expressed above. This, of
course, is of considerable significance in determining the intended
meaning of the statute. NLRB v. Boeing Co., 412 U. S.
67 , 412 U. S. 75 (1973); Power Reactor Development Co. v. Electrical
Workers, 367 U. S. 396 , 367 U. S. 408 (1961).
In 1970, the IRS was sued by parents of black public school
children seeking to enjoin the IRS from according tax-exempt status
under § 501(c)(3) to private schools in Mississippi that
discriminated against blacks. The IRS answered, consistent with its
longstanding position, by maintaining a lack of authority to deny
the tax exemption if the schools met the specified requirements of
§ 501(c)(3). Then, "[i]n the midst of this litigation," Green
v. Connally, 330
F. Supp. 1150 , 1156 (DC), summarily aff'd sub nom. Coit v.
Green, 404 U.S. 997 (1971), and in the face of a preliminary
injunction, Page 461 U. S. 620 the IRS changed its position and adopted the view of the
plaintiffs.
Following the close of the litigation, the IRS published its new
position in Revenue Ruling 71-447, stating that
"a school asserting a right to the benefits provided for in
section 501(c)(3) of the Code as being organized and operated
exclusively for educational purposes must be a common law charity
in order to be exempt under that section."
Rev.Rul. 71-447, 1971-2 Cum.Bull. 230. The IRS then concluded
that a school that promotes racial discrimination violates public
policy, and therefore cannot qualify as a common law charity. The
circumstances under which this change in interpretation was made
suggest that it is entitled to very little deference. But even if
the circumstances were different, the latter-day wisdom of the IRS
has no basis in § 501(c)(3).
Perhaps recognizing the lack of support in the statute itself,
or in its history, for the 1970 IRS change in interpretation, the
Court finds that "[t]he actions of Congress since 1970 leave no
doubt that the IRS reached the correct conclusion in exercising its
authority," concluding that there is "an unusually strong case of
legislative acquiescence in and ratification by implication of the
1970 and 1971 rulings." Ante at 461 U. S. 599 .
The Court relies first on several bills introduced to overturn the
IRS interpretation of § 501(c)(3). Ante at 461 U. S. 600 ,
and n. 25. But we have said before, and it is equally applicable
here, that this type of congressional inaction is of virtually no
weight in determining legislative intent. See United States v.
Wise, 370 U. S. 405 , 370 U. S. 411 (1962); Waterman S.S. Corp. v. United States, 381 U.
S. 252 , 381 U. S. 269 (1965). These bills and related hearings indicate little more than
that a vigorous debate has existed in Congress concerning the new
IRS position.
The Court next asserts that "Congress affirmatively manifested
its acquiescence in the IRS policy when it enacted the present §
501(i) of the Code," a provision that "denies tax-exempt status to
social clubs whose charters or policy statements Page 461 U. S. 621 provide for" racial discrimination. Ante at 461 U. S. 601 .
Quite to the contrary, it seems to me that, in § 501(i), Congress
showed that, when it wants to add a requirement prohibiting racial
discrimination to one of the tax-benefit provisions, it is fully
aware of how to do it. Cf. Commissioner v. Tellier, 383 U. S. 687 , 383 U. S. 693 ,
n. 10 (1966).
The Court intimates that the Ashbrook and Dornan Amendments also
reflect an intent by Congress to acquiesce in the new IRS position. Ante at 461 U. S. 602 ,
n. 27. T he amendments were passed to limit certain enforcement
procedures proposed by the IRS in 1978 and 1979 for determining
whether a school operated in a racially nondiscriminatory fashion.
The Court points out that, in proposing his amendment, Congressman
Ashbrook stated: " My amendment very clearly indicates on its
face that all the regulations in existence as of August 22, 1978,
would not be touched.'" Ibid. The Court fails to note that
Congressman Ashbrook also said: "The IRS has no authority to create public policy. . . . So long
as the Congress has not acted to set forth a national policy
respecting denial of tax exemptions to private schools, it is
improper for the IRS or any other branch of the Federal Government
to seek denial of tax-exempt status. . . . There exists but a
single responsibility which is proper for the Internal Revenue
Service: To serve as tax collector."
125 Cong.Rec. 18444 (1979). In the same debate, Congressman
Grassley asserted:
"Nobody argues that racial discrimination should receive
preferred tax status in the United States. However, the IRS should
not be making these decisions on the agency's own discretion.
Congress should make these decisions." Id. at 18448. The same debates are filled with other
similar statements. While on the whole these debates do not show
conclusively that Congress believed the IRS had exceeded its
authority with the 1970 change in position, they likewise are Page 461 U. S. 622 far less than a showing of acquiescence in and ratification of
the new position.
This Court continuously has been hesitant to find ratification
through inaction. See United States v. Wise, supra. This
is especially true where such a finding
"would result in a construction of the statute which not only is
at odds with the language of the section in question and the
pattern of the statute taken as a whole, but also is extremely far
reaching in terms of the virtually untrammeled and unreviewable
power it would vest in a regulatory agency." SEC v. Sloan, 436 U. S. 103 , 436 U. S. 121 (1978). Few cases would call for more caution in finding
ratification by acquiescence than the present ones. The new IRS
interpretation is not only far less than a longstanding
administrative policy, it is at odds with a position maintained by
the IRS, and unquestioned by Congress, for several decades prior to
1970. The interpretation is unsupported by the statutory language,
it is unsupported by legislative history, the interpretation has
led to considerable controversy in and out of Congress, and the
interpretation gives to the IRS a broad power which, until now,
Congress had kept for itself. Where in addition to these
circumstances Congress has shown time and time again that it is
ready to enact positive legislation to change the Tax Code when it
desires, this Court has no business finding that Congress has
adopted the new IRS position by failing to enact legislation to
reverse it.
I have no disagreement with the Court's finding that there is a
strong national policy in this country opposed to racial
discrimination. I agree with the Court that Congress has the power
to further this policy by denying § 501(c)(3) status to
organizations that practice racial discrimination. [ Footnote 3/3 ] But as of yet, Congress has failed to
do so. Whatever the reasons for the failure, this Court should not
legislate for Congress. [ Footnote
3/4 ] Page 461 U. S. 623 Petitioners are each organized for the "instruction or training
of the individual for the purpose of improving or developing his
capabilities," 26 CFR § 1.501(c)(3) - 1(d)(3) (1982), and thus are
organized for "educational purposes" within the meaning of §
501(c)(3). Petitioners' nonprofit status is uncontested. There is
no indication that either petitioner has been involved in lobbying
activities or political campaigns. Therefore, it is my view that,
unless and until Congress affirmatively amends § 501(c)(3) to
require more, the IRS is without authority to deny petitioners §
501(c)(3) status. For this reason, I would reverse the Court of
Appeals.
[ Footnote 3/1 ] See Revenue Act of 1924, ch. 234, § 231(6), 43 Stat.
282; Revenue Act of 1926, ch. 27, § 231(6), 44 Stat. 40; Revenue
Act of 1928, ch. 852, § 103(6), 45 Stat. 813; Revenue Act of 1932,
ch. 209, § 103(6), 47 Stat.193.
[ Footnote 3/2 ] See Revenue Act of 1936, ch. 690, § 101(6), 49 Stat.
1674; Revenue Act of 1938, ch. 289, § 101(6), 52 Stat. 481.
[ Footnote 3/3 ]
I agree with the Court that such a requirement would not
infringe on petitioners' First Amendment rights.
[ Footnote 3/4 ]
Because of its holding, the Court does not have to decide
whether it would violate the equal protection component of the
Fifth Amendment for Congress to grant § 501(c)(3) status to
organizations that practice racial discrimination. Ante at 461 U. S. 599 ,
n. 24. I would decide that it does not. The statute is facially
neutral; absent a showing of a discriminatory purpose, no equal
protection violation is established. Washington v. Davis, 426 U. S. 229 , 426 U. S.
241 -244 (1976). | The Supreme Court ruled that Bob Jones University and Goldsboro Christian Schools, which practiced racial discrimination in admissions, did not qualify for tax-exempt status under Section 501(c)(3) of the Internal Revenue Code. The Court's decision was based on the interpretation of the statute and the national policy against racial discrimination. While both organizations argued that their First Amendment rights were violated, the Court held that denying tax-exempt status did not infringe on those rights. |
Taxes | Commissioner v. Indianapolis Power & Light Co. | https://supreme.justia.com/cases/federal/us/493/203/ | U.S. Supreme Court CIR v. Indianapolis P & L, 493
U.S. 203 (1990) Commissioner of Internal Revenue
v. Indianapolis Power & Light
Company No. 88-1319 Argued Oct. 31, 1989 Decided Jan. 9, 1990 493
U.S. 203 CERTIORARI TO THE UDNITED STATES
COURT OF APPEALS FOR THE SEVENTH CIRCUIT Syllabus Respondent Indianapolis Power and Light Co. (IPL), a regulated
Indiana utility and an accrual-basis taxpayer, requires customers
having suspect credit to make deposits with it to assure prompt
payment of future electric bills. Prior to termination of service,
customers who satisfy a credit test can obtain a refund of their
deposits or can choose to have the amount applied against future
bills. Although the deposits are at all times subject to the
company's unfettered use and control, IPL does not treat them as
income at the time of receipt, but carries them on its books as
current liabilities. Upon audit of IPL's returns for the tax years
at issue, petitioner Commissioner of Internal Revenue asserted
deficiencies, claiming that the deposits are advance payments for
electricity and therefore are taxable to IPL in the year of
receipt. The Tax Court ruled in favor of IPL on its petition for
redetermination, holding that the deposits' principal purpose is to
serve as security rather than as prepayment of income. The Court of
Appeals affirmed. Held: The customer deposits are not advance payments
for electricity, and therefore do not constitute taxable income to
IPL upon receipt. Although IPL derives some economic benefit from
the deposits, it does not have the requisite "complete dominion"
over them at the time they are made, the crucial point for
determining taxable income. IPL has an obligation to repay the
deposits upon termination of service or satisfaction of the credit
test. Moreover, a customer submitting a deposit makes no commitment
to purchase any electricity at all. Thus, while deposits eventually
may be used to pay for electricity by virtue of customer default or
choice, IPL's right to retain them at the time they are made is
contingent upon events outside its control. This construction is
consistent with the Tax Court's longstanding treatment of sums
deposited to secure a tenant's performance of a lease agreement,
perhaps the closest analogy to the present situation. Pp. 493 U. S.
207 -214.
857 F.2d 1162 (C.A.7 1988), affirmed.
BLACKMUN, J., delivered the opinion for a unanimous Court. Page 493 U. S. 204 Justice BLACKMUN delivered the opinion of the Court.
Respondent Indianapolis Power & Light Company (IPL) requires
certain customers to make deposits with it to assure payment of
future bills for electric service. Petitioner Commissioner of
Internal Revenue contends that these deposits are advance payments
for electricity, and therefore constitute taxable income to IPL
upon receipt. IPL contends otherwise. I IPL is a regulated Indiana corporation that generates and sells
electricity in Indianapolis and its environs. It keeps its books on
the accrual and calendar year basis. During the years 1974 through
1977, approximately 5% of IPL's residential and commercial
customers were required to make deposits "to insure prompt
payment," as the customers' receipts stated, of future utility
bills. These customers were selected because their credit was
suspect. Prior to March 10, 1976, the deposit requirement was
imposed on a case-by-case basis. IPL relied on a credit test but
employed no fixed formula. The amount of the required deposit
ordinarily was twice the customer's estimated monthly bill. IPL
paid 3% interest on a deposit held for six months or more. A
customer could obtain a refund of the deposit prior to termination
of service by requesting a review and demonstrating acceptable
credit. The refund usually was made in cash or by check, but the
customer Page 493 U. S. 205 could choose to have the amount applied against future
bills.
In March, 1976, IPL amended its rules governing the deposit
program. See Title 170, Ind.Admin.Code 4-1-15 (1988).
Under the amended rules, the residential customers from whom
deposits were required were selected on the basis of a fixed
formula. The interest rate was raised to 6%, but was payable only
on deposits held for 12 months or more. A deposit was refunded when
the customer made timely payments for either nine consecutive
months or for 10 out of 12 consecutive months, so long as the two
delinquent months were not themselves consecutive. A customer could
obtain a refund prior to that time by satisfying the credit test.
As under the previous rules, the refund would be made in cash or by
check, or, at the customer's option, applied against future bills.
Any deposit unclaimed after seven years was to escheat to the
State. See Ind.Code § 32-9-1-6(a) (1988). [ Footnote 1 ]
IPL did not treat these deposits as income at the time of
receipt. Rather, as required by state administrative regulations,
the deposits were carried on its books as current liabilities.
Under its accounting system, IPL recognized income when it mailed a
monthly bill. If the deposit was used to offset a customer's bill,
the utility made the necessary accounting adjustments. Customer
deposits were not physically segregated in any way from the
company's general funds. They were commingled with other receipts
and at all times were subject to IPL's unfettered use and control.
It is undisputed that IPL's treatment of the deposits was
consistent with accepted accounting practice and applicable state
regulations.
Upon audit of respondent's returns for the calendar years 1974
through 1977, the Commissioner asserted deficiencies. Although
other items initially were in dispute, the parties were able to
reach agreement on every issue except that of Page 493 U. S. 206 the proper treatment of customer deposits for the years 1975,
1976, and 1977. The Commissioner took the position that the
deposits were advance payments for electricity, and therefore were
taxable to IPL in the year of receipt. He contended that the
increase or decrease in customer deposits outstanding at the end of
each year represented an increase or decrease in IPL's income for
the year. [ Footnote 2 ] IPL
disagreed and filed a petition in the United States Tax Court for
redetermination of the asserted deficiencies.
In a reviewed decision, with one judge not participating, a
unanimous Tax Court ruled in favor of IPL. 88 T.C. 964 (1987). The
court followed the approach it had adopted in City Gas Co. of
Florida v. Commissioner of Internal Revenue, 74 T.C. 386
(1980), rev'd, 689 F.2d 943 (CA 11 1982). It found it
necessary to "continue to examine all of the circumstances," 88
T.C., at 976, and relied on several factors in concluding that the
deposits in question were properly excluded from gross income. It
noted, among other things, that only 5% of IPL's customers were
required to make deposits; that the customer, rather than the
utility, controlled the ultimate disposition of a deposit; and that
IPL consistently treated the deposits as belonging to the
customers, both by listing them as current liabilities for
accounting purposes and by paying interest. Id. at
976-978.
The United States Court of Appeals for the Seventh Circuit
affirmed the Tax Court's decision. 857 F.2d 1162 (1988). The court
stated that
"the proper approach to determining the appropriate tax
treatment of a customer deposit is to look at the primary purpose
of the deposit based on all the Page 493 U. S. 207 facts and circumstances. . . ." Id. at 1167. The court appeared to place primary
reliance, however, on IPL's obligation to pay interest on the
deposits. It asserted that
"as the interest rate paid on a deposit to secure income begins
to approximate the return that the recipient would be expected to
make from 'the use' of the deposit amount, the deposit begins to
serve purposes that comport more squarely with a security
deposit." Id. at 1169. Noting that IPL had paid interest on the
customer deposits throughout the period in question, the court
upheld, as not clearly erroneous, the Tax Court's determination
that the principal purpose of these deposits was to serve as
security, rather than as prepayment of income. Id. at
1170.
Because the Seventh Circuit was in specific disagreement with
the Eleventh Circuit's ruling in City Gas Co. of Florida,
supra, we granted certiorari to resolve the conflict. 490 U.S.
1033 (1989). II We begin with the common ground. IPL acknowledges that these
customer deposits are taxable as income upon receipt if they
constitute advance payments for electricity to be supplied.
[ Footnote 3 ] The Commissioner,
on his part, concedes that customer deposits.that secure the
performance of non-income-producing covenants -- such as a utility
customer's obligation to ensure that meters will not be damaged --
are not taxable income. And it is settled that receipt of a loan is
not income to the borrower. See Commissioner v. Tufts, 461 U. S. 300 , 461 U. S. 307 (1983) ("Because of [the repayment] obligation, Page 493 U. S. 208 the loan proceeds do not qualify as income to the taxpayer"); James v. United States, 366 U. S. 213 , 366 U. S. 219 (1961) (accepted definition of gross income "excludes loans"); Commissioner v. Wilcox, 327 U. S. 404 , 327 U. S. 408 (1946). IPL, stressing its obligation to refund the deposits with
interest, asserts that the payments are similar to loans. The
Commissioner, however, contends that a deposit which serves to
secure the payment of future income is properly analogized to an
advance payment for goods or services. See Rev.Rul.
72-519, 1972-2 Cum.Bull. 32, 33 ("[W]hen the purpose of the deposit
is to guarantee the customer's payment of amounts owed to the
creditor, such a deposit is treated as an advance payment, but when
the purpose of the deposit is to secure a property interest of the
taxpayer the deposit is regarded as a true security deposit").
In economic terms, to be sure, the distinction between a loan
and an advance payment is one of degree rather than of kind. A
commercial loan, like an advance payment, confers an economic
benefit on the recipient: a business presumably does not borrow
money unless it believes that the income it can earn from its use
of the borrowed funds will be greater than its interest obligation. See Illinois Power Co. v. Commissioner of Internal
Revenue, 792 F.2d 683, 690 (CA7 1986). Even though receipt of
the money is subject to a duty to repay, the borrower must regard
itself as better off after the loan than it was before. The
economic benefit of a loan, however, consists entirely of the
opportunity to earn income on the use of the money prior to the
time the loan must be repaid. And in that context, our system is
content to tax these earnings as they are realized. The recipient
of an advance payment, in contrast, gains both immediate use of the
money (with the chance to realize earnings thereon) and the opportunity to make a profit by providing goods or services at
a cost lower than the amount of the payment.
The question, therefore, cannot be resolved simply by noting
that respondent derives some economic benefit from receipt Page 493 U. S. 209 of these deposits. [ Footnote
4 ] Rather, the issue turns upon the nature of the rights and
obligations that IPL assumed when the deposits were made. In
determining what sort of economic benefits qualify as income, this
Court has invoked various formulations. It has referred, for
example, to "undeniable accessions to wealth, clearly realized, and
over which the taxpayers have complete dominion." Commissioner
v. Glenshaw Glass Co., 348 U. S. 426 , 348 U. S. 431 (1955). It also has stated:
"When a taxpayer acquires earnings, lawfully or unlawfully,
without the consensual recognition, express or implied, of an
obligation to repay and without restriction as to their
disposition, 'he has received income. . . .'" James v. United States, 366 U.S. at 366 U. S. 219 ,
quoting North American Oil Consolidated v. Burnet, 286 U. S. 417 , 286 U. S. 424 (1932). IPL hardly enjoyed "complete dominion" over the customer
deposits entrusted to it. Rather, these deposits were acquired
subject to an express "obligation to repay," either at the time
service was terminated or at the time a customer established good
credit. So long as the customer fulfills his legal obligation to
make timely payments, his deposit ultimately is to be refunded, and
both the timing and method of that refund are largely within the
control of the customer.
The Commissioner stresses the fact that these deposits were not
placed in escrow or segregated from IPL's other funds, and that IPL
therefore enjoyed unrestricted use of the money. That circumstance,
however, cannot be dispositive. After all, the same might be said
of a commercial loan; yet the Commissioner does not suggest that a
loan is taxable upon receipt simply because the borrower is free to
use the Page 493 U. S. 210 funds in whatever fashion he chooses until the time of
repayment. In determining whether a taxpayer enjoys "complete
dominion" over a given sum, the crucial point is not whether his
use of the funds is unconstrained during some interim period. The
key is whether the taxpayer has some guarantee that he will be
allowed to keep the money. IPL's receipt of these deposits was
accompanied by no such guarantee.
Nor is it especially significant that these deposits could be
expected to generate income greater than the modest interest IPL
was required to pay. Again, the same could be said of a commercial
loan, since, as has been noted, a business is unlikely to borrow
unless it believes that it can realize benefits that exceed the
cost of servicing the debt. A bank could hardly operate profitably
if its earnings on deposits did not surpass its interest
obligations; but the deposits themselves are not treated as income.
[ Footnote 5 ] Any income that
the utility may earn through use of the deposit money of course is
taxable, but the prospect that income will be generated provides no
ground for taxing the principal.
The Commissioner's advance payment analogy seems to us to rest
upon a misconception of the value of an advance payment to its
recipient. An advance payment, like the deposits at issue here,
concededly protects the seller against the risk that it would be
unable to collect money owed it after it has furnished goods or
services. But an advance payment does much more: it protects
against the risk that the purchaser will back out of the deal
before the seller performs. From the moment an advance payment is
made, the seller is assured that, so long as it fulfills its
contractual obligation, the money is its to keep. Here, in
contrast, a customer submitting a deposit made no commitment to
purchase a specified quantity of electricity, or indeed to purchase
any electricity Page 493 U. S. 211 at all. [ Footnote 6 ] IPL's
right to keep the money depends upon the customer's purchase of
electricity, and upon his later decision to have the deposit
applied to future bills, not merely upon the utility's adherence to
its contractual duties. Under these circumstances, IPL's dominion
over the fund is far less complete than is ordinarily the case in
an advance-payment situation.
The Commissioner emphasizes that these deposits frequently will
be used to pay for electricity, either because the customer
defaults on his obligation or because the customer, having
established credit, chooses to apply the deposit to future bills
rather than to accept a refund. When this occurs, the Commissioner
argues, the transaction, from a cash-flow standpoint, is equivalent
to an advance payment. In his view this economic equivalence
mandates identical tax treatment. [ Footnote 7 ]
Whether these payments constitute income when received, however,
depends upon the parties' rights and obligations at the time
the payments are made. The problem with petitioner's argument
perhaps can best be understood if we imagine a loan between parties
involved in an ongoing commercial Page 493 U. S. 212 relationship. At the time the loan falls due, the lender may
decide to apply the money owed him to the purchase of goods or
services, rather than to accept repayment in cash. But this
decision does not mean that the loan, when made, was an advance
payment after all. The lender in effect has taken repayment of his
money (as was his contractual right) and has chosen to use the
proceeds for the purchase of goods or services from the borrower.
Although, for the sake of convenience, the parties may combine the
two steps, that decision does not blind us to the fact that in
substance two transactions are involved. [ Footnote 8 ]
It is this element of choice that distinguishes an advance
payment from a loan. Whether these customer deposits are the
economic equivalents of advance payments, and therefore taxable
upon receipt, must be determined by examining the relationship
between the parties at the time of the deposit. The individual who
makes an advance payment retains no right to insist upon the return
of the funds; so long as the recipient fulfills the terms of the
bargain, the money is its to keep. The customer who submits a
deposit to the utility, like the lender in the previous
hypothetical, retains the right to insist upon repayment in cash;
he may choose to apply the money to the purchase of electricity,
but he assumes no obligation to do so, and the utility therefore
acquires no unfettered "dominion" over the money at the time of
receipt.
When the Commissioner examines privately structured
transactions, the true understanding of the parties, of course, may
not be apparent. It may be that a transfer of funds, though
nominally a loan, may conceal an unstated agreement that the money
is to be applied to the purchase of goods or Page 493 U. S. 213 services. We need not, and do not, attempt to devise a test for
addressing those situations where the nature of the parties'
bargain is legitimately in dispute. This particular respondent,
however, conducts its business in a heavily regulated environment;
its rights and obligations vis-a-vis its customers are largely
determined by law and regulation, rather than by private
negotiation. That the utility's customers, when they qualify for
refunds of deposits, frequently choose to apply those refunds to
future bills rather than taking repayment in cash does not mean
that any customer has made an unspoken commitment to do so.
Our decision is also consistent with the Tax Court's
long-standing treatment of lease deposits -- perhaps the closest
analogy to the present situation. The Tax Court traditionally has
distinguished between a sum designated as a prepayment of rent --
which is taxable upon receipt -- and a sum deposited to secure the
tenant's performance of a lease agreement. See, e.g., J. &
E. Enterprises, Inc. v. Commissioner, 26 TCM 944 (1967).
[ Footnote 9 ] In fact, the
customer deposits Page 493 U. S. 214 at issue here are less plausibly regarded as income than lease
deposits would be. The typical lease deposit secures the tenant's
fulfillment of a contractual obligation to pay a specified rent
throughout the term of the lease. The utility customer, however,
makes no commitment to purchase any services at all at the time he
tenders the deposit.
We recognize that IPL derives an economic benefit from these
deposits. But a taxpayer does not realize taxable income from every
event that improves his economic condition. A customer who makes
this deposit reflects no commitment to purchase services, and IPL's
right to retain the money is contingent upon events outside its
control. We hold that such dominion as IPL has over these customer
deposits is insufficient for the deposits to qualify as taxable
income at the time they are made.
The judgment of the Court of Appeals is affirmed. It is so ordered. [ Footnote 1 ]
During the years 1974 through 1977, the total amount that
escheated to the State was less than $9,325. Stipulation of Facts �
25.
[ Footnote 2 ]
The parties' stipulation sets forth the balance in IPL's
customer-deposit account on December 31 of each of the years 1954,
1974, 1975, 1976, and 1977. In his notice of deficiency, the
Commissioner concluded that IPL was required to include in income
for 1975 the increase in the account between December 31, 1954, and
December 31, 1975. For 1976 and 1977, IPL was allowed to reflect in
income the respective decreases in the account during those
years.
[ Footnote 3 ]
This Court has held that an accrual-basis taxpayer is required
to treat advance payments as income in the year of receipt. See
Schlude v. Commissioner, 372 U. S. 128 (1963); American Automobile Assn. v. United States, 367 U. S. 687 (1961); Automobile Club of Michigan v. Commissioner, 353 U. S. 180 (1957). These cases concerned payments -- nonrefundable fees for
services -- that indisputably constituted income, the issue was
when that income was taxable. Here, in contrast, the issue is
whether these deposits, as such, are income at all.
[ Footnote 4 ] See Illinois Power Co., 792 F.2d at 690. See
also Burke & Friel, Recent Developments in the Income
Taxation of Individuals, Tax-Free Security: Reflections on Indianapolis Power & Light, 12 Rev. of Taxation of
Individuals 157 174 (1988) (arguing that economic-benefit approach
is superior in theory, but acknowledging that "an economic-benefit
test has not been adopted, and it is unlikely that such an approach
will be pursued by the Service or the courts").
[ Footnote 5 ] Cf. Rev.Rul. 71-189, 1971-1 Cum.Bull. 32 (inactive
deposits are not income until bank asserts dominion over the
accounts). See also Fidelity-Philadelphia Trust Co. v.
Commissioner, 23 T.C. 527 (1954).
[ Footnote 6 ]
A customer, for example, might terminate service the day after
making the deposit. Also, IPL's dominion over a deposit remains
incomplete even after the customer begins buying electricity. As
has been noted, the deposit typically is set at twice the
customer's estimated monthly bill. So long as the customer pays his
bills in a timely fashion, the money he owes the utility (for
electricity used but not yet paid for) almost always will be less
than the amount of the deposit. If this were not the case, the
deposit would provide inadequate protection. Thus, throughout the
period the deposit is held, at least a portion is likely to be
money that IPL has no real assurance of ever retaining.
[ Footnote 7 ]
The Commissioner is unwilling, however, to pursue this line of
reasoning to the limit of its logic. He concedes that these
deposits would not be taxable if they were placed in escrow, Tr. of
Oral Arg. 4; but, from a cash-flow standpoint, it does not make
much difference whether the money is placed in escrow or commingled
with the utility's other funds. In either case, the utility
receives the money and allocates it to subsequent purchases of
electricity if the customer defaults or chooses to apply his refund
to a future bill.
[ Footnote 8 ]
The Commissioner contends that a customer's decision to take his
refund while making a separate payment for services, rather than
applying the deposit to his bill, would amount to nothing more than
an economically meaningless "exchange of checks." But in our view,
the "exchange of checks," while less convenient, more accurately
reflects the economic substance of the transactions.
[ Footnote 9 ]
In J. & E. Enterprises, the Tax Court stated:
"If a sum is received by a lessor at the beginning of a lease,
is subject to his unfettered control, and is to be applied as rent
for a subsequent period during the term of the lease, such sum is
income in the year of receipt even though in certain circumstances
a refund thereof may be required. . . . If, on the other hand, a
sum is deposited to secure the lessee's performance under a lease,
and is to be returned at the expiration thereof, it is not taxable
income even though the fund is deposited with the lessor instead of
in escrow and the lessor has temporary use of the money. . . . In
this situation, the acknowledged liability of the lessor to account
for the deposited sum on the lessee's performance of the lease
covenants prevents the sum from being taxable in the year of
receipt."
26 TCM at 945-946.
In Rev.Rul. 72-519, 1972-2 Cum.Bull. 32, the Commissioner relied
in part on J. & E. Enterprises as authority for the
proposition that deposits intended to secure income-producing
covenants are advance payments taxable as income upon receipt,
while deposits intended to secure non-income-producing covenants
are not. Id. at 33. In our view, neither J. & E
Enterprises nor the other cases cited in the Revenue Ruling
support that distinction. See Hirsch Improvement Co. v.
Commissioner of Internal Revenue, 143 F.2d 912 (CA2), cert. denied, 323 U.S. 750 (1944); Mantell v.
Commissioner, 17 T.C. 1143 ( 1952); Gilken Corp. v.
Commissioner, 10 T.C. 445 (1948), aff'd, 176 F.2d 141
(CA 6 1949). These cases all distinguish between advance payments
and security deposits, not between deposits that do and do not
secure income-producing covenants. | The Supreme Court ruled that customer deposits made to a utility company to assure payment of future bills are not considered advance payments for electricity and, therefore, are not taxable income for the company upon receipt. While the company has temporary use of the money and derives some economic benefit, it does not have complete dominion over the deposits, as customers can obtain a refund or choose to apply the deposit to future bills. The Court's decision is consistent with the longstanding treatment of security deposits in other contexts, such as lease agreements. |
Taxes | Arkansas Best Corp. v. Commissioner | https://supreme.justia.com/cases/federal/us/485/212/ | U.S. Supreme Court Arkansas Best Corp. v. Commissioner, 485
U.S. 212 (1988) Arkansas Best Corp. v. Commissioner
of Internal Revenue No. 86-751 Argued December 9,
1987 Decided March 7, 1988 485
U.S. 212 CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE EIGHTH CIRCUIT Syllabus Under § 1221 of the Internal Revenue Code, the term "capital
asset" means "property held by the taxpayer (whether or not
connected with his trade or business), but does not include" five
specified classes of property. Between 1968 and 1974, petitioner, a
diversified holding company, acquired approximately 65% of a bank's
stock. The bank was apparently prosperous until 1972, when federal
examiners classified it as a problem bank. In 1975, petitioner sold
the bulk of the stock at a loss, which it claimed as an ordinary
loss deduction on its federal income tax return for that year. The
Commissioner of Internal Revenue disallowed the deduction, finding
that the loss was a capital loss rather than an ordinary loss. The
Tax Court, relying on cases interpreting Corn Products Refining
Co. v. Commissioner, 350 U. S. 46 , held
that, since the stock acquired through 1972 was purchased with a
substantial investment purpose, it was a capital asset under § 1221
and therefore gave rise to a capital loss when it was sold;
however, the loss realized on the stock acquired after 1972 was
subject to ordinary loss treatment, since that stock had been
bought and held exclusively for the business purpose of protecting
petitioner's reputation by fending off the bank's failure. The
Court of Appeals reversed the latter determination, ruling that all
of the stock sold in 1975 was subject to capital loss
treatment. Held: A taxpayer's motivation in purchasing an asset is
irrelevant to the question whether it falls within the broad
definition of "capital asset" in § 1221. Petitioner's reading of Corn Products as authorizing ordinary asset treatment for
any asset acquired and held for business, rather than investment,
purposes is too expansive. That reading finds no support in §
1221's language, which does not mention a business motive test, and
is in direct conflict with § 1221's broad definition of capital
asset. Similarly, the contention that § 1221's five listed
exceptions are merely illustrative, rather than exhaustive, is
refuted by the statute's "does not include" phrase, and by the
legislative history and the applicable Treasury regulation.
Moreover, petitioner's reading would make surplusage of three of
the statutory exceptions, whose excluded classes of property would
undoubtedly satisfy a business motive test. Corn Products must instead be interpreted as standing for the narrow proposition
that "hedging" Page 485 U. S. 213 transactions that are an integral part of a business' inventory
purchase system fall within § 1221's first exception for "property
. . . which would properly be included in the [taxpayer's]
inventory." Since petitioner, which is not a dealer in securities,
has never suggested that its bank stock falls within the inventory
exclusion, Corn Products has no application in the present
context. Because petitioner's bank stock falls within §1221's broad
definition of "capital asset" and is outside the classes of
excluded property, the loss arising from its sale is a capital
loss. Pp. 485 U. S.
216 -223.
800 F.2d 215, affirmed.
MARSHALL, J., delivered the opinion of the Court, in which all
other Members joined, except KENNEDY, J., who took no part in the
consideration or decision of the case.
JUSTICE MARSHALL delivered the opinion of the Court.
The issue presented in this case is whether capital stock held
by petitioner Arkansas Best Corporation (Arkansas Best) is a
"capital asset" as defined in § 1221 of the Internal Revenue Code
regardless of whether the stock was purchased and held for a
business purpose or for an investment purpose. I Arkansas Best is a diversified holding company. In 1968, it
acquired approximately 65% of the stock of the National Page 485 U. S. 214 Bank of Commerce (Bank) in Dallas, Texas. Between 1969 and 1974,
Arkansas Best more than tripled the number of shares it owned in
the Bank, although its percentage interest in the Bank remained
relatively stable. These acquisitions were prompted principally by
the Bank's need for added capital. Until 1972, the Bank appeared to
be prosperous and growing, and the added capital was necessary to
accommodate this growth. As the Dallas real estate market declined,
however, so too did the financial health of the Bank, which had a
heavy concentration of loans in the local real estate industry. In
1972, federal examiners classified the Bank as a problem bank. The
infusion of capital after 1972 was prompted by the loan portfolio
problems of the bank.
Petitioner sold the bulk of its Bank stock on June 30, 1975,
leaving it with only a 14.7% stake in the Bank. On its federal
income tax return for 1975, petitioner claimed a deduction for an
ordinary loss of $9,995,688 resulting from the sale of the stock.
The Commissioner of Internal Revenue disallowed the deduction,
finding that the loss from the sale of stock was a capital loss,
rather than an ordinary loss, and that it therefore was subject to
the capital loss limitations in the Internal Revenue Code.
[ Footnote 1 ]
Arkansas Best challenged the Commissioner's determination in the
United States Tax Court. The Tax Court, relying on cases
interpreting Corn Products Refining Co. v. Commissioner, 350 U. S. 46 (1955), held that stock purchased with a substantial investment
purpose is a capital asset which, when sold, gives rise to a
capital gain or loss, whereas stock purchased and held for a
business purpose, without any substantial investment motive, is an
ordinary asset whose sale gives rise to ordinary gains or losses. See 83 T.C. 640, Page 485 U. S. 215 653-654 (1984). The court characterized Arkansas Best's
acquisitions through 1972 as occurring during the Bank's
" growth' phase," and found that these acquisitions "were
motivated primarily by investment purpose, and only incidentally by
some business purpose." Id. at 654. The stock acquired
during this period therefore constituted a capital asset, which
gave rise to a capital loss when sold in 1975. The court
determined, however, that the acquisitions after 1972 occurred
during the Bank's "`problem' phase," ibid., and, except
for certain minor exceptions, "were made exclusively for business
purposes and subsequently held for the same reasons." Id. at 656. These acquisitions, the court found, were designed to
preserve petitioner's business reputation, because without the
added capital the Bank probably would have failed. Id. at
656-657. The loss realized on the sale of this stock was thus held
to be an ordinary loss. The Court of Appeals for the Eighth Circuit reversed the Tax
Court's determination that the loss realized on stock purchased
after 1972 was subject to ordinary loss treatment, holding that all
of the Bank stock sold in 1975 was subject to capital loss
treatment. 800 F.2d 215 (1986). The court reasoned that the Bank
stock clearly fell within the general definition of "capital asset"
in Internal Revenue Code § 1221, and that the stock did not fall
within any of the specific statutory exceptions to this definition.
The court concluded that Arkansas Best's purpose in acquiring and
holding the stock was irrelevant to the determination whether the
stock was a capital asset. We granted certiorari, 480 U.S. 930, and
now affirm. II Section 1221 of the Internal Revenue Code defines "capital
asset" broadly as "property held by the taxpayer (whether or not
connected with his trade or business)," and then excludes five
specific classes of property from capital asset Page 485 U. S. 216 status. In the statute's present form, [ Footnote 2 ] the classes of property exempted from the
broad definition are (1) "property of a kind which would properly
be included in the inventory of the taxpayer"; (2) real property or
other depreciable property used in the taxpayer's trade or
business; (3) "a copyright, a literary, musical, or artistic
composition," or similar property; (4) "accounts or notes
receivable acquired in the ordinary course of trade or business for
services rendered" or from the sale of inventory; and (5)
publications of the Federal Government. Arkansas Best acknowledges
that the Bank stock falls within the literal definition of "capital
asset" in § 1221, and is outside of the statutory exclusions. It
asserts, however, that this determination does not end the inquiry.
Petitioner argues that, in Corn Products Refining Co. v.
Commissioner, supra, this Court rejected a literal reading of
§ 1221, and concluded that assets acquired and sold for ordinary
business purposes, rather than for investment purposes, should be
given ordinary asset treatment. Petitioner's reading of Corn
Products finds much support in the academic literature
[ Footnote 3 ] and in the courts.
[ Footnote 4 ] Unfortunately for
petitioner, this broad reading finds no support in the language of
§ 1221. Page 485 U. S. 217 In essence, petitioner argues that "property held by the
taxpayer (whether or not connected with his trade or business)"
does not include property that is acquired and held for a business
purpose. In petitioner's view, an asset's status as "property" thus
turns on the motivation behind its acquisition. This motive test,
however, is not only nowhere mentioned in § 1221, but it is also in
direct conflict with the parenthetical phrase "whether or not
connected with his trade or business." The broad definition of the
term "capital asset" explicitly makes irrelevant any consideration
of the property's connection with the taxpayer's business, whereas
petitioner's rule would make this factor dispositive. [ Footnote 5 ]
In a related argument, petitioner contends that the five
exceptions listed in § 1221 for certain kinds of property are
illustrative, rather than exhaustive, and that courts are therefore
free to fashion additional exceptions in order to further the
general purposes of the capital asset provisions. The language of
the statute refutes petitioner's construction. Section 1221
provides that "capital asset" means "property held by the
taxpayer[,] . . . but does not include" the five classes Page 485 U. S. 218 of property listed as exceptions. We believe this locution
signifies that the listed exceptions are exclusive. The body of §
1221 establishes a general definition of the term "capital asset,"
and the phrase "does not include" takes out of that broad
definition only the classes of property that are specifically
mentioned. The legislative history of the capital asset definition
supports this interpretation, see H.R.Rep. No. 704, 73d
Cong., 2d Sess., 31 (1934) ("[T]he definition includes all
property, except as specifically excluded"); H.R.Rep. No. 1337, 83d
Cong., 2d Sess., A273 (1954) ("[A] capital asset is property held
by the taxpayer with certain exceptions"), as does the applicable
Treasury regulation, see 26 CFR § 1.1221-1(a) (1987) ("The
term capital assets' includes all classes of property not
specifically excluded by section 1221"). Petitioner's reading of the statute is also in tension with the
exceptions listed in § 1221. These exclusions would be largely
superfluous if assets acquired primarily or exclusively for
business purposes were not capital assets. Inventory, real or
depreciable property used in the taxpayer's trade or business, and
accounts or notes receivable acquired in the ordinary course of
business would undoubtedly satisfy such a business motive test. Yet
these exceptions were created by Congress in separate enactments
spanning 30 years. [ Footnote 6 ]
Without any express direction from Congress, we are unwilling to
read § 1221 in a manner that makes surplusage of these statutory
exclusions. Page 485 U. S. 219 In the end, petitioner places all reliance on its reading of Corn Products Refining Co. v. Commissioner, 350 U. S.
46 (1965) -- a reading we believe is too expansive. In Corn Products, the Court considered whether income arising
from a taxpayer's dealings in corn futures was entitled to capital
gains treatment. The taxpayer was a company that converted corn
into starches, sugars, and other products. After droughts in the
1930's caused sharp increases in corn prices, the company began a
program of buying corn futures to assure itself an adequate supply
of corn and protect against price increases. See id. at 350 U. S. 48 .
The company
"would take delivery on such contracts as it found necessary to
its manufacturing operations and sell the remainder in early summer
if no shortage was imminent. If shortages appeared, however, it
sold futures only as it bought spot corn for grinding." Id. at 350 U. S. 48 -49.
The Court characterized the company's dealing in corn futures as
"hedging." Id. at 350 U. S. 51 . As explained by the Court of Appeals in Corn Products, "[h]edging is a method of dealing in commodity futures whereby a
person or business protects itself against price fluctuations at
the time of delivery of the product which it sells or buys."
215 F.2d 513, 515 (CA2 1954). In evaluating the company's claim
that the sales of corn futures resulted in capital gains and
losses, this Court stated:
"Nor can we find support for petitioner's contention that
hedging is not within the exclusions of [§ 1221]. Admittedly,
petitioner's corn futures do not come within the literal language
of the exclusions set out in that section. They were not stock in
trade, actual inventory, property held for sale to customers or
depreciable property used in a trade or business. But the capital
asset provision of [§ 1221] must not be so broadly applied as to
defeat, rather than further, the purpose of Congress. Congress
intended that profits and losses arising from the everyday
operation of a business be considered as ordinary income or loss,
rather than capital gain or loss. . . . " Page 485 U. S. 220 Since this section is an exception from the normal tax
requirements of the Internal Revenue Code, the definition of a
capital asset must be narrowly applied, and its exclusions
interpreted broadly.
350 U.S. at 350 U. S. 51 -52
(citations omitted). The Court went on to note that hedging
transactions consistently had been considered to give rise to
ordinary gains and losses, and then concluded that the corn futures
were subject to ordinary asset treatment. Id. at 350 U. S.
52 -53.
The Court in Corn Products proffered the oft-quoted
rule of construction that the definition of "capital asset" must be
narrowly applied, and its exclusions interpreted broadly, but it
did not state explicitly whether the holding was based on a narrow
reading of the phrase "property held by the taxpayer" or on a broad
reading of the inventory exclusion of § 1221. In light of the stark
language of § 1221, however, we believe that Corn Products is properly interpreted as involving an application of § 1221's
inventory exception. Such a reading is consistent both with the
Court's reasoning in that case and with § 1221. The Court stated in Corn Products that the company's futures transactions
were
"an integral part of its business designed to protect its
manufacturing operations against a price increase in its principal
raw material and to assure a ready supply for future manufacturing
requirements."
350 U.S. at 350 U. S. 50 .
The company bought, sold, and took delivery under the futures
contracts as required by the company's manufacturing needs. As
Professor Bittker notes, under these circumstances, the futures can
"easily be viewed as surrogates for the raw material itself." 2 B.
Bittker, Federal Taxation of Income, Estates and Gifts � 51.10.3,
p. 51-62 (1981). The Court of Appeals for the Second Circuit, in Corn Products, clearly took this approach. That court
stated that, when commodity futures are "utilized solely for the
purpose of stabilizing inventory cost[,] . . . [they] cannot
reasonably be separated from the inventory items," and concluded
that "property used in hedging transactions Page 485 U. S. 221 properly comes within the exclusions of [§ 1221]." 215 F.2d at
516. This Court indicated its acceptance of the Second Circuit's
reasoning when it began the central paragraph of its opinion: "Nor
can we find support for petitioner's contention that hedging is not
within the exclusions of [§ 1221]." 350 U.S. at 350 U. S. 51 . In
the following paragraph, the Court argued that the Treasury had
consistently viewed such hedging transactions as a form of
insurance to stabilize the cost of inventory, and cited a Treasury
ruling which concluded that the value of a manufacturer's raw
material inventory should be adjusted to take into account hedging
transactions in futures contracts. See id. at 350 U. S. 52 -53
(citing G.C.M. 17322, XV-2 Cum. Bull. 151 (1936)). This discussion,
read in light of the Second Circuit's holding and the plain
language of § 1221, convinces us that, although the corn futures
were not "actual inventory," their use as an integral part of the
taxpayer's inventory purchase system led the Court to treat them as
substitutes for the corn inventory such that they came within a
broad reading of "property of a kind which would properly be
included in the inventory of the taxpayer" in § 1221.
Petitioner argues that, by focusing attention on whether the
asset was acquired and sold as an integral part of the taxpayer's
everyday business operations, the Court in Corn Products intended to create a general exemption from capital asset status
for assets acquired for business purposes. We believe petitioner
misunderstands the relevance of the Court's inquiry. A business
connection, although irrelevant to the initial determination
whether an item is a capital asset, is relevant in determining the
applicability of certain of the statutory exceptions, including the
inventory exception. The close connection between the futures
transactions and the taxpayer's business in Corn Products was crucial to whether the corn futures could be considered
surrogates for the stored inventory of raw corn. For if the futures
dealings were not part of the company's inventory purchase
system, Page 485 U. S. 222 and instead amounted simply to speculation in corn futures, they
could not be considered substitutes for the company's corn
inventory, and would fall outside even a broad reading of the
inventory exclusion. We conclude that Corn Products is
properly interpreted as standing for the narrow proposition that
hedging transactions that are an integral part of a business'
inventory purchase system fall within the inventory exclusion of §
1221. [ Footnote 7 ] Arkansas
Best, which is not a dealer in securities, has never suggested that
the Bank stock falls within the inventory exclusion. Corn
Products thus has no application to this case.
It is also important to note that the business motive test
advocated by petitioner is subject to the same kind of abuse that
the Court condemned in Corn Products. The Court explained
in Corn Products that, unless hedging transactions were
subject to ordinary gain and loss treatment, taxpayers engaged in
such transactions could "transmute ordinary income into capital
gain at will." 350 U.S. at 350 U. S. 53 -54. The hedger could garner capital asset
treatment by selling the future and purchasing the commodity on the
spot market, or ordinary asset treatment by taking delivery under
the future contract. In a similar vein, if capital stock purchased
and held for a business purpose is an ordinary asset, whereas the
same stock purchased and held with an investment motive is a
capital asset, a taxpayer such as Arkansas Best could have
significant influence over whether the asset would receive capital
or ordinary treatment. Because stock is most naturally Page 485 U. S. 223 v..iewed as a capital asset, the Internal Revenue Service would
be hard-pressed to challenge a taxpayer's claim that stock was
acquired as an investment, and that a gain arising from the sale of
such stock was therefore a capital gain. Indeed, we are unaware of
a single decision that has applied the business motive test so as
to require a taxpayer to report a gain from the sale of stock as an
ordinary gain. If the same stock is sold at a loss, however, the
taxpayer may be able to garner ordinary loss treatment by
emphasizing the business purpose behind the stock's acquisition.
The potential for such abuse was evidenced in this case by the fact
that, as late as 1974, when Arkansas Best still hoped to sell the
Bank stock at a profit, Arkansas Best apparently expected to report
the gain as a capital gain. See 83 T.C. at 647-648. III We conclude that a taxpayer's motivation in purchasing an asset
is irrelevant to the question whether the asset is "property held
by a taxpayer (whether or not connected with his business)" and is
thus within § 1221's general definition of "capital asset." Because
the capital stock held by petitioner falls within the broad
definition of the term "capital asset" in § 1221 and is outside the
classes of property excluded from capital asset status, the loss
arising from the sale of the stock is a capital loss. Corn
Products Refining Co. v. Commissioner, supra, which we
interpret as involving a broad reading of the inventory exclusion
of § 1221, has no application in the present context. Accordingly,
the judgment of the Court of Appeals is affirmed. It is so ordered. JUSTICE KENNEDY took no part in the consideration or decision of
this case.
[ Footnote 1 ]
Title 26 U.S.C. § 1211(a) states that
"[i]n the case of a corporation, losses from sales or exchanges
of capital assets shall be allowed only to the extent of gains from
such sales or exchanges."
Section 1212(a) establishes rules governing carrybacks and
carryovers of capital losses, permitting such losses to offset
capital gains in certain earlier or later years.
[ Footnote 2 ]
In 1975, when petitioner sold its Bank stock, § 1221 contained a
different exception (5), which excluded certain federal and state
debt obligations. See 26 U.S.C. § 1221(5) (1970 ed.). That
exception was repealed by the Economic Recovery Tax Act of 1981,
Pub.L. 97-34, § 505(a), 95 Stat. 331. The present exception (5) was
added by the Tax Reform Act of 1976, Pub.L. 94-455, § 2132(a), 90
Stat.1925. These changes have no bearing on this case.
[ Footnote 3 ] See, e.g., 2 B. Bittker, Federal Taxation of Income,
Estates and Gifts § 151.10.3, p. 51-62 (1981); Chirelstein, Capital
Gain and the Sale of a Business Opportunity: The Income Tax
Treatment of Contract Termination Payments, 49 Minn.L.Rev. 1, 41
(1964); Troxell & Noall, Judicial Erosion of the Concept of
Securities as Capital Assets, 19 Tax L.Rev. 185, 187 (1964); Note,
The Corn Products Doctrine and Its Application to
Partnership Interests, 79 Colum.L.Rev. 341, and n. 3 (1979).
[ Footnote 4 ] See, e.g., Campbell Taggart, Inc. v. United States, 744
F.2d 442, 456-458 (CA5 1984); Steadman v. Commissioner, 424 F.2d 1, 5 (CA6), cert. denied, 400 U.S. 869 (1970); Booth Newspapers, Inc. v. United States, 157 Ct.Cl. 886,
893-896, 303 F.2d 916, 920-921 (1962); W. W. Windle Co. v.
Commissioner, 65 T.C. 694, 707-713 (1976).
[ Footnote 5 ]
Petitioner mistakenly relies on cases in which this Court, in
narrowly applying the general definition of "capital asset,"
has
"construed 'capital asset' to exclude property representing
income items or accretions to the value of a capital asset
themselves properly attributable to income,"
even though these items are property in the broad sense of the
word. United States v. Midland-Ross Corp., 381 U. S.
54 , 381 U. S. 57 (1965). See, e.g., Commissioner v. Gillette Motor Co., 364 U. S. 130 (1960) ("capital asset" does not include compensation awarded
taxpayer that represented fair rental value of its facilities); Commissioner v. P.G. Lake, Inc., 356 U.
S. 260 (1958) ("capital asset" does not include proceeds
from sale of oil payment rights); Hort v. Commissioner, 313 U. S. 28 (1941)
("capital asset" does not include payment to lessor for
cancellation of unexpired portion of a lease). This line of cases,
based on the premise that § 1221 "property" does not include claims
or rights to ordinary income, has no application in the present
context. Petitioner sold capital stock, not a claim to ordinary
income.
[ Footnote 6 ]
The inventory exception was part of the original enactment of
the capital asset provision in 1924. See Revenue Act of
1924, ch. 234, § 208(a)(8), 43 Stat. 263. Depreciable property used
in a trade or business was excluded in 1938, see Revenue
Act of 1938, ch. 289, § 117(a)(1), 52 Stat. 500, and real property
used in a trade or business was excluded in 1942, see Revenue Act of 1942, ch. 619, § 151(a), 56 Stat. 846. The exception
for accounts and notes receivable acquired in the ordinary course
of trade or business was added in 1954. Internal Revenue Code of
1954, § 1221(4), 68A Stat. 322.
[ Footnote 7 ]
Although congressional inaction is generally a poor measure of
congressional intent, we are given some pause by the fact that over
25 years have passed since Corn Products Refining Co. v.
Commissioner was initially interpreted as excluding assets
acquired for business purposes from the definition of "capital
asset," see Booth Newspapers, Inc. v. United States, 157
Ct.Cl. 886, 303 F.2d 916 (1962), without any sign of disfavor from
Congress. We cannot ignore the unambiguous language of § 1221,
however, no matter how reticent Congress has been. If a broad
exclusion from capital asset status is to be created for assets
acquired for business purposes, it must come from congressional
action, not silence. | Here is a summary of the Supreme Court case, Arkansas Best Corp. v. Commissioner (1988):
Issue: Whether a taxpayer's motivation for purchasing an asset is relevant in determining if it qualifies as a "capital asset" under § 1221 of the Internal Revenue Code.
Holding: The Supreme Court held that a taxpayer's motivation for purchasing an asset is irrelevant in determining its status as a "capital asset." The Court interpreted the Corn Products case narrowly, stating that it applies only to "hedging" transactions integral to a business' inventory purchase system, which fall under the first exception of § 1221. The Court rejected the argument that the five listed exceptions in § 1221 are illustrative rather than exhaustive and emphasized the broad definition of "capital asset."
Facts: Arkansas Best Corp., a diversified holding company, acquired ~65% of a bank's stock between 1968 and 1974. After the bank encountered problems in 1972, Arkansas Best sold most of the stock at a loss in 1975. They claimed an ordinary loss deduction, but the Commissioner disallowed it, treating it as a capital loss. The Tax Court and Court of Appeals had conflicting rulings on the matter.
Reasoning: The Court found that § 1221's definition of "capital asset" does not include a business motive test and that the listed exceptions are exhaustive, refuting Arkansas Best's arguments. The Court also noted that interpreting Corn Products to allow ordinary asset treatment for business-related assets would conflict with § 1221's broad definition and render some statutory exceptions redundant. |
Taxes | Gitlitz v. Commissioner | https://supreme.justia.com/cases/federal/us/531/206/ | OCTOBER TERM, 2000
Syllabus
GITLITZ ET AL. v. COMMISSIONER OF INTERNAL REVENUE
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE TENTH
CIRCUIT
No. 99-1295. Argued October 2, 2000-Decided January 9, 2001
Shareholders of a corporation taxed under Subchapter S of the
Internal Revenue Code may elect a "pass-through" taxation system,
under which the corporation's profits pass through directly to its
shareholders on a pro rata basis and are reported on the
shareholders' individual tax returns. 26 U. S. C. § 1366(a)(1)(A).
To prevent double taxation of distributed income, shareholders may
increase their corporate bases by certain items of income. §
1367(a)(1)(A). Corporate losses and deductions are passed through
in a similar manner, § 1366(a)(1)(A), and the shareholders' bases
in the S corporation's stock and debt are decreased accordingly, §§
1367(a)(2)(B), 1367(b)(2)(A). However, to the extent that such
losses and deductions exceed a shareholder's basis in the S
corporation's stock and debt, the excess is "suspended" until that
basis becomes large enough to permit the deduction. §§
1366(d)(1)-(2). In 1991, an insolvent S corporation in which
petitioners David Gitlitz and Philip Winn were shareholders
excluded its entire discharge of indebtedness amount from gross
income. On their tax returns, petitioners used their pro rata share
of the discharge amount to increase their bases in the
corporation's stock on the theory that it was an "item of income"
subject to pass-through. They used their increased bases to deduct
corporate losses and deductions, including suspended ones from
previous years. With the upward basis adjustments, they were each
able to deduct the full amount of their pro rata share of the
corporation's losses. The Commissioner determined that they could
not use the corporation's discharge of indebtedness to increase
their bases in the stock and denied their loss deductions. The Tax
Court ultimately agreed. In affirming, the Tenth Circuit assumed
that excluded discharge of indebtedness is an item of income
subject to pass-through, but held that the discharge amount first
had to be used to reduce certain tax attributes of the S
corporation under § 108(b) and that only the leftover amount could
be used to increase basis. Because the tax attribute to be reduced
here (the corporation's net operating loss) equaled the discharged
debt amount, that entire amount was absorbed by the reduction at
the corporate level and nothing remained to be passed through to
the shareholders. 207 Held:
1. The statute's plain language establishes that excluded
discharged debt is an "item of income," which passes through to
shareholders and increases their bases in an S corporation's stock.
Section 61(a)(12) states that discharge of indebtedness is included
in gross income. And § 108(a) provides only that the discharge
ceases to be included in gross income when the S corporation is
insolvent, not that it ceases to be an item of income, as
the Commissioner contends. Not all items of income are included in
gross income, see § 1366(a)(I), so an item's mere exclusion from
gross income does not imply that the amount ceases to be an item of
income. Moreover, §§ 101 through 136 employ the same construction
to exclude various items from gross income, but not even the
Commissioner encourages a reading that would exempt all such items
from pass-through. Instead the Commissioner asserts that discharge
of indebtedness is unique because it requires no economic outlay on
the taxpayer's part, but can identify no statutory language that
makes this distinction relevant. On the contrary, the statute makes
clear that § 108(a)'s exclusion does not alter the character of
discharge of indebtedness as an item of income. Specifically, §
108(e) presumes that such discharge is always "income," and that
the only question for § 108 purposes is whether it is includible in
gross income. The Commissioner's contentions that, notwithstanding
the statute's plain language, excluded discharge of indebtedness is
not income and, specifically, that it is not "tax-exempt income"
under § 1366(a)(I)(A) do not alter the conclusion reached here. Pp.
212-216.
2. Pass-through is performed before the reduction of an S
corporation's tax attributes under § 108(b). The sequencing
question presented here is important. If attribute reduction is
performed before the discharge of indebtedness is passed
through to the shareholders, the shareholders' losses that exceed
basis are treated as the corporation's net operating loss and are
then reduced by the amount of the discharged debt; in this case no
suspended losses would remain that would permit petitioners to take
deductions. However, if it is performed after the discharged
debt income is passed through, then the shareholders would be able
to deduct their losses (up to the amount of the increase in basis
caused by the discharged debt). Any suspended losses remaining then
will be treated as the S corporation's net operating loss and
reduced by the discharged debt amount. Section 108(b)(4)(A)
expressly addresses the sequencing question, directing that the
attribute reductions "shall be made after the determination
of the tax imposed ... for the taxable year of the
discharge." (Emphases added.) In order to determine the "tax
imposed," a shareholder must adjust his basis in S corporation
stock and pass through all items of income and loss. Consequently
the 208 attribute reduction must be made after the basis
adjustment and passthrough. Petitioners must pass through the
discharged debt, increase corporate bases, and then deduct their
losses, all before any attribute reduction could occur. Because
their basis increase is equal to their losses, they have no
suspended losses remaining and thus have no net operating losses to
reduce. The primary arguments made in Courts of Appeals against
this reading of the sequencing provision are rejected. Pp.
216-220. 182 F.3d
1143 , reversed.
THOMAS, J., delivered the opinion of the Court, in which
REHNQUIST, C. J., and STEVENS, O'CONNOR, SCALIA, KENNEDY, SOUTER,
and GINSBURG, JJ., joined. BREYER, J., filed a dissenting opinion, post, p. 220. Darrell D. Hallett argued the cause for petitioners. With
him on the briefs were John M. Colvin and Robert J. Chicoine. Kent L. Jones argued the cause for respondent. With him on the
brief were Solicitor General Waxman, Acting Assistant Attorney
General Junghans, Deputy Solicitor General Wallace, Teresa E.
McLaughlin, and Edward T. Perelmuter. *
JUSTICE THOMAS delivered the opinion of the Court.
The Commissioner of Internal Revenue assessed tax deficiencies
against petitioners David and Louise Gitlitz and Philip and Eleanor
Winn because they used nontaxed discharge of indebtedness to
increase their bases in S corporation stock and to deduct suspended
losses. In this case we must answer two questions. First, we must
decide whether the Internal Revenue Code (Code) permits taxpayers
to increase bases in their S corporation stock by the amount of an
S corporation's discharge of indebtedness excluded from gross
income. And, second, if the Code permits such an in-
* Richard M. Lipton and Theodore R. Bots filed a
brief for the Real Estate Roundtable as amicus curiae urging
reversal. 209 crease, we must decide whether the increase occurs before or
after taxpayers are required to reduce the S corporation's tax
attributes.
I
David Gitlitz and Philip Winn 1 were shareholders of P. D. W.
& A., Inc., a corporation that had elected to be taxed under
Subchapter S of the Code, 26 U. S. C. §§ 1361-1379 (1994 ed. and
Supp. III). Subchapter S allows shareholders of qualified
corporations to elect a "pass-through" taxation system under which
income is subjected to only one level of taxation. See Bufferd v. Commissioner, 506 U. S. 523 , 525
(1993). The corporation's profits pass through directly to its
shareholders on a pro rata basis and are reported on the
shareholders' individual tax returns. See § 1366(a)(1)(A).2 To
prevent double taxation of income upon distribution from the
corporation to the shareholders, § 1367(a)(1)(A) permits
shareholders to increase their corporate bases by items of income
identified in § 1366(a) (1994 ed. and Supp. III). Corporate losses
and deductions are passed through in a similar manner, see §
1366(a)(1)(A), and the shareholders' bases in the S corporation's
stock and debt are decreased accordingly, see §§ 1367(a)(2)(B),
1367(b)(2)(A). However, a shareholder cannot take corporate losses
and deductions into account on his personal tax return to the
extent that such items exceed his basis in the stock and debt of
the S corporation. See
1 Each man filed a joint tax return with his wife. 2 Section
1366(a)(1) provides:
"In determining the tax under this chapter of a shareholder for
the shareholder's taxable year in which the taxable year of the S
corporation ends ... , there shall be taken into account the
shareholder's pro rata share of the corporation's-
"(A) items of income (including tax-exempt income), loss,
deduction, or credit the separate treatment of which could affect
the liability for tax of any shareholder .... " 210 § 1366(d)(1) (Supp. III). If those items exceed the basis, the
excess is "suspended" until the shareholder's basis becomes large
enough to permit the deduction. See §§ 1366(d)(1), (2) (1994 ed.
and Supp. III).
In 1991, P. D. W. & A. realized $2,021,296 of discharged
indebtedness. At the time, the corporation was insolvent in the
amount of $2,181,748. Because it was insolvent even after the
discharge of indebtedness was added to its balance sheet, P. D. W.
& A. excluded the entire discharge of indebtedness amount from
gross income under 26 U. S. C. §§ 108(a) and 108(d)(7)(A). On their
tax returns, Gitlitz and Winn increased their bases in P. D. W.
& A. stock by their pro rata share (50 percent each) of the
amount of the corporation's discharge of indebtedness. Petitioners'
theory was that the discharge of indebtedness was an "item of
income" subject to pass-through under § 1366(a)(1)(A). They used
their increased bases to deduct on their personal tax returns
corporate losses and deductions, including losses and deductions
from previous years that had been suspended under § 1366(d).
Gitlitz and Winn each had losses (including suspended losses and
operating losses) that totaled $1,010,648. With the upward basis
adjustments of $1,010,648 each, Gitlitz and Winn were each able to
deduct the full amount of their pro rata share of P. D. W. &
A.'s losses.
The Commissioner determined that petitioners could not use P. D.
W. & A.'s discharge of indebtedness to increase their bases in
the stock and denied petitioners' loss deductions. Petitioners
petitioned the Tax Court to review the deficiency determinations.
The Tax Court, in its initial opinion, granted relief to
petitioners and held that the discharge of indebtedness was an
"item of income" and therefore could support a basis increase. See Winn v. Commissioner, 73 TCM 3167 (1997), ~ 97,286
RIA Memo withdrawn and reissued, 75 TCM 1840 (1998), ~ 98,071 RIA
Memo TC. In light of the Tax Court's decision in Nelson v. Commis- 211 sioner, 110 T. C. 114 (1998), aff'd, 182 F.3d
1152 (CAlO 1999),3 however, the Tax Court granted the
Commissioner's motion for reconsideration and held that
shareholders may not use an S corporation's untaxed discharge of
indebtedness to increase their bases in corporate stock. See Winn v. Commissioner, 75 TCM 1840 (1998), ~ 98,071
RIA Memo TC.
The Court of Appeals affirmed. See 182 F.3d
1143 (CAlO 1999). It assumed that excluded discharge of
indebtedness is an item of income subject to pass-through to
shareholders pursuant to § 1366(a)(1)(A), id., at 1148, 1151, n. 7,
but held that the discharge of indebtedness amount first had to be
used to reduce certain tax attributes of the S corporation under §
108(b), and that only the leftover amount could be used to increase
basis.4 The Court of Appeals explained that, because the tax
attribute to be reduced (in this case the corporation's net
operating loss) was equal to the amount of discharged debt, the
entire amount of discharged debt was absorbed by the reduction at
the corporate level, and nothing remained of the discharge of
indebtedness to be passed through to the shareholders under §
1366(a)(1)(A). Id., at 1151. Because Courts of Appeals have
disagreed on how to treat discharge of indebtedness of an insolvent
S corporation, compare Gaudiano v. Commissioner, 216 F.3d
524 , 535 (CA6 2000) (holding that tax attributes are
reduced before excluded discharged debt income is passed through to
shareholders), cert. pending, No. 00-459; Witzel v. Commissioner, 200 F.3d
496 , 498 (CA7 2000) (same), cert. pending,
3 In Nelson, the Tax Court held that excluded discharge
of indebtedness does not pass through to an S corporation's
shareholders because § 108 is an exception to normal S corporation
pass-through rules. Specifically, the court held that, because §
108(d)(7)(A) requires that "subsections (a) [and (b) of § 108]
shall be applied at the corporate level" in the case of an S
corporation, it precludes any pass-through of the discharge of
indebtedness to the shareholder level. See Nelson, 110 T. C., at 121-124.
4 Section 108(b)(1) reads: "The amount excluded from gross
income under [§ 108(a)(1)] shall be applied to reduce the tax
attributes of the taxpayer .... " 212 No. 99-1693; and 182 F. 3d, at 1150 (case below), with United
States v. Farley, 202 F.3d
198 , 206 (CA3 2000) (holding that excluded discharged
debt income is passed through to shareholders before tax attributes
are reduced), cert. pending, No. 99-1675 [REPORTER'S NOTE: See post, p. 1111]; see also Pugh v. Commissioner, 213 F.3d
1324 , 1330 (CAll 2000) (holding that excluded discharged
debt income is subject to pass-through and can increase basis),
cert. pending, No. 00-242, we granted certiorari. 529 U. S. 1097
(2000).
II
Before we can reach the issue addressed by the Court of
Appeals-whether the increase in the taxpayers' corporate bases
occurs before or after the taxpayers are required to reduce the S
corporation's tax attributes-we must address the argument raised by
the Commissioner.5 The Commissioner argues that the discharge of
indebtedness of an insolvent S corporation is not an "item of
income" and thus never passes through to shareholders. Under a
plain reading of the statute, we reject this argument and conclude
that excluded discharged debt is indeed an "item of income," which
passes through to the shareholders and increases their bases in the
stock of the S corporation.
5 The Commissioner has altered his arguments throughout the
course of this litigation. According to the Tax Court, during the
first iteration of this case the Commissioner made several
arguments but then settled on a "final" one-that the discharge of
indebtedness of the insolvent S corporation was not an "item of
income," see 73 TCM 3167 (1997), ~ 97,286 RIA Memo TC. In the Court
of Appeals, the Commissioner argued instead that, because any
pass-through of excluded discharge of indebtedness to petitioners
took place after any reduction of tax attributes and by then the
income would have been fully absorbed by the tax attributes, no
discharged debt remained to flow through to petitioners. The
Commissioner relegated to a footnote his argument that discharge of
indebtedness is not an "item of income." See Brief for Appellee in
Nos. 98-9009 and 98-9010 (CAW), p. 33, n. 14. 213 Section 61(a)(12) states that discharge of indebtedness
generally is included in gross income. Section 108(a)(1) provides
an express exception to this general rule: "Gross income does not include any amount which (but for this
subsection) would be includible in gross income by reason of the
discharge ... of indebtedness of the taxpayer if- "(B) the discharge occurs when the taxpayer is insolvent." The Commissioner contends that this exclusion from gross income
alters the character of the discharge of indebtedness so that it is
no longer an "item of income." However, the text and structure of
the statute do not support the Commissioner's theory. Section
108(a) simply does not say that discharge of indebtedness ceases to
be an item of income when the S corporation is insolvent.
Instead it provides only that discharge of indebtedness ceases to
be included in gross income. Not all items of income are
included in gross income, see § 1366(a)(1) (providing that "items
of income," including "tax-exempt" income, are passed through to
shareholders), so mere exclusion of an amount from gross income
does not imply that the amount ceases to be an item of income.
Moreover, §§ 101 through 136 employ the same construction to
exclude various items from gross income: "Gross income does not
include .... " The consequence of reading this language in the
manner suggested by the Commissioner would be to exempt all items
in these sections from passthrough under § 1366. However, not even
the Commissioner encourages us to reach this sweeping conclusion.
Instead the Commissioner asserts that discharge of indebtedness is
unique among the types of items excluded from gross income because
no economic outlay is required of the taxpayer re- 214 ceiving discharge of indebtedness. But the Commissioner is
unable to identify language in the statute that makes this
distinction relevant, and we certainly find none.
On the contrary, the statute makes clear that § 108(a)'s
exclusion does not alter the character of discharge of indebtedness
as an item of income. Specifically, § 108(e)(1) reads: "Except as otherwise provided in this section, there shall be no
insolvency exception from the general rule that gross income
includes income from the discharge of indebtedness." This provision presumes that discharge of indebtedness is always
"income," and that the only question for purposes of § 108 is
whether it is includible in gross income. If discharge of
indebtedness of insolvent entities were not actually "income,"
there would be no need to provide an exception to its inclusion in
gross income; quite simply, if discharge of indebtedness of an
insolvent entity were not "income," it would necessarily not be
included in gross income.
Notwithstanding the plain language of the statute, the
Commissioner argues, generally, that excluded discharge of
indebtedness is not income and, specifically, that it is not
"tax-exempt income" under § 1366(a)(1)(A).6 First, the
6 The Commissioner also contends, as does the dissent, that
because § 108(d)(7)(A) mandates that the discharged debt amount be
determined and applied to reduce tax attributes "at the corporate
level," rather than at the shareholder level, the discharged debt,
even if it is some type of income, simply cannot pass through to
shareholders. In other words, the Commissioner contends that §
108(d)(7)(A) excepts excluded discharged debt from the general
pass-through provisions for S corporations. However, § 108(d)(7)(A)
merely directs that the exclusion from gross income and the tax
attribute reduction be made at the corporate level. Section
108(d)(7)(A) does not state or imply that the debt discharge
provisions shall apply only "at the corporate leveL" The
very purpose of Subchapter S is to tax at the shareholder level,
not the corporate level. Income is determined at the S corporation
level, see § 1363(b), not in order to tax 215 Commissioner argues that § 108 merely codified the "judicial
insolvency exception," and that, under this exception, discharge of
indebtedness of an insolvent taxpayer was not considered income.
The insolvency exception was a rule that the discharge of
indebtedness of an insolvent taxpayer was not taxable income. See, e. g., Dallas Transfer & Terminal Warehouse Co. v. Commissioner, 70 F.2d 95 (CA5 1934); Astoria Marine
Construction Co. v. Commissioner, 12 T. C. 798 (1949).
But the exception has since been limited by § 108(e). Section
108(e) precludes us from relying on any understanding of the
judicial insolvency exception that was not codified in § 108. And
as explained above, the language and logic of § 108 clearly
establish that, although discharge of indebtedness of an insolvent
taxpayer is not included in gross income, it is nevertheless
income.
The Commissioner also relies on a Treasury Regulation to support
his theory that no income is realized from the discharge of the
debt of an insolvent: "Proceedings under Bankruptcy Act. "(1) Income is not realized by a taxpayer by virtue of the
discharge, under section 14 of the Bankruptcy Act (11 U. S. C. 32),
of his indebtedness as the result of an adjudication in bankruptcy,
or by virtue of an agreement among his creditors not consummated
under any provision of the Bankruptcy Act, if immediately
thereafter the taxpayer's liabilities exceed the value of his
assets." 26 CFR § 1.61-12(b) (2000). Even if this regulation could be read (countertextually) to
apply outside the bankruptcy context, it merely states that
the corporation, see § 1363(a) (exempting an S corporation from
income tax), but solely to pass through to the S corporation's
shareholders the corporation's income. Thus, the controlling
provision states that, in determining a shareholder's liability,
"there shall be taken into account the shareholder's pro rata share
of the corporation's ... items of income (including tax-exempt
income) .... " § 1366(a)(1). Nothing in § 108(d)(7)(A) suspends the
operation of these ordinary pass-through rules. 216 "[i]ncome is not realized." The regulation says nothing
about whether discharge of indebtedness is income subject to
pass-through under § 1366.
Second, the Commissioner argues that excluded discharge of
indebtedness is not "tax-exempt" income under § 1366(a)(1)(A), but
rather "tax-deferred" income. According to the Commissioner,
because the taxpayer is required to reduce tax attributes that
could have provided future tax benefits, the taxpayer will pay
taxes on future income that otherwise would have been absorbed by
the forfeited tax attributes. Implicit in the Commissioner's
labeling of such income as "tax-deferred," however, is the
erroneous assumption that § 1366(a)(1)(A) does not include
"tax-deferred" income. Section 1366 applies to "items of income."
This section expressly includes "tax-exempt" income, but this
inclusion does not mean that the statute must therefore exclude
"tax-deferred" income. The section is worded broadly enough to
include any item of income, even tax-deferred income, that "could
affect the liability for tax of any shareholder." § 1366(a)(1)(A).
Thus, none of the Commissioner's contentions alters our conclusion
that discharge of indebtedness of an insolvent S corporation is an
item of income for purposes of § 1366(a)(1)(A).
III
Having concluded that excluded discharge of indebtedness is an
"item of income" and is therefore subject to passthrough to
shareholders under § 1366, we must resolve the sequencing question
addressed by the Court of Appealswhether pass-through is performed
before or after the reduction of the S corporation's tax attributes
under § 108(b). Section 108(b)(1) provides that "[t]he amount
excluded from gross income under [§ 108(a)] shall be applied to
reduce the tax attributes of the taxpayer as provided [in this
section]." Section 108(b)(2) then lists the various tax attributes
to be reduced in the order of reduction. The first tax attribute
to 217 be reduced, and the one at issue in this case, is the net
operating loss. See § l08(b)(2)(A). Section l08(d)(7)(B) specifies
that, for purposes of attribute reduction, the shareholders'
suspended losses for the taxable year of discharge are to be
treated as the S corporation's net operating loss. If tax attribute
reduction is performed before the discharge of indebtedness
is passed through to the shareholders (as the Court of Appeals
held), the shareholders' losses that exceed basis are treated as
the corporation's net operating loss and are then reduced by the
amount of the discharged debt. In this case, no suspended losses
would remain that would permit petitioners to take deductions.7 If,
however, attribute reduction is performed after the
discharged debt income is passed through (as petitioners argue),
then the shareholders would be able to deduct their losses (up to
the amount of the increase in basis caused by the discharged debt).
Any suspended losses remaining then will be treated as the S
corporation's net operating loss and will be reduced by the amount
of the discharged debt. Therefore, the sequence of the steps of
pass-through and attribute reduction determines whether petitioners
here were deficient when they increased their bases by the
discharged debt amount and deducted their losses.
7 Under this scenario, the shareholders' losses would be reduced
by the discharge of indebtedness. However, it is unclear precisely
what would happen to the discharge of indebtedness. The Court of
Appeals below stated that the discharged debt would be "absorbed"
by the reduction to the extent of the net operating loss and that
therefore only the excess excluded discharged debt would remain to
pass through to the shareholders. 182 F.3d
1143 , 1149 (CAlO 1999). In contrast, another Court of Appeals
suggested, albeit in dictum, that the full amount of the discharge
might still pass through to the shareholder and be used to increase
basis; the discharged debt amount would reduce the net operating
loss but would not be absorbed by it. Witzel v. Commissioner, 200 F.3d
496 , 498 (CA7 2000). We need not resolve this issue
because we conclude that the discharge of indebtedness passes
through before any attribute reduction takes place. 218 The sequencing question is expressly addressed in the statute.
Section 108(b)(4)(A) directs that the attribute reductions "shall
be made after the determination of the tax imposed by
this chapter for the taxable year of the discharge." (Emphases
added.) See also § 1017(a) (applying the same sequencing when § 108
attribute reduction affects basis of corporate property). In order
to determine the "tax imposed," an S corporation shareholder must
adjust his basis in his corporate stock and pass through all items
of income and loss. See §§ 1366, 1367 (1994 ed. and Supp. III).
Consequently, the attribute reduction must be made after the
basis adjustment and pass-through. In the case of petitioners, they
must pass through the discharged debt, increase corporate bases,
and then deduct their losses, all before any attribute reduction
could occur. Because their basis increase is equal to their losses,
petitioners have no suspended losses remaining. They, therefore,
have no net operating losses to reduce.
Although the Commissioner has now abandoned the reasoning of the
Court of Appeals below,8 we address the pri-
8 The Commissioner has abandoned his argument related to the
sequencing issue before this Court. This abandonment is
particularly odd given that the sequencing issue predominated in
the Commissioner's argument to the Court of Appeals.
Notwithstanding the Commissioner's attempt at oral argument to
distance himself from the reasoning of the Court of Appeals on this
issue-the Commissioner represented to us that the Court of Appeals
developed its reading of the statute sua sponte, Tr. of Oral
Arg. 22-24, 27-it is apparent from the Commissioner's brief in the
Court of Appeals that the Commissioner supplied the very
sequencing theory that the Court of Appeals adopted. Compare, e. g., Brief for Appellee in Nos. 98-9009 and 98-9010 (CAW),
p. 28 ("First, the discharge of indebtedness income that is
excluded under Section 108(a) at the corporate level is temporarily
set aside and has no tax consequences .... Second, PDW & A
computes its tax attributes, i. e., taxpayers' suspended
losses. Third, the excluded discharge of indebtness income is
applied against and eliminates the suspended losses. Because the
excluded income is applied against-and offset by-the suspended
losses, no item of income flows through to taxpayers under Section
1366(a), and no upward basis adjust- 219 mary arguments made in the Courts of Appeals against
petitioners' reading of the sequencing provision. First, one court
has expressed the concern that, if the discharge of indebtedness is
passed through to the shareholder before the tax attributes
are reduced, then there can never be any discharge of indebtedness
remaining "at the corporate level," § 108(d)(7)(A), by which to
reduce tax attributes.9 Gaudi ano, 216 F. 3d, at 533. This
concern presumes that tax attributes can be reduced only if the
discharge of indebtedness itself remains at the corporate level.
The statute, however, does not impose this restriction. Section
108(b)(1) requires only that the tax attributes be reduced by
"[t]he amount excluded from gross income" (emphasis added), and
that amount is not altered by the mere pass-through of the income
to the shareholder.
Second, courts have discussed the policy concern that, if
shareholders were permitted to pass through the discharge of
indebtedness before reducing any tax attributes, the shareholders
would wrongly experience a "double windfall":
ment is made under Section 1367(a)" (citations omitted)), with, e. g., 182 F. 3d, at 1151 ("PDW & A first must
compute its discharge of indebtedness income and set this figure
aside temporarily. The corporation then must calculate its net
operating loss tax attribute .... Finally, the corporation must
apply the excluded discharged debt to reduce its tax attributes. In
this case, the net operating loss tax attribute fully absorbs the
corporation's excluded discharge of indebtedness income. Thus,
there are no items of income to pass through to Gitlitz and
Winn").
9 Similar to this argument is the contention that, in cases such
as this one in which the shareholders' suspended losses are fully
deducted before attribute reduction could take place, no net
operating loss remains and no attribute reduction can occur, thus
rendering § 108(b) inoperative. However, there will be other cases
in which § 108(b) will be inoperative. In particular, if a taxpayer
has no tax attributes at all, there will be no reduction. Certainly
the statute does not condition the exclusion under § 108(a) on the
ability of the taxpayer to reduce attributes under § 108(b).
Likewise, in the case of shareholders similarly situated to
petitioners in this case, there is also the possibility that other
attributes, see §§ 108(b)(2)(B)-(G), could be reduced. 220 They would be exempted from paying taxes on the full amount of
the discharge of indebtedness, and they would be able to
increase basis and deduct their previously suspended losses. See, e. g., 182 F. 3d, at 1147-1148. Because the Code's plain
text permits the taxpayers here to receive these benefits, we need
not address this policy concern.10
***
The judgment of the Court of Appeals, accordingly, is
reversed.
It is so ordered.
JUSTICE BREYER, dissenting.
I agree with the majority's reasoning with the exception of
footnotes 6 and 10. The basic statutory provision before us is 26
U. S. C. § 108-the provision that excludes from the "gross income"
of any "insolvent" taxpayer, income that cancellation of a debt
(COD) would otherwise generate. As the majority acknowledges,
however, ante, at 214-215, n. 6, § 108 contains a subsection
that sets forth a special exception. The exception, entitled
"Special rules for S corporation," says:
10 The benefit at issue in this case arises in part because §
108(d)(7)(A) permits the exclusion of discharge of indebtedness
income from gross income for an insolvent S corporation even when
the S corporation shareholder is personally solvent. We are aware
of no other instance in which § 108 directly benefits a solvent
entity. However, the result is required by statute. Between 1982
and 1984, § 108 provided that the exclusion from gross income and
the reduction in tax attributes occurred at the shareholder level.
See Subchapter S Revision Act of 1982, Pub. L. 97-354, § 3(e), 96
Stat. 1689. This provision, which paralleled the current taxation
of partnerships at the partner level, see 26 U. S. C. § 108(d)(6),
prevented solvent shareholders from benefiting as a result of their
S corporation's insolvency. In 1984, however, Congress amended the
Code to provide that § 108 be applied "at the corporate level." Tax
Reform Act of 1984, Pub. L. 98-369, § 721(b), 98 Stat. 966. It is
as a direct result of this amendment that the solvent petitioners
in this case are able to benefit from § 108's exclusion. 221 "(A) Certain provisions to be applied at corporate level. "In the case of an S corporation, subsections (a), (b), (c), and
(g) shall be applied at the corporate level." 26 U. S. C. §
108(d)(7)(A). If one reads this language literally as exclusive, both the COD exclusion (§ 108(a)) and the tax attribute reduction (§
108(b)) would apply only "at the corporate level." Hence the COD income would not flow through to S corporation
shareholders. Consequently, the insolvent S corporation's COD income would not increase the shareholder's basis and
would not help the shareholder take otherwise unavailable
deductions for suspended losses.
The Commissioner argues that we should read the language in this
way as preventing the flow-through of the corporation's COD income. Brief for Respondent 27. He points to the language of a
House Committee, which apparently thought, when Congress passed an
amendment to § 108, that the Commissioner's reading is correct. H.
R. Rep. No. 103-111, pp. 624-625 (1993) ("[T]he exclusion and basis
reduction are both made at the S corporation level (sec.
108(d)(7)). The shareholders' basis in their stock is not adjusted
by the amount of debt discharge income that is excluded at the
corporate level"). At least one commentator believes the same. See
Loebl, Does the Excluded COD Income of an Insolvent S
Corporation Increase the Basis of the Shareholders' Stock?, 52 U.
Fla. L. Rev. 957, 981-988 (2000). But see Lockhart & Duffy, Tax
Court Rules in Nelson That S Corporation Excluded COD Income Does Not Increase Shareholder Stock Basis, 25 Wm. Mitchell
L. Rev. 287 (1999).
The Commissioner finds support for his literal, exclusive
reading of § 108(d)(7)(A)'s language in the fact that his reading
would close a significant tax loophole. That loopholepreserved by
the majority-would grant a solvent shareholder of an
insolvent S corporation a tax benefit in the form of permission to
take an otherwise unavailable deduction, 222 thereby sheltering other, unrelated income from tax. See Witzel v. Commissioner, 200 F.3d
496 , 497 (CA7 2000) (Posner, C. J.) ("It is hard to
understand the rationale for using a tax exemption to avoid
taxation not only on the income covered by the exemption but also
on unrelated income that is not tax exempt"). Moreover, the benefit
often would increase in value as the amount of COD income
increases, a result inconsistent with congressional intent to
impose a "price" (attribute reduction), see Lipton, Different
Courts Adopt Different Approaches to the Impact of COD Income on S
Corporations, 92 J. Tax. 207 (2000), on excluded COD. Further, this
deduction-related tax benefit would have very different tax
consequences for identically situated taxpayers, depending only
upon whether a single debt can be split into segments, each of
which is canceled in a different year. For example, under the
majority's interpretation, a $1 million debt canceled in one year
would permit Taxpayer A to deduct $1 million of suspended losses in
that year, thereby permitting A to shelter $1 million of unrelated
income in that year. But because § 108 reduces tax attributes after
the first year, five annual cancellations of $200,000 will not
create a $1 million shelter. Timing is all important.
The majority acknowledges some of these policy concerns and
confesses ignorance of any "other instance in which § 108 directly
benefits a solvent entity," but claims that its reading is mandated
by the plain text of § 108(d)(7)(A) and therefore that the Court
may disregard the policy consequences. Ante, at 220, n. 10.
It is difficult, however, to see why we should interpret that
language as treating different solvent shareholders differently,
given that the words "at the corporate level" were added "[i]n
order to treat all shareholders in the same manner." H. R. Rep. No.
98-432, pt. 2, p. 1640 (1984). And it is more difficult to see why,
given the fact that the "plain language" admits either
interpretation, we should ignore the policy consequences. See Commissioner v. Gillette Motor Transport, Inc., 364 U. S. 130 ,
134-135 223 (1960) (abandoning literal meaning of 26 U. S. C. § 1221 (1958
ed.) for a reading more consistent with congressional intent).
Accord, Commissioner v. P. G. Lake, Inc., 356 U. S. 260 ,
264267 (1958); Corn Products Refining Co. v. Commissioner, 350 U. S. 46, 51-52 (1955); Hort v. Commissioner, 313 U. S. 28 , 30-31
(1941).
The arguments from plain text on both sides here produce
ambiguity, not certainty. And other things being equal, we should
read ambiguous statutes as closing, not maintaining, tax loopholes.
Such is an appropriate understanding of Congress' likely intent.
Here, other things are equal, for, as far as I am aware, the
Commissioner's literal interpretation of § 108(d)(7)(A) as
exclusive would neither cause any taxrelated harm nor create any
statutory anomaly. Petitioners argue that it would create a
linguistic inconsistency, for they point to a Treasury Regulation
that says that the Commissioner will apply hobby loss limitations
under § 183 "at the corporate level in determining" allowable
deductions, while, presumably, nonetheless permitting the deduction
so limited to flow through to the shareholder. Treas. Reg. §
1.183-1(f), 26 CFR § 1.183-1(f) (2000). But we are concerned here
with the "application" of an exclusion, not with "determining" the amount of a deduction. Regardless, the
regulation's use of the words "at the corporate level," like the
three other appearances of the formulation "applied" or
"determined" "at the corporate level" in the Code, occur in
contexts that are so very different from this one that nothing we
say here need affect their interpretation. See 26 U. S. C. §
49(a)(1)(E)(ii)(I) (determining whether financing is recourse
financing); 26 U. S. C. § 264(f)(5)(B) (1994 ed., Supp. III)
(determining how to allocate interest expense to portions of
insurance policies); 26 U. S. C. § 302(e)(1)(A) (determining
whether a stock distribution shall be treated as a partial
liquidation). If there are other arguments militating in favor of
the majority's interpretation, I have not found them. 224 The majority, in footnote 6, says that the words "at the
corporate level" in § 108(d)(7)(A) apply to the exclusion of COD income from corporate income and to "tax attribute
reduction," but do not "suspen[d] the operation of ... ordinary
pass-through rules" because § 108(d)(7)(A) "does not state or imply
that the debt discharge provisions shall apply only 'at the
corporate level.' " It is the majority, however, that should
explain why it reads the provision as nonexclusive (where, as here,
its interpretation of the Code results in the "practical equivalent
of [a] double deduction," Charles Ilfeld Co. v. Hernandez, 292
U. S. 62 , 68 (1934)). See United States v. Skelly Oil
Co., 394 U. S.
678 , 684 (1969) (requiring "clear declaration of intent by
Congress" in such circumstances). I do not contend that §
108(d)(7)(A) must be read as having exclusive effect, only
that, given the alternative, this interpretation provides the best
reading of § 108 as a whole. And I can find no "clear declaration
of intent by Congress" to support the majority's contrary
conclusion regarding § 108(d)(7)(A)'s effect. It is that conclusion
from which, for the reasons stated, I respectfully dissent. | The Supreme Court held that discharged debt is considered an "item of income" for shareholders of an S corporation, allowing them to increase their bases in the corporation's stock and deduct losses. However, the Court also determined that the amount of discharged debt must first be used to reduce the corporation's tax attributes under the tax code. |
Taxes | U.S. v. Windsor | https://supreme.justia.com/cases/federal/us/570/744/ | NOTICE: This opinion is subject to
formal revision before publication in the preliminary print of the
United States Reports. Readers are requested to notify the Reporter
of Decisions, Supreme Court of the United States, Washington,
D. C. 20543, of any typographical or other formal errors, in
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goes to press.
SUPREME COURT OF THE UNITED STATES
_________________
No. 12–307
_________________
UNITED STATES, PETITIONER v. EDITH SCHLAIN
WINDSOR, in her capacity as executor of the ESTATE OF THEA CLARA
SPYER, et al.
on writ of certiorari to the united states
court of appeals for the second circuit
[June 26, 2013]
Justice Kennedy
delivered the opinion of the Court.
Two women then resident
in New York were married in a lawful ceremony in Ontario, Canada,
in 2007. Edith Windsor and Thea Spyer returned to their home in New
York City. When Spyer died in 2009, she left her entire estate to
Windsor. Windsor sought to claim the estate tax exemption for
surviving spouses. She was barred from doing so, however, by a
federal law, the Defense of Marriage Act, which excludes a same-sex
partner from the definition of “spouse” as that term is used in
federal statutes. Windsor paid the taxes but filed suit to
challenge the constitutionality of this provision. The United
States District Court and the Court of Appeals ruled that this
portion of the statute is unconstitutional and ordered the United
States to pay Windsor a refund. This Court granted certiorari and
now affirms the judgment in Windsor’s favor.
I
In 1996, as some
States were beginning to consider the concept of same-sex marriage,
see, e.g., Baehr v. Lewin, 74 Haw. 530, 852 P. 2d 44 (1993),
and before any State had acted to permit it, Congress enacted the
Defense of Marriage Act (DOMA), 110Stat. 2419. DOMA contains two
operative sections: Section 2, which has not been challenged here,
allows States to refuse to recognize same-sex marriages performed
under the laws of other States. See 28 U. S. C.
§1738C.
Section 3 is at issue
here. It amends the Dictionary Act in Title 1, §7, of the United
States Code to provide a fed- eral definition of “marriage” and
“spouse.” Section 3 of DOMA provides as follows:
“In determining
the meaning of any Act of Congress, or of any ruling, regulation,
or interpretation of the various administrative bureaus and
agencies of the United States, the word ‘marriage’ means only a
legal union between one man and one woman as husband and wife, and
the word ‘spouse’ refers only to a person of the opposite sex who
is a husband or a wife.” 1 U. S. C. §7.
The definitional
provision does not by its terms forbid States from enacting laws
permitting same-sex marriages or civil unions or providing state
benefits to residents in that status. The enactment’s comprehensive
definition of marriage for purposes of all federal statutes and
other regulations or directives covered by its terms, however, does
control over 1,000 federal laws in which marital or spousal status
is addressed as a matter of federal law. See GAO, D. Shah, Defense
of Marriage Act: Update to Prior Report 1 (GAO–04–353R, 2004).
Edith Windsor and Thea
Spyer met in New York City in 1963 and began a long-term
relationship. Windsor and Spyer registered as domestic partners
when New York City gave that right to same-sex couples in 1993.
Concerned about Spyer’s health, the couple made the 2007 trip to
Canada for their marriage, but they continued to reside in New York
City. The State of New York deems their Ontario marriage to be a
valid one. See 699 F. 3d 169, 177–178 (CA2 2012).
Spyer died in February
2009, and left her entire estate to Windsor. Because DOMA denies
federal recognition to same-sex spouses, Windsor did not qualify
for the marital exemption from the federal estate tax, which
excludes from taxation “any interest in property which passes or
has passed from the decedent to his surviving spouse.” 26
U. S. C. §2056(a). Windsor paid $363,053 in estate taxes
and sought a refund. The Internal Revenue Service denied the
refund, concluding that, under DOMA, Windsor was not a “surviving
spouse.” Windsor commenced this refund suit in the United States
District Court for the Southern District of New York. She contended
that DOMA violates the guarantee of equal protection, as applied to
the Federal Government through the Fifth Amendment.
While the tax refund
suit was pending, the Attorney General of the United States
notified the Speaker of the House of Representatives, pursuant to
28 U. S. C. §530D, that the Department of Justice would
no longer defend the constitutionality of DOMA’s §3. Noting that
“the Department has previously defended DOMA against
. . . challenges involving legally married same-sex
couples,” App. 184, the Attorney General informed Congress that
“the President has concluded that given a number of factors,
including a documented history of discrimination, classifications
based on sexual orientation should be subject to a heightened
standard of scrutiny.” Id., at 191. The Department of Justice has
submitted many §530D letters over the years refusing to defend laws
it deems unconstitutional, when, for instance, a federal court has
rejected the Government’s defense of a statute and has issued a
judgment against it. This case is unusual, however, because the
§530D letter was not preceded by an adverse judgment. The letter
instead reflected the Executive’s own conclusion, relying on a
definition still being debated and considered in the courts, that
heightened equal protection scrutiny should apply to laws that
classify on the basis of sexual orientation.
Although “the President
. . . instructed the Department not to defend the statute
in Windsor,” he also decided “that Section 3 will continue to be
enforced by the Executive Branch” and that the United States had an
“interest in providing Congress a full and fair opportunity to
participate in the litigation of those cases.” Id., at 191–193. The
stated rationale for this dual-track procedure (determination of
unconstitutionality coupled with ongoing enforcement) was to
“recogniz[e] the judiciary as the final arbiter of the
constitutional claims raised.” Id., at 192.
In response to the
notice from the Attorney General, the Bipartisan Legal Advisory
Group (BLAG) of the House of Representatives voted to intervene in
the litigation to defend the constitutionality of §3 of DOMA. The
Department of Justice did not oppose limited intervention by BLAG.
The District Court denied BLAG’s motion to enter the suit as of
right, on the rationale that the United States already was
represented by the Department of Justice. The District Court,
however, did grant intervention by BLAG as an interested party. See
Fed. Rule Civ. Proc. 24(a)(2).
On the merits of the
tax refund suit, the District Court ruled against the United
States. It held that §3 of DOMA is unconstitutional and ordered the
Treasury to refund the tax with interest. Both the Justice
Department and BLAG filed notices of appeal, and the Solicitor
General filed a petition for certiorari before judgment. Before
this Court acted on the petition, the Court of Appeals for the
Second Circuit affirmed the District Court’s judgment. It applied
heightened scrutiny to classifications based on sexual orientation,
as both the Department and Windsor had urged. The United States has
not complied with the judg- ment. Windsor has not received her
refund, and the Ex- ecutive Branch continues to enforce §3 of
DOMA.
In granting certiorari
on the question of the constitutionality of §3 of DOMA, the Court
requested argument on two additional questions: whether the United
States’ agreement with Windsor’s legal position precludes further
review and whether BLAG has standing to appeal the case. All
parties agree that the Court has jurisdiction to decide this case;
and, with the case in that framework, the Court appointed Professor
Vicki Jackson as amicus curiae to argue the position that the Court
lacks jurisdiction to hear the dispute. 568 U. S. ___ (2012).
She has ably discharged her duties.
In an unrelated case,
the United States Court of Appeals for the First Circuit has also
held §3 of DOMA to be unconstitutional. A petition for certiorari
has been filed in that case. Pet. for Cert. in Bipartisan Legal
Advisory Group v. Gill, O. T. 2012, No. 12–13.
II
It is appropriate to
begin by addressing whether either the Government or BLAG, or both
of them, were entitled to appeal to the Court of Appeals and later
to seek certiorari and appear as parties here.
There is no dispute
that when this case was in the District Court it presented a
concrete disagreement between opposing parties, a dispute suitable
for judicial resolution. “[A] taxpayer has standing to challenge
the collection of a specific tax assessment as unconstitutional;
being forced to pay such a tax causes a real and immediate economic
injury to the individual taxpayer.” Hein v. Freedom From Religion
Foundation, Inc., 551 U. S. 587, 599 (2007) (plurality
opinion) (emphasis deleted). Windsor suffered a redressable injury
when she was required to pay estate taxes from which, in her view,
she was exempt but for the alleged invalidity of §3 of DOMA.
The decision of the
Executive not to defend the constitutionality of §3 in court while
continuing to deny refunds and to assess deficiencies does
introduce a complication. Even though the Executive’s current
position was announced before the District Court entered its
judgment, the Government’s agreement with Windsor’s position would
not have deprived the District Court of jurisdiction to entertain
and resolve the refund suit; for her injury (fail- ure to obtain a
refund allegedly required by law) was concrete, persisting, and
unredressed. The Government’s position—agreeing with Windsor’s
legal contention but refusing to give it effect—meant that there
was a justiciable controversy between the parties, despite what the
claimant would find to be an inconsistency in that stance. Windsor,
the Government, BLAG, and the amicus appear to agree upon that
point. The disagreement is over the standing of the parties, or
aspiring parties, to take an appeal in the Court of Appeals and to
appear as parties in further proceedings in this Court.
The amicus’ position is
that, given the Government’s concession that §3 is
unconstitutional, once the District Court ordered the refund the
case should have ended; and the amicus argues the Court of Appeals
should have dismissed the appeal. The amicus submits that once the
President agreed with Windsor’s legal position and the District
Court issued its judgment, the parties were no longer adverse. From
this standpoint the United States was a prevailing party below,
just as Windsor was. Accordingly, the amicus reasons, it is
inappropriate for this Court to grant certiorari and proceed to
rule on the merits; for the United States seeks no redress from the
judgment entered against it.
This position, however,
elides the distinction between two principles: the jurisdictional
requirements of Article III and the prudential limits on its
exercise. See Warth v. Seldin, 422 U. S. 490, 498 (1975) . The
latter are “essentially matters of judicial self-governance.” Id.,
at 500. The Court has kept these two strands separate: “Article III
standing, which enforces the Constitution’s case-or-controversy
requirement, see Lujan v. Defenders of Wildlife, 504 U. S. 555
–562 (1992); and prudential standing, which embodies ‘judicially
self-imposed limits on the exer- cise of federal jurisdiction,’
Allen [v. Wright,] 468 U. S. [737,] 751 [(1984)].” Elk Grove
Unified School Dist. v. Newdow, 542 U. S. 1 –12 (2004).
The requirements of
Article III standing are familiar:
“First, the plaintiff must have suffered
an ‘injury in fact’—an invasion of a legally protected interest
which is (a) concrete and particularized, and (b) ‘actual or
imminent, not “conjectural or hypothetical.” ’ Second, there
must be a causal connection between the injury and the conduct
complained of—the injury has to be ‘fairly . . .
trace[able] to the challenged action of the defendant, and not
. . . th[e] result [of] the independent action of some
third party not before the court.’ Third, it must be ‘likely,’ as
opposed to merely ‘speculative,’ that the injury will be ‘redressed
by a favor- able decision.’ ” Lujan, supra, at 560–561
(footnote and citations omitted).
Rules of prudential standing, by contrast, are
more flex- ible “rule[s] . . . of federal appellate
practice,” Deposit Guaranty Nat. Bank v. Roper, 445 U. S. 326,
333 (1980) , designed to protect the courts from “decid[ing]
abstract questions of wide public significance even [when] other
governmental institutions may be more competent to ad- dress the
questions and even though judicial intervention may be unnecessary
to protect individual rights.” Warth, supra, at 500.
In this case the United
States retains a stake sufficient to support Article III
jurisdiction on appeal and in proceedings before this Court. The
judgment in question orders the United States to pay Windsor the
refund she seeks. An order directing the Treasury to pay money is
“a real and immediate economic injury,” Hein, 551 U. S., at
599, indeed as real and immediate as an order directing an
individual to pay a tax. That the Executive may welcome this order
to pay the refund if it is accompanied by the constitutional ruling
it wants does not eliminate the injury to the national Treasury if
payment is made, or to the taxpayer if it is not. The judgment
orders the United States to pay money that it would not disburse
but for the court’s order. The Government of the United States has
a valid legal argument that it is injured even if the Executive
disagrees with §3 of DOMA, which results in Windsor’s liability for
the tax. Windsor’s ongoing claim for funds that the United States
refuses to pay thus establishes a controversy sufficient for
Article III jurisdiction. It would be a different case if the
Executive had taken the further step of paying Windsor the refund
to which she was entitled under the District Court’s ruling.
This Court confronted a
comparable case in INS v. Chadha, 462 U. S. 919 (1983) . A
statute by its terms allowed one House of Congress to order the
Immigration and Naturalization Service (INS) to deport the
respondent Chadha. There, as here, the Executive determined that
the statute was unconstitutional, and “the INS presented the
Executive’s views on the constitutionality of the House action to
the Court of Appeals.” Id., at 930. The INS, however, continued to
abide by the statute, and “the INS brief to the Court of Appeals
did not alter the agency’s decision to comply with the House action
ordering deportation of Chadha.” Ibid. This Court held “that the
INS was sufficiently aggrieved by the Court of Appeals deci- sion
prohibiting it from taking action it would otherwise take,” ibid.,
regardless of whether the agency welcomed the judgment. The
necessity of a “case or controversy” to satisfy Article III was
defined as a requirement that the Court’s “ ‘decision will
have real meaning: if we rule for Chadha, he will not be deported;
if we uphold [the statute], the INS will execute its order and
deport him.’ ” Id., at 939–940 (quoting Chadha v. INS, 634
F. 2d 408, 419 (CA9 1980)). This conclusion was not dictum. It
was a necessary predicate to the Court’s holding that “prior to
Congress’ intervention, there was adequate Art. III
adverseness.” 462 U. S., at 939. The holdings of cases are
instructive, and the words of Chadha make clear its holding that
the refusal of the Executive to provide the relief sought suffices
to preserve a justiciable dispute as required by Article III. In
short, even where “the Government largely agree[s] with the
opposing party on the merits of the controversy,” there is
sufficient adverseness and an “adequate basis for jurisdiction in
the fact that the Government intended to enforce the challenged law
against that party.” Id., at 940, n. 12.
It is true that “[a]
party who receives all that he has sought generally is not
aggrieved by the judgment affording the relief and cannot appeal
from it.” Roper, supra, at 333, see also Camreta v. Greene, 563
U. S. ___, ___ (2011) (slip op., at 8) (“As a matter of
practice and prudence, we have generally declined to consider cases
at the request of a prevailing party, even when the Constitution
allowed us to do so”). But this rule “does not have its source in
the jurisdictional limitations of Art. III. In an appropriate case,
appeal may be permitted . . . at the behest of the party
who has prevailed on the merits, so long as that party retains a
stake in the appeal satisfying the requirements of Art. III.”
Roper, supra, at 333–334.
While these principles
suffice to show that this case presents a justiciable controversy
under Article III, the prudential problems inherent in the
Executive’s unusual position require some further discussion. The
Executive’s agreement with Windsor’s legal argument raises the risk
that instead of a “ ‘real, earnest and vital
controversy,’ ” the Court faces a “friendly, non-adversary,
proceeding . . . [in which] ‘a party beaten in the
legislature [seeks to] transfer to the courts an inquiry as to the
constitutionality of the legislative act.’ ” Ashwander v. TVA,
297 U. S. 288, 346 (1936) (Brandeis, J., concurring) (quoting
Chicago & Grand Trunk R. Co. v. Wellman, 143 U. S. 339,
345 (1892) ). Even when Article III permits the exercise of federal
jurisdiction, prudential considerations demand that the Court
insist upon “that concrete adverseness which sharpens the
presentation of issues upon which the court so largely depends for
illumination of difficult constitutional questions.” Baker v. Carr,
369 U. S. 186, 204 (1962) .
There are, of course,
reasons to hear a case and issue a ruling even when one party is
reluctant to prevail in its position. Unlike Article III
requirements—which must be satisfied by the parties before judicial
consideration is appropriate—the relevant prudential factors that
counsel against hearing this case are subject to “countervailing
considerations [that] may outweigh the concerns underlying the
usual reluctance to exert judicial power.” Warth, 422 U. S.,
at 500–501. One consideration is the extent to which adversarial
presentation of the issues is assured by the participation of amici
curiae prepared to defend with vigor the constitutionality of the
legislative act. With respect to this prudential aspect of standing
as well, the Chadha Court encountered a similar situation. It noted
that “there may be prudential, as opposed to Art. III, concerns
about sanctioning the adjudication of [this case] in the absence of
any participant supporting the validity of [the statute]. The Court
of Appeals properly dispelled any such concerns by inviting and
accepting briefs from both Houses of Congress.” 462 U. S., at
940. Chadha was not an anomaly in this respect. The Court adopts
the practice of entertaining arguments made by an amicus when the
Solicitor General confesses error with respect to a judgment below,
even if the confession is in effect an admission that an Act of
Congress is unconstitutional. See, e.g., Dickerson v. United
States, 530 U. S. 428 (2000) .
In the case now before
the Court the attorneys for BLAG present a substantial argument for
the constitutionality of §3 of DOMA. BLAG’s sharp adversarial
presentation of the issues satisfies the prudential concerns that
otherwise might counsel against hearing an appeal from a decision
with which the principal parties agree. Were this Court to hold
that prudential rules require it to dismiss the case, and, in
consequence, that the Court of Appeals erred in failing to dismiss
it as well, extensive litigation would ensue. The district courts
in 94 districts throughout the Nation would be without precedential
guidance not only in tax refund suits but also in cases involving
the whole of DOMA’s sweep involving over 1,000 federal statutes and
a myriad of federal regulations. For instance, the opinion of the
Court of Appeals for the First Circuit, addressing the validity of
DOMA in a case involving regulations of the Department of Health
and Human Services, likely would be vacated with instructions to
dismiss, its ruling and guidance also then erased. See
Massachusetts v. United States Dept. of Health and Human Servs.,
682 F. 3d 1 (CA1 2012). Rights and privileges of hundreds of
thousands of persons would be adversely affected, pending a case in
which all prudential concerns about justiciability are absent. That
numerical prediction may not be certain, but it is certain that the
cost in judicial resources and expense of litigation for all
persons adversely affected would be immense. True, the very extent
of DOMA’s mandate means that at some point a case likely would
arise without the prudential concerns raised here; but the costs,
uncertainties, and alleged harm and injuries likely would continue
for a time measured in years before the issue is resolved. In these
unusual and urgent circumstances, the very term “prudential”
counsels that it is a proper exercise of the Court’s responsibility
to take jurisdiction. For these reasons, the prudential and Article
III requirements are met here; and, as a consequence, the Court
need not decide whether BLAG would have standing to challenge the
District Court’s ruling and its affirmance in the Court of Appeals
on BLAG’s own authority.
The Court’s conclusion
that this petition may be heard on the merits does not imply that
no difficulties would ensue if this were a common practice in
ordinary cases. The Executive’s failure to defend the
constitutionality of an Act of Congress based on a constitutional
theory not yet established in judicial decisions has created a
procedural dilemma. On the one hand, as noted, the Government’s
agreement with Windsor raises questions about the propriety of
entertaining a suit in which it seeks affirmance of an order
invalidating a federal law and ordering the United States to pay
money. On the other hand, if the Execu- tive’s agreement with a
plaintiff that a law is unconsti- tutional is enough to preclude
judicial review, then the Supreme Court’s primary role in
determining the constitutionality of a law that has inflicted real
injury on a plaintiff who has brought a justiciable legal claim
would become only secondary to the President’s. This would
undermine the clear dictate of the separation-of-powers principle
that “when an Act of Congress is alleged to conflict with the
Constitution, ‘[i]t is emphatically the province and duty of the
judicial department to say what the law is.’ ” Zivotofsky v.
Clinton, 566 U. S. ___, ___ (2012) (slip op., at 7) (quoting
Marbury v. Madison, 1 Cranch 137, 177 (1803)). Similarly, with
respect to the legislative power, when Congress has passed a
statute and a President has signed it, it poses grave challenges to
the separation of powers for the Executive at a particular moment
to be able to nullify Congress’ enactment solely on its own
initiative and without any determination from the Court.
The Court’s
jurisdictional holding, it must be underscored, does not mean the
arguments for dismissing this dispute on prudential grounds lack
substance. Yet the difficulty the Executive faces should be
acknowledged. When the Executive makes a principled determination
that a statute is unconstitutional, it faces a difficult choice.
Still, there is no suggestion here that it is appropriate for the
Executive as a matter of course to challenge statutes in the
judicial forum rather than making the case to Congress for their
amendment or repeal. The integrity of the political process would
be at risk if difficult consti- tutional issues were simply
referred to the Court as a routine exercise. But this case is not
routine. And the capable defense of the law by BLAG ensures that
these prudential issues do not cloud the merits question, which is
one of immediate importance to the Federal Government and to
hundreds of thousands of persons. These cir- cumstances support the
Court’s decision to proceed to the merits.
III
When at first Windsor
and Spyer longed to marry, neither New York nor any other State
granted them that right. After waiting some years, in 2007 they
traveled to Ontario to be married there. It seems fair to conclude
that, until recent years, many citizens had not even considered the
possibility that two persons of the same sex might aspire to occupy
the same status and dignity as that of a man and woman in lawful
marriage. For marriage between a man and a woman no doubt had been
thought of by most people as essential to the very definition of
that term and to its role and function throughout the history of
civilization. That belief, for many who long have held it, became
even more urgent, more cherished when challenged. For others,
however, came the beginnings of a new perspective, a new insight.
Accordingly some States concluded that same-sex marriage ought to
be given recognition and validity in the law for those same-sex
couples who wish to define themselves by their commitment to each
other. The limitation of lawful marriage to heterosexual couples,
which for centuries had been deemed both necessary and fundamental,
came to be seen in New York and certain other States as an unjust
exclusion.
Slowly at first and
then in rapid course, the laws of New York came to acknowledge the
urgency of this issue for same-sex couples who wanted to affirm
their commitment to one another before their children, their
family, their friends, and their community. And so New York
recognized same-sex marriages performed elsewhere; and then it
later amended its own marriage laws to permit same-sex marriage.
New York, in common with, as of this writing, 11 other States and
the District of Columbia, decided that same-sex couples should have
the right to marry and so live with pride in themselves and their
union and in a status of equality with all other married persons.
After a statewide deliberative process that enabled its citizens to
discuss and weigh arguments for and against same- sex marriage, New
York acted to enlarge the definition of marriage to correct what
its citizens and elected representatives perceived to be an
injustice that they had not earlier known or understood. See
Marriage Equality Act, 2011 N. Y. Laws 749 (codified at
N. Y. Dom. Rel. Law Ann. §§10–a, 10–b, 13 (West 2013)).
Against this background
of lawful same-sex marriage in some States, the design, purpose,
and effect of DOMA should be considered as the beginning point in
deciding whether it is valid under the Constitution. By history and
tradition the definition and regulation of marriage, as will be
discussed in more detail, has been treated as being within the
authority and realm of the separate States. Yet it is further
established that Congress, in enacting discrete statutes, can make
determinations that bear on marital rights and privileges. Just
this Term the Court upheld the authority of the Congress to
pre-empt state laws, allowing a former spouse to retain life
insurance proceeds under a federal program that gave her priority,
because of formal beneficiary designation rules, over the wife by a
second marriage who survived the husband. Hillman v. Maretta, 569
U. S. ___ (2013); see also Ridgway v. Ridgway, 454 U. S.
46 (1981) ; Wissner v. Wissner, 338 U. S. 655 (1950) . This is
one example of the general principle that when the Federal
Government acts in the exercise of its own proper authority, it has
a wide choice of the mechanisms and means to adopt. See McCulloch
v. Maryland, 4 Wheat. 316, 421 (1819). Congress has the power both
to ensure efficiency in the administration of its programs and to
choose what larger goals and policies to pursue.
Other precedents
involving congressional statutes which affect marriages and family
status further illustrate this point. In addressing the interaction
of state domestic relations and federal immigration law Congress
determined that marriages “entered into for the purpose of
procuring an alien’s admission [to the United States] as an
immigrant” will not qualify the noncitizen for that status, even if
the noncitizen’s marriage is valid and proper for state-law
purposes. 8 U. S. C. §1186a(b)(1) (2006 ed. and Supp. V).
And in establishing income-based criteria for Social Security
benefits, Congress decided that although state law would determine
in general who qualifies as an applicant’s spouse, common-law
marriages also should be recognized, regardless of any particular
State’s view on these relationships. 42 U. S. C.
§1382c(d)(2).
Though these discrete
examples establish the constitutionality of limited federal laws
that regulate the meaning of marriage in order to further federal
policy, DOMA has a far greater reach; for it enacts a directive
applicable to over 1,000 federal statutes and the whole realm of
federal regulations. And its operation is directed to a class of
persons that the laws of New York, and of 11 other States, have
sought to protect. See Goodridge v. Department of Public Health,
440 Mass. 309, 798 N. E. 2d 941 (2003); An Act
Implementing the Guarantee of Equal Protection Under the
Constitution of the State for Same Sex Couples, 2009 Conn. Pub.
Acts no. 09–13; Varnum v. Brien, 763 N. W. 2d 862 (Iowa
2009); Vt. Stat. Ann., Tit. 15, §8 (2010); N. H. Rev. Stat.
Ann. §457:1–a (West Supp. 2012); Religious Freedom and Civil
Marriage Equality Amendment Act of 2009, 57 D. C. Reg. 27
(Dec. 18, 2009); N. Y. Dom. Rel. Law Ann. §10–a (West Supp.
2013); Wash. Rev. Code §26.04.010 (2012); Citizen Initiative, Same-
Sex Marriage, Question 1 (Me. 2012) (results online at
http: / / w w w.maine.gov/sos/cec/elec/2012/tab - ref-2012.html
(all Internet sources as visited June 18, 2013, and avail- able in
Clerk of Court’s case file)); Md. Fam. Law Code Ann. §2–201 (Lexis
2012); An Act to Amend Title 13 of the Delaware Code Relating to
Domestic Relations to Provide for Same-Gender Civil Marriage and to
Convert Exist- ing Civil Unions to Civil Marriages, 79 Del. Laws
ch. 19 (2013); An act relating to marriage; providing for civil
marriage between two persons; providing for exemptions and
protections based on religious association, 2013 Minn. Laws ch. 74;
An Act Relating to Domestic Relations—Persons Eligible to Marry,
2013 R. I. Laws ch. 4.
In order to assess the
validity of that intervention it is necessary to discuss the extent
of the state power and au- thority over marriage as a matter of
history and tradi- tion. State laws defining and regulating
marriage, of course, must respect the constitutional rights of
persons, see, e.g., Loving v. Virginia, 388 U. S. 1 (1967) ;
but, subject to those guarantees, “regulation of domestic
relations” is “an area that has long been regarded as a virtually
exclusive province of the States.” Sosna v. Iowa, 419 U. S.
393, 404 (1975) .
The recognition of
civil marriages is central to state domestic relations law
applicable to its residents and citizens. See Williams v. North
Carolina, 317 U. S. 287, 298 (1942) (“Each state as a
sovereign has a rightful and legitimate concern in the marital
status of persons domiciled within its borders”). The definition of
marriage is the foundation of the State’s broader authority to
regulate the subject of domestic relations with respect to the
“[p]rotection of offspring, property interests, and the enforcement
of marital responsibilities.” Ibid. “[T]he states, at the time of
the adoption of the Constitution, possessed full power over the
subject of marriage and divorce . . . [and] the
Constitution delegated no authority to the Government of the United
States on the subject of marriage and divorce.” Haddock v. Haddock,
201 U. S. 562, 575 (1906) ; see also In re Burrus, 136
U. S. 586 –594 (1890) (“The whole subject of the domestic
relations of husband and wife, parent and child, belongs to the
laws of the States and not to the laws of the United States”).
Consistent with this
allocation of authority, the Federal Government, through our
history, has deferred to state-law policy decisions with respect to
domestic relations. In De Sylva v. Ballentine, 351 U. S. 570
(1956) , for example, the Court held that, “[t]o decide who is the
widow or widower of a deceased author, or who are his executors or
next of kin,” under the Copyright Act “requires a reference to the
law of the State which created those legal relationships” because
“there is no federal law of domestic relations.” Id., at 580. In
order to respect this principle, the federal courts, as a general
rule, do not adjudicate issues of marital status even when there
might otherwise be a basis for federal jurisdiction. See
Ankenbrandt v. Richards, 504 U. S. 689, 703 (1992) . Federal
courts will not hear divorce and custody cases even if they arise
in diversity because of “the virtually exclusive primacy
. . . of the States in the regulation of domestic
relations.” Id., at 714 (Blackmun, J., concurring in judgment).
The significance of
state responsibilities for the definition and regulation of
marriage dates to the Nation’s beginning; for “when the
Constitution was adopted the common understanding was that the
domestic relations of husband and wife and parent and child were
matters reserved to the States.” Ohio ex rel. Popovici v.
Agler, 280 U. S. 379 –384 (1930). Marriage laws vary in some
respects from State to State. For example, the required minimum age
is 16 in Vermont, but only 13 in New Hampshire. Compare Vt. Stat.
Ann., Tit. 18, §5142 (2012), with N. H. Rev. Stat. Ann. §457:4
(West Supp. 2012). Likewise the permissible degree of consanguinity
can vary (most States permit first cousins to marry, but a
handful—such as Iowa and Washington, see Iowa Code §595.19 (2009);
Wash. Rev. Code §26.04.020 (2012)—prohibit the practice). But these
rules are in every event consistent within each State.
Against this background
DOMA rejects the long-established precept that the incidents,
benefits, and obligations of marriage are uniform for all married
couples within each State, though they may vary, subject to
constitutional guarantees, from one State to the next. Despite
these considerations, it is unnecessary to decide whether this
federal intrusion on state power is a violation of the Constitution
because it disrupts the federal balance. The State’s power in
defining the marital relation is of central relevance in this case
quite apart from principles of federalism. Here the State’s
decision to give this class of persons the right to marry conferred
upon them a dignity and status of immense import. When the State
used its historic and essential authority to define the marital
relation in this way, its role and its power in making the decision
enhanced the recognition, dignity, and protection of the class in
their own community. DOMA, because of its reach and extent, departs
from this history and tra- dition of reliance on state law to
define marriage. “ ‘[D]is-criminations of an unusual character
especially sug- gest careful consideration to determine whether
they are obnoxious to the constitutional provision.’ ” Romer
v. Evans, 517 U. S. 620, 633 (1996) (quoting Louisville Gas
& Elec. Co. v. Coleman, 277 U. S. 32 –38 (1928)).
The Federal Government
uses this state-defined class for the opposite purpose—to impose
restrictions and dis- abilities. That result requires this Court
now to address whether the resulting injury and indignity is a
deprivation of an essential part of the liberty protected by the
Fifth Amendment. What the State of New York treats as alike the
federal law deems unlike by a law designed to injure the same class
the State seeks to protect.
In acting first to
recognize and then to allow same-sex marriages, New York was
responding “to the initiative of those who [sought] a voice in
shaping the destiny of their own times.” Bond v. United States, 564
U. S. ___, ___ (2011) (slip op., at 9). These actions were
without doubt a proper exercise of its sovereign authority within
our fed- eral system, all in the way that the Framers of the
Constitu-tion intended. The dynamics of state government in the
federal system are to allow the formation of consensus respecting
the way the members of a discrete community treat each other in
their daily contact and constant interaction with each other.
The States’ interest in
defining and regulating the marital relation, subject to
constitutional guarantees, stems from the understanding that
marriage is more than a routine classification for purposes of
certain statutory benefits. Private, consensual sexual intimacy
between two adult persons of the same sex may not be punished by
the State, and it can form “but one element in a personal bond that
is more enduring.” Lawrence v. Texas, 539 U. S. 558, 567
(2003) . By its recognition of the validity of same-sex marriages
performed in other jurisdictions and then by authorizing same-sex
unions and same-sex marriages, New York sought to give further
protection and dignity to that bond. For same-sex couples who
wished to be married, the State acted to give their lawful conduct
a lawful status. This status is a far-reaching legal acknowledgment
of the intimate relationship between two people, a relationship
deemed by the State worthy of dignity in the community equal with
all other marriages. It reflects both the community’s considered
perspective on the historical roots of the institution of marriage
and its evolving understanding of the meaning of equality.
IV
DOMA seeks to injure
the very class New York seeks to protect. By doing so it violates
basic due process and equal protection principles applicable to the
Federal Government. See U. S. Const., Amdt. 5; Bolling v.
Sharpe, 347 U. S. 497 (1954) . The Constitution’s guarantee of
equality “must at the very least mean that a bare con- gressional
desire to harm a politically unpopular group cannot” justify
disparate treatment of that group. Depart- ment of Agriculture v.
Moreno, 413 U. S. 528 –535 (1973). In determining whether a
law is motived by an improper animus or purpose,
“ ‘[d]iscriminations of an un- usual character’ ”
especially require careful considera- tion. Supra, at 19 (quoting
Romer, supra, at 633). DOMA cannot survive under these principles.
The responsibility of the States for the regulation of domestic
relations is an important indicator of the substantial societal
impact the State’s classifications have in the daily lives and
customs of its people. DOMA’s unusual deviation from the usual
tradition of recognizing and accepting state definitions of
marriage here operates to deprive same-sex couples of the benefits
and responsibilities that come with the federal recognition of
their marriages. This is strong evidence of a law having the
purpose and effect of disapproval of that class. The avowed purpose
and practical effect of the law here in question are to impose a
disadvantage, a separate status, and so a stigma upon all who enter
into same-sex marriages made lawful by the unquestioned authority
of the States.
The history of DOMA’s
enactment and its own text demonstrate that interference with the
equal dignity of same-sex marriages, a dignity conferred by the
States in the exercise of their sovereign power, was more than an
incidental effect of the federal statute. It was its essence. The
House Report announced its conclusion that “it is both appropriate
and necessary for Congress to do what it can to defend the
institution of traditional heterosexual marriage. . . .
H. R. 3396 is appropriately entitled the ‘Defense of Marriage
Act.’ The effort to redefine ‘marriage’ to extend to homosexual
couples is a truly radical proposal that would fundamentally alter
the institution of marriage.” H. R. Rep. No. 104–664, pp.
12–13 (1996). The House concluded that DOMA expresses “both moral
disapproval of homosexuality, and a moral conviction that
heterosexuality better comports with traditional (especially
Judeo-Christian) morality.” Id., at 16 (footnote deleted). The
stated purpose of the law was to promote an “interest in protecting
the traditional moral teachings reflected in heterosexual-only
marriage laws.” Ibid. Were there any doubt of this far-reaching
purpose, the title of the Act confirms it: The Defense of
Marriage.
The arguments put
forward by BLAG are just as candid about the congressional purpose
to influence or interfere with state sovereign choices about who
may be married. As the title and dynamics of the bill indicate, its
purpose is to discourage enactment of state same-sex marriage laws
and to restrict the freedom and choice of couples married under
those laws if they are enacted. The congressional goal was “to put
a thumb on the scales and influence a state’s decision as to how to
shape its own marriage laws.” Massachusetts, 682 F. 3d, at
12–13. The Act’s demonstrated purpose is to ensure that if any
State decides to recognize same-sex marriages, those unions will be
treated as second-class marriages for purposes of federal law. This
raises a most serious question under the Constitution’s Fifth
Amendment.
DOMA’s operation in
practice confirms this purpose. When New York adopted a law to
permit same-sex marriage, it sought to eliminate inequality; but
DOMA frustrates that objective through a system-wide enactment with
no identified connection to any particular area of fed- eral law.
DOMA writes inequality into the entire United States Code. The
particular case at hand concerns the estate tax, but DOMA is more
than a simple determi- nation of what should or should not be
allowed as an estate tax refund. Among the over 1,000 statutes and
numerous federal regulations that DOMA controls are laws pertaining
to Social Security, housing, taxes, criminal sanctions, copyright,
and veterans’ benefits.
DOMA’s principal effect
is to identify a subset of state-sanctioned marriages and make them
unequal. The principal purpose is to impose inequality, not for
other reasons like governmental efficiency. Responsibilities, as
well as rights, enhance the dignity and integrity of the person.
And DOMA contrives to deprive some couples married under the laws
of their State, but not other couples, of both rights and
responsibilities. By creating two contradictory marriage regimes
within the same State, DOMA forces same-sex couples to live as
married for the purpose of state law but unmarried for the purpose
of federal law, thus diminishing the stability and predictability
of basic personal relations the State has found it proper to
acknowledge and protect. By this dynamic DOMA undermines both the
public and private significance of state-sanctioned same-sex
marriages; for it tells those couples, and all the world, that
their otherwise valid marriages are unworthy of federal
recognition. This places same-sex couples in an unstable position
of being in a second-tier marriage. The differentiation demeans the
couple, whose moral and sexual choices the Constitution protects,
see Lawrence, 539 U. S. 558 , and whose relationship the State
has sought to dignify. And it humiliates tens of thousands of
children now being raised by same-sex couples. The law in question
makes it even more difficult for the children to understand the
integrity and closeness of their own family and its concord with
other families in their community and in their daily lives.
Under DOMA, same-sex
married couples have their lives burdened, by reason of government
decree, in visible and public ways. By its great reach, DOMA
touches many aspects of married and family life, from the mundane
to the profound. It prevents same-sex married couples from
obtaining government healthcare benefits they would otherwise
receive. See 5 U. S. C. §§8901(5), 8905. It deprives them
of the Bankruptcy Code’s special protections for domestic-support
obligations. See 11 U. S. C. §§101(14A), 507(a)(1)(A),
523(a)(5), 523(a)(15). It forces them to follow a complicated
procedure to file their state and federal taxes jointly. Technical
Bulletin TB–55, 2010 Vt. Tax LEXIS 6 (Oct. 7, 2010); Brief for
Federalism Scholars as Amici Curiae 34. It prohibits them from
being buried together in veterans’ cemeteries. National Cemetery
Administration Directive 3210/1, p. 37 (June 4, 2008).
For certain married
couples, DOMA’s unequal effects are even more serious. The federal
penal code makes it a crime to “assaul[t], kidna[p], or murde[r]
. . . a member of the immediate family” of “a United
States official, a United States judge, [or] a Federal law
enforcement officer,” 18 U. S. C. §115(a)(1)(A), with the
intent to influence or retaliate against that official, §115(a)(1).
Although a “spouse” qualifies as a member of the officer’s
“immediate family,” §115(c)(2), DOMA makes this protection
inapplicable to same-sex spouses.
DOMA also brings
financial harm to children of same-sex couples. It raises the cost
of health care for families by taxing health benefits provided by
employers to their workers’ same-sex spouses. See 26
U. S. C. §106; Treas. Reg. §1.106–1, 26 CFR §1.106–1
(2012); IRS Private Letter Ruling 9850011 (Sept. 10, 1998). And it
denies or re- duces benefits allowed to families upon the loss of a
spouse and parent, benefits that are an integral part of family
security. See Social Security Administration, Social Security
Survivors Benefits 5 (2012) (benefits available to a surviving
spouse caring for the couple’s child), online at
http://www.ssa.gov/pubs/EN-05-10084.pdf.
DOMA divests married
same-sex couples of the duties and responsibilities that are an
essential part of married life and that they in most cases would be
honored to accept were DOMA not in force. For instance, because it
is expected that spouses will support each other as they pursue
educational opportunities, federal law takes into consideration a
spouse’s income in calculating a student’s fed- eral financial aid
eligibility. See 20 U. S. C. §1087nn(b). Same-sex married
couples are exempt from this requirement. The same is true with
respect to federal ethics rules. Federal executive and agency
officials are prohibited from “participat[ing] personally and
substantially” in matters as to which they or their spouses have a
financial interest. 18 U. S. C. §208(a). A similar
statute prohibits Senators, Senate employees, and their spouses
from accepting high-value gifts from certain sources, see 2
U. S. C. §31–2(a)(1), and another mandates detailed
financial disclosures by numerous high-ranking officials and their
spouses. See 5 U. S. C. App. §§102(a), (e). Under DOMA,
however, these Government-integrity rules do not apply to same-sex
spouses.
* * *
The power the
Constitution grants it also restrains. And though Congress has
great authority to design laws to fit its own conception of sound
national policy, it cannot deny the liberty protected by the Due
Process Clause of the Fifth Amendment.
What has been explained
to this point should more than suffice to establish that the
principal purpose and the necessary effect of this law are to
demean those persons who are in a lawful same-sex marriage. This
requires the Court to hold, as it now does, that DOMA is
unconstitutional as a deprivation of the liberty of the person
protected by the Fifth Amendment of the Constitution.
The liberty protected
by the Fifth Amendment’s Due Process Clause contains within it the
prohibition against denying to any person the equal protection of
the laws. See Bolling, 347 U. S., at 499–500; Adarand
Constructors, Inc. v. Peña, 515 U. S. 200 –218 (1995). While
the Fifth Amendment itself withdraws from Government the power to
degrade or demean in the way this law does, the equal protection
guarantee of the Fourteenth Amendment makes that Fifth Amendment
right all the more specific and all the better understood and
preserved.
The class to which DOMA
directs its restrictions and restraints are those persons who are
joined in same-sex marriages made lawful by the State. DOMA singles
out a class of persons deemed by a State entitled to recognition
and protection to enhance their own liberty. It imposes a
disability on the class by refusing to acknowledge a status the
State finds to be dignified and proper. DOMA instructs all federal
officials, and indeed all persons with whom same-sex couples
interact, including their own children, that their marriage is less
worthy than the marriages of others. The federal statute is
invalid, for no legitimate purpose overcomes the purpose and effect
to disparage and to injure those whom the State, by its marriage
laws, sought to protect in personhood and dignity. By seeking to
displace this protection and treating those persons as living in
marriages less respected than others, the federal statute is in
violation of the Fifth Amendment. This opinion and its holding are
confined to those lawful marriages.
The judgment of the
Court of Appeals for the Second Circuit is affirmed.
It is so ordered. SUPREME COURT OF THE UNITED STATES
_________________
No. 12–307
_________________
UNITED STATES, PETITIONER v. EDITH SCHLAIN
WINDSOR, in her capacity as executor of the ESTATE OF THEA CLARA
SPYER, et al.
on writ of certiorari to the united states
court of appeals for the second circuit
[June 26, 2013]
Chief Justice
Roberts, dissenting.
I agree with Justice
Scalia that this Court lacks jurisdiction to review the decisions
of the courts below. On the merits of the constitutional dispute
the Court decides to decide, I also agree with Justice Scalia that
Congress acted constitutionally in passing the Defense of Marriage
Act (DOMA). Interests in uniformity and stability am- ply justified
Congress’s decision to retain the definition of marriage that, at
that point, had been adopted by every State in our Nation, and
every nation in the world. Post, at 19–20 (dissenting opinion).
The majority sees a
more sinister motive, pointing out that the Federal Government has
generally (though not uniformly) deferred to state definitions of
marriage in the past. That is true, of course, but none of those
prior state-by-state variations had involved differences over
something—as the majority puts it—“thought of by most people as
essential to the very definition of [marriage] and to its role and
function throughout the history of civilization.” Ante, at 13. That
the Federal Government treated this fundamental question
differently than it treated variations over consanguinity or
minimum age is hardly surprising—and hardly enough to support a
conclusion that the “principal purpose,” ante, at 22, of the 342
Representa- tives and 85 Senators who voted for it, and the
President who signed it, was a bare desire to harm. Nor do the
snip- pets of legislative history and the banal title of the Act to
which the majority points suffice to make such a showing. At least
without some more convincing evidence that the Act’s principal
purpose was to codify malice, and that it furthered no legitimate
government interests, I would not tar the political branches with
the brush of bigotry.
But while I disagree
with the result to which the major- ity’s analysis leads it in this
case, I think it more important to point out that its analysis
leads no further. The Court does not have before it, and the logic
of its opinion does not decide, the distinct question whether the
States, in the exercise of their “historic and essential authority
to define the marital relation,” ante, at 18, may continue to
utilize the traditional definition of marriage.
The majority goes out
of its way to make this explicit in the penultimate sentence of its
opinion. It states that “[t]his opinion and its holding are
confined to those lawful marriages,” ante, at 26—referring to
same-sex marriages that a State has already recognized as a result
of the local “community’s considered perspective on the historical
roots of the institution of marriage and its evolving un-
derstanding of the meaning of equality.” Ante, at 20. Justice
Scalia believes this is a “ ‘bald, unreasoned
disclaime[r].’ ” Post, at 22. In my view, though, the
disclaimer is a logical and necessary consequence of the argument
the majority has chosen to adopt. The dominant theme of the
majority opinion is that the Federal Government’s intrusion into an
area “central to state domestic relations law applicable to its
residents and citizens” is sufficiently “unusual” to set off alarm
bells. Ante, at 17, 20. I think the majority goes off course, as I
have said, but it is undeniable that its judgment is based on
federalism.
The majority
extensively chronicles DOMA’s departure from the normal allocation
of responsibility between State and Federal Governments,
emphasizing that DOMA “rejects the long-established precept that
the incidents, benefits, and obligations of marriage are uniform
for all married couples within each State.” Ante, at 18. But there
is no such departure when one State adopts or keeps a definition of
marriage that differs from that of its neighbor, for it is entirely
expected that state definitions would “vary, subject to
constitutional guarantees, from one State to the next.” Ibid. Thus,
while “[t]he State’s power in defining the marital relation is of
central relevance” to the majority’s decision to strike down DOMA
here, ibid., that power will come into play on the other side of
the board in future cases about the constitutionality of state
marriage definitions. So too will the concerns for state diversity
and sovereignty that weigh against DOMA’s constitutionality in this
case. See ante, at 19.
It is not just this
central feature of the majority’s analysis that is unique to DOMA,
but many considerations on the periphery as well. For example, the
majority focuses on the legislative history and title of this
particular Act, ante, at 21; those statute-specific considerations
will, of course, be irrelevant in future cases about different
statutes. The majority emphasizes that DOMA was a “system- wide
enactment with no identified connection to any particular area of
federal law,” but a State’s definition of marriage “is the
foundation of the State’s broader author- ity to regulate the
subject of domestic relations with respect to the ‘[p]rotection of
offspring, property interests, and the enforcement of marital
responsibilities.’ ” Ante, at 22, 17. And the federal decision
undermined (in the majority’s view) the “dignity [already]
conferred by the States in the exercise of their sovereign power,”
ante, at 21, whereas a State’s decision whether to expand the
definition of marriage from its traditional contours involves no
similar concern.
We may in the future
have to resolve challenges to state marriage definitions affecting
same-sex couples. That issue, however, is not before us in this
case, and we hold today that we lack jurisdiction to consider it in
the particular context of Hollingsworth v. Perry, ante, p. ___. I
write only to highlight the limits of the majority’s holding and
reasoning today, lest its opinion be taken to resolve not only a
question that I believe is not properly before us—DOMA’s
constitutionality—but also a question that all agree, and the Court
explicitly acknowledges, is not at issue. SUPREME COURT OF THE UNITED STATES
_________________
No. 12–307
_________________
UNITED STATES, PETITIONER v. EDITH SCHLAIN
WINDSOR, in her capacity as executor of the ESTATE OF THEA CLARA
SPYER, et al.
on writ of certiorari to the united states
court of appeals for the second circuit
[June 26, 2013]
Justice Scalia, with
whom Justice Thomas joins, and with whom The Chief Justice joins as
to Part I, dissenting.
This case is about
power in several respects. It is about the power of our people to
govern themselves, and the power of this Court to pronounce the
law. Today’s opinion aggrandizes the latter, with the predictable
consequence of diminishing the former. We have no power to decide
this case. And even if we did, we have no power under the
Constitution to invalidate this democratically adopted leg-
islation. The Court’s errors on both points spring forth from the
same diseased root: an exalted conception of the role of this
institution in America.
I
A
The Court is
eager—hungry—to tell everyone its view of the legal question at the
heart of this case. Standing in the way is an obstacle, a
technicality of little interest to anyone but the people of We the
People, who created it as a barrier against judges’ intrusion into
their lives. They gave judges, in Article III, only the “judicial
Power,” a power to decide not abstract questions but real, concrete
“Cases” and “Controversies.” Yet the plaintiff and the Gov- ernment
agree entirely on what should happen in this lawsuit. They agree
that the court below got it right; and they agreed in the court
below that the court below that one got it right as well. What,
then, are we doing here?
The answer lies at the
heart of the jurisdictional portion of today’s opinion, where a
single sentence lays bare the majority’s vision of our role. The
Court says that we have the power to decide this case because if we
did not, then our “primary role in determining the
constitutionality of a law” (at least one that “has inflicted real
injury on a plaintiff”) would “become only secondary to the
President’s.” Ante, at 12. But wait, the reader wonders—Windsor won
below, and so cured her injury, and the President was glad to see
it. True, says the majority, but judicial review must march on
regardless, lest we “undermine the clear dictate of the
separation-of-powers principle that when an Act of Congress is
alleged to conflict with the Constitution, it is emphatically the
province and duty of the judicial department to say what the law
is.” Ibid. (internal quotation marks and brackets omitted).
That is jaw-dropping.
It is an assertion of judicial supremacy over the people’s
Representatives in Congress and the Executive. It envisions a
Supreme Court standing (or rather enthroned) at the apex of
government, empowered to decide all constitutional questions,
always and every- where “primary” in its role.
This image of the Court
would have been unrecognizable to those who wrote and ratified our
national charter. They knew well the dangers of “primary” power,
and so created branches of government that would be “perfectly
co-ordinate by the terms of their common commission,” none of which
branches could “pretend to an exclusive or superior right of
settling the boundaries between their respec- tive powers.” The
Federalist, No. 49, p. 314 (C. Rossiter ed. 1961) (J. Madison). The
people did this to protect themselves. They did it to guard their
right to self-rule against the black-robed supremacy that today’s
majority finds so attractive. So it was that Madison could
confidently state, with no fear of contradiction, that there was
nothing of “greater intrinsic value” or “stamped with the authority
of more enlightened patrons of liberty” than a government of
separate and coordinate powers. Id., No. 47, at 301.
For this reason we are
quite forbidden to say what the law is whenever (as today’s opinion
asserts) “ ‘an Act of Congress is alleged to conflict with the
Constitution.’ ” Ante, at 12. We can do so only when that
allegation will determine the outcome of a lawsuit, and is
contradicted by the other party. The “judicial Power” is not, as
the major- ity believes, the power “ ‘to say what the law
is,’ ” ibid., giving the Supreme Court the “primary role in
determining the constitutionality of laws.” The majority must have
in mind one of the foreign constitutions that pronounces such
primacy for its constitutional court and allows that primacy to be
exercised in contexts other than a lawsuit. See, e.g., Basic Law
for the Federal Republic of Germany, Art. 93. The judicial power as
Americans have understood it (and their English ancestors before
them) is the power to adjudicate, with conclusive effect, disputed
govern- ment claims (civil or criminal) against private persons,
and disputed claims by private persons against the government or
other private persons. Sometimes (though not always) the parties
before the court disagree not with regard to the facts of their
case (or not only with regard to the facts) but with regard to the
applicable law—in which event (and only in which event) it becomes
the “ ‘province and duty of the judicial department to say
what the law is.’ ” Ante, at 12.
In other words,
declaring the compatibility of state or federal laws with the
Constitution is not only not the “primary role” of this Court, it
is not a separate, free-standing role at all. We perform that role
incidentally—by accident, as it were—when that is necessary to
resolve the dispute before us. Then, and only then, does it become
“ ‘the province and duty of the judicial department to say
what the law is.’ ” That is why, in 1793, we politely declined
the Washington Administration’s request to “say what the law is” on
a particular treaty matter that was not the subject of a concrete
legal controversy. 3 Correspondence and Public Papers of John Jay
486–489 (H. Johnston ed. 1893). And that is why, as our opinions
have said, some questions of law will never be presented to this
Court, because there will never be anyone with standing to bring a
lawsuit. See Schlesinger v. Reservists Comm. to Stop the War, 418
U. S. 208, 227 (1974) ; United States v. Richardson, 418
U. S. 166, 179 (1974) . As Justice Bran- deis put it, we
cannot “pass upon the constitutionality of legislation in a
friendly, non-adversary, proceeding”; absent a “ ‘real,
earnest and vital controversy between individuals,’ ” we have
neither any work to do nor any power to do it. Ashwander v. TVA,
297 U. S. 288, 346 (1936) (concurring opinion) (quoting
Chicago & Grand Trunk R. Co. v. Wellman, 143 U. S. 339,
345 (1892) ). Our authority begins and ends with the need to
adjudge the rights of an injured party who stands before us seeking
redress. Lujan v. Defenders of Wildlife, 504 U. S. 555, 560
(1992) .
That is completely
absent here. Windsor’s injury was cured by the judgment in her
favor. And while, in ordinary circumstances, the United States is
injured by a directive to pay a tax refund, this suit is far from
ordinary. Whatever injury the United States has suffered will
surely not be redressed by the action that it, as a litigant, asks
us to take. The final sentence of the Solicitor General’s brief on
the merits reads: “For the foregoing reasons, the judgment of the
court of appeals should be affirmed.” Brief for United States
(merits) 54 (emphasis added). That will not cure the Government’s
injury, but carve it into stone. One could spend many fruitless
afternoons ransacking our library for any other petitioner’s brief
seeking an affirmance of the judgment against it. [ 1 ] What the petitioner United States asks us
to do in the case before us is exactly what the respondent Windsor
asks us to do: not to provide relief from the judgment below but to
say that that judgment was correct. And the same was true in the
Court of Appeals: Neither party sought to undo the judgment for
Windsor, and so that court should have dismissed the appeal (just
as we should dismiss) for lack of jurisdiction. Since both parties
agreed with the judgment of the District Court for the Southern
District of New York, the suit should have ended there. The further
proceedings have been a contrivance, having no object in mind
except to ele- vate a District Court judgment that has no
precedential effect in other courts, to one that has precedential
effect throughout the Second Circuit, and then (in this Court)
precedential effect throughout the United States.
We have never before
agreed to speak—to “say what the law is”—where there is no
controversy before us. In the more than two centuries that this
Court has existed as an institution, we have never suggested that
we have the power to decide a question when every party agrees with
both its nominal opponent and the court below on that question’s
answer. The United States reluctantly con- ceded that at oral
argument. See Tr. of Oral Arg. 19–20.
The closest we have
ever come to what the Court blesses today was our opinion in INS v.
Chadha, 462 U. S. 919 (1983) . But in that case, two parties
to the litigation
disagreed with the position of the United States
and with the court below: the House and Senate, which had
intervened in the case. Because Chadha concerned the validity of a
mode of congressional action—the one-house legis- lative veto—the
House and Senate were threatened with destruction of what they
claimed to be one of their institutional powers. The Executive
choosing not to defend that power, [ 2 ] we permitted the House and Senate to intervene.
Nothing like that is present here.
To be sure, the Court
in Chadha said that statutory aggrieved-party status was “not
altered by the fact that the Executive may agree with the holding
that the statute in question is unconstitutional.” Id., at 930–931.
But in a footnote to that statement, the Court acknowledged Arti-
cle III’s separate requirement of a “justiciable case or
controversy,” and stated that this requirement was satisfied
“because of the presence of the two Houses of Congress as adverse
parties.” Id., at 931, n. 6. Later in its opinion, the Chadha
Court remarked that the United States’ announced intention to
enforce the statute also sufficed to permit judicial review, even
absent congressional participation. Id., at 939. That remark is
true, as a description of the judicial review conducted in the
Court of Appeals, where the Houses of Congress had not inter-
vened. (The case originated in the Court of
Appeals, since it sought review of agency action under 8
U. S. C. §1105a(a) (1976 ed.).) There, absent a judgment
setting aside the INS order, Chadha faced deportation. This pas-
sage of our opinion seems to be addressing that initial standing in
the Court of Appeals, as indicated by its quotation from the lower
court’s opinion, 462 U. S., at 939–940. But if it was
addressing standing to pursue the appeal, the remark was both the
purest dictum (as congressional intervention at that point made the
required adverseness “beyond doubt,” id., at 939), and quite
incorrect. When a private party has a judicial decree safely in
hand to prevent his injury, additional judicial action requires
that a party injured by the decree seek to undo it. In Chadha, the
intervening House and Senate fulfilled that requirement. Here no
one does.
The majority’s
discussion of the requirements of Article III bears no resemblance
to our jurisprudence. It accuses the amicus (appointed to argue
against our jurisdiction) of “elid[ing] the distinction between
. . . the jurisdictional requirements of Article III and
the prudential limits on its exercise.” Ante, at 6. It then
proceeds to call the requirement of adverseness a “prudential”
aspect of standing. Of standing. That is incomprehensible. A
plaintiff (or appellant) can have all the standing in the
world—satisfying all three standing requirements of Lujan that the
majority so carefully quotes, ante, at 7—and yet no Article III
controversy may be before the court. Article III requires not just
a plaintiff (or appellant) who has standing to complain but an
opposing party who denies the validity of the complaint. It is not
the amicus that has done the eliding of distinctions, but the
majority, calling the quite separate Article III requirement of
adverseness between the parties an element (which it then
pronounces a “prudential” element) of standing. The question here
is not whether, as the majority puts it, “the United States retains
a stake sufficient to support Article III jurisdiction,” ibid. the
question is whether there is any controversy (which requires
contradiction) between the United States and Ms. Windsor. There is
not.
I find it wryly amusing
that the majority seeks to dismiss the requirement of
party-adverseness as nothing more than a “prudential” aspect of the
sole Article III requirement of standing. (Relegating a
jurisdictional re- quirement to “prudential” status is a wondrous
device, enabling courts to ignore the requirement whenever they
believe it “prudent”—which is to say, a good idea.) Half a century
ago, a Court similarly bent upon announcing its view regarding the
constitutionality of a federal statute achieved that goal by
effecting a remarkably similar but completely opposite distortion
of the principles limiting our jurisdiction. The Court’s notorious
opinion in Flast v. Cohen, 392 U. S. 83 –101 (1968), held that
standing was merely an element (which it pronounced to be a
“prudential” element) of the sole Article III requirement of
adverseness. We have been living with the chaos created by that
power-grabbing decision ever since, see Hein v. Freedom From
Religion Foundation, Inc., 551 U. S. 587 (2007) , as we will
have to live with the chaos created by this one.
The authorities the
majority cites fall miles short of supporting the counterintuitive
notion that an Article III “controversy” can exist without
disagreement between the parties. In Deposit Guaranty Nat. Bank v.
Roper, 445 U. S. 326 (1980) , the District Court had entered
judgment in the individual plaintiff’s favor based on the defendant
bank’s offer to pay the full amount claimed. The plaintiff,
however, sought to appeal the District Court’s denial of class
certification under Federal Rule of Civil Procedure 23. There was a
continuing dispute between the parties concerning the issue raised
on appeal. The same is true of the other case cited by the
majority, Camreta v. Greene, 563 U. S. ___ (2011). There the
District Court found that the defendant state officers had violated
the Fourth Amendment, but rendered judgment in their favor because
they were entitled to official immunity, application of the Fourth
Amendment to their conduct not having been clear at the time of
violation. The officers sought to appeal the holding of Fourth
Amendment violation, which would circumscribe their future conduct;
the plaintiff continued to insist that a Fourth Amendment violation
had occurred. The “prudential” discretion to which both those cases
refer was the discretion to deny an appeal even when a live
controversy exists—not the discretion to grant one when it does
not. The majority can cite no case in which this Court entertained
an appeal in which both parties urged us to affirm the judgment
below. And that is because the existence of a controversy is not a
“prudential” requirement that we have invented, but an essential
element of an Article III case or controversy. The majority’s
notion that a case between friendly parties can be entertained so
long as “adversarial presentation of the issues is assured by the
participation of amici curiae prepared to defend with vigor” the
other side of the issue, ante, at 10, effects a breathtaking
revolution in our Article III jurisprudence.
It may be argued that
if what we say is true some Presidential determinations that
statutes are unconstitutional will not be subject to our review.
That is as it should be, when both the President and the plaintiff
agree that the statute is unconstitutional. Where the Executive is
en- forcing an unconstitutional law, suit will of course lie; but
if, in that suit, the Executive admits the unconstitution- ality of
the law, the litigation should end in an order or a consent decree
enjoining enforcement. This suit saw the light of day only because
the President enforced the Act (and thus gave Windsor standing to
sue) even though he believed it unconstitutional. He could have
equally chosen (more appropriately, some would say) neither to
enforce nor to defend the statute he believed to be unconstitu-
tional, see Presidential Authority to Decline to Execute Un-
constitutional Statutes, 18 Op. Off. Legal Counsel 199 (Nov. 2,
1994)—in which event Windsor would not have been injured, the
District Court could not have refereed this friendly scrimmage, and
the Executive’s determination of unconstitutionality would have
escaped this Court’s desire to blurt out its view of the law. The
matter would have been left, as so many matters ought to be left,
to a tug of war between the President and the Congress, which has
innumerable means (up to and including impeachment) of compelling
the President to enforce the laws it has written. Or the President
could have evaded presentation of the constitutional issue to this
Court simply by declining to appeal the District Court and Court of
Appeals dispositions he agreed with. Be sure of this much: If a
President wants to insulate his judgment of unconstitutionality
from our review, he can. What the views urged in this dissent
produce is not insulation from judicial review but insulation from
Executive contrivance.
The majority brandishes
the famous sentence from Marbury v. Madison, 1 Cranch 137, 177
(1803) that “[i]t is emphatically the province and duty of the
judicial department to say what the law is.” Ante, at 12 (internal
quotation marks omitted). But that sentence neither says nor
implies that it is always the province and duty of the Court to say
what the law is—much less that its responsibility in that regard is
a “primary” one. The very next sentence of Chief Justice Marshall’s
opinion makes the crucial qualification that today’s majority
ignores: “Those who apply the rule to particular cases, must of
necessity expound and interpret that rule.” 1 Cranch, at 177
(emphasis added). Only when a “particular case” is before us—that
is, a controversy that it is our business to resolve under Article
III—do we have the province and duty to pronounce the law. For the
views of our early Court more precisely addressing the question
before us here, the ma- jority ought instead to have consulted the
opinion of Chief Justice Taney in Lord v. Veazie, 8 How. 251
(1850):
“The objection in the case before us is
. . . that the plaintiff and defendant have the same
interest, and that interest adverse and in conflict with the
interest of third persons, whose rights would be seriously affected
if the question of law was decided in the manner that both of the
parties to this suit desire it to be.
“A judgment entered under such
circumstances, and for such purposes, is a mere form. The whole
proceeding was in contempt of the court, and highly reprehensible
. . . . A judgment in form, thus procured, in the
eye of the law is no judgment of the court. It is a nullity, and no
writ of error will lie upon it. This writ is, therefore,
dismissed.” Id., at 255–256.
There is, in the words of Marbury, no “necessity
[to] expound and interpret” the law in this case; just a desire to
place this Court at the center of the Nation’s life. 1 Cranch,
at 177.
B
A few words in
response to the theory of jurisdiction set forth in Justice Alito’s
dissent: Though less far reach- ing in its consequences than the
majority’s conversion of constitutionally required adverseness into
a discretionary element of standing, the theory of that dissent
similarly elevates the Court to the “primary” determiner of
constitutional questions involving the separation of powers, and,
to boot, increases the power of the most dangerous branch: the
“legislative department,” which by its nature “draw[s] all power
into its impetuous vortex.” The Federalist, No. 48, at 309 (J.
Madison). Heretofore in our national his- tory, the President’s
failure to “take Care that the Laws be faithfully executed,”
U. S. Const., Art. II, §3, could only be brought before a
judicial tribunal by someone whose concrete interests were harmed
by that alleged failure. Justice Alito would create a system in
which Congress can hale the Executive before the courts not only to
vindicate its own institutional powers to act, but to correct a
perceived inadequacy in the execution of its laws. [ 3 ] This would lay to rest Tocqueville’s
praise of our judicial system as one which “intimately bind[s] the
case made for the law with the case made for one man,” one in which
legislation is “no longer exposed to the daily aggression of the
parties,” and in which “[t]he political question that [the judge]
must resolve is linked to the interest” of private litigants. A. de
Tocqueville, Democracy in America 97 (H. Mansfield
& D. Winthrop eds. 2000). That would be
replaced by a system in which Congress and the Executive can pop
immediately into court, in their institutional capacity, whenever
the President refuses to implement a statute he believes to be
unconstitutional, and whenever he implements a law in a manner that
is not to Congress’s liking.
Justice Alito’s notion
of standing will likewise enormously shrink the area to which
“judicial censure, exercised by the courts on legislation, cannot
extend,” ibid. For example, a bare majority of both Houses could
bring into court the assertion that the Executive’s implementation
of welfare programs is too generous—a failure that no other
litigant would have standing to complain about. Moreover, as we
indicated in Raines v. Byrd, 521 U. S. 811, 828 (1997) , if
Congress can sue the Executive for the erroneous application of the
law that “injures” its power to legislate, surely the Executive can
sue Congress for its erroneous adoption of an unconstitutional law
that “injures” the Executive’s power to administer—or perhaps for
its protracted failure to act on one of his nominations. The
opportunities for dragging the courts into disputes hith- erto left
for political resolution are endless.
Justice Alito’s dissent
is correct that Raines did not formally decide this issue, but its
reasoning does. The opinion spends three pages discussing famous,
decades-long disputes between the President and Congress—regarding
congressional power to forbid the Presidential removal of executive
officers, regarding the legislative veto, regarding congressional
appointment of executive officers, and regarding the pocket
veto—that would surely have been promptly resolved by a
Congress-vs.-the-President lawsuit if the impairment of a branch’s
powers alone conferred standing to commence litigation. But it does
not, and never has; the “enormous power that the judiciary would
acquire” from the ability to adjudicate such suits “would have made
a mockery of [Hamilton’s] quotation of Montesquieu to the effect
that ‘of the three powers above mentioned . . . the
JUDICIARY is next to nothing.’ ” Barnes v. Kline, 759
F. 2d 21, 58 (CADC 1985) (Bork, J., dissenting) (quoting The
Federalist No. 78 (A. Hamilton)).
To be sure, if Congress
cannot invoke our authority in the way that Justice Alito proposes,
then its only recourse is to confront the President directly.
Unimaginable evil this is not. Our system is designed for
confrontation. That is what “[a]mbition . . .
counteract[ing] ambition,” The Federalist, No. 51, at 322 (J.
Madison), is all about. If majorities in both Houses of Congress
care enough about the matter, they have available innumerable ways
to com- pel executive action without a lawsuit—from refusing to
confirm Presidential appointees to the elimination of funding.
(Nothing says “enforce the Act” quite like “. . . or you
will have money for little else.”) But the condition is crucial;
Congress must care enough to act against the President itself, not
merely enough to instruct its lawyers to ask us to do so. Placing
the Constitution’s entirely anticipated political arm wrestling
into permanent judicial receivership does not do the system a
favor. And by the way, if the President loses the lawsuit but does
not faithfully implement the Court’s decree, just as he did not
faithfully implement Congress’s statute, what then? Only Congress
can bring him to heel by . . . what do you think? Yes: a
direct confrontation with the President.
II
For the reasons
above, I think that this Court has, and the Court of Appeals had,
no power to decide this suit. We should vacate the decision below
and remand to the Court of Appeals for the Second Circuit, with
instructions to dismiss the appeal. Given that the majority has
volunteered its view of the merits, however, I proceed to discuss
that as well.
A
There are many
remarkable things about the majority’s merits holding. The first is
how rootless and shifting its justifications are. For example, the
opinion starts with seven full pages about the traditional power of
States to define domestic relations—initially fooling many readers,
I am sure, into thinking that this is a federalism opinion. But we
are eventually told that “it is unnecessary to decide whether this
federal intrusion on state power is a vio- lation of the
Constitution,” and that “[t]he State’s power in defining the
marital relation is of central relevance in this case quite apart
from principles of federalism” be- cause “the State’s decision to
give this class of persons the right to marry conferred upon them a
dignity and status of immense import.” Ante, at 18. But no one
questions the power of the States to define marriage (with the
concomitant conferral of dignity and status), so what is the point
of devoting seven pages to describing how long and well established
that power is? Even after the opinion has formally disclaimed
reliance upon principles of federalism, mentions of “the usual
tradition of recognizing and accepting state definitions of
marriage” continue. See, e.g., ante, at 20. What to make of this?
The opinion never explains. My guess is that the majority, while
reluctant to suggest that defining the meaning of “marriage” in
federal statutes is unsupported by any of the Federal Government’s
enumerated powers, [ 4 ]
nonetheless needs some rhetorical basis to support its pretense
that today’s prohibition of
laws excluding same-sex marriage is confined
to the Federal Government (leaving the second, state-law shoe to be
dropped later, maybe next Term). But I am only guessing.
Equally perplexing are
the opinion’s references to “the Constitution’s guarantee of
equality.” Ibid. Near the end of the opinion, we are told that
although the “equal protection guarantee of the Fourteenth
Amendment makes [the] Fifth Amendment [due process] right all the
more specific and all the better understood and preserved”—what can
that mean?—“the Fifth Amendment itself withdraws from Government
the power to degrade or demean in the way this law does.” Ante, at
25. The only possible interpretation of this statement is that the
Equal Protection Clause, even the Equal Protection Clause as
incorporated in the Due Process Clause, is not the basis for
today’s holding. But the portion of the majority opinion that
explains why DOMA is unconstitutional (Part IV) begins by citing
Bolling v. Sharpe, 347 U. S. 497 (1954) , Department of
Agriculture v. Moreno, 413 U. S. 528 (1973) , and Romer v.
Evans, 517 U. S. 620 (1996) —all of which are equal-protection
cases. [ 5 ] And those three
cases are the only authorities that the Court cites in Part IV
about the Constitution’s meaning, except for its citation of
Lawrence v. Texas, 539 U. S. 558 (2003) (not an
equal-protection case) to support its passing assertion that the
Constitution protects the “moral and sexual choices” of same-sex
couples, ante, at 23.
Moreover, if this is
meant to be an equal-protection opinion, it is a confusing one. The
opinion does not resolve and indeed does not even mention what had
been the
central question in this litigation: whether,
under the Equal Protection Clause, laws restricting marriage to a
man and a woman are reviewed for more than mere rationality. That
is the issue that divided the parties and the court below, compare
Brief for Respondent Bipartisan Legal Advisory Group of U. S.
House of Representatives (merits) 24–28 (no), with Brief for
Respondent Windsor (merits) 17–31 and Brief for United States
(merits) 18–36 (yes); and compare 699 F. 3d 169, 180–185 (CA2
2012) (yes), with id., at 208–211 (Straub, J., dissenting in part
and concurring in part) (no). In accord with my previously
expressed skepticism about the Court’s “tiers of scrutiny”
approach, I would review this classification only for its
rationality. See United States v. Virginia, 518 U. S. 515 –570
(1996) (Scalia, J., dissenting). As nearly as I can tell, the Court
agrees with that; its opinion does not apply strict scrutiny, and
its central propositions are taken from rational-basis cases like
Moreno. But the Court certainly does not apply anything that
resembles that deferential framework. See Heller v. Doe, 509
U. S. 312, 320 (1993) (a classification “ ‘must be upheld
. . . if there is any reason- ably conceivable state of
facts’ ” that could justify it).
The majority opinion
need not get into the strict-vs.-rational-basis scrutiny question,
and need not justify its holding under either, because it says that
DOMA is unconstitutional as “a deprivation of the liberty of the
person protected by the Fifth Amendment of the Constitution,” ante,
at 25; that it violates “basic due process” principles, ante, at
20; and that it inflicts an “injury and indignity” of a kind that
denies “an essential part of the liberty pro- tected by the Fifth
Amendment,” ante, at 19. The majority never utters the dread words
“substantive due process,” perhaps sensing the disrepute into which
that doctrine has fallen, but that is what those statements mean.
Yet the opinion does not argue that same-sex marriage is “deeply
rooted in this Nation’s history and tradition,” Washington v.
Glucksberg, 521 U. S. 702 –721 (1997), a claim that would of
course be quite absurd. So would the further suggestion (also
necessary, under our substantive-due-process precedents) that a
world in which DOMA exists is one bereft of “ ‘ordered
liberty.’ ” Id., at 721 (quoting Palko v. Connecticut, 302
U. S. 319, 325 (1937) ).
Some might conclude
that this loaf could have used a while longer in the oven. But that
would be wrong; it is already overcooked. The most expert care in
preparation cannot redeem a bad recipe. The sum of all the Court’s
nonspecific hand-waving is that this law is invalid (maybe on
equal-protection grounds, maybe on substantive-due-process grounds,
and perhaps with some amorphous federalism component playing a
role) because it is motivated by a “ ‘bare . . .
desire to harm’ ” couples in same-sex marriages. Ante, at 20.
It is this proposition with which I will therefore engage.
B
As I have observed
before, the Constitution does not forbid the government to enforce
traditional moral and sexual norms. See Lawrence v. Texas, 539
U. S. 558, 599 (2003) (Scalia, J., dissenting). I will not
swell the U. S. Reports with restatements of that point. It is
enough to say that the Constitution neither requires nor forbids
our society to approve of same-sex marriage, much as it neither
requires nor forbids us to approve of no-fault divorce, polygamy,
or the consumption of alcohol.
However, even setting
aside traditional moral disapproval of same-sex marriage (or indeed
same-sex sex), there are many perfectly valid—indeed, downright
boring—justifying rationales for this legislation. Their existence
ought to be the end of this case. For they give the lie to the
Court’s conclusion that only those with hateful hearts could have
voted “aye” on this Act. And more importantly, they serve to make
the contents of the legislators’ hearts quite irrelevant: “It is a
familiar principle of constitutional law that this Court will not
strike down an otherwise constitutional statute on the basis of an
alleged illicit legislative motive.” United States v. O’Brien, 391
U. S. 367, 383 (1968) . Or at least it was a familiar
principle. By holding to the contrary, the majority has declared
open season on any law that (in the opinion of the law’s opponents
and any panel of like-minded federal judges) can be characterized
as mean-spirited.
The majority concludes
that the only motive for this Act was the “bare . . .
desire to harm a politically unpopular group.” Ante, at 20. Bear in
mind that the object of this condemnation is not the legislature of
some once-Confederate Southern state (familiar objects of the
Court’s scorn, see, e.g., Edwards v. Aguillard, 482 U. S. 578
(1987) ), but our respected coordinate branches, the Congress and
Presidency of the United States. Laying such a charge against them
should require the most extraordinary evidence, and I would have
thought that every attempt would be made to indulge a more anodyne
explanation for the statute. The majority does the
opposite—affirmatively concealing from the reader the arguments
that exist in justification. It makes only a passing mention of the
“arguments put forward” by the Act’s defenders, and does not even
trouble to paraphrase or describe them. See ante, at 21. I imagine
that this is because it is harder to maintain the illusion of the
Act’s supporters as unhinged members of a wild-eyed lynch mob when
one first describes their views as they see them.
To choose just one of
these defenders’ arguments, DOMA avoids difficult choice-of-law
issues that will now arise absent a uniform federal definition of
marriage. See, e.g., Baude, Beyond DOMA: Choice of State Law in
Fed- eral Statutes, 64 Stan. L. Rev. 1371 (2012). Imagine a
pair of women who marry in Albany and then move to Alabama, which
does not “recognize as valid any marriage of parties of the same
sex.” Ala. Code §30–1–19(e) (2011). When the couple files their
next federal tax return, may it be a joint one? Which State’s law
controls, for federal-law purposes: their State of celebration
(which recognizes the marriage) or their State of domicile (which
does not)? (Does the answer depend on whether they were just
visiting in Albany?) Are these questions to be answered as a matter
of federal common law, or perhaps by borrowing a State’s
choice-of-law rules? If so, which State’s? And what about States
where the status of an out-of-state same-sex marriage is an
unsettled question under local law? See Godfrey v. Spano, 13
N. Y. 3d 358, 920 N. E. 2d 328 (2009). DOMA avoided all of
this uncertainty by speci- fying which marriages would be
recognized for federal purposes. That is a classic purpose for a
definitional provision.
Further, DOMA preserves
the intended effects of prior legislation against then-unforeseen
changes in circumstance. When Congress provided (for example) that
a special estate-tax exemption would exist for spouses, this
exemption reached only opposite-sex spouses—those being the only
sort that were recognized in any State at the time of DOMA’s
passage. When it became clear that changes in state law might one
day alter that balance, DOMA’s definitional section was enacted to
ensure that state-level experimentation did not automatically alter
the basic operation of federal law, unless and until Congress made
the further judgment to do so on its own. That is not animus—just
stabilizing prudence. Congress has hardly demonstrated itself
unwilling to make such further, revising judgments upon due
deliberation. See, e.g., Don’t Ask, Don’t Tell Repeal Act of 2010,
124Stat. 3515.
The Court mentions none
of this. Instead, it accuses the Congress that enacted this law and
the President who signed it of something much worse than, for
example, having acted in excess of enumerated federal powers—or
even having drawn distinctions that prove to be irrational. Those
legal errors may be made in good faith, errors though they are. But
the majority says that the supporters of this Act acted with
malice—with the “purpose” (ante, at 25) “to disparage and to
injure” same-sex couples. It says that the motivation for DOMA was
to “demean,” ibid.; to “impose inequality,” ante, at 22; to “impose
. . . a stigma,” ante, at 21; to deny people “equal
dignity,” ibid.; to brand gay people as “unworthy,” ante, at 23;
and to “humiliat[e]” their children, ibid. (emphasis added).
I am sure these
accusations are quite untrue. To be sure (as the majority points
out), the legislation is called the Defense of Marriage Act. But to
defend traditional marriage is not to condemn, demean, or humiliate
those who would prefer other arrangements, any more than to defend
the Constitution of the United States is to condemn, demean, or
humiliate other constitutions. To hurl such accusations so casually
demeans this institution. In the majority’s judgment, any
resistance to its holding is beyond the pale of reasoned
disagreement. To question its high-handed invalidation of a
presumptively valid statute is to act (the majority is sure) with
the purpose to “dis- parage,” ”injure,” “degrade,” ”demean,” and
“humiliate” our fellow human beings, our fellow citizens, who are
homosexual. All that, simply for supporting an Act that did no more
than codify an aspect of marriage that had been unquestioned in our
society for most of its existence—indeed, had been unquestioned in
virtually all societies for virtually all of human history. It is
one thing for a society to elect change; it is another for a court
of law to impose change by adjudging those who oppose it hostes
humani generis, enemies of the human race.
* * *
The penultimate
sentence of the majority’s opinion is a naked declaration that
“[t]his opinion and its holding are confined” to those couples
“joined in same-sex marriages made lawful by the State.” Ante, at
26, 25. I have heard such “bald, unreasoned disclaimer[s]” before.
Lawrence, 539 U. S., at 604. When the Court declared a
constitutional right to homosexual sodomy, we were assured that the
case had nothing, nothing at all to do with “whether the government
must give formal recognition to any relationship that homosexual
persons seek to enter.” Id., at 578. Now we are told that DOMA is
invalid because it “demeans the couple, whose moral and sexual
choices the Constitution protects,” ante, at 23—with an
accompanying citation of Lawrence. It takes real cheek for today’s
majority to assure us, as it is going out the door, that a
constitutional requirement to give formal recognition to same-sex
marriage is not at issue here—when what has preceded that assurance
is a lecture on how superior the majority’s moral judgment in favor
of same-sex marriage is to the Congress’s hateful moral judgment
against it. I promise you this: The only thing that will “confine”
the Court’s holding is its sense of what it can get away with.
I do not mean to
suggest disagreement with The Chief Justice’s view, ante,
p. 2–4 (dissenting opinion), that lower federal courts and
state courts can distinguish today’s case when the issue before
them is state denial of marital status to same-sex couples—or even
that this Court could theoretically do so. Lord, an opinion with
such scatter-shot rationales as this one (federalism noises among
them) can be distinguished in many ways. And deserves to be. State
and lower federal courts should take the Court at its word and
distinguish away.
In my opinion, however,
the view that this Court will take of state prohibition of same-sex
marriage is indicated beyond mistaking by today’s opinion. As I
have said, the real rationale of today’s opinion, whatever
disappearing trail of its legalistic argle-bargle one chooses to
follow, is that DOMA is motivated by “ ‘bare . . .
desire to harm’ ” couples in same-sex marriages. Supra, at 18.
How easy it is, indeed how inevitable, to reach the same conclusion
with regard to state laws denying same-sex couples marital status.
Consider how easy (inevitable) it is to make the following
substitutions in a passage from today’s opinion ante, at 22:
“DOMA’s This state law’s principal effect
is to identify a subset of state-sanctioned marriages constitution-
ally protected sexual relationships, see Lawrence, and make them
unequal. The principal purpose is to impose inequality, not for
other reasons like govern- mental efficiency. Responsibilities, as
well as rights, enhance the dignity and integrity of the person.
And DOMA this state law contrives to deprive some couples married
under the laws of their State enjoying constitutionally protected
sexual relationships, but not other couples, of both rights and
responsibilities.”
Or try this passage, from ante, at 22–23:
“[DOMA] This state law tells those
couples, and all the world, that their otherwise valid marriages
relationships are unworthy of federal state recognition. This
places same-sex couples in an unstable position of being in a
second-tier marriage relationship. The differentiation demeans the
couple, whose moral and sexual choices the Constitution protects,
see Lawrence, . . . .”
Or this, from ante, at 23—which does not even
require alteration, except as to the invented number:
“And it humiliates tens of thousands of
children now being raised by same-sex couples. The law in question
makes it even more difficult for the children to understand the
integrity and closeness of their own family and its concord with
other families in their commu- nity and in their daily lives.”
Similarly transposable passages—deliberately
transpos- able, I think—abound. In sum, that Court which finds it
so horrific that Congress irrationally and hatefully robbed
same-sex couples of the “personhood and dignity” which state
legislatures conferred upon them, will of a certitude be similarly
appalled by state legislatures’ irrational and hateful failure to
acknowledge that “personhood and dig- nity” in the first place.
Ante, at 26. As far as this Court is concerned, no one should be
fooled; it is just a matter of listening and waiting for the other
shoe.
By formally declaring
anyone opposed to same-sex marriage an enemy of human decency, the
majority arms well every challenger to a state law restricting
marriage to its traditional definition. Henceforth those
challengers will lead with this Court’s declaration that there is
“no legitimate purpose” served by such a law, and will claim that
the traditional definition has “the purpose and effect to disparage
and to injure” the “personhood and dignity” of same-sex couples,
see ante, at 25, 26. The majority’s limiting assurance will be
meaningless in the face of language like that, as the majority well
knows. That is why the language is there. The result will be a
judicial distortion of our society’s debate over marriage—a debate
that can seem in need of our clumsy “help” only to a member of this
institution.
As to that debate: Few
public controversies touch an institution so central to the lives
of so many, and few inspire such attendant passion by good people
on all sides. Few public controversies will ever demonstrate so
vividly the beauty of what our Framers gave us, a gift the Court
pawns today to buy its stolen moment in the spotlight: a system of
government that permits us to rule ourselves. Since DOMA’s passage,
citizens on all sides of the question have seen victories and they
have seen defeats. There have been plebiscites, legislation,
persuasion, and loud voices—in other words, democracy. Victories in
one place for some, see North Carolina Const., Amdt. 1 (providing
that “[m]arriage between one man and one woman is the only domestic
legal union that shall be valid or recognized in this State”)
(approved by a popular vote, 61% to 39% on May 8, 2012), [ 6 ] are offset by victories in other
places for others, see Maryland Question 6 (establishing “that
Maryland’s civil marriage laws allow gay and lesbian couples to
obtain a civil marriage license”) (approved by a popular vote, 52%
to 48%, on November 6, 2012). [ 7 ] Even in a sin- gle State, the question has come out
differently on different occasions. Compare Maine Question 1
(permitting “the State of Maine to issue marriage licenses to
same-sex couples”) (approved by a popular vote, 53% to 47%, on
November 6, 2012) [ 8 ] with
Maine Question 1 (rejecting “the new law that lets same-sex couples
marry”) (approved by a popular vote, 53% to 47%, on November 3,
2009). [ 9 ]
In the majority’s
telling, this story is black-and-white: Hate your neighbor or come
along with us. The truth is more complicated. It is hard to admit
that one’s political opponents are not monsters, especially in a
struggle like this one, and the challenge in the end proves more
than today’s Court can handle. Too bad. A reminder that dis-
agreement over something so fundamental as marriage can still be
politically legitimate would have been a fit task for what in
earlier times was called the judicial temperament. We might have
covered ourselves with honor today, by promising all sides of this
debate that it was
theirs to settle and that we would respect their
resolution. We might have let the People decide.
But that the majority
will not do. Some will rejoice in today’s decision, and some will
despair at it; that is the nature of a controversy that matters so
much to so many. But the Court has cheated both sides, robbing the
winners of an honest victory, and the losers of the peace that
comes from a fair defeat. We owed both of them better. I
dissent. Notes 1 For an even more advanced
scavenger hunt, one might search the annals of Anglo-American law
for another “Motion to Dismiss” like the one the United States
filed in District Court: It argued that the court should agree
“with Plaintiff and the United States” and “not dismiss” the
complaint. (Emphasis mine.) Then, having gotten exactly what it
asked for, the United States promptly appealed. 2 There the Justice
Department’s refusal to defend the legislationwas in accord with
its longstanding (and entirely reasonable) practice of declining to
defend legislation that in its view infringes upon Presidential
powers. There is no justification for the Justice Department’s
abandoning the law in the present case. The majority opinion makes
a point of scolding the President for his “failure to defend the
constitutionality of an Act of Congress based on a constitutional
theory not yet established in judicial decisions,” ante, at 12. But
the rebuke is tongue-in-cheek, for the majority gladly gives the
President what he wants. Contrary to all precedent, it decides this
case (and even decides it the way the President wishes) despite his
abandonment of the defense and the consequent absence of a case or
controversy. 3 Justice Alito attempts to
limit his argument by claiming that Congress is injured (and can
therefore appeal) when its statute is held unconstitutional without
Presidential defense, but is not injured when its statute is held
unconstitutional despite Presidential defense. I do not understand
that line. The injury to Congress is the same whether the President
has defended the statute or not. And if the injury is threatened,
why should Congress not be able to participate in the suit from the
beginning, just as the President can? And if having a statute
declared unconstitutional (and therefore inoperative) by a court is
an injury, why is it not an injury when a statute is declared
unconstitutional by the President and rendered inoperative by his
consequent failure to enforce it? Or when the President simply
declines to enforce it without opining on its constitutionality? If
it is the inoperativeness that constitutes the injury—the
“impairment of [the legislative] function,” as Justice Alito puts
it, post, at 4—it should make no difference which of the other two
branches inflicts it, and whether the Constitution is the pretext.
A principled and predictable system of jurisprudence cannot rest
upon a shifting concept of injury, designed to support standing
when we would like it. If this Court agreed with Justice Alito’s
distinction, its opinion in Raines v. Byrd, , which involved an
original suit by Members of Congress challenging an assertedly
unconstitutional law, would have been written quite differently;
and Justice Alito’s distinguishing of that case on grounds quite
irrelevant to his theory of standing would have been
unnecessary. 4 Such a suggestion would
be impossible, given the Federal Government’s long history of
making pronouncements regarding marriage—for example, conditioning
Utah’s entry into the Union upon its prohibition of polygamy. See
Act of July 16, 1894, ch. 138, §3, (“The constitution [of Utah]”
must provide “perfect toleration of religious sentiment,”
“Provided, That polygamous or plural marriages are forever
prohibited”). 5 Since the Equal
Protection Clause technically applies only against the States, see
U. S. Const., Amdt. 14, Bolling and Moreno, dealing with
federal action, relied upon “the equal protection component of the
Due Process Clause of the ,” Moreno, 413 U. S., at
533. 6 North Carolina State
Board of Elections, Official Results: Primary Election of May 8,
2012, Constitutional Amendment. 7 Maryland State Board of
Elections, Official 2012 Presidential General Election Results for
All State Questions, Question 06. 8 Maine Bureau of
Elections, Nov. 3, 2009, Referendum Tabulation (Question
1). 9 Maine Bureau of
Elections, Nov. 6, 2012, Referendum ElectionTabulations (Question
1). SUPREME COURT OF THE UNITED STATES
_________________
No. 12–307
_________________
UNITED STATES, PETITIONER v. EDITH SCHLAIN
WINDSOR, in her capacity as executor of the ESTATE OF THEA CLARA
SPYER, et al.
on writ of certiorari to the united states
court of appeals for the second circuit
[June 26, 2013]
Justice Alito, with
whom Justice Thomas joins as to Parts II and III, dissenting.
Our Nation is engaged
in a heated debate about same-sex marriage. That debate is, at
bottom, about the nature of the institution of marriage. Respondent
Edith Windsor, supported by the United States, asks this Court to
intervene in that debate, and although she couches her argument in
different terms, what she seeks is a holding that enshrines in the
Constitution a particular understanding of marriage under which the
sex of the partners makes no difference. The Constitution, however,
does not dictate that choice. It leaves the choice to the people,
acting through their elected representatives at both the federal
and state levels. I would therefore hold that Congress did not
violate Windsor’s constitutional rights by enacting §3 of the
Defense of Marriage Act (DOMA), 110Stat. 2419, which defines the
meaning of marriage under federal statutes that either confer upon
married persons cer- tain federal benefits or impose upon them
certain federal obligations.
I
I turn first to the
question of standing. In my view, the
United States clearly is not a proper
petitioner in this case. The United States does not ask us to
overturn the judgment of the court below or to alter that judgment
in any way. Quite to the contrary, the United States argues
emphatically in favor of the correctness of that judgment. We have
never before reviewed a decision at the sole behest of a party that
took such a position, and to do so would be to render an advisory
opinion, in violation of Article III’s dictates. For the reasons
given in Justice Scalia’s dissent, I do not find the Court’s
arguments to the contrary to be persuasive.
Whether the
Bipartisan Legal Advisory Group of the House of Representatives
(BLAG) has standing to petition is a much more difficult question.
It is also a signifi- cantly closer question than whether the
intervenors in Hol- lingsworth v. Perry, ante,
p. ___ —which the Court also decides today—have standing
to appeal. It is remarkable that the Court has simultaneously
decided that the United States, which “receive[d] all that [it]
ha[d] sought” below, Deposit Guaranty Nat. Bank v. Roper, 445
U. S. 326, 333 (1980) , is a proper petitioner in this case
but that the intervenors in Hollingsworth, who represent the party
that lost in the lower court, are not. In my view, both the
Hollingsworth intervenors and BLAG have standing. [ 1 ]
A party invoking the
Court’s authority has a sufficient stake to permit it to appeal
when it has “ ‘suffered an injury in fact’ that is caused by
‘the conduct complained of’ and that ‘will be redressed by a
favorable decision.’ ” Camreta v. Greene, 563 U. S. ___,
___ (2011) (slip op., at 5) (quoting Lujan v. Defenders of
Wildlife, 504 U. S. 555 –561 (1992)). In the present case, the
House of Representatives, which has authorized BLAG to represent
its interests in this matter, [ 2 ] suffered just such an injury.
In INS v. Chadha, 462
U. S. 919 (1983) , the Court held that the two Houses of
Congress were “proper parties” to file a petition in defense of the
constitutionality of the one-house veto statute, id., at 930,
n. 5 (internal quota- tion marks omitted). Accordingly, the
Court granted and decided petitions by both the Senate and the
House, in addition to the Executive’s petition. Id., at 919,
n. *. That the two Houses had standing to petition is not
surprising: The Court of Appeals’ decision in Chadha, by holding
the one-house veto to be unconstitutional, had limited Congress’
power to legislate. In discussing Article III standing, the Court
suggested that Congress suffered a similar injury whenever federal
legislation it had passed was struck down, noting that it had “long
held that Congress is the proper party to defend the validity of a
statute when an agency of government, as a defendant charged with
enforcing the statute, agrees with plaintiffs that the statute is
inapplicable or unconstitutional.” Id., at 940.
The United States
attempts to distinguish Chadha on the ground that it “involved an
unusual statute that vested the House and the Senate themselves
each with special procedural rights—namely, the right effectively
to veto Executive action.” Brief for United States (jurisdiction)
36. But that is a distinction without a difference: just as the
Court of Appeals decision that the Chadha Court affirmed impaired
Congress’ power by striking down the one-house veto, so the Second
Circuit’s decision here impairs Congress’ legislative power by
striking down an Act of Congress. The United States has not
explained why the fact that the impairment at issue in Chadha was
“special” or “procedural” has any relevance to whether Congress
suffered an injury. Indeed, because legislating is Congress’
central function, any impairment of that function is a more
grievous injury than the impairment of a procedural add-on.
The Court’s decision in
Coleman v. Miller, 307 U. S. 433 (1939) , bolsters this
conclusion. In Coleman, we held that a group of state senators had
standing to challenge a lower court decision approving the
procedures used to ratify an amendment to the Federal Constitution.
We reasoned that the senators’ votes—which would otherwise have
carried the day—were nullified by that action. See id., at 438
(“Here, the plaintiffs include twenty senators, whose votes against
ratification have been overridden and virtually held for naught
although if they are right in their contentions their votes would
have been sufficient to defeat ratification. We think that these
senators have a plain, direct and adequate interest in maintaining
the ef- fectiveness of their votes”); id., at 446 (“[W]e find no
departure from principle in recognizing in the instant case that at
least the twenty senators whose votes, if their contention were
sustained, would have been sufficient to defeat the resolution
ratifying the proposed constitutional amendment, have an interest
in the controversy which, treated by the state court as a basis for
entertaining and deciding the federal questions, is sufficient to
give the Court jurisdiction to review that decision”). By striking
down §3 of DOMA as unconstitutional, the Second Circuit effectively
“held for naught” an Act of Congress. Just as the
state-senator-petitioners in Coleman were necessary parties to the
amendment’s ratification, the House of Representatives was a
necessary party to DOMA’s passage; indeed, the House’s vote would
have been sufficient to prevent DOMA’s repeal if the Court had not
chosen to execute that repeal judicially.
Both the United States
and the Court-appointed amicus err in arguing that Raines v. Byrd,
521 U. S. 811 (1997) , is to the contrary. In that case, the Court
held that Members of Congress who had voted “nay” to the Line Item
Veto Act did not have standing to challenge that statute in federal
court. Raines is inapposite for two reasons. First, Raines dealt
with individual Members of Congress and specifically pointed to the
individual Members’ lack of institutional endorsement as a sign of
their standing problem: “We attach some importance to the fact that
appellees have not been authorized to represent their respective
Houses of Congress in this action, and indeed both Houses actively
oppose their suit.” Id., at 829; see also ibid., n. 10 (citing
cases to the effect that “members of collegial bodies do not have
standing to perfect an appeal the body itself has declined to take”
(internal quotation marks omitted)).
Second, the Members in
Raines—unlike the state senators in Coleman—were not the pivotal
figures whose votes would have caused the Act to fail absent some
challenged action. Indeed, it is telling that Raines characterized
Coleman as standing “for the proposition that legislators whose
votes would have been sufficient to defeat (or enact) a specific
legislative Act have standing to sue if that legislative action
goes into effect (or does not go into effect), on the ground that
their votes have been completely nullified.” 521 U. S., at 823.
Here, by contrast, passage by the House was needed for DOMA to
become law. U. S. Const., Art. I, §7 (bicameralism and presentment
requirements for legislation).
I appreciate the
argument that the Constitution confers on the President alone the
authority to defend federal law in litigation, but in my view, as I
have explained, that argument is contrary to the Court’s holding in
Chadha, and it is certainly contrary to the Chadha Court’s
endorsement of the principle that “Congress is the proper party to
defend the validity of a statute” when the Executive refuses to do
so on constitutional grounds. 462 U. S., at 940. See also 2
U. S. C. §288h(7) (Senate Legal Counsel shall defend the
constitutionality of Acts of Congress when placed in issue). [ 3 ] Accordingly, in the narrow
category of cases in which a court strikes down an Act of Congress
and the Executive declines to defend the Act, Congress both has
standing to defend the undefended statute and is a proper party to
do so.
II
Windsor and the
United States argue that §3 of DOMA violates the equal protection
principles that the Court has found in the Fifth Amendment’s Due
Process Clause. See Brief for Respondent Windsor (merits) 17–62;
Brief for United States (merits) 16–54; cf. Bolling v. Sharpe, 347
U. S. 497 (1954) . The Court rests its holding on related
arguments. See ante, at 24–25.
Same-sex marriage
presents a highly emotional and important question of public
policy—but not a difficult ques- tion of constitutional law. The
Constitution does not
guarantee the right to enter into a same-sex
marriage. Indeed, no provision of the Constitution speaks to the
issue.
The Court has sometimes
found the Due Process Clauses to have a substantive component that
guarantees liber- ties beyond the absence of physical restraint.
And the Court’s holding that “DOMA is unconstitutional as a dep-
rivation of the liberty of the person protected by the Fifth
Amendment of the Constitution,” ante, at 25, suggests that
substantive due process may partially underlie the Court’s decision
today. But it is well established that any “substantive” component
to the Due Process Clause protects only “those fundamental rights
and lib- erties which are, objectively, ‘deeply rooted in this
Nation’s history and tradition,’ ” Washington v. Glucksberg,
521 U. S. 702 –721 (1997); Snyder v. Massachusetts, 291
U. S. 97, 105 (1934) (referring to fundamental rights as those
that are so “rooted in the traditions and conscience of our people
as to be ranked as fundamental”), as well as “ ‘implicit in
the concept of ordered liberty,’ such that ‘neither liberty nor
justice would exist if they were sacrificed.’ ” Glucksberg,
supra, at 721 (quoting Palko v. Connecticut, 302 U. S. 319
–326 (1937)).
It is beyond dispute
that the right to same-sex marriage is not deeply rooted in this
Nation’s history and tradition. In this country, no State permitted
same-sex marriage until the Massachusetts Supreme Judicial Court
held in 2003 that limiting marriage to opposite-sex couples
violated the State Constitution. See Goodridge v. Department of
Public Health, 440 Mass. 309, 798 N. E. 2d 941. Nor is
the right to same-sex marriage deeply rooted in the traditions of
other nations. No country allowed same-sex couples to marry until
the Netherlands did so in 2000. [ 4 ]
What Windsor and the
United States seek, therefore, is not the protection of a deeply
rooted right but the recognition of a very new right, and they seek
this innovation not from a legislative body elected by the people,
but from unelected judges. Faced with such a request, judges have
cause for both caution and humility.
The family is an
ancient and universal human institution. Family structure reflects
the characteristics of a civilization, and changes in family
structure and in the popular understanding of marriage and the
family can have profound effects. Past changes in the understand-
ing of marriage—for example, the gradual ascendance of the idea
that romantic love is a prerequisite to marriage—have had
far-reaching consequences. But the process by which such
consequences come about is complex, involving the interaction of
numerous factors, and tends to occur over an extended period of
time.
We can expect something
similar to take place if same-sex marriage becomes widely accepted.
The long-term consequences of this change are not now known and are
unlikely to be ascertainable for some time to come. [ 5 ] There are those who think that allowing
same-sex marriage will seriously undermine the institution of
marriage. See, e.g., S. Girgis, R. Anderson, & R. George, What
is Marriage? Man and Woman: A Defense 53–58 (2012); Finnis,
Marriage: A Basic and Exigent Good, 91 The Monist 388, 398
(2008). [ 6 ] Others think that recognition of same-sex marriage will fortify a
now-shaky institution. See, e.g., A. Sullivan, Virtually Normal: An
Argument About Homosexuality 202–203 (1996); J. Rauch, Gay
Marriage: Why It Is Good for Gays, Good for Straights, and Good for
Amer- ica 94 (2004).
At present, no
one—including social scientists, philosophers, and historians—can
predict with any certainty what the long-term ramifications of
widespread acceptance of same-sex marriage will be. And judges
are
certainly not equipped to make such an
assessment. The Members of this Court have the authority and the
responsibility to interpret and apply the Constitution. Thus, if
the Constitution contained a provision guaranteeing the right to
marry a person of the same sex, it would be our duty to enforce
that right. But the Constitution simply does not speak to the issue
of same-sex marriage. In our system of government, ultimate
sovereignty rests with the people, and the people have the right to
control their own destiny. Any change on a question so fundamental
should be made by the people through their elected officials.
III
Perhaps because they
cannot show that same-sex marriage is a fundamental right under our
Constitution, Windsor and the United States couch their arguments
in equal protection terms. They argue that §3 of DOMA discriminates
on the basis of sexual orientation, that classifications based on
sexual orientation should trigger a form of “heightened” scrutiny,
and that §3 cannot survive such scrutiny. They further maintain
that the governmental interests that §3 purports to serve are not
sufficiently important and that it has not been adequately shown
that §3 serves those interests very well. The Court’s holding, too,
seems to rest on “the equal protection guarantee of the Fourteenth
Amendment,” ante, at 25—although the Court is careful not to adopt
most of Windsor’s and the United States’ argument.
In my view, the
approach that Windsor and the United States advocate is misguided.
Our equal protection frame- work, upon which Windsor and the United
States rely, is a judicial construct that provides a useful
mechanism for analyzing a certain universe of equal protection
cases. But that framework is ill suited for use in evaluating the
constitutionality of laws based on the traditional understanding of
marriage, which fundamentally turn on what marriage is.
Underlying our equal
protection jurisprudence is the central notion that “[a]
classification ‘must be reasonable, not arbitrary, and must rest
upon some ground of difference having a fair and substantial
relation to the object of the legislation, so that all persons
similarly circumstanced shall be treated alike.’ ” Reed v.
Reed, 404 U. S. 71, 76 (1971) (quoting F. S. Royter Guano Co.
v. Virginia, 253 U. S. 412, 415 (1920) ). The modern tiers of
scrutiny—on which Windsor and the United States rely so heavily—are
a heuristic to help judges determine when classifications have that
“fair and substantial relation to the object of the legislation.”
Reed, supra, at 76.
So, for example, those
classifications subject to strict scrutiny—i.e., classifications
that must be “narrowly tailored” to achieve a “compelling”
government interest, Parents Involved in Community Schools v.
Seattle School Dist. No. 1, 551 U. S. 701, 720 (2007)
(internal quotation marks omitted)—are those that are “so seldom
relevant to the achievement of any legitimate state interest that
laws grounded in such considerations are deemed to reflect
prejudice and antipathy.” Cleburne v. Cleburne Living Center, Inc.,
473 U. S. 432, 440 (1985) ; cf. id., at 452–453 (Stevens, J.,
concurring) (“It would be utterly irrational to limit the franchise
on the basis of height or weight; it is equally invalid to limit it
on the basis of skin color. None of these attributes has any
bearing at all on the citizen’s willingness or ability to exercise
that civil right”).
In contrast, those
characteristics subject to so-called intermediate scrutiny—i.e.,
those classifications that must be “ ‘substantially
related’ ” to the achievement of “im- portant governmental
objective[s],” United States v. Virginia, 518 U. S. 515, 524
(1996) ; id., at 567 (Scalia, J., dissenting)—are those that are
sometimes relevant considerations to be taken into account by
legislators, but “generally provid[e] no sensible ground for
different treatment,” Cleburne, supra, at 440. For example, the
Court has held that statutory rape laws that criminalize sexual
intercourse with a woman under the age of 18 years, but place no
similar liability on partners of underage men, are grounded in the
very real distinction that “young men and young women are not
similarly situated with respect to the problems and the risks of
sexual intercourse.” Michael M. v. Superior Court, Sonoma Cty., 450
U. S. 464, 471 (1981) (plurality opnion). The plurality
reasoned that “[o]nly women may become pregnant, and they suffer
disproportionately the profound physical, emotional, and
psychological consequences of sexual activity.” Ibid. In other
contexts, however, the Court has found that classifications based
on gender are “arbitrary,” Reed, supra, at 76, and based on
“outmoded notions of the relative capabilities of men and women,”
Cleburne, supra, at 441, as when a State provides that a man must
always be preferred to an equally qualified woman when both seek to
administer the estate of a deceased party, see Reed, supra, at
76–77.
Finally, so-called
rational-basis review applies to classifications based on
“distinguishing characteristics relevant to interests the State has
the authority to implement.” Cleburne, supra, at 441. We have long
recognized that “the equal protection of the laws must coexist with
the practical necessity that most legislation classifies for one
purpose or another, with resulting disadvantages to various groups
or persons.” Romer v. Evans, 517 U. S. 620, 631 (1996) . As a
result, in rational-basis cases, where the court does not view the
classification at issue as “inher- ently suspect,” Adarand
Constructors, Inc. v. Peña, 515 U. S. 200, 218 (1995)
(internal quotation marks omitted), “the courts have been very
reluctant, as they should be in our federal system and with our
respect for the separation of powers, to closely scrutinize
legislative choices as to whether, how, and to what extent those
interests should be pursued.” Cleburne, supra, at 441–442.
In asking the Court to
determine that §3 of DOMA is subject to and violates heightened
scrutiny, Windsor and the United States thus ask us to rule that
the presence of two members of the opposite sex is as rationally
related to marriage as white skin is to voting or a Y-chromosome is
to the ability to administer an estate. That is a striking request
and one that unelected judges should pause before granting.
Acceptance of the argument would cast all those who cling to
traditional beliefs about the nature of marriage in the role of
bigots or superstitious fools.
By asking the Court to
strike down DOMA as not satisfying some form of heightened
scrutiny, Windsor and the United States are really seeking to have
the Court resolve a debate between two competing views of
marriage.
The first and older
view, which I will call the “tradi- tional” or “conjugal” view,
sees marriage as an intrinsically opposite-sex institution. BLAG
notes that virtually every culture, including many not influenced
by the Abrahamic religions, has limited marriage to people of the
opposite sex. Brief for Respondent BLAG (merits) 2 (citing
Hernandez v. Robles, 7 N. Y. 3d 338, 361, 855 N. E. 2d 1,
8 (2006) (“Until a few decades ago, it was an accepted truth for
almost everyone who ever lived, in any society in which marriage
existed, that there could be marriages only between participants of
different sex”)). And BLAG attempts to explain this phenomenon by
arguing that the institution of marriage was created for the
purpose of channeling heterosexual intercourse into a structure
that supports child rearing. Brief for Respondent BLAG 44–46, 49.
Others explain the basis for the institution in more philosophical
terms. They argue that marriage is essentially the solemnizing of a
comprehensive, exclusive, permanent union that is intrinsically
ordered to producing new life, even if it does not always do so.
See, e.g., Girgis, Anderson, & George, What is Marriage? Man
and Woman: A Defense, at 23–28. While modern cultural changes have
weakened the link between marriage and procreation in the popular
mind, there is no doubt that, throughout human history and across
many cultures, marriage has been viewed as an exclusively
opposite-sex institution and as one inextricably linked to
procreation and biological kinship.
The other, newer view
is what I will call the “consent-based” vision of marriage, a
vision that primarily defines marriage as the solemnization of
mutual commitment—marked by strong emotional attachment and sexual
attraction—between two persons. At least as it applies to
heterosexual couples, this view of marriage now plays a very
prominent role in the popular understanding of the institution.
Indeed, our popular culture is infused with this understanding of
marriage. Proponents of same-sex marriage argue that because gender
differentiation is not relevant to this vision, the exclusion of
same-sex couples from the institution of marriage is rank
discrimination.
The Constitution does
not codify either of these views of marriage (although I suspect it
would have been hard at the time of the adoption of the
Constitution or the Fifth Amendment to find Americans who did not
take the traditional view for granted). The silence of the
Constitution on this question should be enough to end the matter as
far as the judiciary is concerned. Yet, Windsor and the United
States implicitly ask us to endorse the consent-based view of
marriage and to reject the traditional view, thereby arrogating to
ourselves the power to decide a question that philosophers,
historians, social scientists, and theologians are better qualified
to explore. [ 7 ] Because our
consti- tutional order assigns the resolution of questions of this
nature to the people, I would not presume to en- shrine either
vision of marriage in our constitutional jurisprudence.
Legislatures, however,
have little choice but to decide between the two views. We have
long made clear that neither the political branches of the Federal
Government nor state governments are required to be neutral between
competing visions of the good, provided that the vision of the good
that they adopt is not countermanded by the Constitution. See,
e.g., Rust v. Sullivan, 500 U. S. 173, 192 (1991) (“[T]he
government ‘may make a value judgment favoring childbirth over
abortion’ ” (quoting Maher v. Rue, 432 U. S. 464, 474
(1977) )). Accordingly, both Congress and the States are entitled
to enact laws recognizing either of the two understandings of
marriage. And given the size of government and the degree to which
it now regulates daily life, it seems unlikely that either Congress
or the States could maintain complete neutrality even if they tried
assiduously to do so.
Rather than fully
embracing the arguments made by Windsor and the United States, the
Court strikes down §3 of DOMA as a classification not properly
supported by its objectives. The Court reaches this conclusion in
part because it believes that §3 encroaches upon the States’
sovereign prerogative to define marriage. See ante, at 21–22 (“As
the title and dynamics of the bill indicate, its purpose is to
discourage enactment of state same-sex marriage laws and to
restrict the freedom and choice of couples married under those laws
if they are enacted. The congressional goal was ‘to put a thumb on
the scales and influence a state’s decision as to how to shape its
own marriage laws’ ” (quoting Massachusetts v. United States
Dept. of Health and Human Servs., 682 F. 3d 1, 12–13 (CA1
2012))). Indeed, the Court’s ultimate conclusion is that DOMA falls
afoul of the Fifth Amendment because it “singles out a class of
persons deemed by a State entitled to recognition and protection to
enhance their own liberty” and “imposes a disability on the class
by refusing to acknowledge a status the State finds to be dignified
and proper.” Ante, at 25 (emphasis added).
To the extent that the
Court takes the position that the question of same-sex marriage
should be resolved primar- ily at the state level, I wholeheartedly
agree. I hope that the Court will ultimately permit the people of
each State to decide this question for themselves. Unless the Court
is willing to allow this to occur, the whiffs of federalism in the
today’s opinion of the Court will soon be scattered to the
wind.
In any event, §3 of
DOMA, in my view, does not encroach on the prerogatives of the
States, assuming of course that the many federal statutes affected
by DOMA have not already done so. Section 3 does not prevent any
State from recognizing same-sex marriage or from extending to
same-sex couples any right, privilege, benefit, or obligation
stemming from state law. All that §3 does is to define a class of
persons to whom federal law extends cer- tain special benefits and
upon whom federal law imposes certain special burdens. In these
provisions, Congress used marital status as a way of defining this
class—in part, I assume, because it viewed marriage as a valua- ble
institution to be fostered and in part because it viewed married
couples as comprising a unique type of economic unit that merits
special regulatory treatment. Assuming that Congress has the power
under the Constitution to enact the laws affected by §3, Congress
has the power to define the category of persons to whom those laws
apply.
* * *
For these reasons, I
would hold that §3 of DOMA does not violate the Fifth Amendment. I
respectfully dissent. Notes 1 Our precedents make clear
that, in order to support our jurisdic-tion, BLAG must demonstrate
that it had Article III standing in its own right, quite apart from
its status as an intervenor. See Diamond v. Charles, (“Although
intervenors are considered parties entitled, among other things, to
seek review by this Court, an intervenor’s right to continue a suit
in the absence of the party on whose side intervention was
permitted is contingent upon a showing by the intervenor that he
fulfills the requirements of Art. III” (citation omitted));
Arizonans for Official English v. Arizona, (“Standing to defend on
appeal in the place of an original defendant, no less than standing
to sue, demands that the litigant possess a direct stake in the
outcome” (internal quotation marks omitted)); id.,at 65 (“An
intervenor cannot step into the shoes of the original party unless
the intervenor independently fulfills the requirements of Article
III” (internal quotation marks omitted)). 2 H. Res. 5, 113th
Cong., 1st Sess., §4(a)(1)(B) (2013) (“[BLAG] continues to speak
for, and articulates the institutional position of, the House in
all litigation matters in which it appears, including in Windsor v.
United States”). 3 Buckley v. Valeo, , is
not to the contrary. The Court’s statements there concerned
enforcement, not defense. 4 Curry-Sumner, A Patchwork
of Partnerships: Comparative Overview of Registration Schemes in
Europe, in Legal Recognition of Same-Sex Partnerships 71, 72 (K.
Boele-Woelki & A. Fuchs eds., rev. 2d ed., 2012). 5 As sociologists have
documented, it sometimes takes decades to doc-ument the effects of
social changes—like the sharp rise in divorcerates following the
advent of no-fault divorce—on children and society. See generally
J. Wallerstein, J. Lewis, & S. Blakeslee, The Unexpected Legacy
of Divorce: The 25 Year Landmark Study (2000). 6 Among those holding that
position, some deplore and some applaud this predicted development.
Compare, e.g., Wardle, “Multiply and Replenish”: Considering
Same-Sex Marriage in Light of State Interests in Marital
Procreation, 24 Harv. J. L. & Pub. Pol’y 771, 799 (2001)
(“Culturally, the legalization of same-sex marriage would send a
mes-sage that would undermine the social boundaries relating to
mar-riage and family relations. The confusion of social roles
linked with marriage and parenting would be tremendous, and the
message of ‘anything goes’ in the way of sexual behavior,
procreation, and parenthood would wreak its greatest havoc among
groups of vulnerable individuals who most need the encouragement of
bright line lawsand clear social mores concerning procreative
responsibility”) and Gal-lagher, (How) Will Gay Marriage Weaken
Marriage as a Social Institution: A Reply to Andrew Koppelman, 2 U.
St. Thomas L. J. 33, 58 (2005) (“If the idea of marriage
really does matter—if society really does need a social institution
that manages opposite-sex attractions in the interests of children
and society—then taking an already weakened social institution,
subjecting it to radical new redefinitions, and hoping that there
are no consequences is probably neither a wise nor a compassionate
idea”), with Brownworth, Something Borrowed, Something Blue: Is
Marriage Right for Queers? in I Do/I Don’t: Queers on Marriage 53,
58–59 (G. Wharton & I. Phillips eds. 2004) (Former President
George W. “Bush is correct . . . when he states that
allowing same-sex couples to marry will weaken the institution of
marriage. It most certainly will do so, and that will make marriage
a far better concept than it previously has been”) and Willis, Can
Marriage Be Saved? A Forum, The Nation, p. 16 (2004) (celebrating
the fact that “conferring the legitimacy of marriage on homosexual
relations will introduce an implicit revolt against the institution
into its very heart”). 7 The degree to which this
question is intractable to typical judicial processes of
decisionmaking was highlighted by the trial in Hollingsworth v.
Perry, ante, p. ___. In that case, the trial judge, after receiving
testimony from some expert witnesses, purported to make “findings
of fact” on such questions as why marriage came to be, Perry v.
Schwarzenegger, 704 F. Supp. 2d 921, 958 (ND Cal. 2010)
(finding of fact no. 27) (“Marriage between a man and a woman was
traditionally organized based on presumptions of division of labor
along gender lines. Men were seen as suited for certain types of
work and women for others. Women were seen as suited to raise
children and men were seen as suited to provide for the family”),
what marriage is, id., at 961 (finding of fact no. 34) (“Marriage
is the state recognition and approval of a couple’s choice to live
with each other, to remain committed to one another and to form a
household based on their own feelings about one another and to join
in an economic partnership and support one another and any
dependents”), and the effect legalizing same-sex marriage would
have on opposite-sex marriage, id., at 972 (finding of fact no. 55)
(“Permitting same-sex couples to marry will not affect the number
of opposite-sex couples who marry, divorce, cohabit, have children
outside of marriage or otherwise affect the stability of
opposite-sex marriages”). At times, the trial reached the heights
of parody, as when the trial judge questioned his ability to take
into account the views of great thinkers of the past because they
were unavailable to testify in person in his courtroom. See 13 Tr.
in No. C 09–2292 VRW (ND Cal.), pp. 3038–3039. And, if this
spectacle were not enough, some professors of constitutional law
have argued that we are bound to accept the trial judge’s
findings—including those on major philosophical questions and
predictions about the future—unless they are “clearly erroneous.”
See Brief for Constitutional Law and Civil Procedure Professors as
Amici Curiae in Hollingsworth v. Perry, O. T. 2012, No.
12–144, pp. 2–3 (“[T]he district court’s factual findings are
compelling and should be given significant weight”); id., at 25
(“Under any standard of review, this Court should credit and adopt
the trial court’s findings because they result from rigorous and
exacting application of the Federal Rules of Evidence, and are
supported by reliable research and by the unanimous consensus of
mainstream social science experts”). Only an arrogant legal culture
that has lost all appreciation of its own limitations could take
such a suggestion seriously. | The United States Supreme Court ruled that the Defense of Marriage Act (DOMA), which defines marriage as a union between one man and one woman, is unconstitutional. The case centered around Edith Windsor and Thea Spyer, a same-sex couple who were married in Canada in 2007 and resided in New York. When Spyer died in 2009, Windsor was denied the federal estate tax exemption for surviving spouses due to DOMA. The Court's decision affirms the lower court's ruling in favor of Windsor, granting her a refund and recognizing same-sex marriages under federal law. |
Taxes | Jones v. Flowers | https://supreme.justia.com/cases/federal/us/547/220/ | OPINION OF THE COURT JONES V. FLOWERS 547 U. S. ____ (2006) SUPREME COURT OF THE UNITED STATES NO. 04-1477 GARY KENT JONES, PETITIONER v. LINDA K.
FLOWERS et al.
on writ of certiorari to the supreme court of
arkansas
[April 26, 2006]
Chief Justice Roberts delivered
the opinion of the Court.
Before a State may take property
and sell it for unpaid taxes, the Due Process Clause of the
Fourteenth Amendment requires the government to provide the owner
“notice and opportunity for hearing appropriate to the nature of
the case.” Mullane v. Central Hanover Bank & Trust
Co., 339 U. S.
306 , 313 (1950). We granted certiorari to determine whether,
when notice of a tax sale is mailed to the owner and returned
undelivered, the government must take additional reasonable steps
to provide notice before taking the owner’s property.
I
In 1967, petitioner Gary Jones
purchased a house at 717 North Bryan Street in Little Rock,
Arkansas. He lived in the house with his wife until they separated
in 1993. Jones then moved into an apartment in Little Rock, and his
wife continued to live in the North Bryan Street house. Jones paid
his mortgage each month for 30 years, and the mortgage company paid
Jones’ property taxes. After Jones paid off his mortgage in 1997,
the property taxes went unpaid, and the property was certified as
delinquent.
In April 2000, respondent Mark
Wilcox, the Commissioner of State Lands (Commissioner), attempted
to notify Jones of his tax delinquency, and his right to redeem the
property, by mailing a certified letter to Jones at the North Bryan
Street address. See Ark. Code Ann. §26–37–301 (1997). The packet of
information stated that unless Jones redeemed the property, it
would be subject to public sale two years later on April 17, 2002.
See ibid. Nobody was home to sign for the letter, and
nobody appeared at the post office to retrieve the letter within
the next 15 days. The post office returned the unopened packet to
the Commissioner marked “ ‘unclaimed.’ ” Pet. for Cert.
3.
Two years later, and just a few weeks before
the public sale, the Commissioner published a notice of public sale
in the Arkansas Democrat Gazette. No bids were submitted, which
permitted the State to negotiate a private sale of the property.
See §26–37–202(b). Several months later, respondent Linda Flowers
submitted a purchase offer. The Commissioner mailed another
certified letter to Jones at the North Bryan Street address,
attempting to notify him that his house would be sold to Flowers if
he did not pay his taxes. Like the first letter, the second was
also returned to the Commissioner marked “unclaimed.” Ibid. Flowers purchased the house, which the parties
stipulated in the trial court had a fair market value of $80,000,
for $21,042.15. Record 224. Immediately after the 30-day period for
postsale redemption passed, see §26–37–202(e), Flowers had an
unlawful detainer notice delivered to the property. The notice was
served on Jones’ daughter, who contacted Jones and notified him of
the tax sale. Id., at 11 (Exh. B).
Jones filed a lawsuit in Arkansas state court
against the Commissioner and Flowers, alleging that the
Commissioner’s failure to provide notice of the tax sale and of
Jones’ right to redeem resulted in the taking of his property
without due process. The Commissioner and Flowers moved for summary
judgment on the ground that the two unclaimed letters sent by the
Commissioner were a constitutionally adequate attempt at notice,
and Jones filed a cross-motion for summary judgment. The trial
court granted summary judgment in favor of the Commissioner and
Flowers. App. to Pet. for Cert. 12a–13a. It concluded that the
Arkansas tax sale statute, which set forth the notice procedure
followed by the Commissioner, complied with constitutional due
process requirements.
Jones appealed, and the Arkansas Supreme Court
affirmed the trial court’s judgment. 359 Ark. 443, ___ S. W.
3d ___ (2004). The court noted our precedent stating that due
process does not require actual notice, see Dusenbery v. United States, 534 U. S. 161 , 170 (2002), and it held
that attempting to provide notice by certified mail satisfied due
process in the circumstances presented, 359 Ark., at ___, ___
S. W. 3d, at ___.
We granted certiorari, 545 U. S. ___ (2005),
to resolve a conflict among the Circuits and State Supreme Courts
concerning whether the Due Process Clause requires the government
to take additional reasonable steps to notify a property owner when
notice of a tax sale is returned undelivered. Compare, e.g.,
Akey v. Clinton County , 375 F. 3d 231, 236 (CA2
2004) (“In light of the notice’s return, the County was required to
use ‘reasonably diligent efforts’ to ascertain Akey’s correct
address”), and Kennedy v. Mossafa , 100 N. Y.
2d 1, 9, 789 N. E. 2d 607, 611 (2003) (“[W]e reject the view
that the enforcing officer’s obligation is always satisfied by
sending the notice to the address listed in the tax roll, even
where the notice is returned as undeliverable”), with Smith v. Cliffs on the Bay Condominium Assn. , 463
Mich. 420, 429, 617 N. W. 2d 536, 541 (2000) (per
curiam) (“The fact that one of the mailings was returned by
the post office as undeliverable does not impose on the state the
obligation to undertake an investigation to see if a new address …
could be located”). We hold that when mailed notice of a tax sale
is returned unclaimed, the State must take additional reasonable
steps to attempt to provide notice to the property owner before
selling his property, if it is practicable to do so. Under the
circumstances presented here, additional reasonable steps were
available to the State. We therefore reverse the judgment of the
Arkansas Supreme Court.
II
A
Due process does not require that
a property owner receive actual notice before the government may
take his property. Dusenbery , supra , at 170.
Rather, we have stated that due process requires the government to
provide “notice reasonably calculated, under all the circumstances,
to apprise interested parties of the pendency of the action and
afford them an opportunity to present their objections.” Mullane , 339 U. S., at 314. The Commissioner argues that
once the State provided notice reasonably calculated to apprise
Jones of the impending tax sale by mailing him a certified letter,
due process was satisfied. The Arkansas statutory scheme is
reasonably calculated to provide notice, the Commissioner
continues, because it provides for notice by certified mail to an
address that the property owner is responsible for keeping up to
date. See Ark. Code Ann. §26–35–705 (1997). The Commissioner notes
this Court’s ample precedent condoning notice by mail, see, e.g., Dusenbery, supra, at 169; Tulsa Professional
Collection Services, Inc. v. Pope, 485 U. S. 478 , 490 (1988); Mennonite Bd. of Missions v. Adams, 462 U. S. 791 , 798 (1983); Mullane , supra , at 318–319, and adds that the
Arkansas scheme exceeds constitutional requirements by requiring
the Commissioner to use certified mail. Brief for Respondent
Commissioner 14–15.
It is true that this Court has
deemed notice constitutionally sufficient if it was reasonably
calculated to reach the intended recipient when sent. See, e.g., Dusenbery , supra , at 168–169; Mullane , 339 U. S., at 314. In each of these cases, the
government attempted to provide notice and heard nothing back
indicating that anything had gone awry, and we stated that “[t]he
reasonableness and hence the constitutional validity of [the]
chosen method may be defended on the ground that it is in itself
reasonably certain to inform those affected.” Id., at 315;
see also Dusenbery , supra , at 170. But we have
never addressed whether due process entails further responsibility
when the government becomes aware prior to the taking that its
attempt at notice has failed. That is a new wrinkle, and we have
explained that the “notice required will vary with circumstances
and conditions.” Walker v. City of Hutchinson, 352 U. S. 112 ,
115 (1956). The question presented is whether such knowledge on the
government’s part is a “circumstance and condition” that varies the
“notice required.”
The Courts of Appeals and State Supreme Courts
have addressed this question on frequent occasions, and most have
decided that when the government learns its attempt at notice has
failed, due process requires the government to do something more
before real property may be sold in a tax sale.[ Footnote 1 ] See, e.g., Plemons v. Gale , 396 F. 3d 569, 576 (CA4 2005); Akey , 375 F. 3d, at 236; Hamilton v. Renewed Hope, Inc. , 277 Ga. 465, 468, 589 S. E. 2d
81, 85 (2003); Kennedy , 100 N. Y. 2d, at 9, 789
N. E. 2d, at 611; Malone v. Robinson , 614
A. 2d 33, 38 (D. C. App. 1992); St. George Antiochian
Orthodox Christian Church v. Aggarwal , 326 Md. 90,
103, 603 A. 2d 484, 490 (1992); Wells Fargo Credit
Corp. v. Ziegler , 780 P. 2d 703, 705 (Okla.
1989); Rosenberg v. Smidt , 727 P. 2d 778,
780–783 (Alaska 1986); Giacobbi v. Hall , 109
Idaho 293, 297, 707 P. 2d 404, 408 (1985); Tracy v. County of Chester , Tax Claim Bureau, 507 Pa. 288,
296, 489 A. 2d 1334, 1338–1339 (1985). But see Smith ,
463 Mich., at 429, 617 N. W. 2d, at 541; Dahn v. Trownsell , 1998 SD 36, ¶23, 576 N. W. 2d 535,
541–542; Elizondo v. Read , 588 N. E. 2d 501,
504 (Ind. 1992); Atlantic City v. Block C–11, Lot
11 , 74 N. J. 34, 39–40, 376 A. 2d 926, 928 (1977).
Many States already require in their statutes that the government
do more than simply mail notice to delinquent owners, either at the
outset or as a followup measure if initial mailed notice is
ineffective.[ Footnote 2 ]
In Mullane , we stated that “when
notice is a person’s due … [t]he means employed must be such as one
desirous of actually informing the absentee might reasonably adopt
to accomplish it,” 339 U. S., at 315, and that assessing the
adequacy of a particular form of notice requires balancing the
“interest of the State” against “the individual interest sought to
be protected by the Fourteenth Amendment,” id. , at 314.
Our leading cases on notice have evaluated the adequacy of notice
given to beneficiaries of a common trust fund, Mullane , supra; a mortgagee, Mennonite , 462 U. S. 791 ; owners of seized cash
and automobiles, Dusenbery, 534 U. S. 161 ; Robinson v. Hanrahan, 409 U. S. 38 (1972) (per curiam); creditors of an estate, Tulsa
Professional , 485 U. S. 478 ; and tenants living in
public housing, Greene v. Lindsey, 456 U. S. 444 (1982). In
this case, we evaluate the adequacy of notice prior to the State
extinguishing a property owner’s interest in a home.
We do not think that a person who actually
desired to inform a real property owner of an impending tax sale of
a house he owns would do nothing when a certified letter sent to
the owner is returned unclaimed. If the Commissioner prepared a
stack of letters to mail to delinquent taxpayers, handed them to
the postman, and then watched as the departing postman accidentally
dropped the letters down a storm drain, one would certainly expect
the Commissioner’s office to prepare a new stack of letters and
send them again. No one “desirous of actually informing” the owners
would simply shrug his shoulders as the letters disappeared and say
“I tried.” Failure to follow up would be unreasonable, despite the
fact that the letters were reasonably calculated to reach their
intended recipients when delivered to the postman.
By the same token, when a letter is returned
by the post office, the sender will ordinarily attempt to resend
it, if it is practicable to do so. See Small v. United
States , 136 F. 3d 1334, 1337 (CADC 1998). This is
especially true when, as here, the subject matter of the letter
concerns such an important and irreversible prospect as the loss of
a house. Although the State may have made a reasonable calculation
of how to reach Jones, it had good reason to suspect when the
notice was returned that Jones was “no better off than if the
notice had never been sent.” Malone , supra, at
37. Deciding to take no further action is not what someone
“desirous of actually informing” Jones would do; such a person
would take further reasonable steps if any were available.
In prior cases, we have required the
government to consider unique information about an intended
recipient regardless of whether a statutory scheme is reasonably
calculated to provide notice in the ordinary case. In Robinson v. Hanrahan, we held that notice of
forfeiture proceedings sent to a vehicle owner’s home address was
inadequate when the State knew that the property owner was in
prison. 409 U. S., at 40. In Covey v. Town of
Somers , 351 U.
S. 141 (1956), we held that notice of foreclosure by mailing,
posting, and publication was inadequate when town officials knew
that the property owner was incompetent and without a guardian’s
protection. Id. , at 146–147.
The Commissioner points out that in these
cases, the State was aware of such information before it
calculated how best to provide notice. But it is difficult to
explain why due process would have settled for something less if
the government had learned after notice was sent, but before the
taking occurred, that the property owner was in prison or was
incompetent. Under Robinson and Covey , the
government’s knowledge that notice pursuant to the normal procedure
was ineffective triggered an obligation on the government’s part to
take additional steps to effect notice. That knowledge was one of
the “practicalities and peculiarities of the case,” Mullane , supra, at 314–315, that the Court took
into account in determining whether constitutional requirements
were met. It should similarly be taken into account in assessing
the adequacy of notice in this case. The dissent dismisses the
State’s knowledge that its notice was ineffective as “learned long
after the fact,” post , at 7, n. 5 (opinion of Thomas,
J.), but the notice letter was promptly returned to the State two
to three weeks after it was sent, and the Arkansas statutory regime
precludes the State from taking the property for two years while the property owner may exercise his right to redeem, see Ark.
Code Ann. §26–37–301 (Supp. 2005).
It is certainly true, as the Commissioner and
Solicitor General contend, that the failure of notice in a specific
case does not establish the inadequacy of the attempted notice; in
that sense, the constitutionality of a particular procedure for
notice is assessed ex ante , rather than post hoc .
But if a feature of the State’s chosen procedure is that it
promptly provides additional information to the government about
the effectiveness of notice, it does not contravene the ex
ante principle to consider what the government does with that
information in assessing the adequacy of the chosen procedure.
After all, the State knew ex ante that it would promptly
learn whether its effort to effect notice through certified mail
had succeeded. It would not be inconsistent with the approach the
Court has taken in notice cases to ask, with respect to a procedure
under which telephone calls were placed to owners, what the State
did when no one answered. Asking what the State does when a notice
letter is returned unclaimed is not substantively different.
The Commissioner has three further arguments
for why reasonable followup measures were not required in this
case. First, notice was sent to an address that Jones provided and
had a legal obligation to keep updated. See Ark. Code Ann.
§26–35–705 (1997). Second, “after failing to receive a property tax
bill and pay property taxes, a property holder is on inquiry-notice
that his property is subject to governmental taking.” Brief for
Respondent Commissioner 18–19. Third, Jones was obliged to ensure
that those in whose hands he left his property would alert him if
it was in jeopardy. None of these contentions relieves the State of
its constitutional obligation to provide adequate notice.
The Commissioner does not argue that Jones’
failure to comply with a statutory obligation to keep his address
updated forfeits his right to constitutionally sufficient notice,
and we agree. Id. , at 19; see also Brief for United States
as Amicus Curiae 16, n. 5 (quoting Mennonite , 462 U. S., at 799 (“ ‘[A] party’s ability
to take steps to safeguard its own interests does not relieve the
State of its constitutional obligation’ ”)). In Robinson , we noted that Illinois law required each vehicle
owner to register his address with the secretary of state, and that
the State’s vehicle forfeiture scheme provided for notice by mail
to the address listed in the secretary’s records. See 409 U. S., at
38, n. 1 (citing Ill. Rev. Stat., ch. 95 1 2, §3–405 (1971), and ch. 38, §36–1 (1969)).
But we found that the State had not provided constitutionally
sufficient notice, despite having followed its reasonably
calculated scheme, because it knew that Robinson could not be
reached at his address of record. 409 U. S., at 31–32. Although
Ark. Code Ann. §26–35–705 provides strong support for the
Commissioner’s argument that mailing a certified letter to Jones at
717 North Bryan Street was reasonably calculated to reach him, it
does not alter the reasonableness of the Commissioner’s position
that he must do nothing more when the notice is promptly returned
“unclaimed.” As for the
Commissioner’s inquiry notice argument, the common knowledge that
property may become subject to government taking when taxes are not
paid does not excuse the government from complying with its
constitutional obligation of notice before taking private property.
We have previously stated the opposite: An interested party’s
“knowledge of delinquency in the payment of taxes is not equivalent
to notice that a tax sale is pending.” Mennonite , supra, at 800. It is at least as widely known that
arrestees have the right to remain silent, and that anything they
say may be used against them, see Dickerson v. United
States, 530 U.
S. 428 , 443 (2000) (“ Miranda [v. Arizona, 384 U. S. 436 (1966),] has become embedded in routine police practice to the
point where the warnings have become part of our national
culture”), but that knowledge does not excuse a police failure to
provide Miranda warnings. Arkansas affords even a
delinquent taxpayer the right to settle accounts with the State and
redeem his property, so Jones’ failure to pay his taxes in a timely
manner cannot by itself excuse inadequate notice. Finally, the
Commissioner reminds us of a statement from Mullane that
the State can assume an owner leaves his property in the hands of
one who will inform him if his interest is in jeopardy. 339 U. S.,
at 316. But in this passage, Justice Jackson writes of “libel of a
ship, attachment of a chattel[,] or entry upon real estate in the
name of law”—such “seiz[ures]” of property, he concluded, “may
reasonably be expected to come promptly to the owner’s attention.” Ibid. An occupant, however, is not charged with acting as
the owner’s agent in all respects, and it is quite a leap from
Justice Jackson’s examples to conclude that it is an obligation of
tenancy to follow up with certified mail of unknown content
addressed to the owner. In fact, the State makes it impossible for
the occupant to learn why the Commissioner is writing the owner,
because an occupant cannot call for a certified letter without
first obtaining the owner’s signature. For all the occupant knows,
the Commissioner of State Lands might write to certain residents
about a variety of matters he finds important, such as state parks
or highway construction; it would by no means be obvious to an
occupant observing a certified mail slip from the Commissioner that
the owner is in danger of losing his property. In any event, there
is no record evidence that notices of attempted delivery were left
at 717 North Bryan Street. Mr. Jones
should have been more diligent with respect to his property, no
question. People must pay their taxes, and the government may hold
citizens accountable for tax delinquency by taking their property.
But before forcing a citizen to satisfy his debt by forfeiting his
property, due process requires the government to provide adequate
notice of the impending taking. U. S. Const., Amdt. 14; Mennonite , supra , at 799. B In response to the returned form suggesting
that Jones had not received notice that he was about to lose his
property, the State did—nothing. For the reasons stated, we
conclude the State should have taken additional reasonable steps to
notify Jones, if practicable to do so. The question remains whether
there were any such available steps. While “[i]t is not our
responsibility to prescribe the form of service that the
[government] should adopt,” Greene, 456 U. S., at 455,
n. 9, if there were no reasonable additional steps the
government could have taken upon return of the unclaimed notice
letter, it cannot be faulted for doing
nothing. We think there were several reasonable steps
the State could have taken. What steps are reasonable in response
to new information depends upon what the new information reveals.
The return of the certified letter marked “unclaimed” meant either
that Jones still lived at 717 North Bryan Street, but was not home
when the postman called and did not retrieve the letter at the post
office, or that Jones no longer resided at that address. One
reasonable step primarily addressed to the former possibility would
be for the State to resend the notice by regular mail, so that a
signature was not required. The Commissioner says that use of
certified mail makes actual notice more likely, because requiring
the recipient’s signature protects against misdelivery. But that is
only true, of course, when someone is home to sign for the letter,
or to inform the mail carrier that he has arrived at the wrong
address. Otherwise, “[c]ertified mail is dispatched and handled in
transit as ordinary mail,” United States Postal Service, Domestic
Mail Manual §503.3.2.1 (Mar. 16, 2006), and the use of certified
mail might make actual notice less likely in some cases—the letter
cannot be left like regular mail to be examined at the end of the
day, and it can only be retrieved from the post office for a
specified period of time. Following up with regular mail might also
increase the chances of actual notice to Jones if—as it turned
out—he had moved. Even occupants who ignored certified mail notice
slips addressed to the owner (if any had been left) might scrawl
the owner’s new address on the notice packet and leave it for the
postman to retrieve, or notify Jones
directly. Other reasonable followup measures, directed
at the possibility that Jones had moved as well as that he had
simply not retrieved the certified letter, would have been to post
notice on the front door, or to address otherwise undeliverable
mail to “occupant.” Most States that explicitly outline additional
procedures in their tax sale statutes require just such steps. See
n. 2, supra . Either approach would increase the
likelihood that the owner would be notified that he was about to
lose his property, given the failure of a letter deliverable only
to the owner in person. That is clear in the case of an owner who
still resided at the premises. It is also true in the case of an
owner who has moved: Occupants who might disregard a certified mail
slip not addressed to them are less likely to ignore posted notice,
and a letter addressed to them (even as “occupant”) might be opened
and read. In either case, there is a significant chance the
occupants will alert the owner, if only because a change in
ownership could well affect their own occupancy. In fact, Jones
first learned of the State’s effort to sell his house when he was
alerted by one of the occupants—his daughter—after she was served
with an unlawful detainer notice. Jones believes that the Commissioner should
have searched for his new address in the Little Rock phonebook and
other government records such as income tax rolls. We do not
believe the government was required to go this far. As the
Commissioner points out, the return of Jones’ mail marked
“unclaimed” did not necessarily mean that 717 North Bryan Street
was an incorrect address; it merely informed the Commissioner that
no one appeared to sign for the mail before the designated date on
which it would be returned to the sender. An open-ended search for
a new address—especially when the State obligates the taxpayer to
keep his address updated with the tax collector, see Ark. Code Ann.
§26–35–705 (1997)—imposes burdens on the State significantly
greater than the several relatively easy options outlined
above. The Commissioner complains about the burden
of even those additional steps, but his argument is belied by
Arkansas’ current requirement that notice to homestead owners be
accomplished by personal service if certified mail is returned,
§26–37–301(e) (Supp. 2005), and the fact that Arkansas transfers
the cost of notice to the taxpayer or the tax sale purchaser,
§26–37–104(a). The Commissioner has offered no estimate of how many
notice letters are returned, and no facts to support the dissent’s
assertion that the Commissioner must now physically locate “tens of
thousands of properties every year.” Post , at 10. Citing
our decision in Greene v. Lindsey, the Solicitor
General adds that posted notice could be taken down by children or
vandals. But in Greene , we noted that outside the specific
facts of that case, posting notice on real property is “a
singularly appropriate and effective way of ensuring that a person
… is actually apprised of proceedings against him.” 456 U. S., at
452–453. Successfully providing notice is often the most efficient
way to collect unpaid taxes, see Mennonite , 462 U. S., at
800, n. 5 (more effective notice may ease burden on State if
recipient arranges to pay delinquent taxes prior to tax sale); Tr.
of Oral Arg. 24 (85 percent of tax delinquent properties in
Arkansas are redeemed upon notice of delinquency), but rather than
taking relatively easy additional steps to effect notice, the State
undertook the burden and expense of purchasing a newspaper
advertisement, conducting an auction, and then negotiating a
private sale of the property to Flowers. The Solicitor General argues that requiring
further effort when the government learns that notice was not
delivered will cause the government to favor modes of providing
notice that do not generate additional information—for example,
starting (and stopping) with regular mail instead of certified
mail. We find this unlikely, as we have no doubt that the
government repeatedly finds itself being asked to prove that notice
was sent and received. Using certified mail provides the State with
documentation of personal delivery and protection against false
claims that notice was never received. That added security,
however, comes at a price—the State also learns when notice has not been received. We conclude that, under the
circumstances presented, the State cannot simply ignore that
information in proceeding to take and sell the owner’s property—any
more than it could ignore the information that the owner in Robinson was in jail, or that the owner in Covey was incompetent. Though the Commissioner argues that followup
measures are not constitutionally required, he reminds us that the
State did make some attempt to follow up with Jones by publishing
notice in the newspaper a few weeks before the public sale. Several
decades ago, this Court observed that “[c]hance alone” brings a
person’s attention to “an advertisement in small type inserted in
the back pages of a newspaper,” Mullane , 339 U. S., at
315, and that notice by publication is adequate only where “it is
not reasonably possible or practicable to give more adequate
warning,” id. , at 317. Following up by publication was not
constitutionally adequate under the circumstances presented here
because, as we have explained, it was possible and practicable to
give Jones more adequate warning of the impending tax
sale. The dissent forcefully articulates some basic
principles about constitutionally required notice, principles from
which we have no intention to depart. In particular, we disclaim
any “new rule” that is “contrary to Dusenbery and a
significant departure from Mullane .” Post , at 6.
In Dusenbery , the Government was aware that someone at the
prison had signed for the prisoner’s notice letter, and we
determined that this attempt at notice was adequate, despite the
fact that the State could have made notice more likely by requiring
the prisoner to sign for the letter himself. 534 U. S., at 171. In
this case, of course, the notice letter was returned to the
Commissioner, informing him that his attempt at notice had
failed. As for Mullane , it directs that
“when notice is a person’s due … [t]he means employed must be such
as one desirous of actually informing the absentee might reasonably
adopt to accomplish it.” 339 U. S., at 315. Mindful of the
dissent’s concerns, we conclude, at the end of the day, that
someone who actually wanted to alert Jones that he was in danger of
losing his house would do more when the attempted notice letter was
returned unclaimed, and there was more that reasonably could be
done. As noted, “[i]t is not our responsibility to
prescribe the form of service that the [government] should adopt.” Greene , supra, at 455, n. 9. In prior cases
finding notice inadequate, we have not attempted to redraft the
State’s notice statute. See, e.g., Tulsa Professional , 485
U. S., at 490–491; Robinson , 409 U. S., at 40; Schroeder v. City of New York, 371 U. S. 208 , 213–214
(1962); Walker , 352 U. S., at 116; Covey , 351 U.
S., at 146–147. The State can determine how to proceed in response
to our conclusion that notice was inadequate here, and the States
have taken a variety of approaches to the present question. See
n. 2, supra . It suffices for present purposes that we
are confident that additional reasonable steps were available for
Arkansas to employ before taking Jones’
property. * * * There is no reason to suppose that the State
will ever be less than fully zealous in its efforts to secure the
tax revenue it needs. The same cannot be said for the State’s
efforts to ensure that its citizens receive proper notice before
the State takes action against them. In this case, the State is
exerting extraordinary power against a property owner—taking and
selling a house he owns. It is not too much to insist that the
State do a bit more to attempt to let him know about it when the
notice letter addressed to him is returned
unclaimed. The Commissioner’s effort to provide notice
to Jones of an impending tax sale of his house was insufficient to
satisfy due process given the circumstances of this case. The
judgment of the Arkansas Supreme Court is reversed, and the case is
remanded for proceedings not inconsistent with this
opinion. It is
so ordered. Justice Alito took no part in the
consideration or decision of this case. Footnote 1 Most Courts of Appeals have also concluded that the Due
Process Clause of the Fifth Amendment requires the Federal
Government to take further reasonable steps in the property
forfeiture context. See, e.g., United States v. Ritchie , 342 F. 3d 903, 911 (CA9 2003); Foehl v. United States , 238 F. 3d 474, 480
(CA3 2001); Small v. United States , 136
F. 3d 1334, 1337–1338 (CADC 1998); Torres v. $36,256.80 U. S. Currency , 25 F. 3d 1154, 1161 (CA2
1994); Barrera-Montenegro v. United States , 74
F. 3d 657, 660 (CA5 1996); United States v. Rodgers , 108 F. 3d 1247, 1252–1253 (CA10 1997); see
also Garcia v. Meza , 235 F. 3d 287, 291 (CA7
2000) (declining to adopt a per se rule that only examines
notice at the time it is sent, but also declining to impose an
affirmative duty to seek out claimants in every case where notice
is returned undelivered). But see Madewell v. Downs , 68 F. 3d 1030, 1047 (CA8 1995); Sarit v. United States Drug Enforcement Admin. , 987 F. 2d
10, 14–15 (CA1 1993). Footnote 2 Many States require that notice be given to the occupants
of the property as a matter of course. See Cal. Rev. & Tax.
Code Ann. §3704.7 (West Supp. 2006); Ga. Code Ann.
§48–4–45(a)(1)(B) (Supp. 2005); Ill. Comp. Stat., ch. 35,
§§200/21–75(a), 200/22–10, 200/22–15 (West 2004); Me. Rev. Stat.
Ann., Tit. 36, §1073 (1990); Md. Tax-Prop. Code Ann.
§14–836(b)(4)(i)(2) (Lexis 2001); Mich. Comp. Laws Ann. §211.78i(3)
(West 2005); Minn. Stat. §281.23(6) (2004); Mont. Code Ann.
§§15–18–212(1)(a), (2)(A) (2005); N. D. Cent. Code Ann.
§57–28–04(3) (Lexis 2005); Okla. Stat., Tit. 68, §3118(A) (West
Supp. 2006); S. D. Codified Laws §10–25–5 (2004); Utah Code
Ann. §59–2–1351(2)(a) (Lexis 2004); Wis. Stat. §75.12(1)
(2003–2004); Wyo. Stat. Ann. §39–13–108(e)(v)(B) (2005). Some
States require that notice be posted on the property or at the
property owner’s last known address either at the outset, see Del.
Code Ann., Tit. 9, §§8724, 8772 (1989 and Supp. 2004); Ga. Code
Ann. §48–4–78(d) (Supp. 2005); Haw. Rev. Stat. §246–56 (2003); Md.
Tax-Prop. Code Ann. §14–836(b)(6) (Lexis 2001); Okla. Stat., Tit.
68, §3118(A) (West Supp. 2006), or as a followup measure when
personal service cannot be accomplished or certified mail is
returned, see Fla. Stat. §197.522(2)(a) (2003); Minn. Stat.
§281.23(6) (2004); S. C. Code Ann. §12–51–40(c) (Supp. 2005).
And a few States require a diligent inquiry to find a property
owner’s correct address when mailed notice is returned. See Miss.
Code Ann. §27–43–3 (2002); Nev. Rev. Stat. §361.595(3)(b) (2003);
Pa. Stat. Ann., Tit. 72, §5860.607a (Purdon 1990); R. I. Gen.
Laws §44–9–25.1 (2005). See also 26 U. S. C. §6335(a) (requiring
the Internal Revenue Service to make a reasonable attempt to
personally serve notice on a delinquent taxpayer before relying
upon notice by certified mail); 28 U. S. C.
§3203(g)(1)(A)(i)(IV) (requiring written notice to tenants of real
property subject to sale under the Federal Debt Collection
Practices Act); 12 U. S. C. §3758(2)(A)(iii) (requiring
written notice to occupants before foreclosure by the Secretary of
Housing and Urban Development); §3758(2)(B)(ii) (requiring that
notice be posted on the property if occupants are
unknown). THOMAS, J., DISSENTING JONES V. FLOWERS 547 U. S. ____ (2006) SUPREME COURT OF THE UNITED STATES NO. 04-1477 GARY KENT JONES, PETITIONER v. LINDA K.
FLOWERS et al.
on writ of certiorari to the supreme court of
arkansas
[April 26, 2006]
Justice Thomas, with whom Justice
Scalia and Justice Kennedy join, dissenting.
When petitioner failed to pay his
property taxes for several consecutive years, respondent
Commissioner of State Lands in Arkansas, using the record address
that petitioner provided to the State, sent petitioner a letter by
certified mail, noting his tax delinquency and explaining that his
property would be subject to public sale if the delinquent taxes
and penalties were not paid. After petitioner failed to respond,
the State also published notice of the delinquency and public sale
in an Arkansas newspaper. Soon after respondent Linda K. Flowers
submitted a purchase offer to the State, it sent petitioner a
second letter by certified mail explaining that the sale would
proceed if the delinquent taxes and penalties were not paid.
Petitioner argues that the State violated his
rights under the Due Process Clause of the Fourteenth Amendment
because, in his view, the State failed to take sufficient steps to
contact him before selling his property to Flowers. Petitioner
contends that once the State became aware that he had not claimed
the certified mail, it was constitutionally obligated to employ
additional methods to locate him.
Adopting petitioner’s arguments, the Court
holds today that “when mailed notice of a tax sale is returned
unclaimed, the State must take additional reasonable steps to
attempt to provide notice to the property owner before selling his
property, if it is practicable to do so.” Ante , at 4. The
Court concludes that it was practicable for Arkansas to take
additional steps here—namely, notice by regular mail, posting
notice on petitioner’s door, and addressing mail to “occupant.” Ante , at 13. Because, under this Court’s precedents, the
State’s notice methods clearly satisfy the requirements of the Due
Process Clause, I respectfully dissent.
I
The Fourteenth Amendment
prohibits the States from “depriv[ing] any person of life, liberty,
or property, without due process of law.” This Court has held that
a State must provide an individual with notice and opportunity to
be heard before the State may deprive him of his property. Mullane v. Central Hanover Bank & Trust Co., 339 U. S. 306 ,
313 (1950). Balancing a State’s interest in efficiently managing
its administrative system and an individual’s interest in adequate
notice, this Court has held that a State must provide “notice
reasonably calculated, under all the circumstances, to apprise
interested parties of the pendency of the action.” Id ., at
313–314. As this Court has explained, “when notice is a person’s
due … [t]he means employed must be such as one desirous of actually
informing the absentee might reasonably adopt to accomplish it.” Id ., at 315. “[H]eroic efforts,” however, are not
required. Dusenbery v. United States, 534 U. S. 161 , 170
(2002). To the contrary, we have expressly rejected “[a]
construction of the Due Process Clause which would place impossible
or impractical obstacles in the way [of the State].” Mullane,
supra, at 313–314. Thus, “none of our cases … has required
actual notice”; instead, “we have allowed the Government to defend
the ‘reasonableness and hence the constitutional validity of any
chosen method … on the ground that it is in itself reasonably
certain to inform those affected.’ ” Dusenbery, supra, at 169–170 (quoting Mullane , supra , at 315).
The methods of notice employed by
Arkansas were reasonably calculated to inform petitioner of
proceedings affecting his property interest and thus satisfy the
requirements of the Due Process Clause. The State mailed a notice
by certified letter to the address provided by petitioner. The
certified letter was returned to the State marked “unclaimed” after
three attempts to deliver it. The State then published a notice of
public sale containing redemption information in the Arkansas
Democrat Gazette newspaper. After Flowers submitted a purchase
offer, the State sent yet another certified letter to petitioner at
his record address. That letter, too, was returned to the State
marked “unclaimed” after three delivery attempts.[ Footnote 1 ]
Arkansas’ attempts to contact petitioner by
certified mail at his “record address,” without more, satisfy due
process. Dusenbery, supra , at 169. See also Mullane,
supra , at 318; Tulsa Professional Collection Services,
Inc. v. Pope, 485 U. S. 478 , 490
(1988) (“We have repeatedly recognized that mail service is an
inexpensive and efficient mechanism that is reasonably calculated
to provide actual notice”); Mennonite Bd. of Missions v. Adams, 462
U. S. 791 , 792, 798 (1983) (holding that “notice mailed to [the affected party’s] last known available
address ” is sufficient where a State seeks to sell “real
property on which payments of property taxes have been delinquent”
(emphasis added)). Because the notices were sent to the address
provided by petitioner himself, the State had an especially sound
basis for determining that notice would reach him. Moreover,
Arkansas exceeded the constitutional minimum by additionally
publishing notice in a local newspaper.[ Footnote 2 ] See Mullane , supra, at 318.
Due process requires nothing more—and certainly not here, where
petitioner had a statutory duty to pay his taxes and to report any
change of address to the state taxing authority. See Ark. Code Ann.
§26–35–705 (1997).
My conclusion that Arkansas’ notice methods
satisfy due process is reinforced by the well-established
presumption that individuals, especially those owning property, act
in their own interest. Recognizing that “ ‘[i]t is the part of
common prudence for all those who have any interest in [a thing],
to guard that interest by persons who are in a situation to protect
it,’ ” Mullane , supra , at 316 (quoting The Mary , 9 Cranch 126, 144 (1815)), this Court has
concluded that “[t]he ways of an owner with tangible property are
such that he usually arranges means to learn of any direct attack
upon his possessory or proprietary rights.” Mullane , 339
U. S., at 316. Consistent with this observation, Arkansas was free
to “indulge the assumption” that petitioner had either provided the
State taxing authority with a correct and up-to-date mailing
address—as required by state law—“or that he … left some caretaker
under a duty to let him know that [his property was] being
jeopardized.”[ Footnote 3 ] Ibid. The Court does not conclude that certified
mail is inherently insufficient as a means of notice, but rather
that “the government’s knowledge that notice pursuant to the normal
procedure was ineffective triggered an obligation on the
government’s part to take additional steps to effect notice.” Ante , at 9. I disagree.
First, whether a method of notice is
reasonably calculated to notify the interested party is determined ex ante, i.e., from the viewpoint of the government agency
at the time its notice is sent. This follows from Mullane ,
where this Court rested its analysis on the information the sender
had “at hand” when its notice was sent. 339 U. S., at 318.
Relatedly, we have refused to evaluate the reasonableness of a
particular method of notice by comparing it to alternative methods
that are identified after the fact. See Dusenbery , 534 U.
S., at 171–172. Today the Court appears to abandon both of these
practices. Its rejection of Arkansas’ selected method of notice—a
method this Court has repeatedly concluded is constitutionally
sufficient—is based upon information that was unavailable when
notice was sent. Indeed, the Court’s proposed notice
methods—regular mail, posting and addressing mail to “occupant,” ante , at 12–14—are entirely the product of post
hoc considerations, including the discovery that members of
petitioner’s family continued to live in the house. Similarly, the
Court’s observation that “[t]he Commissioner[’s] complain[t] about
the burden of … additional steps … is belied by Arkansas’ current
requirement that notice to homestead-owners be accomplished by
personal service if certified mail is returned,” ante, at
14–15, is contrary to Dusenbery ’s “conclusion that the
Government ought not be penalized and told to ‘try harder’ … simply
because [it] has since upgraded its policies,” 534 U. S., at 172
(citation omitted).
Second, implicit in our holding that due
process does not require “actual notice,” see id., at
169–170, is that when the “government becomes aware … that its
attempt at notice has failed,” ante, at 5, it is not
required to take additional steps to ensure that notice has been
received. Petitioner’s challenge to Arkansas’ notice methods, and
the Court’s acceptance of it, is little more than a thinly veiled
attack on Dusenbery. Under the majority’s logic, each time
a doubt is raised with respect to whether notice has reached an
interested party, the State will have to consider additional means
better calculated to achieve notice. Because this rule turns on
speculative, newly acquired information, it has no natural end
point, and, in effect, requires the States to achieve something
close to actual notice. The majority’s new rule is contrary to Dusenbery and a significant departure from Mullane .
The only circumstances in which this Court has
found notice by mail and publication inadequate under the Due
Process Clause involve situations where the state or local
government knew at the outset that its notice efforts were destined
to fail and knew how to rectify the problem prior to sending
notice. See Robinson v. Hanrahan, 409 U. S. 38 , 39 (1972) (per curiam) (intended recipient known to be in
jail) ; Covey v. Town of Somers , 351 U. S. 141 , 145
(1956) (intended recipient known to be incompetent and without a
guardian).
In Robinson , the State, having
arrested petitioner and detained him in county jail, immediately
instituted forfeiture proceedings against his automobile and mailed
notice of those proceedings to his residential address. 409 U. S.,
at 38. Robinson, who was incarcerated in the county jail during the
entirety of the forfeiture proceedings, did not receive notice of
the proceedings until after he was released and the forfeiture
order had been entered. Id. , at 38–39. Because the State
knew beforehand that Robinson was not at, and had no access to, the
address to which it sent the notice, this Court held that the
State’s efforts were not “reasonably calculated” to notify him of
the pending proceedings. Id., at 40. Similarly, in Covey , the Court concluded that the methods of notice used
by the town—mailing, posting, and publishing—were not reasonably
calculated to inform Covey of proceedings adverse to her property
interests because local officials knew prior to sending notice that
she was “without mental capacity to handle her affairs” and unable
to comprehend the meaning of the notices. 351 U. S., at 144,
146.
By contrast, Arkansas did not know at the time
it sent notice to petitioner that its method would fail; and
Arkansas did not know that petitioner no longer lived at the record
address simply because letters were returned “unclaimed.” Pet. for
Cert. 3. “[U]nclaimed” does not necessarily mean that an address is
no longer correct; it may indicate that an intended recipient has
simply failed or refused to claim mail. See United States Postal
Service, Domestic Mail Manual (DMM), §507, Exh. 1.4.1,
http://pe.usps.gov/text/dmm300/507.htm.[ Footnote 4 ] Given that the State had been using the
address provided by petitioner and that petitioner had a legal duty
to maintain a current mailing address with the state taxing
authority, return of the mail as “unclaimed” did not arm Arkansas
with the type of specific knowledge that the governments had at
hand in Robinson and Covey . Cf. ante, at
13. The State cannot be charged to correct a problem of
petitioner’s own creation and of which it was not aware.[ Footnote 5 ] Even if the State had
divined that petitioner was no longer at the record address, its
publication of notice in a local newspaper would have sufficed
because Mullane authorizes the use of publication when the
record address is unknown. See 339 U. S., at 316 (“[P]ublication
traditionally has been acceptable as notification supplemental to
other action which in itself may reasonably be expected to convey a
warning”).
II
The Court’s proposed methods,
aside from being constitutionally unnecessary, are also burdensome,
impractical, and no more likely to effect notice than the methods
actually employed by the State.
In Arkansas, approximately 18,000
parcels of delinquent real estate are certified annually. Tsann
Kuen Enterprises Co. v. Campbell , 335 Ark. 110,
119–120, 129 S. W. 3d 822, 828 (2003). Under the Court’s rule, the
State will bear the burden of locating thousands of delinquent
property owners. These administrative burdens are not compelled by
the Due Process Clause. See Mullane, supra , at 313–314; Tulsa Professional Collection Services, Inc., 485 U. S.,
at 489–490 (stating that constitutionally sufficient notice “need
not be inefficient or burdensome”). Here, Arkansas has determined
that its law requiring property owners to maintain a current
address with the state taxing authority, in conjunction with its
authorization to send property notices to the record address, is an
efficient and fair way to administer its tax collection system. The
Court’s decision today forecloses such a reasonable system and
burdens the State with inefficiencies caused by delinquent
taxpayers.
Moreover, the Court’s proposed methods are no
more reasonably calculated to achieve notice than the methods
employed by the State here. Regular mail is hardly foolproof;
indeed, it is arguably less effective than certified mail.
Certified mail is tracked, delivery attempts are recorded, actual
delivery is logged, and notices are posted to alert someone at the
residence that certified mail is being held at a local post office.
By creating a record, these features give parties grounds for
defending or challenging notice. By contrast, regular mail is
untraceable; there is no record of either delivery or receipt. Had
the State used regular mail, petitioner would presumably argue that
it should have sent notice by certified mail because it creates a
paper trail.[ Footnote 6 ]
The Court itself recognizes the deficiencies
of its proposed methods. It acknowledges that “[f]ollowing up with
regular mail might … increase the chances of actual
notice”; “occupants who ignored certified mail notice slips … might scrawl the owner’s new address on the notice
packet,” ante , at 12; and “a letter addressed to
[occupant] might be opened and read,” ante , at 14
(emphasis added). Nevertheless, the Court justifies its redrafting
of Arkansas’ notice statute on the ground that “[its] approach[es]
would increase the likelihood that the owner would be notified that
he was about to lose his property … .” Ibid. That, however, is not the test; indeed, we rejected such reasoning
in Dusenbery . See 534 U. S., at 171 (rejecting the
argument that “the FBI’s notice was constitutionally flawed because
it was ‘substantially less likely to bring home notice’ than a
feasible substitute” (citations omitted)).
The Court’s suggestion that Arkansas post
notice is similarly unavailing. The State’s records are organized
by legal description, not address, which makes the prospect of
physically locating tens of thousands of properties every year, and
posting notice on each, impractical. See Tsann Kuen Enterprises
Co. , supra, at 119–120, 129 S. W. 3d, at 828. Also,
this Court has previously concluded that posting is an inherently
unreliable method of notice. See G reene v. Lindsey , 456 U. S. 444 , 453–454
(1982).
Similarly, addressing the mail to “occupant,”
see ante, at 13, is no more reasonably calculated to reach
petitioner. It is sheer speculation to assume, as the Court does,
that although “[o]ccupants . . . might disregard a certified mail
slip … , a letter addressed to them (even as ‘occupant’) might
be opened and read.” Ante , at 14. It is at least as likely
that an occupant who receives generically addressed mail will
discard it as junk mail.
III
If “title to property should not
depend on [factual] vagaries,” Dusenberry , supra, at 171, then certainly it cannot turn on “wrinkle[s],” ante , at 5, caused by a property owner’s own failure to be
a prudent ward of his interests. The meaning of the Constitution
should not turn on the antics of tax evaders and scofflaws. Nor is
the self-created conundrum in which petitioner finds himself a
legitimate ground for imposing additional constitutional
obligations on the State. The State’s attempts to notify petitioner
by certified mail at the address that he provided and,
additionally, by publishing notice in a local newspaper satisfy due
process. Accordingly, I would affirm the judgment of the Arkansas
Supreme Court. Footnote 1 Though the Court posits that “there is no
record evidence that notices of attempted delivery were left at 717
North Bryan Street,” ante , at 12, the postal carrier was
required to leave notice at the address at each delivery attempt
indicating that delivery of certified mail had been attempted and
that the mail could be retrieved at the local post office. See
United States Postal Operations Manual §813.25 (July 2005),
http://www.nalc.org/depart/can/pdf/manuals/pom/pomc8.pdf (all
Internet materials as visited Apr. 21, 2006, and available in Clerk
of Court’s case file) (“The carrier must leave a notice of arrival
on Form 3849 if the carrier cannot deliver the certifiable article
for any reason”). Footnote 2 The Court found inadequate the State’s
attempt at notice by publication, as if that were the State’s sole method for effectuating notice, see ante , at
16. But the State plainly used it here as a secondary method of notice. Footnote 3 The issue is not, as the Court maintains,
whether the current occupant is “charged with acting as the owner’s
agent.” Ante , at 12. Rather, the issue is whether
petitioner discharged his own duty to guard his
interests. Footnote 4 The Postal Service uses “Moved, Left No
Address” to indicate that the “[A]ddressee moved and filed no
change-of-address order,” and “Not Deliverable as Addressed—Unable
to Forward” to indicate that the mail is “undeliverable at address
given; no change-of-address order on file; forwarding order
expired.” DMM §507, Exh. 1.4.1. Footnote 5 The Court’s “storm drain” hypothetical, ante , at 7–8, presents the harder question of when notice
is sent—at the precise moment the Commissioner places the mail in
the postal carrier’s hand or the split second later when he
observes the departing carrier drop the mail down the storm drain.
That more difficult question is not before us in this case because
Arkansas learned long after the fact that its attempts had been
unsuccessful. Footnote 6 Interestingly, the Court stops short of
saddling the State with the other steps that petitioner argues a
State should take any time the interested party fails to claim
letters mailed to his record address, see ante , at 14,
namely searching state tax records, the phone-book, the Internet,
department of motor vehicle records, or voting rolls, contacting
his employer, or employing debt collectors. Here, the Court reasons
that because of the context—the fact that the letter was returned
merely “unclaimed” and petitioner had a duty to maintain a current
address—the State is not required to go as far as petitioner urges. Ibid . Though the methods proposed by petitioner are
severely flawed (for instance, the commonality of his surname
“Jones” calls into question the fruitfulness of Internet and
phone-book searches), there is no principled basis for the Court’s
conclusion that petitioner’s other proposed methods would “impos[e]
burdens on the State significantly greater than the several
relatively easy options outlined [by the Court].” Ibid . | The Supreme Court ruled that the government must take additional steps to provide notice to the owner before selling their property for unpaid taxes if the initial notice of tax sale is returned undelivered. In this case, the state's attempt to notify Gary Jones of his tax delinquency by certified letter was insufficient, as it was returned "unclaimed." The state should have taken further steps, such as resending the letter or attempting to contact Jones through other means, before selling his property. |
Criminal Trials & Prosecutions | Strauder v. West Virginia | https://supreme.justia.com/cases/federal/us/100/303/ | U.S. Supreme Court Strauder v. West Virginia, 100
U.S. 303 (1879) Strauder v. West
Virginia 100
U.S. 303 ERROR TO THE SUPREME COURT OF
APPEALS OF THE STATE OF WEST
VIRGINIA Syllabus 1. The Fourteenth Amendment of the Constitution of the United
States considered, and held to be one of a series of
constitutional provisions having a common purpose, namely to secure
to a recently emancipated race, which had been held in slavery
through many generations, all the civil rights that the superior
race enjoy, and to give to it the protection of the general
government, in the enjoyment of such rights, whenever they should
be denied by the States. Whether the amendment had other, and if so
what, purposes not decided.
2. The amendment not only gave citizenship and the privileges of
citizenship to persons of color, but denied to any State the power
to withhold from them the equal protection of the laws, and
invested Congress with power, by appropriate legislation, to
enforce its provisions.
3. The amendment, although prohibitory in term, confers by
necessary implication a positive immunity, or right, most valuable
to persons of the colored race -- the right to exemption from
unfriendly legislation against them distinctively as colored --
exemption from discriminations, imposed by public authority, which
imply legal inferiority in civil society, lessen the security of
their rights, and are steps towards reducing them to the condition
of a subject race.
4. The statute of West Virginia which, in effect, singles out
and denies to colored citizens the right and privilege of
participating in the administration of the law as jurors because of
their color, though qualified in all other respects, is,
practically, a brand upon them, and a discrimination against them
which is forbidden by the amendment. It denies to such citizens the
equal protection of the laws, since the constitution of juries is a
very essential part of the protection which the trial by jury is
intended to secure. The very idea of a jury is that it is a body of
men composed of the peers or equals of the person whose rights it
is selected or summoned to determine; that is, of persons having
the same legal status in society as that which he holds.
5. Where, as here, the State statute secures to every white man
the right of trial by jury selected from, and without
discrimination against, his race, and at the same time permits or
requires such discrimination against the colored man because of his
race, the latter is not equally protected by law with the
former.
6. Sect. 41 of the Revised Statutes, which declares that,
"when any civil suit or criminal prosecution is commenced in any
State court, for any cause whatsoever, against any person who is
denied or cannot enforce in the judicial tribunals of the State, or
in the part of the State where such suit or prosecution is pending,
any right secured to him by any law providing for the equal civil
rights of citizens of the United States, . . . such suit or
prosecution may, upon the petition of such defendant, filed in said
State court, at any time before the trial or final hearing of the
cause, stating the facts and verified by oath, be removed, for
trial, into the next circuit court to be held in the district where
it is pending,"
considered and held not to be in conflict with the
Constitution of the United States. Page 100 U. S. 304 The facts are stated in the opinion of the court.
MR. JUSTICE STRONG delivered the opinion of the court.
The plaintiff in error, a colored man, was indicted for murder
in the Circuit Court of Ohio County in West Virginia, on the 20th
of October, 1874, and, upon trial, was convicted and sentenced. The
record was then removed to the Supreme Court of the State, and
there the judgment of the Circuit Court was affirmed. The present
case is a writ of error to that court, and it is now, in substance,
averred that, at the trial in the State court, the defendant (now
plaintiff in error) was denied rights to which he was entitled
under the Constitution and laws of the United States.
In the Circuit Court of the State, before the trial of the
indictment was commenced, the defendant presented his petition,
verified by his oath, praying for a removal of the cause into the
Circuit Court of the United States, assigning, as ground for the
removal, that,
"by virtue of the laws of the State of West Virginia, no colored
man was eligible to be a member of the grand jury or to serve on a
petit jury in the State; that white men are so eligible, and that,
by reason of his being a colored man and having been a slave, he
had reason to believe, and did believe, he could not have the full
and equal benefit of all laws and proceedings in the State of West
Virginia for the security of his person as is enjoyed by white
citizens, and that he had less chance of enforcing in the courts of
the State his rights on the prosecution, as a citizen of the United
States, and that the probabilities of a denial of them to him as
such citizen on every trial which might take place on the
indictment in the courts of the State were much more enhanced than
if he was a white man."
This petition was denied by the State court, and the cause was
forced to trial.
Motions to quash the venire "because the law under which Page 100 U. S. 305 it was issued was unconstitutional, null, and void," and
successive motions to challenge the array of the panel, for a new
trial, and in arrest of judgment were then made, all of which were
overruled and made by exceptions part of the record.
The law of the State to which reference was made in the petition
for removal and in the several motions was enacted on the 12th of
March, 1873 (Acts of 18778, p. 102), and it is as follows:
"All white male persons who are twenty-one year of age and who
are citizens of this State shall be liable to serve as jurors,
except as herein provided."
The persons excepted are State officials.
In this court, several errors have been assigned, and the
controlling question underlying them all are, first, whether, by
the Constitution and laws of the United States, every citizen of
the United States has a right to a trial of an indictment against
him by a jury selected and impaneled without discrimination against
his race or color, because of race or color, and, second, if he has
such a right and is denied its enjoyment by the State in which he
is indicted, may he cause the case to be removed into the Circuit
Court of the United States?
It is to be observed that the first of these questions is not
whether a colored man, when an indictment has been preferred
against him, has a right to a grand or a petit jury composed in
whole or in part of persons of his own race or color, but it is
whether, in the composition or selection of juror by whom he is to
be indicted or tried, all persons of his race or color may be
excluded by law solely because of their race or color, so that by
no possibility can any colored man sit upon the jury.
The questions are important, for they demand a construction of
the recent amendment of the Constitution. If the defendant has a
right to have a jury selected for the trial of his case without
discrimination against all persons of his race or color, because of
their race or color, the right, if not created, is protected by
those amendments and the legislation of Congress under them. The
Fourteenth Amendment ordains that
"all persons born or naturalized in the United States and
subject to the jurisdiction thereof are citizens of the United
States and of the State wherein they reside. No State shall make
or Page 100 U. S. 306 enforce any laws which shall abridge the privilege or immunities
of citizens of the United States, nor shall any State deprive any
person of life, liberty, or property without due process of law,
nor deny to any person within its jurisdiction the equal protection
of the laws."
This is one of a series of constitutional provisions having a
common purpose -- namely, securing to a race recently emancipated,
a race that, through many generations, had been held in slavery,
all the civil rights that the superior race enjoy. The true spirit
and meaning of the amendments, as we said in the Slaughterhouse
Cases , 16 Wall. 36, cannot be understood without
keeping in view the history of the times when they were adopted and
the general objects they plainly sought to accomplish. At the time
when they were incorporated into the Constitution, it required
little knowledge of human nature to anticipate that those who had
long been regarded as an inferior and subject race would, when
suddenly raised to the rank of citizenship, be looked upon with
jealousy and positive dislike, and that State laws might be enacted
or enforced to perpetuate the distinctions that had before existed.
discriminations against them had been habitual. It was well known
that, in some States, laws making such discrimination then existed,
and others might well be expected. The colored race, as a race, was
abject and ignorant, and in that condition was unfitted to command
the respect of those who had superior intelligence. Their training
had left them mere children, and, as such, they needed the
protection which a wise government extend to those who are unable
to protect themselves. They especially needed protection against
unfriendly action in the States where they were resident. It was in
view of these considerations the Fourteenth Amendment was framed
and adopted. It was designed to assure to the colored race the
enjoyment of all the civil rights that, under the law, are enjoyed
by white persons, and to give to that race the protection of the
general government in that enjoyment whenever it should be denied
by the States. It not only gave citizenship and the privileges of
citizenship to persons of color, but it denied to any State the
power to withhold from them the equal protection of the laws, and
authorized Congress to enforce its provisions Page 100 U. S. 307 by appropriate legislation. To quote the language used by us in
the Slaughterhouse Cases, "No one can fail to be impressed with the one pervading purpose
found in all the amendments, lying at the foundation of each, and
without which none of them would have been suggested -- we mean the
freedom of the slave race, the security and firm establishment of
that freedom, and the protection of the newly made freeman and
citizen from the oppressions of those who had formerly exercised
unlimited dominion over them."
So again:
"The existence of laws in the States where the newly emancipated
negroes resided which discriminated with gross injustice and
hardship against them as a class was the evil to be remedied, and,
by it [the Fourteenth Amendment], such laws were forbidden. If,
however, the States did not conform their laws to its requirements,
then, by the fifth section of the article of amendment, Congress
was authorized to enforce it by suitable legislation."
And it was added,
"We doubt very much whether any action of a State not directed
by way of discrimination against the negroes as a class will ever
be held to come within the purview of this provision."
If this is the spirit and meaning of the amendment, whether it
means more or not, it is to be construed liberally to carry out the
purposes of its framers. It ordains that no State shall make or
enforce any laws which shall abridge the privileges or immunities
of citizens of the United States (evidently referring to the newly
made citizens, who, being citizens of the United States, are
declared to be also citizens of the State in which they reside). It
ordains that no State shall deprive any person of life, liberty, or
property without due process of law, or deny to any person within
its jurisdiction the equal protection of the laws. What is this but
declaring that the law in the States shall be the same for the
black as for the white; that all persons, whether colored or white,
shall stand equal before the laws of the States, and, in regard to
the colored race, for whose protection the amendment was primarily
designed, that no discrimination shall be made against them bar law
because of their color? The words of the amendment, it is true, are
prohibitory, but they contain a necessary implication of a positive
immunity, or right, most valuable to the Page 100 U. S. 308 colored race -- the right to exemption from unfriendly
legislation against them distinctively as colored -- exemption from
legal discriminations, implying inferiority in civil society,
lessening the security of their enjoyment of the rights which
others enjoy, and discriminations which are steps towards reducing
them to the condition of a subject race.
That the West Virginia statute respecting juries -- the statute
that controlled the selection of the grand and petit jury in the
case of the plaintiff in error -- is such a discrimination ought
not to be doubted. Nor would it be if the persons excluded by it
were white men. If, in those States where the colored people
constitute a majority of the entire population, a law should be
enacted excluding all white men from jury service, thus denying to
them the privilege of participating fully with the blacks in the
administration of justice, we apprehend no one would be heard to
claim that it would not be a denial to white men of the equal
protection of the laws. Nor, if a law should be passed excluding
all naturalized Celtic Irishmen, would there be any doubt of its
inconsistency with the spirit of the amendment. The very fact that
colored people are singled out and expressly denied by a statute
all right to participate in the administration of the law as jurors
because of their color, though they are citizens and may be in
other respects fully qualified, is practically a brand upon them
affixed by the law, an assertion of their inferiority, and a
stimulant to that race prejudice which is an impediment to securing
to individuals of the race that equal justice which the law aims to
secure to all others.
The right to a trial by jury is guaranteed to every citizen of
West Virginia by the Constitution of that State, and the
constitution of juries is a very essential part of the protection
such a mode of trial is intended to secure. The very idea of a jury
is a body of men composed of the peers or equals of the person
whose rights it is selected or summoned to determine -- that is, of
his neighbors, fellows, associates, persons having the same legal
status in society as that which he holds. Blackstone, in his
Commentaries, says,
"The right of trial by jury, or the country, is a trial by the
peers of every Englishman, and is the grand bulwark of his
liberties, and is secured to him by Page 100 U. S. 309 the Great Charter."
It is also guarded by statutory enactments intended to make
impossible what Mr. Bentham called "packing juries." It is well
known that prejudices often exit against particular classes in the
community which sway the judgment of jurors and which therefore
operate in some cases to deny to persons of those classes the full
enjoyment of that protection which others enjoy. Prejudice in a
local community is held to be a reason for a change of venue. The
framers of the constitutional amendment must have known full well
the existence of such prejudice and its likelihood to continue
against the manumitted slaves and their race, and that knowledge
was doubtless a motive that led to the amendment. By their
manumission and citizenship, the colored race became entitled to
the equal protection of the laws of the States in which they
resided, and the apprehension that, through prejudice, they might
be denied that equal protection, that is, that there might be
discrimination against them, was the inducement to bestow upon the
national government the power to enforce the provision that no
State shall deny to them the equal protection of the laws. Without
the apprehended existence of prejudice, that portion of the
amendment would have been unnecessary, and it might have been left
to the States to extend equality of protection.
In view of these considerations, it is hard to see why the
statute of West Virginia should not be regarded as discriminating
against a colored man when he is put upon trial for an alleged
criminal offence against the State. It is not easy to comprehend
how it can be said that, while every white man is entitled to a
trial by a jury selected from persons of his own race or color, or,
rather, selected without discrimination against his color, and a
negro is not, the latter is equally protected by the law with the
former. Is not protection of life and liberty against race or color
prejudice a right, a legal right, under the constitutional
amendment? And how can it be maintained that compelling a colored
man to submit to a trial for his life by a jury drawn from a panel
from which the State has expressly excluded every man of his race,
because of color alone, however well qualified in other respects,
is not a denial to him of equal legal protection? Page 100 U. S. 310 We do not say that, within the limits from which it is not
excluded by the amendment, a State may not prescribe the
qualifications of its jurors, and, in so doing, make
discriminations. It may confine the selection to males, to
freeholders, to citizens, to persons within certain ages, or to
persons having educational qualifications. We do not believe the
Fourteenth Amendment was ever intended to prohibit this. Looking at
its history, it is clear it had no such purpose. Its aim was
against discrimination because of race or color. As we have said
more than once, its design was to protect an emancipated race, and
to strike down all possible legal discriminations against those who
belong to it. To quote further from 16 Wall., supra: "In giving construction to any of these article [amendments], it
is necessary to keep the main purpose steadily in view. . . . It is
so clearly a provision for that race and that emergency that a
strong case would be necessary for its application to any
other."
We are not now called upon to affirm or deny that it had other
purposes.
The Fourteenth Amendment makes no attempt to enumerate the
rights it designed to protect. It speaks in general terms, and
those are as comprehensive as possible. Its language is
prohibitory, but every prohibition implies the existence of rights
and immunities, prominent among which is an immunity from
inequality of legal protection either for life, liberty, or
property. Any State action that denies this immunity to a colored
man is in conflict with the Constitution.
Concluding, therefore, that the statute of West Virginia,
discriminating in the selection of jurors, as it does, against
negroes because of their color, amounts to a denial of the equal
protection of the laws to a colored man when he is put upon trial
for an alleged offence against the State, it remains only to be
considered whether the power of Congress to enforce the provisions
of the Fourteenth Amendment by appropriate legislation is
sufficient to justify the enactment of sect. 641 of the Revised
Statutes.
A right or an immunity, whether created by the Constitution or
only guaranteed by it, even without any express delegation of
power, may be protected by Congress. Prigg
v. The Commonwealth of Pennsylvania , 16 Pet. 539.
So, in Page 100 U. S. 311 United States v. Reese, 92 U. S.
214 , it was aid by the Chief Justice of this court:
"Rights and immunities created by or dependent upon the
Constitution of the United States can be protected by Congress. The
form and manner of the protection may be such as Congress, in the
legitimate exercise of its legislative discretion, shall provide.
These may be varied to meet the necessities of the particular right
to be protected."
But there is express authority to protect the rights and
immunities referred to in the Fourteenth Amendment, and to enforce
observance of them by appropriate congressional legislation. And
one very efficient and appropriate mode of extending such
protection and securing to a party the enjoyment of the right or
immunity is a law providing for the removal of his case from a
State court, in which the right is denied by the State law, into a
Federal court, where it will be upheld. This is an ordinary mode of
protecting rights and immunities conferred by the Federal
Constitution and laws. Sect. 641 is such a provision. It enacts
that
"when any civil suit or criminal prosecution is commenced in any
State court for any cause whatsoever against any person who is
denied, or cannot enforce, in the judicial tribunals of the State,
or in the part of the State where such prosecution is pending, any
right secured to him by any law providing for the equal civil
rights of citizens of the United States, or of all persons within
the jurisdiction of the United States, such suit or prosecution
may, upon the petition of such defendant, filed in said State court
at any time before the trial, or final hearing of the case, stating
the facts, and verified by oath, be removed before trial into the
next Circuit Court of the United States to be held in the district
where it is pending."
This act plainly has reference to sects. 1977 and 1978 of the
statutes which partially enumerate the rights and immunities
intended to be guaranteed by the Constitution, the first of which
declares that
"all persons within the jurisdiction of the United States shall
have the same right in every State and Territory to make and
enforce contracts, to sue, be parties, give evidence, and to the
full and equal benefit of all laws and proceedings for the security
of persons and property as is enjoyed by white citizens, and shall
be subject to like punishment, Page 100 U. S. 312 pains, penalties, taxes, licenses, and exactions of every kind,
and to no other."
This act puts in the form of a statute what had been
substantially ordained by the constitutional amendment. It was a
step towards enforcing the constitutional provisions. Sect. 641 was
an advanced step, fully warranted, we think, by the fifth section
of the Fourteenth Amendment.
We have heretofore considered and affirmed the constitutional
power of Congress to authorize the removal from State courts into
the circuit courts of the United States, before trial, of criminal
prosecutions for alleged offences against the laws of the State
when the defence presents a Federal question or when a right under
the Federal Constitution or laws is involved. Tennessee v.
Davis, supra, p. 100 U. S. 267 .
It is unnecessary to repeat what we there said.
That the petition of the plaintiff in error, filed by him in the
State court before the trial of his case, made a case for removal
into the Federal Circuit Court under sect. 641 is very plain if, by
the constitutional amendment and sect. 1977 of the Revised
Statutes, he was entitled to immunity from discrimination against
him in the selection of jurors because of their color, as we have
endeavored to show that he was. It set forth sufficient facts to
exhibit a denial of that immunity, and a denial by the statute law
of the State.
There was error, therefore, in proceeding to the trial of the
indictment against him after his petition was filed as also in
overruling his challenge to the array of the jury and in refusing
to quash the panel.
The judgment of the Supreme Court of West Virginia will be
reversed, and the case remitted with instructions to reverse the
judgment of the Circuit Court of Ohio county, and it is So ordered. MR. JUSTICE FIELD.
I dissent from the judgment of the court in this case on the
grounds stated in my opinion in Ex parte Virginia ( infra, p. 100 U. S.
349 ), aud MR. JUSTICE CLIFFORD concurs with me. | The Supreme Court ruled that a West Virginia law, which effectively denied African Americans the right to serve as jurors due to their race, violated the Fourteenth Amendment of the US Constitution. The Court interpreted the amendment as granting all citizens, regardless of race, equal protection under the law and immunity from discriminatory legislation. The Court concluded that the right to trial by jury includes the right to have a jury composed of one's peers, without discrimination based on race. The Court's decision established the principle that laws targeting individuals based on their race and implying legal inferiority are unconstitutional. |
Taxes | South Dakota v. Wayfair, Inc. | https://supreme.justia.com/cases/federal/us/585/17-494/ | NOTICE: This opinion is subject to
formal revision before publication in the preliminary print of the
United States Reports. Readers are requested to notify the Reporter
of Decisions, Supreme Court of the United States, Washington,
D. C. 20543, of any typographical or other formal errors, in
order that corrections may be made before the preliminary print
goes to press.
SUPREME COURT OF THE UNITED STATES
_________________
No. 17–494
_________________
SOUTH DAKOTA, PETITIONER v. WAYFAIR,
INC., et al.
on writ of certiorari to the supreme court of
south dakota
[June 21, 2018]
Justice Kennedy delivered the opinion of the
Court.
When a consumer purchases goods or services, the
consumer’s State often imposes a sales tax. This case requires the
Court to determine when an out-of-state seller can be required to
collect and remit that tax. All concede that taxing the sales in
question here is lawful. The question is whether the out-of-state
seller can be held responsible for its payment, and this turns on a
proper interpretation of the Commerce Clause, U. S. Const.,
Art. I, §8, cl. 3.
In two earlier cases the Court held that an
out-of-state seller’s liability to collect and remit the tax to the
consumer’s State depended on whether the seller had a physical
presence in that State, but that mere shipment of goods into the
consumer’s State, following an order from a catalog, did not
satisfy the physical presence requirement. National Bellas Hess,
Inc. v. Department of Revenue of Ill. , 386 U. S.
753 (1967); Quill Corp. v. North Dakota , 504
U. S. 298 (1992). The Court granted certiorari here to
reconsider the scope and validity of the physical presence rule
mandated by those cases.
I
Like most States, South Dakota has a sales
tax. It taxes the retail sales of goods and services in the State.
S. D. Codified Laws §§10–45–2, 10–45–4 (2010 and Supp. 2017).
Sellers are generally required to collect and remit this tax to the
Department of Revenue. §10–45–27.3. If for some reason the sales
tax is not remitted by the seller, then in-state consumers are
separately responsible for paying a use tax at the same rate. See
§§10–46–2, 10–46–4, 10–46–6. Many States employ this kind of
complementary sales and use tax regime.
Under this Court’s decisions in Bellas
Hess and Quill , South Dakota may not require a business
to collect its sales tax if the business lacks a physical presence
in the State. Without that physical presence, South Dakota instead
must rely on its residents to pay the use tax owed on their
purchases from out-of-state sellers. “[T]he impracticability of
[this] collection from the multitude of individual purchasers is
obvious.” National Geographic Soc. v. California Bd. of
Equalization , 430 U. S. 551, 555 (1977). And consumer
compliance rates are notoriously low. See, e.g., GAO, Report
to Congressional Requesters: Sales Taxes, States Could Gain Revenue
from Expanded Authority, but Businesses Are Likely to Experience
Compliance Costs 5 (GAO–18–114, Nov. 2017) (Sales Taxes Report);
California State Bd. of Equalization, Revenue Estimate: Electronic
Commerce and Mail Order Sales 7 (2013) (Table 3) (estimating a 4
percent collection rate). It is estimated that Bellas Hess and Quill cause the States to lose between $8 and $33
billion every year. See Sales Taxes Report, at 11–12 (estimating $8
to $13 billion); Brief for Petitioner 34–35 (citing estimates of
$23 and $33.9 billion). In South Dakota alone, the Department of
Revenue estimates revenue loss at $48 to $58 million annually. App.
24. Particularly because South Dakota has no state income tax, it
must put substantial reliance on its sales and use taxes for the
revenue necessary to fund essential services. Those taxes account
for over 60 percent of its general fund.
In 2016, South Dakota confronted the serious
inequity Quill imposes by enacting S. 106—“An Act to provide
for the collection of sales taxes from certain remote sellers, to
establish certain Legislative findings, and to declare an
emergency.” S. 106, 2016 Leg. Assembly, 91st Sess. (S. D. 2016) (S.
B. 106). The legislature found that the inability to collect sales
tax from remote sellers was “seriously eroding the sales tax base”
and “causing revenue losses and imminent harm . . .
through the loss of critical funding for state and local services.”
§8(1). The legislature also declared an emergency: “Whereas, this
Act is necessary for the support of the state government and its
existing public institutions, an emergency is hereby declared to
exist.” §9. Fearing further erosion of the tax base, the
legislature expressed its intention to “apply South Dakota’s sales
and use tax obligations to the limit of federal and state
constitutional doctrines” and noted the urgent need for this Court
to reconsider its precedents. §§8(11), (8).
To that end, the Act requires out-of-state
sellers to collect and remit sales tax “as if the seller had a
physical presence in the state.” §1. The Act applies only to
sellers that, on an annual basis, deliver more than $100,000 of
goods or services into the State or engage in 200 or more separate
transactions for the delivery of goods or services into the State. Ibid. The Act also forecloses the retroactive application of
this requirement and provides means for the Act to be appropriately
stayed until the constitutionality of the law has been clearly
established. §§5, 3, 8(10).
Respondents Wayfair, Inc., Overstock.com, Inc.,
and Newegg, Inc., are merchants with no employees or real estate in
South Dakota. Wayfair, Inc., is a leading online retailer of home
goods and furniture and had net revenues of over $4.7 billion last
year. Overstock.com, Inc., is one of the top online retailers in
the United States, selling a wide variety of products from home
goods and furniture to clothing and jewelry; and it had net
revenues of over $1.7 billion last year. Newegg, Inc., is a major
online retailer of consumer electronics in the United States. Each
of these three companies ships its goods directly to purchasers
throughout the United States, including South Dakota. Each easily
meets the minimum sales or transactions requirement of the Act, but
none collects South Dakota sales tax. 2017 S. D. 56, ¶¶ 10–11,
901 N. W. 2d 754, 759–760.
Pursuant to the Act’s provisions for expeditious
judicial review, South Dakota filed a declaratory judgment action
against respondents in state court, seeking a declaration that the
requirements of the Act are valid and applicable to respondents and
an injunction requiring respondents to register for licenses to
collect and remit sales tax. App. 11, 30. Respondents moved for
summary judgment, arguing that the Act is unconstitutional. 901
N. W. 2d, at 759–760. South Dakota conceded that the Act
cannot survive under Bellas Hess and Quill but
asserted the importance, indeed the necessity, of asking this Court
to review those earlier decisions in light of current economic
realities. 901 N. W. 2d, at 760; see also S. B. 106, §8. The
trial court granted summary judgment to respondents. App. to Pet.
for Cert. 17a.
The South Dakota Supreme Court affirmed. It
stated: “However persuasive the State’s arguments on the merits of
revisiting the issue, Quill has not been overruled [and]
remains the controlling precedent on the issue of Commerce Clause
limitations on interstate collection of sales and use taxes.” 901
N. W. 2d, at 761. This Court granted certiorari. 583
U. S. ___ (2018).
II
The Constitution grants Congress the power
“[t]o regulate Commerce . . . among the several States.”
Art. I, §8, cl. 3. The Commerce Clause “reflect[s] a
central concern of the Framers that was an immediate reason for
calling the Constitutional Convention: the conviction that in order
to succeed, the new Union would have to avoid the tendencies toward
economic Balkanization that had plagued relations among the
Colonies and later among the States under the Articles of
Confederation.” Hughes v. Oklahoma , 441 U. S.
322, 325–326 (1979). Although the Commerce Clause is written as an
affirmative grant of authority to Congress, this Court has long
held that in some instances it imposes limitations on the States
absent congressional action. Of course, when Congress exercises its
power to regulate commerce by enacting legislation, the legislation
controls. Southern Pacific Co. v. Arizona ex rel.
Sullivan , 325 U. S. 761, 769 (1945). But this Court has
observed that “in general Congress has left it to the courts to
formulate the rules” to preserve “the free flow of interstate
commerce.” Id., at 770.
To understand the issue presented in this case,
it is instructive first to survey the general development of this
Court’s Commerce Clause principles and then to review the
application of those principles to state taxes.
A
From early in its history, a central function
of this Court has been to adjudicate disputes that require
interpretation of the Commerce Clause in order to determine its
meaning, its reach, and the extent to which it limits state
regulations of commerce. Gibbons v. Ogden , 9 Wheat. 1
(1824), began setting the course by defining the meaning of
commerce. Chief Justice Marshall explained that commerce included
both “the interchange of commodities” and “commercial intercourse.” Id., at 189, 193. A concurring opinion further stated that
Congress had the exclusive power to regulate commerce. See id., at 236 (opinion of Johnson, J.). Had that latter
submission prevailed and States been denied the power of concurrent
regulation, history might have seen sweeping federal regulations at
an early date that foreclosed the States from experimentation with
laws and policies of their own, or, on the other hand, proposals to
reexamine Gibbons ’ broad definition of commerce to
accommodate the necessity of allowing States the power to enact
laws to implement the political will of their people.
Just five years after Gibbons , however,
in another opinion by Chief Justice Marshall, the Court sustained
what in substance was a state regulation of interstate commerce. In Willson v. Black Bird Creek Marsh Co. , 2 Pet. 245
(1829), the Court allowed a State to dam and bank a stream that was
part of an interstate water system, an action that likely would
have been an impermissible intrusion on the national power over
commerce had it been the rule that only Congress could regulate in
that sphere. See id., at 252. Thus, by implication at least,
the Court indicated that the power to regulate commerce in some
circumstances was held by the States and Congress concurrently. And
so both a broad interpretation of interstate commerce and the
concurrent regulatory power of the States can be traced to Gibbons and Willson .
Over the next few decades, the Court refined the
doctrine to accommodate the necessary balance between state and
federal power. In Cooley v. Board of Wardens of Port of
Philadelphia ex rel. Soc. for Relief of Distressed Pilots , 12
How. 299 (1852), the Court addressed local laws regulating river
pilots who operated in interstate waters and guided many ships on
interstate or foreign voyages. The Court held that, while Congress
surely could regulate on this subject had it chosen to act, the
State, too, could regulate. The Court distinguished between those
subjects that by their nature “imperatively deman[d] a single
uniform rule, operating equally on the commerce of the United
States,” and those that “deman[d] th[e] diversity, which alone can
meet . . . local necessities.” Id. , at 319. Though
considerable uncertainties were yet to be overcome, these
precedents still laid the groundwork for the analytical framework
that now prevails for Commerce Clause cases.
This Court’s doctrine has developed further with
time. Modern precedents rest upon two primary principles that mark
the boundaries of a State’s authority to regulate interstate
commerce. First, state regulations may not discriminate against
interstate commerce; and second, States may not impose undue
burdens on interstate commerce. State laws that discriminate
against interstate commerce face “a virtually per se rule of invalidity.” Granholm v. Heald , 544
U. S. 460, 476 (2005) (internal quotation marks omitted).
State laws that “regulat[e] even-handedly to effectuate a
legitimate local public interest . . . will be upheld
unless the burden imposed on such commerce is clearly excessive in
relation to the putative local benefits.” Pike v. Bruce
Church, Inc. , 397 U. S. 137, 142 (1970); see also Southern Pacific , supra , at 779. Al- though subject
to exceptions and variations, see, e.g., Hughes v. Alexandria Scrap Corp. , 426 U. S. 794 (1976); Brown-Forman Distillers Corp. v. New York State Liquor
Authority , 476 U. S. 573 (1986), these two principles
guide the courts in adjudicating cases challenging state laws under
the Commerce Clause.
B
These principles also animate the Court’s
Commerce Clause precedents addressing the validity of state taxes.
The Court explained the now-accepted framework for state taxation
in Complete Auto Transit, Inc. v. Brady , 430
U. S. 274 (1977). The Court held that a State “may tax
exclusively interstate commerce so long as the tax does not create
any effect forbidden by the Commerce Clause.” Id. , at 285.
After all, “interstate commerce may be required to pay its fair
share of state taxes.” D. H. Holmes Co. v. McNamara ,
486 U. S. 24, 31 (1988). The Court will sustain a tax so long
as it (1) applies to an activity with a substantial nexus with the
taxing State, (2) is fairly apportioned, (3) does not discriminate
against interstate commerce, and (4) is fairly related to the
services the State provides. See Complete Auto , supra , at 279.
Before Complete Auto , the Court had
addressed a challenge to an Illinois tax that required out-of-state
retailers to collect and remit taxes on sales made to consumers who
purchased goods for use within Illinois. Bellas Hess , 386
U. S., at 754–755. The Court held that a mail-order company
“whose only connection with customers in the State is by common
carrier or the United States mail” lacked the requisite minimum
contacts with the State required by both the Due Process Clause and
the Commerce Clause. Id., at 758. Unless the retailer
maintained a physical presence such as “retail outlets, solicitors,
or property within a State,” the State lacked the power to require
that retailer to collect a local use tax. Ibid. The dissent
dis- agreed: “There should be no doubt that this large-scale,
systematic, continuous solicitation and exploitation of the
Illinois consumer market is a sufficient ‘nexus’ to require Bellas
Hess to collect from Illinois customers and to remit the use tax.” Id., at 761–762 (opinion of Fortas, J., joined by Black and
Douglas, JJ.).
In 1992, the Court reexamined the physical
presence rule in Quill . That case presented a challenge to
North Dakota’s “attempt to require an out-of-state mail-order house
that has neither outlets nor sales representatives in the State to
collect and pay a use tax on goods purchased for use within the
State.” 504 U. S., at 301. Despite the fact that Bellas
Hess linked due process and the Commerce Clause together, the
Court in Quill overruled the due process holding, but not
the Commerce Clause holding; and it thus reaffirmed the physical
presence rule. 504 U. S., at 307–308, 317–318.
The Court in Quill recognized that
intervening precedents, specifically Complete Auto , “might
not dictate the same result were the issue to arise for the first
time today.” 504 U. S., at 311. But, nevertheless, the Quill majority concluded that the physical presence rule was
necessary to prevent undue burdens on interstate commerce. Id., at 313, and n. 6. It grounded the physical
presence rule in Complete Auto ’s requirement that a tax have
a “ ‘substantial nexus’ ” with the activity being taxed.
504 U. S., at 311.
Three Justices based their decision to uphold
the physical presence rule on stare decisis alone. Id. , at 320 (Scalia, J., joined by Kennedy and Thomas, JJ.,
concurring in part and concurring in judgment). Dissenting in
relevant part, Justice White argued that “there is no relationship
between the physical-presence/nexus rule the Court retains and
Commerce Clause considerations that allegedly justify it.” Id. , at 327 (opinion concurring in part and dissenting in
part).
III
The physical presence rule has “been the
target of criticism over many years from many quarters.” Direct
Marketing Assn. v. Brohl , 814 F. 3d 1129, 1148,
1150–1151 (CA10 2016) (Gorsuch, J., concurring). Quill , it
has been said, was “premised on assumptions that are unfounded” and
“riddled with internal inconsistencies.” Rothfeld, Quill :
Confusing the Commerce Clause, 56 Tax Notes 487, 488 (1992 ). Quill created an inefficient “online sales tax loophole”
that gives out-of-state businesses an advantage. A. Laffer & D.
Arduin, Pro-Growth Tax Reform and E-Fairness 1, 4 (July 2013). And
“while nexus rules are clearly necessary,” the Court “should focus
on rules that are appropriate to the twenty-first century, not the
nineteenth.” Hellerstein, Deconstructing the Debate Over State
Taxation of Electronic Commerce, 13 Harv. J. L. & Tech.
549, 553 (2000). Each year, the physical presence rule becomes
further removed from economic reality and results in significant
revenue losses to the States. These critiques underscore that the
physical presence rule, both as first formulated and as applied
today, is an incorrect interpretation of the Commerce Clause.
A Quill is flawed on its own terms.
First, the physical presence rule is not a necessary interpretation
of the requirement that a state tax must be “applied to an activ-
ity with a substantial nexus with the taxing State.” Complete
Auto , 430 U. S., at 279. Second, Quill creates
rather than resolves market distortions. And third, Quill im- poses the sort of arbitrary, formalistic distinction that the
Court’s modern Commerce Clause precedents disavow.
1
All agree that South Dakota has the authority
to tax these transactions. S. B. 106 applies to sales of “tangible
personal property, products transferred electronically, or services for delivery into South Dakota .” §1 (emphasis added). “It
has long been settled” that the sale of goods or services “has a
sufficient nexus to the State in which the sale is consummated to
be treated as a local transaction taxable by that State.” Oklahoma Tax Comm’n v. Jefferson Lines, Inc. , 514
U. S. 175, 184 (1995); see also 2 C. Trost & P. Hartman,
Federal Limitations on State and Local Taxation 2d §11:1, p. 471
(2003) (“Generally speaking, a sale is attributable to its
destination”).
The central dispute is whether South Dakota may
require remote sellers to collect and remit the tax without some
additional connection to the State. The Court has previously stated
that “[t]he imposition on the seller of the duty to insure
collection of the tax from the purchaser does not violate the
[C]ommerce [C]lause.” McGoldrick v. Berwind-White Coal
Mining Co. , 309 U. S. 33, 50, n. 9 (1940). It is a
“ ‘familiar and sanctioned device.’ ” Scripto,
Inc. v. Carson , 362 U. S. 207, 212 (1960). There
just must be “a substantial nexus with the taxing State.” Complete Auto , supra , at 279.
This nexus requirement is “closely related,” Bellas Hess , 386 U. S., at 756, to the due process
requirement that there be “some definite link, some minimum
connection, between a state and the person, property or transaction
it seeks to tax,” Miller Brothers Co. v. Maryland ,
347 U. S. 340, 344–345 (1954). It is settled law that a
business need not have a physical presence in a State to satisfy
the demands of due process. Burger King Corp. v. Rudzewicz , 471 U. S. 462, 476 (1985). Although physical
presence “ ‘frequently will enhance’ ” a business’
connection with a State, “ ‘it is an inescapable fact of
modern commercial life that a substantial amount of business is
transacted . . . [with no] need for physical presence
within a State in which business is conducted.’ ” Quill , 504 U. S., at 308. Quill itself
recognized that “[t]he requirements of due process are met
irrespective of a corporation’s lack of physical presence in the
taxing State.” Ibid. When considering whether a State may levy a tax,
Due Process and Commerce Clause standards may not be identical or
coterminous, but there are significant parallels. The reasons given
in Quill for rejecting the physical presence rule for due
process purposes apply as well to the question whether physical
presence is a requisite for an out-of-state seller’s liability to
remit sales taxes. Physical presence is not necessary to create a
substantial nexus.
The Quill majority expressed concern that
without the physical presence rule “a state tax might unduly burden
interstate commerce” by subjecting retailers to tax-collection
obligations in thousands of different taxing jurisdictions. Id. , at 313, n. 6. But the administrative costs of
compliance, especially in the modern economy with its Internet
technology, are largely unrelated to whether a company happens to
have a physical presence in a State. For example, a business with
one salesperson in each State must collect sales taxes in every
jurisdiction in which goods are delivered; but a business with 500
salespersons in one central location and a website accessible in
every State need not collect sales taxes on otherwise identical
nationwide sales. In other words, under Quill , a small
company with diverse physical presence might be equally or more
burdened by compliance costs than a large remote seller. The
physical presence rule is a poor proxy for the compliance costs
faced by companies that do business in multiple States. Other
aspects of the Court’s doctrine can better and more accurately
address any potential burdens on interstate commerce, whether or
not Quill ’s physical presence rule is satisfied.
2
The Court has consistently explained that the
Commerce Clause was designed to prevent States from engaging in
economic discrimination so they would not divide into isolated,
separable units. See Philadelphia v. New Jersey , 437
U. S. 617, 623 (1978). But it is “not the purpose of the
[C]ommerce [C]lause to relieve those engaged in interstate commerce
from their just share of state tax burden.” Complete Auto , supra , at 288 (internal quotation marks omitted). And it is
certainly not the purpose of the Commerce Clause to permit the
Judiciary to create market distortions. “If the Commerce Clause was
intended to put businesses on an even playing field, the [physical
presence] rule is hardly a way to achieve that goal.” Quill , supra , at 329 (opinion of White, J.). Quill puts both local businesses and many
interstate businesses with physical presence at a competitive
disadvantage relative to remote sellers. Remote sellers can avoid
the regulatory burdens of tax collection and can offer de facto lower prices caused by the widespread failure
of consumers to pay the tax on their own. This “guarantees a
competitive benefit to certain firms simply because of the
organizational form they choose” while the rest of the Court’s
jurisprudence “is all about preventing discrimination between
firms.” Direct Marketing , 814 F. 3d, at 1150–1151
(Gorsuch, J., concurring). In effect, Quill has come to
serve as a judicially created tax shelter for businesses that
decide to limit their physical presence and still sell their goods
and services to a State’s consumers—something that has become
easier and more prevalent as technology has advanced.
Worse still, the rule produces an incentive to
avoid physical presence in multiple States. Distortions caused by
the desire of businesses to avoid tax collection mean that the
market may currently lack storefronts, distribution points, and
employment centers that otherwise would be efficient or desirable.
The Commerce Clause must not prefer interstate commerce only to the
point where a merchant physically crosses state borders. Rejecting
the physical presence rule is necessary to ensure that artificial
competitive advantages are not created by this Court’s precedents.
This Court should not prevent States from collecting lawful taxes
through a physical presence rule that can be satisfied only if
there is an employee or a building in the State.
3
The Court’s Commerce Clause jurisprudence has
“eschewed formalism for a sensitive, case-by-case analysis of
purposes and effects.” West Lynn Creamery, Inc. v. Healy , 512 U. S. 186, 201 (1994). Quill , in
contrast, treats economically identical actors differently, and for
arbitrary reasons.
Consider, for example, two businesses that sell
furniture online. The first stocks a few items of inventory in a
small warehouse in North Sioux City, South Dakota. The second uses
a major warehouse just across the border in South Sioux City,
Nebraska, and maintains a sophisticated website with a virtual
showroom accessible in every State, including South Dakota. By
reason of its physical presence, the first business must collect
and remit a tax on all of its sales to customers from South Dakota,
even those sales that have nothing to do with the warehouse. See National Geographic , 430 U. S., at 561; Scripto,
Inc. , 362 U. S., at 211–212. But, under Quill , the
second, hypothetical seller cannot be subject to the same tax for
the sales of the same items made through a pervasive Internet
presence. This distinction simply makes no sense. So long as a
state law avoids “any effect forbidden by the Commerce Clause,” Complete Auto , 430 U. S., at 285, courts should not
rely on anachronistic formalisms to invalidate it. The basic
principles of the Court’s Commerce Clause jurisprudence are
grounded in functional, marketplace dynamics; and States can and
should consider those realities in enacting and enforcing their tax
laws.
B
The Quill Court itself acknowledged
that the physical presence rule is “artificial at its edges.” 504
U. S., at 315. That was an understatement when Quill was decided; and when the day-to-day functions of marketing and
distribution in the modern economy are considered, it is all the
more evident that the physical presence rule is artificial in its
entirety.
Modern e-commerce does not align analytically
with a test that relies on the sort of physical presence defined in Quill . In a footnote, Quill rejected the argument
that “title to ‘a few floppy diskettes’ present in a State” was
sufficient to constitute a “substantial nexus,” id ., at 315,
n. 8. But it is not clear why a single employee or a single
warehouse should create a substantial nexus while “physical”
aspects of pervasive modern technology should not. For example, a
company with a website accessible in South Dakota may be said to
have a physical presence in the State via the customers’ computers.
A website may leave cookies saved to the customers’ hard drives, or
customers may download the company’s app onto their phones. Or a
company may lease data storage that is permanently, or even
occasionally, located in South Dakota. Cf. United States v. Microsoft Corp. , 584 U. S. ___ (2018) ( per
curiam ). What may have seemed like a “clear,” “bright-line
tes[t]” when Quill was written now threatens to compound the
arbitrary consequences that should have been apparent from the
outset. 504 U. S., at 315.
The “dramatic technological and social changes”
of our “increasingly interconnected economy” mean that buyers are
“closer to most major retailers” than ever before—“regardless of
how close or far the nearest storefront.” Direct Marketing
Assn. v. Brohl , 575 U. S. ___, ___, ___ (2015)
(Kennedy, J., concurring) (slip op., at 2, 3). Between targeted
advertising and instant access to most consumers via any
internet-enabled device, “a business may be present in a State in a
meaningful way without” that presence “being physical in the
traditional sense of the term.” Id. , at ___ (slip op., at
3). A virtual showroom can show far more inventory, in far more
detail, and with greater opportunities for consumer and seller
interaction than might be possible for local stores. Yet the
continuous and pervasive virtual presence of retailers today is,
under Quill , simply irrelevant. This Court should not
maintain a rule that ignores these substantial virtual connections
to the State.
C
The physical presence rule as defined and
enforced in Bellas Hess and Quill is not just a
technical legal problem—it is an extraordinary imposition by the
Judiciary on States’ authority to collect taxes and perform
critical public functions. Forty-one States, two Territories, and
the District of Columbia now ask this Court to reject the test
formulated in Quill . See Brief for Colorado et al. as Amici Curiae . Quill ’s physical presence rule intrudes
on States’ reasonable choices in enacting their tax systems. And
that it allows remote sellers to escape an obligation to remit a
lawful state tax is unfair and unjust. It is unfair and unjust to
those competitors, both local and out of State, who must remit the
tax; to the consumers who pay the tax; and to the States that seek
fair enforcement of the sales tax, a tax many States for many years
have considered an indispensable source for raising revenue.
In essence, respondents ask this Court to retain
a rule that allows their customers to escape payment of sales
taxes—taxes that are essential to create and secure the active
market they supply with goods and services. An example may suffice.
Wayfair offers to sell a vast selection of furnishings. Its
advertising seeks to create an image of beautiful, peaceful homes,
but it also says that “ ‘[o]ne of the best things about buying
through Wayfair is that we do not have to charge sales tax.’ ”
Brief for Petitioner 55. What Wayfair ignores in its subtle offer
to assist in tax evasion is that creating a dream home assumes
solvent state and local governments. State taxes fund the police
and fire departments that protect the homes containing their
customers’ furniture and ensure goods are safely delivered;
maintain the public roads and municipal services that allow
communication with and access to customers; support the “sound
local banking institutions to support credit transactions [and]
courts to ensure collection of the purchase price,” Quill ,
504 U. S., at 328 (opinion of White, J.); and help create the
“climate of consumer confidence” that facilitates sales, see ibid. According to respondents, it is unfair to stymie their
tax-free solicitation of customers. But there is nothing unfair
about requiring companies that avail themselves of the States’
benefits to bear an equal share of the burden of tax collection.
Fairness dictates quite the opposite result. Helping respondents’
customers evade a lawful tax unfairly shifts to those consumers who
buy from their competitors with a physical presence that satisfies Quill —even one warehouse or one salesperson—an increased
share of the taxes. It is essential to public confidence in the tax
system that the Court avoid creating inequitable exceptions. This
is also essential to the confidence placed in this Court’s Commerce
Clause decisions. Yet the physical presence rule undermines that
necessary confidence by giving some online retailers an arbitrary
advantage over their competitors who collect state sales taxes.
In the name of federalism and free markets, Quill does harm to both. The physical presence rule it
defines has limited States’ ability to seek long-term prosperity
and has prevented market participants from competing on an even
playing field.
IV “ Although we approach the
reconsideration of our decisions with the utmost caution, stare
decisis is not an inexorable command.” Pearson v. Callahan , 555 U. S. 223, 233 (2009) (quoting State
Oil Co. v. Khan , 522 U. S. 3, 20 (1997);
alterations and internal quotation marks omitted). Here, stare
decisis can no longer support the Court’s prohibition of a
valid exercise of the States’ sovereign power.
If it becomes apparent that the Court’s Commerce
Clause decisions prohibit the States from exercising their lawful
sovereign powers in our federal system, the Court should be
vigilant in correcting the error. While it can be conceded that
Congress has the authority to change the physical presence rule,
Congress cannot change the constitutional default rule. It is
inconsistent with the Court’s proper role to ask Congress to
address a false constitutional premise of this Court’s own
creation. Courts have acted as the front line of review in this
limited sphere; and hence it is important that their principles be
accurate and logical, whether or not Congress can or will act in
response. It is currently the Court, and not Congress, that is
limiting the lawful prerogatives of the States.
Further, the real world implementation of
Commerce Clause doctrines now makes it manifest that the physical
presence rule as defined by Quill must give way to the
“far-reaching systemic and structural changes in the economy” and
“many other societal dimensions” caused by the Cyber Age. Direct
Marketing , 575 U. S., at ___ (Kennedy, J., concurring)
(slip op., at 3). Though Quill was wrong on its own terms
when it was decided in 1992, since then the Internet revolution has
made its earlier error all the more egregious and harmful.
The Quill Court did not have before it
the present realities of the interstate marketplace. In 1992, less
than 2 percent of Americans had Internet access. See Brief for
Retail Litigation Center, Inc., et al. as Amici Curiae 11, and n. 10. Today that number is about 89 percent. Ibid., and n. 11. When it decided Quill , the
Court could not have envisioned a world in which the world’s
largest retailer would be a remote seller, S. Li, Amazon Overtakes
Wal-Mart as Biggest Retailer, L. A. Times, July 24, 2015,
http://www.
latimes.com/business/la-fi-amazon-walmart-20150724-story.html (all
Internet materials as last visited June 18, 2018).
The Internet’s prevalence and power have changed
the dynamics of the national economy. In 1992, mail-order sales in
the United States totaled $180 billion. 504 U. S., at 329
(opinion of White, J.). Last year, e-commerce retail sales alone
were estimated at $453.5 billion. Dept. of Commerce, U. S.
Census Bureau News, Quarterly Retail E-Commerce Sales: 4th Quarter
2017 (CB18–21, Feb. 16, 2018). Combined with traditional remote
sellers, the total exceeds half a trillion dollars. Sales Taxes
Report, at 9. Since the Department of Commerce first began tracking
e-commerce sales, those sales have increased tenfold from 0.8
percent to 8.9 percent of total retail sales in the United States.
Compare Dept. of Commerce, U. S. Census Bureau, Retail
E-Commerce Sales in Fourth Quarter 2000 (CB01–28, Feb. 16, 2001),
https://www.census.gov/mrts/ www/data/pdf/00Q4.pdf, with U. S.
Census Bureau News, Quarterly Retail E-Commerce Sales: 4th Quarter
2017. And it is likely that this percentage will increase. Last
year, e-commerce grew at four times the rate of traditional retail,
and it shows no sign of any slower pace. See ibid .
This expansion has also increased the revenue
shortfall faced by States seeking to collect their sales and use
taxes. In 1992, it was estimated that the States were losing
between $694 million and $3 billion per year in sales tax revenues
as a result of the physical presence rule. Brief for Law Professors
et al. as Amici Curiae 11, n. 7. Now estimates
range from $8 to $33 billion. Sales Taxes Report, at 11–12; Brief
for Petitioner 34–35. The South Dakota Legislature has declared an
emergency, S. B. 106, §9, which again demonstrates urgency of
overturning the physical presence rule.
The argument, moreover, that the physical
presence rule is clear and easy to apply is unsound. Attempts to
apply the physical presence rule to online retail sales are proving
unworkable. States are already confronting the complexities of
defining physical presence in the Cyber Age. For example,
Massachusetts proposed a regulation that would have defined
physical presence to include making apps available to be downloaded
by in-state residents and placing cookies on in-state residents’
web browsers. See 830 Code Mass. Regs. 64H.1.7 (2017). Ohio
recently adopted a similar standard. See Ohio Rev. Code Ann.
§5741.01(I)(2)(i) (Lexis Supp. 2018). Some States have enacted
so-called “click through” nexus statutes, which define nexus to
include out-of-state sellers that contract with in-state residents
who refer customers for compensation. See e.g., N. Y.
Tax Law Ann. §1101(b)(8)(vi) (West 2017); Brief for Tax Foundation
as Amicus Curiae 20–22 (listing 21 States with similar
statutes). Others still, like Colorado, have imposed notice and
reporting requirements on out-of-state retailers that fall just
short of actually collecting and remitting the tax. See Direct
Marketing , 814 F. 3d, at 1133 (discussing Colo. Rev. Stat.
§39–21–112(3.5)); Brief for Tax Foundation 24–26 (listing nine
States with similar statutes). Statutes of this sort are likely to
embroil courts in technical and arbitrary disputes about what
counts as physical presence.
Reliance interests are a legitimate
consideration when the Court weighs adherence to an earlier but
flawed precedent. See Kimble v. Marvel Entertainment,
LLC , 576 U. S. ___, ___–___ (2015) (slip op., at 9–10).
But even on its own terms, the physical presence rule as defined by Quill is no longer a clear or easily applicable standard, so
arguments for reliance based on its clarity are misplaced. And,
importantly, stare decisis accommodates only “legitimate
reliance interest[s].” United States v. Ross , 456
U. S. 798, 824 (1982). Here, the tax distortion created by Quill exists in large part because consumers regularly fail
to comply with lawful use taxes. Some remote retailers go so far as
to advertise sales as tax free. See S. B. 106, §8(3); see also
Brief for Petitioner 55. A business “is in no position to found a
constitutional right on the practical opportunities for tax
avoidance.” Nelson v. Sears, Roebuck & Co. , 312
U. S. 359, 366 (1941).
Respondents argue that “the physical presence
rule has permitted start-ups and small businesses to use the
Internet as a means to grow their companies and access a national
market, without exposing them to the daunting complexity and
business-development obstacles of nationwide sales tax collection.”
Brief for Respondents 29. These burdens may pose legitimate
concerns in some instances, particularly for small businesses that
make a small volume of sales to customers in many States. State
taxes differ, not only in the rate imposed but also in the
categories of goods that are taxed and, sometimes, the relevant
date of purchase. Eventually, software that is available at a
reasonable cost may make it easier for small businesses to cope
with these problems. Indeed, as the physical presence rule no
longer controls, those systems may well become available in a short
period of time, either from private providers or from state taxing
agencies themselves. And in all events, Congress may legislate to
address these problems if it deems it necessary and fit to do
so.
In this case, however, South Dakota affords
small merchants a reasonable degree of protection. The law at issue
requires a merchant to collect the tax only if it does a
considerable amount of business in the State; the law is not
retroactive; and South Dakota is a party to the Streamlined Sales
and Use Tax Agreement, see infra at 23.
Finally, other aspects of the Court’s Commerce
Clause doctrine can protect against any undue burden on interstate
commerce, taking into consideration the small businesses, startups,
or others who engage in commerce across state lines. For example,
the United States argues that tax-collection requirements should be
analyzed under the balancing framework of Pike v. Bruce
Church, Inc. , 397 U. S. 137. Others have argued that
retroactive liability risks a double tax burden in violation of the
Court’s apportionment jurisprudence because it would make both the
buyer and the seller legally liable for collecting and remitting
the tax on a transaction intended to be taxed only once. See Brief
for Law Professors et al. as Amici Curiae 7, n. 5.
Complex state tax systems could have the effect of discriminating
against interstate commerce. Concerns that complex state tax
systems could be a burden on small business are answered in part by
noting that, as discussed below, there are various plans already in
place to simplify collection; and since in-state businesses pay the
taxes as well, the risk of discrimination against out-of-state
sellers is avoided. And, if some small businesses with only de
minimis contacts seek relief from collection systems thought to
be a burden, those entities may still do so under other theories.
These issues are not before the Court in the instant case; but
their potential to arise in some later case cannot justify
retaining this artificial, anachronistic rule that deprives States
of vast revenues from major businesses.
For these reasons, the Court concludes that the
physical presence rule of Quill is unsound and incorrect.
The Court’s decisions in Quill Corp. v. North Dakota ,
504 U. S. 298 (1992), and National Bellas Hess, Inc. v. Department of Revenue of Ill. , 386 U. S. 753 (1967),
should be, and now are, overruled.
V
In the absence of Quill and Bellas
Hess , the first prong of the Complete Auto test simply
asks whether the tax applies to an activity with a substantial
nexus with the taxing State. 430 U. S., at 279. “[S]uch a
nexus is established when the taxpayer [or collector] ‘avails
itself of the substantial privilege of carrying on business’ in
that jurisdiction.” Polar Tankers, Inc. v. City of
Valdez , 557 U. S. 1, 11 (2009).
Here, the nexus is clearly sufficient based on
both the economic and virtual contacts respondents have with the
State. The Act applies only to sellers that deliver more than
$100,000 of goods or services into South Dakota or engage in 200 or
more separate transactions for the delivery of goods and services
into the State on an annual basis. S. B. 106, §1. This quantity of
business could not have occurred unless the seller availed itself
of the substantial privilege of carrying on business in South
Dakota. And respondents are large, national companies that
undoubtedly maintain an extensive virtual presence. Thus, the
substantial nexus requirement of Complete Auto is satisfied
in this case.
The question remains whether some other
principle in the Court’s Commerce Clause doctrine might invalidate
the Act. Because the Quill physical presence rule was an
obvious barrier to the Act’s validity, these issues have not yet
been litigated or briefed, and so the Court need not resolve them
here. That said, South Dakota’s tax system includes several
features that appear designed to prevent discrimination against or
undue burdens upon interstate commerce. First, the Act applies a
safe harbor to those who transact only limited business in South
Dakota. Second, the Act ensures that no obligation to remit the
sales tax may be applied retroactively. S. B. 106, §5. Third, South
Dakota is one of more than 20 States that have adopted the
Streamlined Sales and Use Tax Agreement. This system standardizes
taxes to reduce administrative and compliance costs: It requires a
single, state level tax administration, uniform definitions of
products and services, simplified tax rate structures, and other
uniform rules. It also provides sellers access to sales tax
administration software paid for by the State. Sellers who choose
to use such software are immune from audit liability. See App.
26–27. Any remaining claims regarding the application of the
Commerce Clause in the absence of Quill and Bellas
Hess may be addressed in the first instance on remand.
The judgment of the Supreme Court of South
Dakota is vacated, and the case is remanded for further proceedings
not inconsistent with this opinion.
It is so ordered. SUPREME COURT OF THE UNITED STATES
_________________
No. 17–494
_________________
SOUTH DAKOTA, PETITIONER v. WAYFAIR,
INC., et al.
on writ of certiorari to the supreme court of
south dakota
[June 21, 2018]
Justice Thomas, concurring.
Justice Byron White joined the majority opinion
in National Bellas Hess, Inc. v. Department of Revenue of
Ill. , 386 U. S. 753 (1967). Twenty-five years later, we
had the opportunity to overrule Bellas Hess in Quill
Corp. v. North Dakota , 504 U. S. 298 (1992). Only
Justice White voted to do so. See id. , at 322 (opinion
concurring in part and dissenting in part). I should have joined
his opinion. Today, I am slightly further removed from Quill than Justice White was from Bellas Hess . And like Justice
White, a quarter century of experience has convinced me that Bellas Hess and Quill “can no longer be rationally
justified.” 504 U. S., at 333. The same is true for this
Court’s entire negative Commerce Clause jurisprudence. See Comptroller of Treasury of Md. v. Wynne , 575
U. S. ___, ___ (2015) (Thomas, J., dissenting) (slip op., at
1). Although I adhered to that jurisprudence in Quill , it is
never too late to “surrende[r] former views to a better considered
position.” McGrath v. Kristensen , 340 U. S. 162,
178 (1950) (Jackson, J., concurring). I therefore join the Court’s
opinion. SUPREME COURT OF THE UNITED STATES
_________________
No. 17–494
_________________
SOUTH DAKOTA, PETITIONER v. WAYFAIR,
INC., et al.
on writ of certiorari to the supreme court of
south dakota
[June 21, 2018 ]
Justice Gorsuch, concurring.
Our dormant commerce cases usually prevent
States from discriminating between in-state and out-of-state firms. National Bellas Hess, Inc. v. Department of Revenue of
Ill ., 386 U. S. 753 (1967), and Quill Corp. v. North Dakota , 504 U. S. 298 (1992), do just the
opposite. For years they have enforced a judicially created tax
break for out-of-state Internet and mail-order firms at the expense
of in-state brick-and-mortar rivals. See ante, at 12–13; Direct Marketing Assn. v. Brohl , 814 F. 3d, 1129,
1150 (CA10 2016) (Gorsuch, J. concurring). As Justice White
recognized 26 years ago, judges have no authority to construct a
discriminatory “tax shelter” like this. Quill, supra, at 329 (opinion concurring in part and dissenting in part). The
Court is right to correct the mistake and I am pleased to join its
opinion.
My agreement with the Court’s discussion of the
history of our dormant commerce clause jurisprudence, however,
should not be mistaken for agreement with all aspects of the
doctrine. The Commerce Clause is found in Article I and authorizes Congress to regulate interstate commerce. Meanwhile our
dormant commerce cases suggest Article III courts may
invalidate state laws that offend no congressional statute. Whether
and how much of this can be squared with the text of the Commerce
Clause, justified by stare decisis , or defended as
misbranded products of federalism or antidiscrimination imperatives
flowing from Article IV’s Privileges and Immunities Clause are
questions for another day. See Energy & Environment Legal
Inst. v. Epel , 793 F.3d 1169, 1171 (CA10 2015); Comptroller of Treasury of Md. v. Wynne , 575
U. S. ___, ___–___ (2015) (Scalia, J., dissenting) (slip op.,
at 1–3); Camps Newfound/Owatonna, Inc. v. Town of
Harrison , 520 U. S. 564, 610–620 (1997) (Thomas, J.,
dissenting). Today we put Bellas Hess and Quill to
rest and rightly end the paradox of condemning interstate
discrimination in the national economy while promoting it
ourselves. SUPREME COURT OF THE UNITED STATES
_________________
No. 17–494
_________________
SOUTH DAKOTA, PETITIONER v. WAYFAIR,
INC., et al.
on writ of certiorari to the supreme court of
south dakota
[June 21, 2018]
Chief Justice Roberts, with whom Justice
Breyer, Justice Sotomayor, and Justice Kagan join, dissenting.
In National Bellas Hess, Inc. v. Department of Revenue of Ill. , 386 U. S. 753 (1967),
this Court held that, under the dormant Commerce Clause, a State
could not require retailers without a physical presence in that
State to collect taxes on the sale of goods to its residents. A
quarter century later, in Quill Corp. v. North
Dakota , 504 U. S. 298 (1992), this Court was invited to
overrule Bellas Hess but declined to do so. Another quarter
century has passed, and another State now asks us to abandon the
physical-presence rule. I would decline that invitation as
well.
I agree that Bellas Hess was wrongly
decided, for many of the reasons given by the Court. The Court
argues in favor of overturning that decision because the
“Internet’s prevalence and power have changed the dynamics of the
national economy.” Ante, at 18. But that is the very reason
I oppose discarding the physical-presence rule. E-commerce has
grown into a significant and vibrant part of our national economy
against the backdrop of established rules, including the
physical-presence rule. Any alteration to those rules with the
potential to disrupt the development of such a critical segment of
the economy should be undertaken by Congress. The Court should not
act on this important question of current economic policy, solely
to expiate a mistake it made over 50 years ago.
I
This Court “does not overturn its precedents
lightly.” Michigan v. Bay Mills Indian Community , 572
U. S. ___, ___ (2014) (slip op., at 15). Departing from the
doctrine of stare decisis is an “exceptional action”
demanding “special justification.” Arizona v. Rumsey ,
467 U. S. 203, 212 (1984). The bar is even higher in fields in
which Congress “exercises primary authority” and can, if it wishes,
override this Court’s decisions with contrary legislation. Bay
Mills , 572 U. S., at ___ (slip op., at 16) (tribal
sovereign immunity); see, e.g., Kimble v. Marvel
Entertainment, LLC , 576 U. S. ___, ___ (2015) (slip op.,
at 8) (statutory interpretation); Halliburton Co. v. Erica P. John Fund, Inc. , 573 U. S. ___, ___ (2014)
(slip op., at 12) (judicially created doctrine implementing a
judicially created cause of action). In such cases, we have said
that “the burden borne by the party advocating the abandonment of
an established precedent” is “greater” than usual. Patterson v. McLean Credit Union , 491 U. S. 164, 172 (1989). That
is so “even where the error is a matter of serious concern,
provided correction can be had by legislation.” Square D Co. v. Niagara Frontier Tariff Bureau, Inc. , 476 U. S. 409,
424 (1986) (quoting Burnet v. Coronado Oil & Gas
Co. , 285 U. S. 393, 406 (1932) (Brandeis, J.,
dissenting)).
We have applied this heightened form of stare
decisis in the dormant Commerce Clause context. Under our
dormant Commerce Clause precedents, when Congress has not yet
legislated on a matter of interstate commerce, it is the province
of “the courts to formulate the rules.” Southern Pacific Co. v. Arizona ex rel. Sullivan , 325 U. S. 761, 770 (1945).
But because Congress “has plenary power to regulate commerce among
the States,” Quill , 504 U. S., at 305, it may at any
time replace such judicial rules with legislation of its own, see Prudential Ins. Co. v. Benjamin , 328 U. S. 408,
424–425 (1946).
In Quill , this Court emphasized that the
decision to hew to the physical-presence rule on stare
decisis grounds was “made easier by the fact that the
underlying issue is not only one that Congress may be better
qualified to resolve, but also one that Congress has the ultimate
power to resolve.” 504 U. S., at 318 (footnote omitted). Even
assuming we had gone astray in Bellas Hess , the “very fact”
of Congress’s superior authority in this realm “g[a]ve us pause and
counsel[ed] withholding our hand.” Quill , 504 U. S., at
318 (alterations omitted). We postulated that “the better part of
both wisdom and valor [may be] to respect the judgment of the other
branches of the Government.” Id., at 319; see id., at
320 (Scalia, J., concurring in part and concurring in judgment)
(recognizing that stare decisis has “special force” in the
dormant Commerce Clause context due to Congress’s “final say over
regulation of interstate commerce”). The Court thus left it to
Congress “to decide whether, when, and to what extent the States
may burden interstate mail-order concerns with a duty to collect
use taxes.” Id., at 318 (majority opinion).
II
This is neither the first, nor the second, but
the third time this Court has been asked whether a State may
obligate sellers with no physical presence within its borders to
collect tax on sales to residents. Whatever salience the adage
“third time’s a charm” has in daily life, it is a poor guide to
Supreme Court decisionmaking. If stare decisis applied with
special force in Quill , it should be an even greater
impediment to overruling precedent now, particularly since this
Court in Quill “tossed [the ball] into Congress’s court, for
acceptance or not as that branch elects.” Kimble , 576
U. S., at ___ (slip op., at 8); see Quill , 504
U. S., at 318 (“Congress is now free to decide” the
circumstances in which “the States may burden interstate
. . . concerns with a duty to collect use taxes”).
Congress has in fact been considering whether to
alter the rule established in Bellas Hess for some time. See
Addendum to Brief for Four United States Senators as Amici
Curiae 1–4 (compiling efforts by Congress between 2001 and 2017
to pass legislation respecting interstate sales tax collection);
Brief for Rep. Bob Goodlatte et al. as Amici Curiae 20–23 (Goodlatte Brief) (same). Three bills addressing the issue
are currently pending. See Marketplace Fairness Act of 2017, S.
976, 115th Cong., 1st Sess. (2017); Remote Transactions Parity Act
of 2017, H. R. 2193, 115th Cong., 1st Sess. (2017); No
Regulation Without Representation Act, H. R. 2887, 115th Cong., 1st
Sess. (2017). Nothing in today’s decision precludes Congress from
continuing to seek a legislative solution. But by suddenly changing
the ground rules, the Court may have waylaid Congress’s
consideration of the issue. Armed with today’s decision, state
officials can be expected to redirect their attention from working
with Congress on a national solution, to securing new tax revenue
from remote retailers. See, e.g., Brief for Sen. Ted Cruz
et al. as Amici Curiae 10–11 (“Overturning Quill would undo much of Con- gress’ work to find a workable national
compromise under the Commerce Clause.”).
The Court proceeds with an inexplicable sense of
urgency. It asserts that the passage of time is only increasing the
need to take the extraordinary step of overruling Bellas
Hess and Quill : “Each year, the physical presence rule
becomes further removed from economic reality and results in
significant revenue losses to the States.” Ante , at 10. The
factual predicates for that assertion include a Government
Accountability Office (GAO) estimate that, under the
physical-presence rule, States lose billions of dollars annually in
sales tax revenue. See ante , at 2, 19 (citing GAO, Report to
Congressional Requesters: Sales Taxes, States Could Gain Revenue
from Expanded Authority, but Businesses Are Likely to Experience
Compliance Costs 5 (GAO–18–114, Nov. 2017) (Sales Taxes Report)).
But evidence in the same GAO report indicates that the pendulum is
swinging in the opposite direction, and has been for some time.
States and local governments are already able to collect
approximately 80 percent of the tax revenue that would be available
if there were no physical-presence rule. See Sales Taxes Report 8.
Among the top 100 Internet retailers that rate is between 87 and 96
percent. See id., at 41. Some companies, including the
online behemoth Amazon,[ 1 ]* now
voluntarily collect and remit sales tax in every State that
assesses one—even those in which they have no physical presence.
See id., at 10. To the extent the physical-presence rule is
harming States, the harm is apparently receding with time.
The Court rests its decision to overrule Bellas Hess on the “present realities of the interstate
marketplace.” Ante, at 18. As the Court puts it, allowing
remote sellers to escape remitting a lawful tax is “unfair and
unjust.” Ante, at 16. “[U]nfair and unjust to
. . . competitors . . . who must remit the tax;
to the consumers who pay the tax; and to the States that seek fair
enforcement of the sales tax.” Ante, at 16. But “the present
realities of the interstate marketplace” include the possibility
that the marketplace itself could be affected by abandoning the
physical-presence rule. The Court’s focus on unfairness and
injustice does not appear to embrace consideration of that current
public policy concern.
The Court, for example, breezily disregards the
costs that its decision will impose on retailers. Correctly
calculating and remitting sales taxes on all e-commerce sales will
likely prove baffling for many retailers. Over 10,000 jurisdictions
levy sales taxes, each with “different tax rates, different rules
governing tax-exempt goods and services, different product category
definitions, and different standards for determining whether an
out-of-state seller has a substantial presence” in the
jurisdiction. Sales Taxes Report 3. A few examples: New Jersey
knitters pay sales tax on yarn purchased for art projects, but not
on yarn earmarked for sweaters. See Brief for eBay, Inc.,
et al. as Amici Curiae 8, n. 3 (eBay Brief ).
Texas taxes sales of plain deodorant at 6.25 percent but imposes no
tax on deodorant with antiperspirant. See id. , at 7.
Illinois categorizes Twix and Snickers bars—chocolate-and-caramel
confections usually displayed side-by-side in the candy aisle—as
food and candy, respectively (Twix have flour; Snickers don’t), and
taxes them differently. See id., at 8; Brief for Etsy, Inc.,
as Amicus Curiae 14–17 (Etsy Brief ) (providing
additional illustrations).
The burden will fall disproportionately on small
businesses. One vitalizing effect of the Internet has been
connecting small, even “micro” businesses to potential buyers
across the Nation. People starting a business selling their
embroidered pillowcases or carved decoys can offer their wares
throughout the country—but probably not if they have to figure out
the tax due on every sale. See Sales Taxes Report 22 (indicating
that “costs will likely increase the most for businesses that do
not have established legal teams, software systems, or outside
counsel to assist with compliance related questions”). And the
software said to facilitate compliance is still in its infancy, and
its capabilities and expense are subject to debate. See Etsy Brief
17–19 (describing the inadequacies of such software); eBay Brief
8–12 (same); Sales Taxes Report 16–20 (concluding that businesses
will incur “high” compliance costs). The Court’s decision today
will surely have the effect of dampening opportunities for commerce
in a broad range of new markets.
A good reason to leave these matters to Congress
is that legislators may more directly consider the competing
interests at stake. Unlike this Court, Congress has the flexibility
to address these questions in a wide variety of ways. As we have
said in other dormant Commerce Clause cases, Congress “has the
capacity to investigate and analyze facts beyond anything the
Judiciary could match.” General Motors Corp. v. Tracy , 519 U. S. 278, 309 (1997); see Department of
Revenue of Ky. v. Davis , 553 U. S. 328, 356
(2008).
Here, after investigation, Congress could
reasonably decide that current trends might sufficiently expand tax
revenues, obviating the need for an abrupt policy shift with
potentially adverse consequences for e-commerce. Or Congress might
decide that the benefits of allowing States to secure additional
tax revenue outweigh any foreseeable harm to e-commerce. Or
Congress might elect to accommodate these competing interests, by,
for example, allowing States to tax Internet sales by remote
retailers only if revenue from such sales exceeds some set amount
per year. See Goodlatte Brief 12–14 (providing varied examples of
how Congress could address sales tax collection). In any event,
Congress can focus directly on current policy concerns rather than
past legal mistakes. Congress can also provide a nuanced answer to
the troubling question whether any change will have retroactive
effect.
An erroneous decision from this Court may well
have been an unintended factor contributing to the growth of
e-commerce. See, e.g., W. Taylor, Who’s Writing the Book on
Web Business? Fast Company (Oct. 31, 1996),
https: // www.fastcompany.com / 27309 / whos-writing-book-web-business.
The Court is of course correct that the Nation’s economy has
changed dramatically since the time that Bellas Hess and Quill roamed the earth. I fear the Court today is
compounding its past error by trying to fix it in a totally
different era. The Constitution gives Congress the power “[t]o
regulate Commerce . . . among the several States.”
Art. I, §8. I would let Congress decide whether to depart from
the physical-presence rule that has governed this area for half a
century.
I respectfully dissent. Notes 1 * C. Isidore, Amazon To
Start Collecting State Sales Taxes Everywhere (Mar. 29, 2017), CNN
Tech,
http://money.cnn.com/2017/03/29/technology/amazon-sales-tax/
(all Internet materials as last visited June 19,
2018). | The Supreme Court ruled that South Dakota can require remote online retailers with no physical presence in the state to collect and remit sales tax on purchases made by South Dakota residents. This overturns previous rulings that had established a physical presence requirement for sales tax collection, with Justice Kennedy citing the "dramatically changed" nature of the economy due to the growth of e-commerce as a key factor in the decision. The ruling gives states more power to collect sales tax revenue from online retailers, but may also create compliance challenges and potentially impact the growth of e-commerce. |
Criminal Trials & Prosecutions | Moore v. Dempsey | https://supreme.justia.com/cases/federal/us/261/86/ | U.S. Supreme Court Moore v. Dempsey, 261 U.S.
86 (1923) Moore v. Dempsey No.199 Argued January 9,
1923 Decided February 19,
1923 261 U.S.
86 APPEAL FROM THE DISTRICT COURT OF
THE UNITED STATES FOR THE EASTERN DISTRICT OF
ARKANSAS Syllabus 1. Upon an appeal from an order of the District Court dismissing
a petition for habeas corpus upon demurrer, the allegations of fact
pleaded in the petition and admitted by the demurrer must be
accepted as true. P. 261 U. S.
87 .
2. A trial for murder in a state court in which the accused are
hurried to conviction under mob domination without regard for their
rights is without due process of law and absolutely void. P. 261 U. S.
90 .
3. In the absence of sufficient corrective process afforded by
the state courts, when persons held under a death sentence and
alleging facts showing that their conviction resulted from such a
trial, apply to the Federal District Court for habeas corpus, that
court must find whether the facts so alleged are true, and whether
they can be explained so far as to leave the state proceedings
undisturbed. P. 261 U. S.
91 . Reversed. APPEAL from an order of the District Court dismissing a petition
for habeas corpus upon demurrer. Page 261 U. S. 87 MR. JUSTICE HOLMES delivered the opinion of the Court.
This is an appeal from an order of the District Court for the
Eastern District of Arkansas dismissing a writ of habeas corpus
upon demurrer, the presiding judge certifying that there was
probable cause for allowing the appeal. There were two cases
originally, but, by agreement, they were consolidated into one. The
appellants are five negroes who were convicted of murder in the
first degree and sentenced to death by the Court of the State of
Arkansas. The ground of the petition for the writ is that the
proceedings in the State Court, although a trial in form, were only
a form, and that the appellants were hurried to conviction under
the pressure of a mob without any regard for their rights and
without according to them due process of law.
The case stated by the petition is as follows, and it will be
understood that, while we put it in narrative form, we are not
affirming the facts to be as stated, but only what we must take
them to be, as they are admitted by the demurrer. On the night of
September 30, 1919, a number of colored people assembled in their
church were attacked and fired upon by a body of white men, and in
the disturbance that followed, a white man was killed. The report
of the killing caused great excitement, and was followed by the
hunting down and shooting of many negroes and also by the killing
on October 1 of one Clinton Lee, a white man, for whose murder the
petitioners were indicted. They seem to have been arrested with
many others on the same day. The petitioners say that Lee must have
been killed by other whites, but that we leave on one side, as what
we have to deal with is not the petitioners' innocence Page 261 U. S. 88 or guilt, but solely the question whether their constitutional
rights have been preserved. They say that their meeting was to
employ counsel for protection against extortions practiced upon
them by the landowners, and that the landowners tried to prevent
their effort, but that again we pass by as not directly bearing
upon the trial. It should be mentioned, however, that O. S.
Bratton, a son of the counsel who is said to have been contemplated
and who took part in the argument here, arriving for consultation
on October 1, is said to have barely escaped being mobbed; that he
was arrested and confined during the month on a charge of murder,
and, on October 31, was indicted for barratry, but later in the day
was told that he would be discharged, but that he must leave
secretly by a closed automobile to take the train at West Helena.,
four miles away, to avoid being mobbed. It is alleged that the
judge of the Court in which the petitioners were tried facilitated
the departure and went with Bratton to see him safely off.
A Committee of Seven was appointed by the Governor in regard to
what the committee called the "insurrection" in the county. The
newspapers daily published inflammatory articles. On the 7th, a
statement by one of the committee was made public to the effect
that the present trouble was
"a deliberately planned insurrection of the negroes against the
whites, directed by an organization known as the 'Progressive
Farmers' and Household Union of America' established for the
purpose of banding negroes together for the killing of white
people."
According to the statement, the organization was started by a
swindler to get money from the blacks.
Shortly after the arrest of the petitioners, a mob marched to
the jail for the purpose of lynching them, but were prevented by
the presence of United States troops and the promise of some of the
Committee of Seven and other leading officials that, if the mob
would refrain, as Page 261 U. S. 89 the petition puts it, they would execute those found guilty in
the form of law. The Committee's own statement was that the reason
that the people refrained from mob violence was "that this
Committee gave our citizens their solemn promise that the law would
be carried out." According to affidavits of two white men and the
colored witnesses on whose testimony the petitioners were
convicted, produced by the petitioners since the last decision of
the Supreme Court hereafter mentioned, the Committee made good
their promise by calling colored witnesses and having them whipped
and tortured until they would say what was wanted, among them being
the two relied on to prove the petitioners' guilt. However this may
be, a grand jury of white men was organized on October 27 with one
of the Committee of Seven and, it is alleged, with many of a posse
organized to fight the blacks upon it, and, on the morning of the
29th, the indictment was returned. On November 3, the petitioners
were brought into Court, informed that a certain lawyer was
appointed their counsel, and were placed on trial before a white
jury -- blacks being systematically excluded from both grand and
petit juries. The Court and neighborhood were thronged with an
adverse crowd that threatened the most dangerous consequences to
anyone interfering with the desired result. The counsel did not
venture to demand delay or a change of venue, to challenge a
juryman or to ask for separate trials. He had had no preliminary
consultation with the accused, called no witnesses for the defence,
although they could have been produced, and did not put the
defendants on the stand. The trial lasted about three-quarters of
an hour, and in less than five minutes, the jury brought in a
verdict of guilty of murder in the first degree. According to the
allegations and affidavits, there never was a chance for the
petitioners to be acquitted; no juryman could have voted for an
acquittal and continued to live in Phillips County, and if Page 261 U. S. 90 any prisoner by any chance had been acquitted by a jury, he
could not have escaped the mob.
The averments as to the prejudice by which the trial was
environed have some corroboration in appeals to the Governor, about
a year later, earnestly urging him not to interfere with the
execution of the petitioners. One came from five members of the
Committee of Seven, and stated, in addition to what has been quoted
heretofore, that "all our citizens are of the opinion that the law
should take its course." Another, from a part of the American
Legion, protests against a contemplated commutation of the sentence
of four of the petitioners and repeats that a
"solemn promise was given by the leading citizens of the
community that, if the guilty parties were not lynched, and let the
law take its course, that justice would be done and the majesty of
the law upheld."
A meeting of the Helena Rotary Club, attended by members
representing, as it said, seventy-five of the leading industrial
and commercial enterprises of Helena, passed a resolution approving
and supporting the action of the American Legion post. The Lions
Club of Helena, at a meeting attended by members said to represent
sixty of the leading industrial and commercial enterprises of the
city, passed a resolution to the same effect. In May of the same
year, a trial of six other negroes was coming on, and it was
represented to the Governor by the white citizens and officials of
Phillips County that, in all probability, those negroes would be
lynched. It is alleged that, in order to appease the mob spirit and
in a measure secure the safety of the six, the Governor fixed the
date for the execution of the petitioners at June 10, 1921, but
that the execution was stayed by proceedings in Court; we presume
the proceedings before the Chancellor to which we shall advert.
In Frank v. Mangum, 237 U. S. 309 , 237 U. S. 335 ,
it was recognized, of course, that if, in fact, a trial is
dominated by a Page 261 U. S. 91 mob so that there is an actual interference with the course of
justice, there is a departure from due process of law, and
that,
"if the State, supplying no corrective process, carries into
execution a judgment of death or imprisonment based upon a verdict
thus produced by mob domination, the State deprives the accused of
his life or liberty without due process of law."
We assume in accordance with that case that the corrective
process supplied by the State may be so adequate that interference
by habeas corpus ought not to be allowed. It certainly is true that
mere mistakes of law in the course of a trial are not to be
corrected in that way. But if the case is that the whole proceeding
is a mask -- that counsel, jury and judge were swept to the fatal
end by an irresistible wave of public passion, and that the State
Courts failed to correct the wrong; neither perfection in the
machinery for correction nor the possibility that the trial court
and counsel saw no other way of avoiding an immediate outbreak of
the mob can prevent this Court from securing to the petitioners
their constitutional rights.
In this case, a motion for a new trial on the ground alleged in
this petition was overruled, and, upon exceptions and appeal to the
Supreme Court, the judgment was affirmed. The Supreme Court said
that the complaint of discrimination against petitioners by the
exclusion of colored men from the jury came too late, and, by way
of answer to the objection that no fair trial could be had in the
circumstances, stated that it could not say "that this must
necessarily have been the case"; that eminent counsel was appointed
to defend the petitioners, that the trial was had according to law,
the jury correctly charged, and the testimony legally sufficient.
On June 8, 1921, two days before the date fixed for their
execution; a petition for habeas corp?s was presented to the
Chancellor, and he issued the writ and an injunction against the
execution of the petitioners; but the Supreme Court of the
State Page 261 U. S. 92 held that the Chancellor had no jurisdiction under the state
law, whatever might be the law of the United States. The present
petition perhaps was suggested by the language of the Court: "What
the result would be of an application to a Federal Court, we need
not inquire." It was presented to the District Court on September
21. We shall not say more concerning the corrective process
afforded to the petitioners than that it does not seem to us
sufficient to allow a Judge of the United States to escape the duty
of examining the facts for himself when, if true as alleged, they
make the trial absolutely void. We have confined the statement to
facts admitted by the demurrer. We will not say that they cannot be
met, but it appears to us unavoidable that the District Judge
should find whether the facts alleged are true and whether they can
be explained so far as to leave the state proceedings
undisturbed. Order reverse. The case to stand for hearing before the
District Court. Mr. Justice McREYNOLDS, dissenting.
We are asked to overrule the judgment of the District Court
discharging a writ of habeas corpus by means of which five negroes
sought to escape electrocution for the murder of Clinton Lee. §
753, Rev.Stats. [ Footnote 1 ]
They were convicted and sentenced in the Circuit Court of Phillips
County, Arkansas, two years before the writ issued. The petition
for the writ was supported by affidavits of these five ignorant men
whose lives were at stake, the ex parte affidavits of
three other negroes who had pleaded guilty Page 261 U. S. 93 and were then confined in the penitentiary under sentences for
the same murder, and the affidavits of two white men -- low
villains according to their own admissions. It should be remembered
that to narrate the allegations of the petition is but to repeat
statements from these sources. Considering all the circumstances --
the course of the cause in the state courts and upon application
here for certiorari, etc. -- the District Court held the alleged
facts insufficient prima facie to show nullity of the
original judgment.
The matter is one of gravity. If every man convicted of crime in
a state court may thereafter resort to the federal court and by
swearing, as advised, that certain allegations of fact tending to
impeach his trial are "true to the best of his knowledge and
belief," thereby obtain as of right further review, another way has
been added to a list already unfortunately long to prevent prompt
punishment. The delays incident to enforcement of our criminal laws
have become a national scandal and give serious alarm to those who
observe. Wrongly to decide the present cause probably will produce
very unfortunate consequences.
In Frank v. Mangum, 237 U. S. 309 , 237 U. S. 325 , 237 U. S. 326 , 237 U. S. 327 , 237 U. S. 329 , 237 U. S. 335 ,
after great consideration, a majority of this Court approved the
doctrine which should be applied here. The doctrine is right and
wholesome. I cannot agree now to put it aside and substitute the
views expressed by the minority of the Court in that cause.
Much of the opinion in the Frank case might be repeated
here if emphasis were necessary. It will suffice Page 261 U. S. 94 to quote a few paragraphs; but fully to understand, the whole
should be read.
"In dealing with these contentions, we should have in mind the
nature and extent of the duty that is imposed upon a Federal court
on application for the writ of habeas corpus under § 753, Rev.Stat.
Under the terms of that section, in order to entitle the present
appellant to the relief sought, it must appear that he is held in
custody in violation of the Constitution of the United States. Rogers v. Peck, 199 U. S. 425 , 199 U. S.
434 . Moreover, if he is held in custody by reason of his
conviction upon a criminal charge before a court having plenary
jurisdiction over the subject matter or offense, the place where it
was committed, and the person of the prisoner, it results from the
nature of the writ itself that he cannot have relief on habeas
corpus. Mere errors in point of law, however serious, committed by
a criminal court in the exercise of its jurisdiction over a case
properly subject to its cognizance, cannot be reviewed by habeas
corpus. That writ cannot be employed as a substitute for the writ
of error."
"As to the 'due process of law' that is required by the
Fourteenth Amendment, it is perfectly well settled that a criminal
prosecution in the courts of a State, based upon a law not in
itself repugnant to the Federal Constitution and conducted
according to the settled course of judicial proceedings as
established by the law of the State, so long as it includes notice,
and a hearing, or an opportunity to be heard, before a court of
competent jurisdiction, according to established modes of
procedure, is 'due process' in the constitutional sense."
"It is, therefore, conceded by counsel for appellant that, in
the present case, we may not review irregularities or erroneous
rulings upon the trial, however serious, and that the writ of
habeas corpus will lie only in case the judgment under which the
prisoner is detained is shown to be absolutely Page 261 U. S. 95 void for want of jurisdiction in the court that pronounced it,
either because such jurisdiction was absent at the beginning or
because it was lost in the course of the proceedings."
"But it would be clearly erroneous to confine the inquiry to the
proceedings and judgment of the trial court. The laws of the State
of Georgia (as will appear from decisions elsewhere cited), provide
for an appeal in criminal cases to the Supreme Court of that State
upon divers grounds, including such as those upon which it is here
asserted that the trial court was lacking in jurisdiction."
"It follows as a logical consequence that where, as here, a
criminal prosecution has proceeded through all the courts of the
State, including the appellate as well as the trial court, the
result of the appellate review cannot be ignored when afterwards
the prisoner applies for his release on the ground of a deprivation
of Federal rights sufficient to oust the State of its jurisdiction
to proceed to judgment and execution against him. This is not a
mere matter of comity, as seems to be supposed. The rule stands
upon a much higher plane, for it arises out of the very nature and
ground of the inquiry into the proceedings of the state tribunals,
and touches closely upon the relations between the state and the
Federal governments. As was declared by this court in Ex parte
Royall, 117 U. S. 241 , 117 U. S.
252 -- applying in a habeas corpus case what was said in Covell v. Heyman, 111 U. S. 176 , 111 U. S.
182 , a case of conflict of jurisdiction: --"
"The forbearance which courts of coordinate jurisdiction,
administered under a single system, exercise towards each other,
whereby conflicts are avoided, by avoiding interference with the
process of each other, is a principle of comity, with perhaps no
higher sanction than the utility which comes from concord; but
between state courts and those of the United States, it is
something more. It is a principle of right and of law, Page 261 U. S. 96 and, therefore, of necessity."
" And see In re Tyler, Petitioner, 149 U. S.
164 , 149 U. S. 186 . . . ."
"We, of course, agree that, if a trial is, in fact, dominated by
a mob, so that the jury is intimidated and the trial judge yields,
and so that there is an actual interference with the course of
justice, there is, in that court, a departure from due process of
law in the proper sense of that term. And if the State, supplying
no corrective process, carries into execution a judgment of death
or imprisonment based upon a verdict thus produced by mob
domination, the State deprives the accused of his life or liberty
without due process of law."
"But the State may supply such corrective process as to it seems
proper. Georgia has adopted the familiar procedure of a motion for
a new trial followed by an appeal to its Supreme Court, not
confined to the mere record of conviction but going at large, and
upon evidence adduced outside of that record, into the question
whether the processes of justice have been interfered with in the
trial court. Repeated instances are reported of verdicts and
judgments set aside and new trials granted for disorder or mob
violence interfering with the prisoner's right to a fair trial. Myers v. State, 97 Georgia 76(5), 99; Collier v.
State, 115 Georgia 803."
Let us consider with some detail what was presented to the court
below.
There was the complete record of the cause in the state courts
-- trial and Supreme -- showing no irregularity. After indictment,
the defendants were arraigned for trial and eminent counsel
appointed to defend them. He cross-examined the witnesses, made
exceptions, and evidently was careful to preserve a full and
complete transcript of the proceedings. The trial was unusually
short, but there is nothing in the record to indicate that it was
illegally hastened. November 3, 1919, the jury returned a verdict
of "guilty;" November 11th the defendants were sentenced Page 261 U. S. 97 to be executed on December 27th; December 20th new counsel
chosen by them or their friends moved for a new trial and supported
the motion by affidavits of defendants and two other negroes who
declared they testified falsely because of torture. This motion
questioned the validity of the conviction upon the very grounds now
advanced -- torture, prejudice, mob domination, failure of counsel
to protect interests, etc. It is thus summarized by counsel for
appellants --
"The grounds urged in the motion were the state of public
feeling against the defendants, the fact that the defendants and
witnesses were frequently subjected to torture for the purpose of
extracting from them admissions of guilt and to make them testify
against the defendants; that they were given no opportunity to
consult with their friends and seek assistance, or informed of the
charge against them until after their indictment; that they were
carried from jail to the courtroom without having been permitted to
see or talk with an attorney or any other person in regard to their
defense; that the court appointed counsel for the defendants
without consulting them, or giving them an opportunity to employ
their own counsel; that the state of public feeling was such that
they could not have a fair jury; that the trial proceeded without
their consulting with their counsel or any witnesses, or being
given an opportunity to obtain witnesses; that they were never in
court before and were entirely ignorant of what they could do to
defend themselves; that the trial from beginning to end occupied
three-fourths of an hour and the verdict was returned in from three
to six minutes. Four of the defendants say that they never had a
copy of the indictment served upon them, one had it only
forty-eight hours before the trial."
"Another ground was that, under the practice which prevailed in
the State, only white men were summoned Page 261 U. S. 98 to sit on the grand jury or the jury, and that, by this
discrimination, the defendants were deprived of their rights under
the Constitution of the United States; that they had no notice or
knowledge of what steps they should take to raise this point before
the trial; that the verdict is contrary to the law and
evidence."
"To this motion are attached two affidavits, one of Alf Banks,
Jr., and another of William Wordlaw who testified to the fact that
they were whipped, placed in the electric chair and strangled by
something put in their noses to make them testify. These defendants
did not suffer from what was done to these witnesses, as they did
not testify at their trial, but their affidavits confirm the
testimony of the others as to the treatment to which the Negroes in
confinement were exposed."
A new trial having been denied, an appeal was granted to the
State Supreme Court and sixty days allowed for preparing bill of
exceptions; March 22, 1920, this appeal was argued orally and by
briefs; March 29th the court announced its opinion, reviewed the
proceedings and affirmed the judgment. Hicks v. State, 143
Ark. 158. A petition for rehearing was presented April 19th and
overruled April 26th.
A petition for certiorari filed in this Court May 24, 1920, with
the record of proceedings in the state courts, set forth in detail
the very grounds of complaint now before us. It was presented
October 5th, denied October 11th, 1920.
April 29, 1921, the Governor directed execution of the
defendants on June 10th. June 8th, the Chancery Court of Pulaski
County granted them a writ of habeas corpus; on June 20th, the
State Supreme Court held that the Chancery Court lacked
jurisdiction and prohibited further proceedings. State v.
Martineau, 149 Ark. 237. August 4th, a justice of this Court
denied writ of error. Thereupon, the Governor fixed September 23rd
for execution. Page 261 U. S. 99 On September 21st, the present habeas corpus proceeding began,
and since then, the matter has been in the courts.
It appears that, during September, 1919, bloody conflicts took
place between whites and blacks in Phillips County, Arkansas --
"The Elaine Riot." Many negroes and some whites were killed. A
committee of seven prominent white men was chosen to direct
operations in putting down the so-called insurrection and conduct
investigation with a view of discovering and punishing the guilty.
This committee published a statement, certainly not intemperate,
about October 7th, wherein they stated the "ignorance and
superstition of a race of children" was played upon for gain by a
black swindler, and told of an organization to attack the whites.
It urged all persons, white or black, in possession of information
which might assist in discovering those responsible for the
insurrection, to confer with it upon the understanding that such
action would be for the public safety, and informant's identity
carefully safeguarded. I find nothing in this statement which
counsels lawlessness or indicates more than an honest effort by
upstanding men to meet the grave situation.
It is true that, in October, 1920, almost a year after the trial
here under consideration, the American Legion post at Helena --
approximately three hundred ex service white men -- made protest to
the Governor against commutation of the sentences. It is copied in
the margin as printed in the record. [ Footnote 2 ] The Helena Rotary Club, November 10, Page 261 U. S. 100 1920, expressed emphatic approval of this protest, and the Lions
Club took like action. These resolutions are not violent, and
certainly do not establish the theory that defendants' conviction
in November, 1919 -- a year before was an empty form and utterly
void; nor, as the Page 261 U. S. 101 petition recklessly alleges, do they
"further and conclusively show the existence of the mob spirit
prevailing among all the white people of Phillips County at the
time petitioners and the other defendants were put through the form
of trials and show that the only reason the mob stayed its hand,
the only reason they were not lynched, was that the leading
citizens of the community made a solemn promise to the mob that
they should be executed in the form of law."
The Supreme Court of the State twice reversed the conviction of
other negroes charged with committing murder during the disorders
of September, 1919. The first opinion came down on the very day
upon which the judgment against petitioners was affirmed, and held
the verdict so defective that no judgment could be entered upon it.
The second directed a reversal because the trial court had refused
to hear evidence on the motion to set aside the regular panel of
the petit jury. Banks v. State, 143 Ark. 154; Ware v.
State, 146 Ark. 321. The Supreme Court, as well as the trial
court, considered the claims of petitioners set forth by trusted
counsel in the motion for a new trial. This Court denied a petition
for certiorari wherein the facts and circumstances now relied upon
were set out with great detail. Years have passed since they were
convicted of an atrocious crime. Certainly they have not been
rushed towards the death chair; on the contrary, there has been
long delay, and some impatience over the result is not unnatural.
The recent execution of assassins in England within thirty days of
the crime, affords a striking contrast.
With all those things before him, I am unable to say that the
District Judge, acquainted with local conditions, erred when he
held the petition for the writ of habeas corpus insufficient. His
duty was to consider the whole case and decide whether there
appeared to be substantial reason for further proceedings. Page 261 U. S. 102 Under the disclosed circumstances, I cannot agree that the
solemn adjudications by courts of a great State, which this Court
has refused to review, can be successfully impeached by the mere ex parte affidavits made upon information and belief of
ignorant convicts joined by two white men -- confessedly atrocious
criminals. The fact that petitioners are poor an ignorant and black
naturally arouses sympathy; but that does not release us from
enforcing principles which are essential to the orderly operation
of our federal system.
I am authorized to say that MR. JUSTICE SUTHERLAND concurs in
this dissent.
[ Footnote 1 ]
"The writ of habeas corpus shall in no case extend to a prisoner
in jail, unless where he is in custody under or by color of the
authority of the United States, or is committed for trial before
some court thereof; or is in custody for an act done or omitted in
pursuance of a law of the United States, or of an order, process,
or decree of a court or judge thereof; or is in custody in
violation of the Constitution or of a law or treaty of the United
States; or, being a subject or citizen of a foreign state, and
domiciled therein, is in custody for an act done or omitted under
any alleged right, title, authority, privilege, protection, or
exemption claimed under the commission, or order, or sanction of
any foreign state, or under color thereof, the validity and effect
whereof depend upon the law of nations; or unless it is necessary
to bring the prisoner into court to testify."
[ Footnote 2 ]
" RESOLUTION" "It has been brought to the attention of the Richard L. Kitchens
Post No. 31, American Legion, Helena, Arkansas, that the Governor
is contemplating commuting the sentence of four of the negroes who
are now under death sentences for their participation in the Elaine
Riot, to lesser sentences, and we, the members of this Post feel
that any action toward this end by the Governor would do more harm
in the community and breed lawlessness, as well as disregard for
constituted authority, as at the time of this race riot the members
of this Post were called upon to go to Hoop Spur and Elaine to
protect life and property, and in compliance with this request,
there were two American Legion members killed and one seriously
injured, besides the other nonmembers who also perished, and when
the guilty negroes were apprehended, a solemn promise was given by
the leading citizens of the community that, if these guilty parties
were not lynched, and let the law take its course, that justice
would be done and the majesty of the law upheld."
"The twelve negroes now under sentence of death, but whose
sentences are suspended -- account of court procedure, and six of
these negro cases have -- taken to the Supreme Court of the United
States, which court declined to review. The other six cases, whose
original trials were reversed and new trials given them, were
convicted, and their cases were appealed to the Supreme Court of
the State and attorneys of their own selection were permitted to
handle their cases."
"Now therefore be it resolved by this Post assembled on this the
19th day of October, 1920, that we most earnestly protest against
the commutation of any of the sentences of these twelve negroes
convicted of murder in the Elaine riot of October, 1919, their
having received a fair trial and -- proven guilty, and the leniency
of the court was shown in the balance of the cases tried, these
being the ring leaders and guilty murderers, and that law and order
will be vindicated and a solemn promise kept."
"Be it further resolved that a committee of four be appointed by
the Post Commander. This Committee is hereby empowered to represent
this Post at a conference, or several conferences, with the
Governor of Arkansas and to take such steps as they may deem
necessary to carry out the wishes of this resolution and leaving
nothing undone to have these sentences carried out. This committee
to report in full to the next meeting of this Post."
"Passed unanimously 8:30 P.M. October 19, 1920, basement of the
Episcopal Church, Helena, Arkansas." | In the case of Moore v. Dempsey (1923), the US Supreme Court ruled that a state court murder trial where the accused were rushed to conviction under mob domination, disregarding their rights, violated the due process clause of the Fourteenth Amendment. The Court held that when a state court's corrective process is insufficient, and individuals sentenced to death present facts showing their conviction resulted from such a trial, the federal district court must determine the truth of those facts and whether the state proceedings can stand. The Court reversed the lower court's dismissal of the habeas corpus petition and remanded the case for further proceedings. |
Criminal Trials & Prosecutions | Balzac v. Porto Rico | https://supreme.justia.com/cases/federal/us/258/298/ | U.S. Supreme Court Balzac v. Porto Rico, 258
U.S. 298 (1922) Balzac v. Porto Rico Nos. 178, 179 Argued March 20, 1922 Decided April 10,
1922 258
U.S. 298 ERROR TO THE SUPREME COURT OF PORTO
RICO Syllabus 1. The Act of January 28, 1915, c. 22, 38 Stat. 803, amending §
246 of the Judicial Code, and providing that writs of error from
this Court may be prosecuted to the supreme courts of Porto Rico
and Hawaii in the same classes of cases as to the courts of last
resort of the states under Jud.Code, § 237, meant to assimilate the
jurisdiction over those territorial courts to that over the state
courts and is to be construed as embracing subsequent changes in §
237 not obviously inapplicable, such as the amendments made by the
Act of September 6, 1916, c. 448, 39 Stat. 726. P. 258 U. S.
300 .
2. In prosecutions for criminal libel in a district court of
Porto Rico, defendant demanded a jury under the Sixth Amendment,
which was denied him upon a construction of local statutes,
applicable to this and other misdemeanors. Held that the
demand drew in question the validity of the statutes, within the
meaning of Jud.Code § 237, as amended in 1916, and that judgments
of the Supreme Court of Porto Rico affirming the convictions were
reviewable here by writ of error. P. 258 U. S.
302 .
3. To present the constitutionality of a statute, it is not
essential that an assignment of error should mention the statute in
question, if the record definitely shows that its constitutionality
was questioned and the assignment is clearly directed to that
controversy. P. 258 U. S.
303 .
4. The provisions of the Constitution guaranteeing jury trial in
all criminal prosecutions do not apply to a territory belonging to
the Page 258 U. S. 299 United States which has not been incorporated into the Union,
and Porto Rico was not so incorporated by the Act of April 12,
1900, c.191, 31 Stat. 77, which gave it a temporary government. P. 258 U. S. 304 . Dorr v. United States, 195 U. S. 138 .
5. The Organic Act for Porto Rico of March 2, 1917, c. 145, 39
Stat. 951, known as the Jones Act, did not have the effect of
incorporating Porto Rico into the United States. P. 258 U. S.
305 .
6. Since the Spanish War, an intention of Congress to
incorporate new territory into the Union is not to be admitted
without express declaration or an implication so strong as to
exclude any other view. P. 258 U. S. 306 .
7. The provisions of § 5 of the Organic Act, supra, for
extending federal citizenship to citizens and certain residents of
Porto Rico, did not extend the jury system there. P. 258 U. S.
307 .
8. Neither can incorporation into the United States be implied
from the organization of the United States District Court in Porto
Rico, allowance of review of cases from its Supreme Court involving
the Constitution, admission of Porto Ricans to the Military and
Naval Academies, sale of United States stamps in the Island, or
extension to it of federal revenue, navigation, banking,
bankruptcy, employers' liability, safety appliance, extradition and
census laws. P. 258 U. S.
311 .
9. Published reflections on the Governor of Porto Rico held libelous and not legitimate comment protected by the
guaranty of free speech and free press in the First Amendment of
the Constitution. P. 258 U. S. 314 .
28 P.R. 139, 141 affirmed.
Review of two judgments of the Supreme Court of Porto Rico which
affirmed judgments of the District Court for Arecibo imposing
sentences to imprisonment based on convictions of criminal
libel. Page 258 U. S. 300 MR. CHIEF JUSTICE TAFT delivered the opinion of the Court.
These are two prosecutions for criminal libel, brought against
the same defendant, Jesus M. Balzac, on informations filed in the
District Court for Arecibo, Porto Rico, by the district attorney
for that district. Balzac was the editor of a daily paper published
in Arecibo, known as "El Baluarte," and the articles upon which the
charges of libel were based were published on April 16 and April
23, 1918, respectively. In each case, the defendant demanded a
jury. The Code of Criminal Procedure of Porto Rico grants a jury
trial in cases of felony, but not in misdemeanors. The defendant
nevertheless contended that he was entitled to a jury in such a
case, under the Sixth Amendment to the Constitution, and that the
language of the alleged libels was only fair comment, and their
publication was protected by the First Amendment. His contentions
were overruled; he was tried by the court, and was convicted in
both cases and sentenced to five months' imprisonment in the
district jail in the first, and to four months in the second, and
to the payment of the costs in each. The defendant appealed to the
Supreme Court of Porto Rico. That court affirmed both judgments. People v. Balzac, 28 P.R. Co. 139; second case, 28 P.R.
Co. 141.
The first question in these cases is one of jurisdiction of this
Court. By § 244 of the Judicial Code, approved March 3, 1911, it
was provided that writs of error and appeals from the final
judgments and decrees of the Supreme Court of Porto Rico might be
prosecuted to this Court in any case in which was drawn in question
the validity of a treaty or statute of, or authority exercised
under, the United States or wherein the Constitution of the United
States, or a treaty thereof, or an act of Congress was brought in
question and the right claimed thereunder was denied, and this
without regard to the Page 258 U. S. 301 amount involved. By the Act of January 28, 1915 (38 Stat. 803),
§ 244 of the Judicial Code was repealed, but § 246 was amended and
made to apply to the appellate jurisdiction of this Court in
respect to the decisions of the Supreme Court, not only of Hawaii,
as before, but also Porto Rico, and it was provided that writs of
error to those courts from this Court could be prosecuted in the
same class of cases as those in which this Court was authorized
under § 237 of the Judicial Code to review decisions of state
courts of last resort. Section 237 at that time allowed a writ of
error to final decisions in state courts of last resort where was
drawn in question the validity of a treaty, or a statute of, or an
authority exercised under, the United States and the decision was
against its validity, or where was drawn in question the validity
of a statute of, or an authority exercised under any state, on the
ground of its being repugnant to the Constitution, treaties, or
laws of the United States and the decision was in favor of its
validity, or where any title, right, privilege, or immunity was
claimed under the Constitution, or any treaty or statute of, or
commission held, or authority exercised under, the United States,
and the decision was against the title, right, privilege or
immunity especially set up or claimed by either party under such
Constitution, treaty, statute, commission or authority. By Act of
January 28, 1915, 38 Stat. 803, 804, amending § 246, this Court was
given power by certiorari to bring up for review all final
judgments or decrees in civil or criminal cases in the Supreme
Courts of Porto Rico and Hawaii, other than those reviewable here
by writ of error because in the class similar to that described in
§ 237 of the Judicial Code. By Act of September 6, 1916, 39 Stat.
726, the jurisdiction of this Court to review by writ of error,
under § 237, final judgments and decrees of state courts of last
resort was cut down by omitting cases (other than those involving
the validity of Page 258 U. S. 302 a treaty, statute or authority exercised under the United States
or any state) wherein a title, right, privilege, or immunity, was
claimed under the Constitution, or any treaty or statute of, or
commission held, or authority exercised under, the United States,
and the decision was against such title, right, privilege or
immunity, and such cases, it was provided, could only be examined
on review in this Court by certiorari.
The question now presented is whether the amendment to § 237 of
the Judicial Code by the Act of 1916 applies to, and affects, the
appellate jurisdiction of this Court in reviewing decisions of the
Supreme Court of Porto Rico. We think it does. We think that the
manifest purpose of the Act of 1915, amending § 246 of the Code, in
its reference to § 237 of the Judicial Code was to assimilate the
appellate jurisdiction of this Court over the Supreme Courts of
Porto Rico and Hawaii to that over state courts of last resort, and
that the reference in amended § 246, to § 237 may be fairly
construed to embrace subsequent changes in § 237 that are not
obviously inapplicable.
This brings us to the question whether there was drawn in
question in these cases the validity of a statute of Porto Rico
under the Constitution of the United States. The Penal Code of
Porto Rico divides crimes into felonies and misdemeanors
(Rev.Stats. and Codes of Porto Rico 1911, Penal Code, § 13). A
felony is described as a crime punishable by death or imprisonment
in the penitentiary. Every other crime is declared to be a
misdemeanor. Penal Code, § 14. Section 178 of the Porto Rican Code
of Criminal Procedure provided that issues of fact in cases of
felony should be tried by a jury when the defendant so elected, but
gave no such right in the case of misdemeanors. This was construed
by the Supreme Court to deny such right. People v. Bird, 5
P.R. Co. 387.
By § 244 (5676) of the Penal Code (as amended by Act of March 9,
1911, p. 71), the publication of a libel is made Page 258 U. S. 303 punishable by a fine not exceeding $5,000, or imprisonment in
jail for a term not exceeding two years, or both such fine and
imprisonment, and also the costs of the action, in the discretion
of the court. It is therefore plain that libel under the Porto
Rican law is a misdemeanor, and a jury trial was not required
therein. By the Act of July 22, 1919 (Laws of Porto Rico 1919, No.
84, p. 684), a jury trial is now given in misdemeanors, but that
did not come into force until after these libels were published and
these trials had.
When the Penal Code and the Code of Criminal Procedure were
first passed in 1901, they both contained the provision that, in
all cases of libel, the jury should determine the law and the fact.
It was held, however, by the Supreme Court of Porto Rico in People v. Bird, 5 P.R. Co. 387, 405, that this did not
give a jury trial, but only made provision that, if and when a
right of jury trial was given in such cases, the jury should have
the power to determine the law and the fact. Thereafter, the Act of
March 10, 1904 (Laws of Porto Rico 1904, p. 130), expressly
repealed all reference to trials for libel in the Jury Act.
The effect of the Penal Code of Procedure, as construed by the
Supreme Court of Porto Rico, and of the Act of March 10, 1904,
repealing the jury act as to libel cases, was a statutory denial of
the right of jury trial in such cases. A demand for a jury trial in
this case therefore drew in question the validity of the statutes
upon which the court relied in denying the demand. This necessarily
leads to the conclusion that these cases are in the same class as
those which come to this Court by writ of error under § 237, as
amended by the Act of 1916, and that jurisdiction by writ of error
exists.
Was the issue properly saved in the record by the defendant? We
think it was. The demand for a jury trial, the statute to the
contrary notwithstanding, was made at the trial. It was renewed in
the assignments of error in Page 258 U. S. 304 the Porto Rican Supreme Court and here. Those assignments did
not mention the statutes whose validity was involved, but merely
averred that the defendant had been denied his right as an American
citizen under the Sixth Amendment to the Constitution. While this
is informal, we think that it is sufficient when the record
discloses the real nature of the controversy and the specification
of the assignment leaves no doubt that it is directed to that
controversy.
We have now to inquire whether that part of the Sixth Amendment
to the Constitution which requires that, in all criminal
prosecutions, the accused shall enjoy the right to a speedy and
public trial, by an impartial jury of the state and district
wherein the crime shall have been committed, which district shall
have been previously ascertained by law, applies to Porto Rico.
Another provision on the subject is in Article III of the
Constitution, providing that the trial of all crimes, except in
cases of impeachment, shall be by jury, and such trial shall be
held in the state where the said crimes shall have been committed,
but when not committed within any state, the trial shall be at such
place or places as the Congress may by law have directed. The
Seventh Amendment of the Constitution provides that, in suits at
common law, when the value in controversy shall exceed twenty
dollars, the right of trial by jury shall be preserved. It is well
settled that these provisions for jury trial in criminal and civil
cases apply to the Territories of the United States. Webster v.
Reid , 11 How. 437, 52 U. S. 460 ; Reynolds v. United States, 98 U. S.
145 , 98 U. S. 167 ; Callan v. Wilson, 127 U. S. 540 , 127 U. S. 556 ; American Publishing Co. v. Fisher, 166 U.
S. 464 ; Thompson v. Utah, 170 U.
S. 343 , 170 U. S. 347 ; Capital Traction Co. v. Hof, 174 U. S.
1 ; Black v. Jackson, 177 U.
S. 349 ; Rasmussen v. United States, 197 U. S. 516 , 197 U. S. 528 ; Gurvich v. United States, 198 U.S. 581. But it is just as
clearly settled that they do not apply to territory belonging to
the Page 258 U. S. 305 United States which has not been incorporated into the Union. Hawaii v. Mankichi, 190 U. S. 197 ; Dorr v. United States, 195 U. S. 138 , 195 U. S. 145 .
It was further settled in Downes v. Bidwell, 182 U.
S. 244 , and confirmed by Dorr v. United States, 195 U. S. 138 ,
that neither the Philippines nor Porto Rico was territory which had
been incorporated in the Union or become a part of the United
States, as distinguished from merely belonging to it, and that the
acts giving temporary governments to the Philippines, 32 Stat. 691,
and to Porto Rico, 31 Stat. 77, had no such effect. The Insular
Cases revealed much diversity of opinion in this Court as to
the constitutional status of the territory acquired by the Treaty
of Paris ending the Spanish War, but the Dorr case shows
that the opinion of Mr. Justice White of the majority, in Downes v. Bidwell, has become the settled law of the
Court. The conclusion of this Court in the Dorr case, p. 195 U. S. 149 ,
was as follows:
"We conclude that the power to govern territory, implied in the
right to acquire it, and given to Congress in the Constitution in
Article IV, § 3, to whatever other limitations it may be subject,
the extent of which must be decided as questions arise, does not
require that body to enact for ceded territory, not made part of
the United States by congressional action, a system of laws which
shall include the right of trial by jury, and that the Constitution
does not, without legislation and of its own force, carry such
right to territory so situated."
The question before us therefore is: has Congress, since the
Foraker Act of April 12, 1900 (31 Stat. 77), enacted legislation
incorporating Porto Rico into the Union? Counsel for the plaintiff
in error give, in their brief, an extended list of acts, to which
we shall refer later, which they urge as indicating a purpose to
make the island a part of the United States, but they chiefly rely
on the Organic Act of Porto Rico of March 2, 1917, c. 145, 39 Stat.
951, known as the Jones Act. Page 258 U. S. 306 The act is entitled "An act to provide a civil government for
Porto Rico and for other purposes." It does not indicate by its
title that it has a purpose to incorporate the island into the
Union. It does not contain any clause which declares such purpose
or effect. While this is not conclusive, it strongly tends to show
that Congress did not have such an intention. Few questions have
been the subject of such discussion and dispute in our country as
the status of our territory acquired from Spain in 1899. The
division between the political parties in respect to it, the
diversity of the views of the members of this Court in regard to
its constitutional aspects, and the constant recurrence of the
subject in the Houses of Congress fixed the attention of all on the
future relation of this acquired territory to the United States.
Had Congress intended to take the important step of changing the
treaty status of Porto Rico by incorporating it into the Union, it
is reasonable to suppose that it would have done so by the plain
declaration, and would not have left it to mere inference. Before
the question became acute at the close of the Spanish War, the
distinction between acquisition and incorporation was not regarded
as important, or at least it was not fully understood and had not
aroused great controversy. Before that, the purpose of Congress
might well be a matter of mere inference from various legislative
acts; but in these latter days, incorporation is not to be assumed
without express declaration, or an implication so strong as to
exclude any other view.
Again, the second section of the act is called a "Bill of
Rights," and included therein is substantially every one of the
guaranties of the federal Constitution except those relating to
indictment by a grand jury in the case of infamous crimes and the
right of trial by jury in civil and criminal cases. If it was
intended to incorporate Porto Rico into the Union by this act,
which would ex proprio vigore make applicable the whole
Bill of Rights Page 258 U. S. 307 of the Constitution to the island, why was it thought necessary
to create for it a Bill of Rights and carefully exclude trial by
jury? In the very forefront of the act is this substitute for
incorporation and application of the Bill of Rights of the
Constitution. This seems to us a conclusive argument against the
contention of counsel for the plaintiff in error.
The section of the Jones Act which counsel press on us is § 5.
This in effect declares that all persons who under the Foraker Act
were made citizens of Porto Rico and certain other residents shall
become citizens of the United States, unless they prefer not to
become such, in which case they are to declare such preference
within six months, and thereafter they lose certain political
rights under the new government. In the same section, the United
States district court is given power separately to naturalize
individuals of some other classes of residents. We set out the
section in full in the margin. * Unaffected by
the considerations Page 258 U. S. 308 already suggested, perhaps the declaration of § 5 would furnish
ground for an inference such as counsel for plaintiff in error
contend, but, under the circumstances, we find it entirely
consistent with nonincorporation. When Porto Ricans passed from
under the government of Spain, they lost the protection of that
government as subjects of the King of Spain, a title by which they
had been known for centuries. They had a right to expect, in
passing under the dominion of the United States, a status entitling
them to the protection of their new sovereign. In theory and in
law, they had it as citizens of Porto Rico, but it was an anomalous
status, or seemed to be so in view of the fact that those who owed
and rendered allegiance to the other great world powers were given
the same designation and status as those living in their respective
home countries so far as protection against foreign injustice went.
It became a yearning of the Porto Ricans to be American citizens,
therefore, and this act gave them the boon. What additional rights
did it give them? It enabled them to move into the continental
United States and becoming residents of any state there, to enjoy
every right of any other citizen of the United States, civil,
social and political. A citizen of the Philippines must be
naturalized before he can settle and vote in this country. Act of
June 29, 1906, § 30, 34 Stat. 606. Not so the Porto Rican under the
Organic Act of 1917. Page 258 U. S. 309 In Porto Rico, however, the Porto Rican cannot insist upon the
right of trial by jury except as his own representatives in his
legislature shall confer it on him. The citizen of the United
States living in Porto Rico cannot there enjoy a right of trial by
jury under the federal Constitution, any more than the Porto Rican.
It is locality that is determinative of the application of the
Constitution, in such matters as judicial procedure, and not the
status of the people who live in it.
It is true that, in the absence of other and countervailing
evidence, a law of Congress or a provision in a treaty acquiring
territory, declaring an intention to confer political and civil
rights on the inhabitants of the new lands as American citizens,
may be properly interpreted to mean an incorporation of it into the
Union, as in the case of Louisiana and Alaska. This was one of the
chief grounds upon which this Court placed its conclusion that
Alaska had been incorporated in the Union in Rasmussen v.
United States, 197 U. S. 516 . But
Alaska was a very different case from that of Porto Rico. It was an
enormous territory, very sparsely settled, and offering opportunity
for immigration and settlement by American citizens. It was on the
American continent, and within easy reach of the then United
States. It involved none of the difficulties which incorporation of
the Philippines and Porto Rico presents, and one of them is in the
very matter of trial by jury. This Court refers to the difficulties
in Dorr v. United States, 195 U.
S. 138 , 195 U. S.
148 :
"If the right to trial by jury were a fundamental right which
goes wherever the jurisdiction of the United States extends, or if
Congress, in framing laws for outlying territory, . . . was obliged
to establish that system by affirmative legislation, it would
follow that, no matter what the needs or capacities of the people,
trial by jury, and in no other way, must be forthwith established,
although the result may be to work injustice Page 258 U. S. 310 and provoke disturbance, rather than to aid the orderly
administration of justice. . . . Again, if the United States shall
acquire by treaty the cession of territory having an established
system of jurisprudence, where jury trials are unknown, but a
method of fair and orderly trial prevails under an acceptable and
long established code, the preference of the people must be
disregarded, their established customs ignored, and they themselves
coerced to accept, in advance of incorporation into the United
States, a system of trial unknown to them and unsuited to their
needs. We do not think it was intended, in giving power to Congress
to make regulations for the territories, to hamper its exercise
with this condition."
The jury system needs citizens trained to the exercise of the
responsibilities of jurors. In common law countries, centuries of
tradition have prepared a conception of the impartial attitude
jurors must assume. The jury system postulates a conscious duty of
participation in the machinery of justice which it is hard for
people not brought up in fundamentally popular government at once
to acquire. One of its greatest benefits is in the security it
gives the people that they, as jurors, actual or possible, being
part of the judicial system of the country, can prevent its
arbitrary use or abuse. Congress has thought that a people like the
Filipinos, or the Porto Ricans, trained to a complete judicial
system which knows no juries, living in compact and ancient
communities, with definitely formed customs and political
conceptions, should be permitted themselves to determine how far
they wish to adopt this institution of Anglo-Saxon origin, and
when. Hence the care with which, from the time when Mr. McKinley
wrote his historic letter to Mr. Root in April of 1900 (Public Laws
Philippine Commission, 6-9-Act of July 2, 1902, 691, 692)
concerning the character of government to be set up for the
Philippines by the Phillippine Commission, until the Act Page 258 U. S. 311 of 1917, giving a new Organic Act to Porto Rico, the United
States has been liberal in granting to the islands acquired by the
Treaty of Paris most of the American constitutional guaranties, but
has been sedulous to avoid forcing a jury system on a Spanish and
civil law country until it desired it. We cannot find any intention
to depart from this policy in making Porto Ricans American
citizens, explained as this is by the desire to put them as
individuals on an exact equality with citizens from the American
homeland, to secure them more certain protection against the world,
and to give them an opportunity, should they desire, to move into
the United States proper, and there without naturalization to enjoy
all political and other rights.
We need not dwell on another consideration which requires us not
lightly to infer, from acts thus easily explained on other grounds,
an intention to incorporate in the Union these distant ocean
communities of a different origin and language from those of our
continental people. Incorporation has always been a step, and an
important one, leading to statehood. Without in the slightest
degree intimating an opinion as to the wisdom of such a policy, for
that is not our province, it is reasonable to assume that, when
such a step is taken, it will be begun and taken by Congress
deliberately, and with a clear declaration of purpose, and not left
a matter of mere inference or construction.
Counsel for the plaintiff in error also rely on the organization
of a United States district court in Porto Rico, on the allowance
of review of the Porto Rican Supreme Court in cases when the
Constitution of the United States is involved, on the statutory
permission that Porto Rican youth can attend West Point and
Annapolis Academies, on the authorized sale of United States stamps
in the island, on the extension of revenue, navigation,
immigration, Page 258 U. S. 312 national banking, bankruptcy, federal employers' liability,
safety appliance, extradition, and census laws in one way or
another to Porto Rico. With the background of the considerations
already stated, none of these, nor all of them put together,
furnish ground for the conclusion pressed on us.
The United States district court is not a true United States
court established under Article III of the Constitution to
administer the judicial power of the United States therein
conveyed. It is created by virtue of the sovereign congressional
faculty, granted under Article IV, § 3, of that instrument, of
making all needful rules and regulations respecting the territory
belonging to the United States. The resemblance of its jurisdiction
to that of true United States courts, in offering an opportunity to
nonresidents of resorting to a tribunal not subject to local
influence, does not change its character as a mere territorial
court. Nor does the legislative recognition that federal
constitutional questions may arise in litigation in Porto Rico have
any weight in this discussion. The Constitution of the United
States is in force in Porto Rico, as it is wherever and whenever
the sovereign power of that government is exerted. This has not
only been admitted, but emphasized, by this Court in all its
authoritative expressions upon the issues arising in the Insular cases, especially in the Downes v.
Bidwell and the Dorr cases. The Constitution,
however, contains grants of power, and limitations which in the
nature of things are not always and everywhere applicable and the
real issue in the Insular cases was not whether the
Constitution extended to the Philippines or Porto Rico when we went
there, but which ones of its provisions were applicable by way of
limitation upon the exercise of executive and legislative power in
dealing with new conditions and requirements. The guaranties of
certain fundamental personal rights declared in the Constitution,
as, for instance, Page 258 U. S. 313 that no person could be deprived of life, liberty, or property
without due process of law, had from the beginning full application
in the Philippines and Porto Rico, and, as this guaranty is one of
the must fruitful in causing litigation in our own country,
provision was naturally made for similar controversy in Porto Rico.
Indeed, provision is made for the consideration of constitutional
questions coming on appeal and writs of error from the Supreme
Court of the Philippines, which are certainly not incorporated in
the Union. Judicial Code, § 248.
On the whole, therefore, we find no features in the Organic Act
of Porto Rico of 1917 from which we can infer the purpose of
Congress to incorporate Porto Rico into the United States with the
consequences which would follow.
This Court has passed on substantially the same questions
presented here in two cases, Porto Rico v. Tapia, 245 U.S.
639, and People v. Muratti, 245 U.S. 639. In the former,
the question was whether one who was charged with committing a
felonious homicide some 12 days after the passage of the Organic
Act in 1917 could be brought to trial without an indictment of a
grand jury as required by the Fifth Amendment to the Constitution.
The United States District Court of Porto Rico, on a writ of habeas
corpus, held that he could not be held to answer, and discharged
him. In the other case, the felony charged was alleged to have been
committed before the passage of the Organic Act, but prosecution
was begun afterwards. In that, the Supreme Court of Porto Rico held
that an indictment was not rendered necessary by the Organic Act.
This Court reversed the district court in the Tapia case
and affirmed the Supreme Court in the Muratti case,
necessarily holding the Organic Act had not incorporated Porto Rico
into the United States. These cases were disposed of by a per
curiam. Counsel have urged us in the cases Page 258 U. S. 314 at the bar to deal with the questions raised more at length in
exposition of the effect of the Organic Act of 1917 upon the issue,
and we have done so.
A second assignment of error is based on the claim that the
alleged libels here did not pass the bounds of legitimate comment
on the conduct of the governor of the island, against whom they
were directed, and that its prosecution is a violation of the First
Amendment to the Constitution, securing free speech and a free
press. A reading of the two articles removes the slightest doubt
that they go far beyond the "exuberant expressions of meridional
speech," to use the expression of this Court in a similar case in Gandia v. Pittingill, 222 U. S. 452 , 222 U. S. 458 .
Indeed, they are so excessive and outrageous in their character
that they suggest the query whether their superlative vilification
has not overleaped itself and become unconsciously humorous. But
this is not a defense.
The judgments of the Supreme Court of Porto Rico are Affirmed. MR. JUSTICE HOLMES concurs in the result.
*
"Sec. 5. That all citizens of Porto Rico as defined by section
seven of the act of April twelfth, nineteen hundred, 'temporarily
to provide revenues and a civil government for Porto Rico, and for
other purposes,' and all natives of Porto Rico who were temporarily
absent from that island on April eleventh, eighteen hundred and
ninety-nine, and have since returned and are permanently residing
in that island, and are not citizens of any foreign country, are
hereby declared, and shall be deemed and held to be, citizens of
the United States: Provided, that any person hereinbefore
described may retain his present political status by making a
declaration, under oath, of his decision to do so within six months
of the taking effect of this act before the district court in the
district in which he resides, the declaration to be in form as
follows:"
"I, _____, _____, being duly sworn, hereby declare my intention
not to become a citizen of the United States as provided in the act
of Congress conferring United States citizenship upon citizens of
Porto Rico and certain natives permanently residing in said
island."
In the case of any such person who may be absent from the island
during said six months, the term of this proviso may be availed of
by transmitting a declaration, under oath, in the form herein in
provided within six months of the taking effect of the act to the
executive secretary of Porto Rico: And provided further, that any person who is born in Porto Rico of an alien parent and is
permanently residing in that island may, if of full age, within six
months of the taking his majority or within or if a minor, upon
reaching his majority or within one year thereafter, make a sworn
declaration of allegiance to the United States before the United
States district court for Porto Rico setting forth therein all the
facts connected with his or her birth and residence in Porto Rico
and accompanying due proof thereof, and, from and after the making
of such declaration, shall be considered to be a citizen of the
United States. | The case of Balzac v. Porto Rico (1922) dealt with the applicability of the Sixth Amendment right to a jury trial in a US territory that had not been incorporated into the Union. The defendant, Balzac, was denied a jury trial in a criminal libel case in Porto Rico (now Puerto Rico), and the Supreme Court was asked to review the decision.
The key issue was whether the constitutional guarantee of a jury trial applied to US territories like Porto Rico, which had not been fully incorporated into the Union. The Court held that it did not, affirming the judgments of the Supreme Court of Porto Rico. It found that neither the Act of April 12, 1900, nor the Organic Act of 1917 (the Jones Act) incorporated Porto Rico into the United States, and therefore, the territory was not subject to the same constitutional guarantees as states within the Union.
The case also addressed the defendant's claim that his right to free speech and press under the First Amendment had been violated, but the Court found that the libelous nature of the articles in question was not protected by the First Amendment. |
Criminal Trials & Prosecutions | Gideon v. Wainwright | https://supreme.justia.com/cases/federal/us/372/335/ | U.S. Supreme Court Gideon v. Wainwright, 372
U.S. 335 (1963) Gideon v. Wainwright No. 155 Argued January 15,
1963 Decided March 18,
1963 372
U.S. 335 CERTIORARI TO THE SUPREME COURT OF
FLORIDA Syllabus Charged in a Florida State Court with a noncapital felony,
petitioner appeared without funds and without counsel and asked the
Court to appoint counsel for him, but this was denied on the ground
that the state law permitted appointment of counsel for indigent
defendants in capital cases only. Petitioner conducted his own
defense about as well as could be expected of a layman, but he was
convicted and sentenced to imprisonment. Subsequently, he applied
to the State Supreme Court for a writ of habeas corpus, on the
ground that his conviction violated his rights under the Federal
Constitution. The State Supreme Court denied all relief. Held: The right of an indigent defendant in a criminal
trial to have the assistance of counsel is a fundamental right
essential to a fair trial, and petitioner's trial and conviction
without the assistance of counsel violated the Fourteenth
Amendment. Betts v. Brady, 316 U.
S. 455 , overruled. Pp. 372 U. S.
336 -345.
Reversed and cause remanded. Page 372 U. S. 336 MR. JUSTICE BLACK delivered the opinion of the Court.
Petitioner was charged in a Florida state court with having
broken and entered a poolroom with intent to commit a misdemeanor.
This offense is a felony under Page 372 U. S. 337 Florida law. Appearing in court without funds and without a
lawyer, petitioner asked the court to appoint counsel for him,
whereupon the following colloquy took place:
"The COURT: Mr. Gideon, I am sorry, but I cannot appoint Counsel
to represent you in this case. Under the laws of the State of
Florida, the only time the Court can appoint Counsel to represent a
Defendant is when that person is charged with a capital offense. I
am sorry, but I will have to deny your request to appoint Counsel
to defend you in this case."
"The DEFENDANT: The United States Supreme Court says I am
entitled to be represented by Counsel."
Put to trial before a jury, Gideon conducted his defense about
as well as could be expected from a layman. He made an opening
statement to the jury, cross-examined the State's witnesses,
presented witnesses in his own defense, declined to testify
himself, and made a short argument "emphasizing his innocence to
the charge contained in the Information filed in this case." The
jury returned a verdict of guilty, and petitioner was sentenced to
serve five years in the state prison. Later, petitioner filed in
the Florida Supreme Court this habeas corpus petition attacking his
conviction and sentence on the ground that the trial court's
refusal to appoint counsel for him denied him rights "guaranteed by
the Constitution and the Bill of Rights by the United States
Government." [ Footnote 1 ]
Treating the petition for habeas corpus as properly before it, the
State Supreme Court, "upon consideration thereof" but without an
opinion, denied all relief. Since 1942, when Betts v.
Brady, 316 U. S. 455 , was
decided by a divided Page 372 U. S. 338 Court, the problem of a defendant's federal constitutional right
to counsel in a state court has been a continuing source of
controversy and litigation in both state and federal courts.
[ Footnote 2 ] To give this
problem another review here, we granted certiorari. 370 U.S. 908.
Since Gideon was proceeding in forma pauperis, we
appointed counsel to represent him and requested both sides to
discuss in their briefs and oral arguments the following: "Should
this Court's holding in Betts v. Brady, 316 U.
S. 455 , be reconsidered?" I The facts upon which Betts claimed that he had been
unconstitutionally denied the right to have counsel appointed to
assist him are strikingly like the facts upon which Gideon here
bases his federal constitutional claim. Betts was indicted for
robbery in a Maryland state court. On arraignment, he told the
trial judge of his lack of funds to hire a lawyer and asked the
court to appoint one for him. Betts was advised that it was not the
practice in that county to appoint counsel for indigent defendants
except in murder and rape cases. He then pleaded not guilty, had
witnesses summoned, cross-examined the State's witnesses, examined
his own, and chose not to testify himself. He was found guilty by
the judge, sitting without a jury, and sentenced to eight years in
prison. Page 372 U. S. 339 Like Gideon, Betts sought release by habeas corpus, alleging
that he had been denied the right to assistance of counsel in
violation of the Fourteenth Amendment. Betts was denied any relief,
and, on review, this Court affirmed. It was held that a refusal to
appoint counsel for an indigent defendant charged with a felony did
not necessarily violate the Due Process Clause of the Fourteenth
Amendment, which, for reasons given, the Court deemed to be the
only applicable federal constitutional provision. The Court
said:
"Asserted denial [of due process] is to be tested by an
appraisal of the totality of facts in a given case. That which may,
in one setting, constitute a denial of fundamental fairness,
shocking to the universal sense of justice, may, in other
circumstances, and in the light of other considerations, fall short
of such denial."
316 U.S. at 316 U. S. 462 .
Treating due process as "a concept less rigid and more fluid than
those envisaged in other specific and particular provisions of the
Bill of Rights," the Court held that refusal to appoint counsel
under the particular facts and circumstances in the Betts case was not so "offensive to the common and fundamental ideas of
fairness" as to amount to a denial of due process. Since the facts
and circumstances of the two cases are so nearly indistinguishable,
we think the Betts v. Brady holding, if left standing,
would require us to reject Gideon's claim that the Constitution
guarantees him the assistance of counsel. Upon full
reconsideration, we conclude that Betts v. Brady should be
overruled. II The Sixth Amendment provides, "In all criminal prosecutions, the
accused shall enjoy the right . . . to have the Assistance of
Counsel for his defence." We have construed Page 372 U. S. 340 this to mean that, in federal courts, counsel must be provided
for defendants unable to employ counsel unless the right is
competently and intelligently waived. [ Footnote 3 ] Betts argued that this right is extended to
indigent defendants in state courts by the Fourteenth Amendment. In
response, the Court stated that, while the Sixth Amendment laid
down
"no rule for the conduct of the States, the question recurs
whether the constraint laid by the Amendment upon the national
courts expresses a rule so fundamental and essential to a fair
trial, and so, to due process of law, that it is made obligatory
upon the States by the Fourteenth Amendment."
316 U.S. at 316 U. S. 465 .
In order to decide whether the Sixth Amendment's guarantee of
counsel is of this fundamental nature, the Court in Betts set out and considered
"[r]elevant data on the subject . . . afforded by constitutional
and statutory provisions subsisting in the colonies and the States
prior to the inclusion of the Bill of Rights in the national
Constitution, and in the constitutional, legislative, and judicial
history of the States to the present date."
316 U.S. at 316 U. S. 465 .
On the basis of this historical data, the Court concluded that
"appointment of counsel is not a fundamental right, essential to a
fair trial." 316 U.S. at 316 U. S. 471 .
It was for this reason the Betts Court refused to accept
the contention that the Sixth Amendment's guarantee of counsel for
indigent federal defendants was extended to or, in the words of
that Court, "made obligatory upon, the States by the Fourteenth
Amendment." Plainly, had the Court concluded that appointment of
counsel for an indigent criminal defendant was "a fundamental
right, essential to a fair trial," it would have held that the
Fourteenth Amendment requires appointment of counsel in a state
court, just as the Sixth Amendment requires in a federal court. Page 372 U. S. 341 We think the Court in Betts had ample precedent for
acknowledging that those guarantees of the Bill of Rights which are
fundamental safeguards of liberty immune from federal abridgment
are equally protected against state invasion by the Due Process
Clause of the Fourteenth Amendment. This same principle was
recognized, explained, and applied in Powell v. Alabama, 287 U. S. 45 (1932), a case upholding the right of counsel, where the Court held
that, despite sweeping language to the contrary in Hurtado v.
California, 110 U. S. 516 (1884), the Fourteenth Amendment "embraced" those " fundamental
principles of liberty and justice which lie at the base of all our
civil and political institutions,'" even though they had been
"specifically dealt with in another part of the federal
Constitution." 287 U.S. at 287 U. S. 67 . In many cases other than Powell and Betts, this Court has looked to the fundamental nature
of original Bill of Rights guarantees to decide whether the
Fourteenth Amendment makes them obligatory on the States.
Explicitly recognized to be of this "fundamental nature," and
therefore made immune from state invasion by the Fourteenth, or
some part of it, are the First Amendment's freedoms of speech,
press, religion, assembly, association, and petition for redress of
grievances. [ Footnote 4 ] For
the same reason, though not always in precisely the same
terminology, the Court has made obligatory on the States the Fifth
Amendment's command that Page 372 U. S. 342 private property shall not be taken for public use without just
compensation, [ Footnote 5 ] the
Fourth Amendment's prohibition of unreasonable searches and
seizures, [ Footnote 6 ] and the
Eighth's ban on cruel and unusual punishment. [ Footnote 7 ] On the other hand, this Court in Palko v. Connecticut, 302 U. S. 319 (1937), refused to hold that the Fourteenth Amendment made the
double jeopardy provision of the Fifth Amendment obligatory on the
States. In so refusing, however, the Court, speaking through Mr.
Justice Cardozo, was careful to emphasize that
"immunities that are valid as against the federal government by
force of the specific pledges of particular amendments have been
found to be implicit in the concept of ordered liberty, and thus,
through the Fourteenth Amendment, become valid as against the
states,"
and that guarantees "in their origin . . . effective against the
federal government alone" had, by prior cases,
"been taken over from the earlier articles of the federal bill
of rights and brought within the Fourteenth Amendment by a process
of absorption."
302 U.S. at 302 U. S.
324 -326.
We accept Betts v. Brady's assumption, based as it was
on our prior cases, that a provision of the Bill of Rights which is
"fundamental and essential to a fair trial" is made obligatory upon
the States by the Fourteenth Amendment. We think the Court in Betts was wrong, however, in concluding that the Sixth
Amendment's guarantee of counsel is not one of these fundamental
rights. Ten years before Betts v. Brady, this Court, after
full consideration of all the historical data examined in Betts, had unequivocally declared that "the right to the
aid of Page 372 U. S. 343 counsel is of this fundamental character." Powell v.
Alabama, 287 U. S. 45 , 287 U. S. 68 (1932). While the Court, at the close of its Powell opinion, did, by its language, as this Court frequently does, limit
its holding to the particular facts and circumstances of that case,
its conclusions about the fundamental nature of the right to
counsel are unmistakable. Several years later, in 1936, the Court
reemphasized what it had said about the fundamental nature of the
right to counsel in this language:
"We concluded that certain fundamental rights, safeguarded by
the first eight amendments against federal action, were also
safeguarded against state action by the due process of law clause
of the Fourteenth Amendment, and among them the fundamental right
of the accused to the aid of counsel in a criminal
prosecution." Grosjean v. American Press Co., 297 U.
S. 233 , 297 U. S.
243 -244 (1936). And again, in 1938, this Court said:
"[The assistance of counsel] is one of the safeguards of the
Sixth Amendment deemed necessary to insure fundamental human rights
of life and liberty. . . . The Sixth Amendment stands as a constant
admonition that, if the constitutional safeguards it provides be
lost, justice will not 'still be done.'" Johnson v. Zerbst, 304 U. S. 458 , 304 U. S. 462 (1938). To the same effect, see Avery v. Alabama, 308 U. S. 444 (1940), and Smith v. O'Grady, 312 U.
S. 329 (1941). In light of these and many other prior
decisions of this Court, it is not surprising that the Betts Court, when faced with the contention that "one
charged with crime, who is unable to obtain counsel, must be
furnished counsel by the State," conceded that "[e]xpressions in
the opinions of this court lend color to the argument. . . ." 316
U.S. at 316 U. S.
462 -463. The fact is that, in deciding as it did -- that
"appointment of counsel is not a fundamental right, Page 372 U. S. 344 essential to a fair trial" -- the Court in Betts v.
Brady made an abrupt break with its own well considered
precedents. In returning to these old precedents, sounder, we
believe, than the new, we but restore constitutional principles
established to achieve a fair system of justice. Not only these
precedents, but also reason and reflection, require us to recognize
that, in our adversary system of criminal justice, any person haled
into court, who is too poor to hire a lawyer, cannot be assured a
fair trial unless counsel is provided for him. This seems to us to
be an obvious truth. Governments, both state and federal, quite
properly spend vast sums of money to establish machinery to try
defendants accused of crime. Lawyers to prosecute are everywhere
deemed essential to protect the public's interest in an orderly
society. Similarly, there are few defendants charged with crime,
few indeed, who fail to hire the best lawyers they can get to
prepare and present their defenses. That government hires lawyers
to prosecute and defendants who have the money hire lawyers to
defend are the strongest indications of the widespread belief that
lawyers in criminal courts are necessities, not luxuries. The right
of one charged with crime to counsel may not be deemed fundamental
and essential to fair trials in some countries, but it is in ours.
From the very beginning, our state and national constitutions and
laws have laid great emphasis on procedural and substantive
safeguards designed to assure fair trials before impartial
tribunals in which every defendant stands equal before the law.
This noble ideal cannot be realized if the poor man charged with
crime has to face his accusers without a lawyer to assist him. A
defendant's need for a lawyer is nowhere better stated than in the
moving words of Mr. Justice Sutherland in Powell v.
Alabama: "The right to be heard would be, in many cases, of little avail
if it did not comprehend the right to be Page 372 U. S. 345 heard by counsel. Even the intelligent and educated layman has
small and sometimes no skill in the science of law. If charged with
crime, he is incapable, generally, of determining for himself
whether the indictment is good or bad. He is unfamiliar with the
rules of evidence. Left without the aid of counsel, he may be put
on trial without a proper charge, and convicted upon incompetent
evidence, or evidence irrelevant to the issue or otherwise
inadmissible. He lacks both the skill and knowledge adequately to
prepare his defense, even though he have a perfect one. He requires
the guiding hand of counsel at every step in the proceedings
against him. Without it, though he be not guilty, he faces the
danger of conviction because he does not know how to establish his
innocence."
287 U.S. at 287 U. S. 68 -69.
The Court in Betts v. Brady departed from the sound wisdom
upon which the Court's holding in Powell v. Alabama rested. Florida, supported by two other States, has asked that Betts v. Brady be left intact. Twenty-two States, as
friends of the Court, argue that Betts was "an anachronism
when handed down," and that it should now be overruled. We
agree.
The judgment is reversed, and the cause is remanded to the
Supreme Court of Florida for further action not inconsistent with
this opinion. Reversed. [ Footnote 1 ]
Later, in the petition for habeas corpus, signed and apparently
prepared by petitioner himself, he stated, "I, Clarence Earl
Gideon, claim that I was denied the rights of the 4th, 5th and 14th
amendments of the Bill of Rights."
[ Footnote 2 ]
Of the many such cases to reach this Court, recent examples are Carnley v. Cochran, 369 U. S. 506 (1962); Hudson v. North Carolina, 363 U.
S. 697 (1960); Moore v. Michigan, 355 U.
S. 155 (1957). Illustrative cases in the state courts
are Artrip v. State, 136 So. 2d 574 (Ct.App.Ala.1962); Shafer v. Warden, 211 Md. 635, 126 A.2d 573 (1956). For
examples of commentary, see Allen, The Supreme Court,
Federalism, and State Systems of Criminal Justice, 8 De Paul L.Rev.
213 (1959); Kamisar, The Right to Counsel and the Fourteenth
Amendment: A Dialogue on "The Most Pervasive Right" of an Accused,
30 U. of Chi.L.Rev. 1 (1962); The Right to Counsel, 45 Minn.L.Rev.
693 (1961).
[ Footnote 3 ] Johnson v. Zerbst, 304 U. S. 458 (1938).
[ Footnote 4 ] E.g., Gitlow v. New York, 268 U.
S. 652 , 268 U. S. 666 (1925) (speech and press); Lovell v. City of Griffin, 303 U. S. 444 , 303 U. S. 450 (1938) (speech and press); Staub v. City of Baxley, 355 U. S. 313 , 355 U. S. 321 (1958) (speech); Grosjean v. American Press Co., 297 U. S. 233 , 297 U. S. 244 (1936) (press); Cantwell v. Connecticut, 310 U.
S. 296 , 310 U. S. 303 (1940) (religion); De Jonge v. Oregon, 299 U.
S. 353 , 299 U. S. 364 (1937) (assembly); Shelton v. Tucker, 364 U.
S. 479 , 364 U. S. 486 ,
488 (1960) (association); Louisiana ex rel. Gremillion v.
NAACP, 366 U. S. 293 , 366 U. S. 296 (1961) (association); Edwards v. South Carolina, 372 U. S. 229 (1963) (speech, assembly, petition for redress of grievances).
[ Footnote 5 ] E.g., Chicago, B. & Q. R. Co. v. Chicago, 166 U. S. 226 , 166 U. S.
235 -241 (1897); Smyth v. Ames, 169 U.
S. 466 , 169 U. S.
522 -526 (1898).
[ Footnote 6 ] E.g., Wolf v. Colorado, 338 U. S.
25 , 338 U. S. 27 -28
(1949); Elkins v. United States, 364 U.
S. 206 , 364 U. S. 213 (1960); Mapp v. Ohio, 367 U. S. 643 , 367 U. S. 655 (1961).
[ Footnote 7 ] Robinson v. California, 370 U.
S. 660 , 370 U. S. 666 (1962).
MR. JUSTICE DOUGLAS.
While I join the opinion of the Court, a brief historical resume
of the relation between the Bill of Rights and the first section of
the Fourteenth Amendment seems pertinent. Since the adoption of
that Amendment, ten justices have felt that it protects from
infringement by the States the privileges, protections, and
safeguards granted by the Bill of Rights. Page 372 U. S. 346 Justice Field, the first Justice Harlan, and probably Justice
Brewer, took that position in O'Neil v. Vermont, 144 U. S. 323 , 144 U. S.
362 -363, 144 U. S.
370 -371, as did Justices BLACK, DOUGLAS, Murphy and
Rutledge in Adamson v. California, 332 U. S.
46 , 332 U. S. 71 -72,
124. And see Poe v. Ullman, 367 U.
S. 497 , 367 U. S.
515 -522 (dissenting opinion). That view was also
expressed by Justices Bradley and Swayne in the Slaughter-House
Cases , 16 Wall. 36, 83 U. S.
118 -119, 83 U. S. 122 ,
and seemingly was accepted by Justice Clifford when he dissented
with Justice Field in Walker v. Sauvinet, 92 U. S.
90 , 92 U. S. 90 , 92 U. S. 92 .
[ Footnote 2/1 ] Unfortunately, it
has never commanded a Court. Yet, happily, all constitutional
questions are always open. Erie R. Co. v. Tompkins, 304 U. S. 64 . And
what we do today does not foreclose the matter.
My Brother HARLAN is of the view that a guarantee of the Bill of
Rights that is made applicable to the States by reason of the
Fourteenth Amendment is a lesser version of that same guarantee as
applied to the Federal Government. [ Footnote 2/2 ] Mr. Justice Jackson shared that view.
[ Footnote 2/3 ] Page 372 U. S. 347 But that view has not prevailed, [ Footnote 2/4 ] and rights protected against state
invasion by the Due Process Clause of the Fourteenth Amendment are
not watered-dow versions of what the Bill of Rights guarantees.
[ Footnote 2/1 ]
Justices Bradley, Swayne and Field emphasized that the first
eight Amendments granted citizens of the United States certain
privileges and immunities that were protected from abridgment by
the States by the Fourteenth Amendment. See Slaughter-House
Cases, supra, at 83 U. S.
118 -119; O'Neil v. Vermont, supra, at 144 U. S. 363 .
Justices Harlan and Brewer accepted the same theory in the O'Neil case ( see id. at 144 U. S.
370 -371), though Justice Harlan indicated that all
"persons," not merely "citizens," were given this protection. Ibid. In Twining v. New Jersey, 211 U. S.
78 , 211 U. S. 117 ,
Justice Harlan's position was made clear:
"In my judgment, immunity from self-incrimination is protected
against hostile state action not only by . . . [the Privileges and
Immunities Clause], but [also] by . . . [the Due Process
Clause]."
Justice Brewer, in joining the opinion of the Court, abandoned
the view that the entire Bill of Rights applies to the States in Maxwell v. Dow, 176 U. S. 581 .
[ Footnote 2/2 ] See Roth v. United States, 354 U.
S. 476 , 354 U. S. 501 ,
506; Smith v. California, 361 U.
S. 147 , 361 U. S.
169 .
[ Footnote 2/3 ] Beauharnais v. Illinois, 343 U.
S. 250 , 343 U. S. 288 . Cf. the opinions of Justices Holmes and Brandeis in Gitlow v. New York, 268 U. S. 652 , 268 U. S. 672 ,
and Whitney v. California, 274 U.
S. 357 , 274 U. S.
372 .
[ Footnote 2/4 ]
The cases are collected by MR. JUSTICE BLACK in Speiser v.
Randall, 357 U. S. 513 , 357 U. S. 530 . And see Eaton v. Price, 364 U. S. 263 , 364 U. S.
274 -276.
MR. JUSTICE CLARK, concurring in the result.
In Bute v. Illinois, 333 U. S. 640 (1948), this Court found no special circumstances requiring the
appointment of counsel, but stated that,
"if these charges had been capital charges, the court would have
been required, both by the state statute and the decisions of this
Court interpreting the Fourteenth Amendment, to take some such
steps." Id. at 339 U. S. 674 .
Prior to that case, I find no language in any cases in this Court
indicating that appointment of counsel in all capital cases was
required by the Fourteenth Amendment. [ Footnote 3/1 ] At the next Term of the Court, Mr. Justice
Reed revealed that the Court was divided as to noncapital cases,
but that "the due process clause . . . requires counsel for all
persons charged with serious crimes. . . ." Uveges v.
Pennsylvania, 335 U. S. 437 , 335 U. S. 441 (1948). Finally, in Hamilton v. Alabama, 368 U. S.
52 (1961), we said that, "[w]hen one pleads to a capital
charge without benefit of counsel, we do not stop to determine
whether prejudice resulted." Id. at 368 U. S.
55 . Page 372 U. S. 348 That the Sixth Amendment requires appointment of counsel in "all
criminal prosecutions" is clear both from the language of the
Amendment and from this Court's interpretation. See Johnson v.
Zerbst, 304 U. S. 458 (1938). It is equally clear from the above cases, all decided after Betts v. Brady, 316 U. S. 455 (1942), that the Fourteenth Amendment requires such appointment in
all prosecutions for capital crimes. The Court's decision today,
then, does no more than erase a distinction which has no basis in
logic and an increasingly eroded basis in authority. In Kinsella v. United States ex rel. Singleton, 361 U.
S. 234 (1960), we specifically rejected any
constitutional distinction between capital and noncapital offenses
as regards congressional power to provide for court-martial trials
of civilian dependents of armed forces personnel. Having previously
held that civilian dependents could not constitutionally be
deprived of the protections of Article III and the Fifth and Sixth
Amendments in capital cases, Reid v. Covert, 354 U. S.
1 (1957), we held that the same result must follow in
noncapital cases. Indeed, our opinion there foreshadowed the
decision today, [ Footnote 3/2 ] as
we noted that:
"Obviously Fourteenth Amendment cases dealing with state action
have no application here, but if Page 372 U. S. 349 they did, we believe that to deprive civilian dependents of the
safeguards of a jury trial here . . . would be as invalid under
those cases as it would be in cases of a capital nature."
361 U.S. at 361 U. S.
246 -247.
I must conclude here, as in Kinsella, supra, that the
Constitution makes no distinction between capital and noncapital
cases. The Fourteenth Amendment requires due process of law for the
deprival of "liberty," just as for deprival of "life," and there
cannot constitutionally be a difference in the quality of the
process based merely upon a supposed difference in the sanction
involved. How can the Fourteenth Amendment tolerate a procedure
which it condemns in capital cases on the ground that deprival of
liberty may be less onerous than deprival of life -- a value
judgment not universally accepted [ Footnote 3/3 ] -- or that only the latter deprival is
irrevocable? I can find no acceptable rationalization for such a
result, and I therefore concur in the judgment of the Court.
[ Footnote 3/1 ]
It might, however, be said that there is such an implication in Avery v. Alabama, 308 U. S. 444 (1940), a capital case in which counsel had been appointed, but in
which the petitioner claimed a denial of "effective" assistance.
The Court, in affirming, noted that,
"[h]ad petitioner been denied any representation of counsel at
all, such a clear violation of the Fourteenth Amendment's guarantee
of assistance of counsel would have required reversal of his
conviction." Id. at 308 U. S. 445 .
No "special circumstances" were recited by the Court, but, in
citing Powell v. Alabama, 287 U. S.
45 (1932), as authority for its dictum, it appears that
the Court did not rely solely on the capital nature of the
offense.
[ Footnote 3/2 ]
Portents of today's decision may be found as well in Griffin
v. Illinois, 351 U. S. 12 (1956), and Ferguson v. Georgia, 365 U.
S. 570 (1961). In Griffin, a noncapital case,
we held that the petitioner's constitutional rights were violated
by the State's procedure, which provided free transcripts for
indigent defendants only in capital cases. In Ferguson, we
struck down a state practice denying the appellant the effective
assistance of counsel, cautioning that
"[o]ur decision does not turn on the facts that the appellant
was tried for a capital offense and was represented by employed
counsel. The command of the Fourteenth Amendment also applies in
the case of an accused tried for a noncapital offense, or
represented by appointed counsel."
365 U.S. at 365 U. S.
596 .
[ Footnote 3/3 ] See, e.g., Barzun, In Favor of Capital Punishment, 31
American Scholar 181, 188-189 (1962).
MR. JUSTICE HARLAN, concurring.
I agree that Betts v. Brady should be overruled, but
consider it entitled to a more respectful burial than has been
accorded, at least on the part of those of us who were not on the
Court when that case was decided.
I cannot subscribe to the view that Betts v. Brady represented "an abrupt break with its own well considered
precedents." Ante, p. 372 U. S. 344 .
In 1932, in Powell v. Alabama, 287 U. S.
45 , a capital case, this Court declared that, under the
particular facts there presented --
"the ignorance and illiteracy of the defendants, their youth,
the circumstances of public hostility . . . and, above all, that
they stood in deadly peril of their lives"
(287 U.S. at 287 U. S. 71 ) --
the state court had a duty to assign counsel for Page 372 U. S. 350 the trial as a necessary requisite of due process of law. It is
evident that these limiting facts were not added to the opinion as
an afterthought; they were repeatedly emphasized, see 287
U.S. at 287 U. S. 52 , 287 U. S. 57 -58, 287 U. S. 71 ,
and were clearly regarded as important to the result.
Thus, when this Court, a decade later, decided Betts v.
Brady, it did no more than to admit of the possible existence
of special circumstances in noncapital, as well as capital, trials,
while at the same time insisting that such circumstances be shown
in order to establish a denial of due process. The right to
appointed counsel had been recognized as being considerably broader
in federal prosecutions, see Johnson v. Zerbst, 304 U. S. 458 , but
to have imposed these requirements on the States would indeed have
been "an abrupt break" with the almost immediate past. The
declaration that the right to appointed counsel in state
prosecutions, as established in Powell v. Alabama, was not
limited to capital cases was, in truth, not a departure from, but
an extension of, existing precedent.
The principles declared in Powell and in Betts, however, have had a troubled journey throughout the
years that have followed first the one case and then the other.
Even by the time of the Betts decision, dictum in at least
one of the Court's opinions had indicated that there was an
absolute right to the services of counsel in the trial of state
capital cases. [ Footnote 4/1 ] Such
dicta continued to appear in subsequent decisions, [ Footnote 4/2 ] and any lingering doubts were finally
eliminated by the holding of Hamilton v. Alabama, 368 U. S. 52 .
In noncapital cases, the "special circumstances" rule has
continued to exist in form while its substance has been
substantially and steadily eroded. In the first decade after Betts, there were cases in which the Court Page 372 U. S. 351 found special circumstances to be lacking, but usually by a
sharply divided vote. [ Footnote
4/3 ] However, no such decision has been cited to us, and I have
found none, after Quicksall v. Michigan, 339 U.
S. 660 , decided in 1950. At the same time, there have
been not a few cases in which special circumstances were found in
little or nothing more than the "complexity" of the legal questions
presented, although those questions were often of only routine
difficulty. [ Footnote 4/4 ] The
Court has come to recognize, in other words, that the mere
existence of a serious criminal charge constituted, in itself,
special circumstances requiring the services of counsel at trial.
In truth, the Betts v. Brady rule is no longer a
reality.
This evolution, however, appears not to have been fully
recognized by many state courts, in this instance charged with the
front-line responsibility for the enforcement of constitutional
rights. [ Footnote 4/5 ] To continue
a rule which is honored by this Court only with lip service is not
a healthy thing, and, in the long run, will do disservice to the
federal system.
The special circumstances rule has been formally abandoned in
capital cases, and the time has now come when it should be
similarly abandoned in noncapital cases, at least as to offenses
which, as the one involved here, carry the possibility of a
substantial prison sentence. (Whether the rule should extend to all
criminal cases need not now be decided.) This indeed does no more
than to make explicit something that has long since been
foreshadowed in our decisions. Page 372 U. S. 352 In agreeing with the Court that the right to counsel in a case
such as this should now be expressly recognized as a fundamental
right embraced in the Fourteenth Amendment, I wish to make a
further observation. When we hold a right or immunity, valid
against the Federal Government, to be "implicit in the concept of
ordered liberty" [ Footnote 4/6 ] and
thus valid against the States, I do not read our past decisions to
suggest that, by so holding, we automatically carry over an entire
body of federal law and apply it in full sweep to the States. Any
such concept would disregard the frequently wide disparity between
the legitimate interests of the States and of the Federal
Government, the divergent problems that they face, and the
significantly different consequences of their actions. Cf. Roth
v. United States, 354 U. S. 476 , 354 U. S.
496 -508 (separate opinion of this writer). In what is
done today, I do not understand the Court to depart from the
principles laid down in Palko v. Connecticut, 302 U.
S. 319 , or to embrace the concept that the Fourteenth
Amendment "incorporates" the Sixth Amendment as such.
On these premises I join in the judgment of the Court.
[ Footnote 4/1 ] Avery v. Alabama, 308 U. S. 444 , 308 U. S.
445 .
[ Footnote 4/2 ] E.g., Bute v. Illinois, 333 U.
S. 640 , 333 U. S. 674 ; Uveges v. Pennsylvania, 335 U. S. 437 , 335 U. S.
441 .
[ Footnote 4/3 ] E.g., Foster v. Illinois, 332 U.
S. 134 ; Bute v. Illinois, 333 U.
S. 640 ; Gryger v. Burke, 334 U.
S. 728 .
[ Footnote 4/4 ] E.g., Williams v. Kaiser, 323 U.
S. 471 ; Hudson v. North Carolina, 363 U.
S. 697 ; Chewning v. Cunningham, 368 U.
S. 443 .
[ Footnote 4/5 ] See, e.g., Commonwealth ex rel. Simon v. Maroney, 405
Pa. 562, 176 A.2d 94 (1961); Shaffer v. Warden, 211 Md.
635, 126 A.2d 573 (1956); Henderson v. Bannan, 256 F.2d
363 (C.A. 6th Cir.1958).
[ Footnote 4/6 ] Palko v. Connecticut, 302 U. S. 319 , 302 U. S.
325 . | Here is a summary of the Supreme Court case Gideon v. Wainwright:
The Supreme Court held that an indigent defendant in a criminal trial has the right to have legal assistance, which is essential for a fair trial. This right is guaranteed by the Fourteenth Amendment, and state courts are responsible for enforcing it. The Court overruled Betts v. Brady, which allowed states to deny counsel to indigent defendants in non-capital cases. The Court recognized that the right to counsel is a fundamental right and should be explicitly guaranteed in non-capital cases where the defendant faces a substantial prison sentence. Justice Black, delivering the opinion, emphasized that this decision did not mean that the entire body of federal law regarding the right to counsel would be applied to the states. |
Criminal Trials & Prosecutions | Rochin v. California | https://supreme.justia.com/cases/federal/us/342/165/ | U.S. Supreme Court Rochin v. California, 342
U.S. 165 (1952) Rochin v. California No. 83 Argued October 16,
1951 Decided January 2,
1952 342
U.S. 165 CERTIORARI TO THE DISTRICT COURT OF
APPEAL FOR THE SECOND APPELLATE DISTRICT OF
CALIFORNIA Syllabus Having "some information" that petitioner was selling narcotics,
three state officers entered his home and forced their way into the
bedroom occupied by him and his wife. When asked about two capsules
lying on a bedside table, petitioner put them in his mouth. After
an unsuccessful struggle to extract them by force, the officers
took petitioner to a hospital, where an emetic was forced into his
stomach against his will. He vomited two capsules which were found
to contain morphine. These were admitted in evidence over his
objection, and he was convicted in a state court of violating a
state law forbidding possession of morphine. Held: The conviction is reversed, because it was
obtained by methods violative of the Due Process Clause of the
Fourteenth Amendment. Pp. 342 U. S.
166 -174. 101 Cal. App.
2d 140 , 225 P.2d 1, reversed.
In a California state court, petitioner was convicted of
violating a state law forbidding the possession of morphine. The
District Court of Appeal affirmed. 101 Cal. App.
2d 140 , 225 P.2d 1. The State Supreme Court denied a review.
This Court granted certiorari. 341 U.S. 939. Reversed, p. 342 U. S.
174 . Page 342 U. S. 166 MR. JUSTICE FRANKFURTER delivered the opinion of the Court.
Having "some information that [the petitioner here] was selling
narcotics," three deputy sheriffs of the County of Los Angeles, on
the morning of July 1, 1949, made for the two-story dwelling house
in which Rochin lived with his mother, common law wife, brothers
and sisters. Finding the outside door open, they entered and then
forced open the door to Rochin's room on the second floor. Inside
they found petitioner sitting partly dressed on the side of the
bed, upon which his wife was lying. On a "night stand" beside the
bed, the deputies spied two capsules. When asked "Whose stuff is
this?", Rochin seized the capsules and put them in his mouth. A
struggle ensued in the course of which the three officers "jumped
upon him" and attempted to extract the capsules. The force they
applied proved unavailing against Rochin's resistance. He was
handcuffed and taken to a hospital. At the direction of one of the
officers, a doctor forced an emetic solution through a tube into
Rochin's stomach against his will. This "stomach pumping" produced
vomiting. In the vomited matter were found two capsules which
proved to contain morphine.
Rochin was brought to trial before a California Superior Court,
sitting without a jury, on the charge of possessing "a preparation
of morphine" in violation of the California Health and Safety Code
1947, § 11500. Rochin was convicted and sentenced to sixty days'
imprisonment. The chief evidence against him was the two capsules.
They were admitted over petitioner's objection, although the means
of obtaining them was frankly set forth in the testimony by one of
the deputies, substantially as here narrated.
On appeal, the District Court of Appeal affirmed the conviction,
despite the finding that the officer
"were Page 342 U. S. 167 guilty of unlawfully breaking into and entering defendant's
room, and were guilty of unlawfully assaulting and battering
defendant while in the room,"
and "were guilty of unlawfully assaulting, battering, torturing
and falsely imprisoning the defendant at the alleged hospital." 101 Cal. App.
2d 140 , 143, 225 P.2d 1, 3. One of the three judges, while
finding that "the record in this case reveals a shocking series of
violations of constitutional rights", concurred only because he
felt bound by decisions of his Supreme Court. These, he asserted,
"have been looked upon by law enforcement officers as an
encouragement, if not an invitation, to the commission of such
lawless acts." Ibid. The Supreme Court of California
denied without opinion Rochin's petition for a hearing. [ Footnote 1 ] Two justice dissented from
this denial, and, in doing so, expressed themselves thus:
". . . a conviction which rests upon evidence of incriminating
objects obtained from the body of the accused by physical abuse is
as invalid as a conviction which rests upon a verbal confession
extracted from him by such abuse. . . . Had the evidence forced
from defendant's lips consisted of an oral confession that he
illegally possessed a drug . . . , he would have the protection of
the rule of law which excludes coerced confessions from evidence.
But because the evidence forced from his lips consisted of real
objects, the People of this state are permitted to base a
conviction upon it. [We] find no valid ground of distinction
between a verbal confession extracted by physical abuse and a
confession wrested from defendant's body by physical abuse."
101 Cal. App. 2d 143, 149-150, 225 P.2d 913, 917-918. Page 342 U. S. 168 This Court granted certiorari, 341 U.S. 939, because a serious
question is raised as to the limitations which the Due Process
Clause of the Fourteenth Amendment imposes on the conduct of
criminal proceedings by the States.
In our federal system, the administration of criminal justice is
predominantly committed to the care of the States. The power to
define crimes belongs to Congress only as an appropriate means of
carrying into execution its limited grant of legislative powers.
U.S.Const. Art. I, § 8, cl. 18. Broadly speaking, crimes in the
United States are what the laws of the individual States make them,
subject to the limitations of Art. I, § 10, cl. 1, in the original
Constitution, prohibiting bills of attainder and ex post
facto laws, and of the Thirteenth and Fourteenth
Amendments.
These limitations, in the main, concern not restrictions upon
the powers of the States to define crime, except in the restricted
area where federal authority has preempted the field, but
restrictions upon the manner in which the States may enforce their
penal codes. Accordingly, in reviewing a State criminal conviction
under a claim of right guaranteed by the Due Process Clause of the
Fourteenth Amendment, from which is derived the most far-reaching
and most frequent federal basis of challenging State criminal
justice,
"we must be deeply mindful of the responsibilities of the States
for the enforcement of criminal laws, and exercise with due
humility our merely negative function in subjecting convictions
from state courts to the very narrow scrutiny which the Due Process
Clause of the Fourteenth Amendment authorizes." Malinski v. New York, 324 U. S. 401 , 324 U. S. 412 , 324 U. S. 418 .
Due process of law, "itself a historical product," Jackman v.
Rosenbaum Co., 260 U. S. 22 , 260 U. S. 31 , is
not to be turned into a destructive dogma against the States in the
administration of their systems of criminal justice. Page 342 U. S. 169 However, this Court too has its responsibility. Regard for the
requirements of the Due Process Clause
"inescapably imposes upon this Court an exercise of judgment
upon the whole course of the proceedings [resulting in a
conviction] in order to ascertain whether they offend those canons
of decency and fairness which express the notions of justice of
English-speaking peoples even toward those charged with the most
heinous offenses." Malinski v. New York, supra, at 324 U. S.
416 -417. These standards of justice are not
authoritatively formulated anywhere as though they were specifics.
Due process of law is a summarized constitutional guarantee of
respect for those personal immunities which, as Mr. Justice Cardozo
twice wrote for the Court, are "so rooted in the traditions and
conscience of our people as to be ranked as fundamental," Snyder v. Massachusetts, 291 U. S. 97 , 291 U. S. 105 ,
or are "implicit in the concept of ordered liberty." Palko v.
Connecticut, 302 U. S. 319 , 302 U. S. 325 .
[ Footnote 2 ]
The Court's function in the observance of this settled
conception of the Due Process Clause does not leave us without
adequate guides in subjecting State criminal procedures to
constitutional judgment. In dealing not with the machinery of
government, but with human rights, the absence of formal
exactitude, or want of fixity of meaning, is not an unusual, or
even regrettable, attribute of constitutional provisions. Words
being symbols do not speak without a gloss. On the one hand, the
gloss may be the deposit of history, whereby a term gains technical
content. Thus the requirements of the Sixth and Seventh Amendments
for trial by jury in the federal Page 342 U. S. 170 courts have a rigid meaning. No changes or chances can alter the
content of the verbal symbol of "jury" -- a body of twelve men who
must reach a unanimous conclusion if the verdict is to go against
the defendant. [ Footnote 3 ] On
the other hand, the gloss of some of the verbal symbols of the
Constitution does not give them a fixed technical content. It
exacts a continuing process of application.
When the gloss has thus not been fixed, but is a function of the
process of judgment, the judgment is bound to fall differently at
different times and differently at the same time through different
judges. Even more specific provisions, such as the guaranty of
freedom of speech and the detailed protection against unreasonable
searches and seizures, have inevitably evoked as sharp divisions in
this Court as the least specific and most comprehensive protection
of liberties, the Due Process Clause.
The vague contours of the Due Process Clause do not leave judges
at large. [ Footnote 4 ] We may
not draw on our merely personal and private notions and disregard
the limits that bind judges in their judicial function. Even though
the concept of due process of law is not final and fixed, these
limits are derived from considerations that are fused in the whole
nature of or judicial process. See Cardozo, Page 342 U. S. 171 The Nature of the Judicial Process; The Growth of the Law; The
Paradoxes of Legal Science. These are considerations deeply rooted
in reason and in the compelling traditions of the legal profession.
The Due Process Clause places upon this Court the duty of
exercising a judgment, within the narrow confines of judicial power
in reviewing State convictions, upon interests of society pushing
in opposite directions.
Due process of law, thus conceived, is not to be derided as
resort to a revival of "natural law." [ Footnote 5 ] To believe that this judicial exercise of
judgment could be avoided by freezing "due process of law" at some
fixed stage of time or thought is to suggest that the most
important aspect of constitutional adjudication is a function for
inanimate machines, and not for judges, for whom the independence
safeguarded by Article III of the Constitution was designed and who
are presumably guided by established standards of judicial
behavior. Even cybernetics has not yet made that haughty claim. To
practice the requisite detachment and to achieve sufficient
objectivity no doubt demands of judges the habit of self-discipline
and self-criticism, incertitude that one's own views are
incontestable, and alert tolerance toward views not shared. But Page 342 U. S. 172 these are precisely the presuppositions of our judicial process.
They are precisely the qualities society has a right to expect from
those entrusted with ultimate judicial power.
Restraints on our jurisdiction are self-imposed only in the
sense that there is from our decisions no immediate appeal short of
impeachment or constitutional amendment. But that does not make due
process of law a matter of judicial caprice. The faculties of the
Due Process Clause may be indefinite and vague, but the mode of
their ascertainment is not self-willed. In each case, "due process
of law" requires an evaluation based on a disinterested inquiry
pursued in the spirit of science, on a balanced order of facts
exactly and fairly stated, on the detached consideration of
conflicting claims, see Hudson County Water Co. v.
McCarter, 209 U. S. 349 , 209 U. S. 355 ,
on a judgment not ad hoc and episodic, but duly mindful of
reconciling the needs both of continuity and of change in a
progressive society.
Applying these general considerations to the circumstances of
the present case, we are compelled to conclude that the proceedings
by which this conviction was obtained do more than offend some
fastidious squeamishness or private sentimentalism about combatting
crime too energetically. This is conduct that shocks the
conscience. Illegally breaking into the privacy of the petitioner,
the struggle to open his mouth and remove what was there, the
forcible extraction of his stomach's contents -- this course of
proceeding by agents of government to obtain evidence is bound to
offend even hardened sensibilities. They are methods too close to
the rack and the screw to permit of constitutional
differentiation.
It has long since ceased to be true that due process of law is
heedless of the means by which otherwise relevant and credible
evidence is obtained. This was not true even before the series of
recent cases enforced the constitutional principle that the States
may not base convictions upon Page 342 U. S. 173 confessions, however much verified, obtained by coercion. These
decisions are not arbitrary exceptions to the comprehensive right
of States to fashion their own rules of evidence for criminal
trials. They are not sports in our constitutional law, but
applications of a general principle. They are only instances of the
general requirement that States, in their prosecutions, respect
certain decencies of civilized conduct. Due process of law, as a
historic and generative principle, precludes defining, and thereby
confining, these standards of conduct more precisely than to say
that convictions cannot be brought about by methods that offend "a
sense of justice." See Mr. Chief Justice Hughes, speaking
for a unanimous Court in Brown v. Mississippi, 297 U. S. 278 , 297 U. S.
285 -286. It would be a stultification of the
responsibility which the course of constitutional history has cast
upon this Court to hold that in order to convict a man the police
cannot extract by force what is in his mind but can extract what is
in his stomach. [ Footnote
6 ]
To attempt in this case to distinguish what lawyers call "real
evidence" from verbal evidence is to ignore the reasons for
excluding coerced confessions. Use of involuntary verbal
confessions in State criminal trials is constitutionally obnoxious
not only because of their unreliability. They are inadmissible
under the Due Process Clause even though statements contained in
them may be independently established as true. Coerced confessions
offend the community's sense of fair play and decency. So here, to
sanction the brutal conduct which, naturally enough, was condemned
by the court whose judgment is before us would be to afford
brutality the cloak of law. Nothing Page 342 U. S. 174 would be more calculated to discredit law, and thereby to
brutalize the temper of a society.
In deciding this, case we do not heedlessly bring into question
decisions in many States dealing with essentially different, even
if related, problems. We therefore put to one side cases which have
arisen in the State courts through use of modern methods and
devices for discovering wrongdoers and bringing them to book. It
does not fairly represent these decisions to suggest that they
legalize force so brutal and so offensive to human dignity in
securing evidence from a suspect as is revealed by this record.
Indeed, the California Supreme Court has not sanctioned this mode
of securing a conviction. It merely exercised its discretion to
decline a review of the conviction. All the California judges who
have expressed themselves in this case have condemned the conduct
in the strongest language.
We are not unmindful that hypothetical situations can be
conjured up standing imperceptibly from the circumstances of this
case and, by gradations, producing practical differences despite
seemingly logical extensions. But the Constitution is "intended to
preserve practical and substantial rights, not to maintain
theories." Davis v. Mills, 194 U.
S. 451 , 194 U. S.
457 .
On the facts of this case, the conviction of the petitioner has
been obtained by methods that offend the Due Process Clause. The
judgment below must be reversed. Reversed. MR. JUSTICE MINTON took no part in the consideration or decision
of this case.
[ Footnote 1 ]
The petition for a hearing is addressed to the discretion of the
California Supreme Court, and a denial has apparently the same
significance as the denial of certiorari in this Court. Cal.Const.
Art. VI, §§ 4, 4c; "Rules on Appeal," Rules 28, 29, 36 Cal. 2d
24-25 (1951). See 3 Stan.L.Rev. 243-269 (1951).
[ Footnote 2 ]
What is here summarized was deemed by a majority of the Court,
in Malinski v. New York, 324 U. S. 401 , 324 U. S. 412 and 324 U. S. 438 ,
to be "the controlling principles upon which this Court reviews on
constitutional grounds a state court conviction for crime." They
have been applied by this Court many times, long before and since
the Malinski case.
[ Footnote 3 ]
This is the federal jury required constitutionally, although
England and at least half of the States have, in some civil cases,
juries which are composed of less than 12 or whose verdict may be
less than unanimous. See County Courts Act, 1934, 24 &
25 Geo. V, c. 53, § 93; Arizona State Legislative Bureau,
Legislative Briefs No. 4, Grand and Petit Juries in the United
States, v-vi (Feb. 15, 1940); The Council of State Governments, The
Book of the States, 1950-1951, 515.
[ Footnote 4 ]
Burke's observations on the method of ascertaining law by judges
are pertinent:
"Your committee do not find any positive law which binds the
judges of the courts in Westminster-hall publicly to give a
reasoned opinion from the bench in support of their judgment upon
matters that are stated before them. But the course hath prevailed
from the oldest times. It hath been so general and so uniform that
it must be considered as the law of the land."
Report of the Committee of Managers on the Causes of the
Duration of Mr. Hastings' Trial, 4 Speeches of Edmund Burke (1816),
200-201.
And Burke had an answer for those who argue that the liberty of
the citizen cannot be adequately protected by the flexible
conception of due process of law:
". . . the English jurisprudence has not any other sure
foundation, nor consequently the lives and properties of the
subject any sure hold, but in the maxims, rules, and principles,
and juridical traditionary line of decisions. . . ." Id. at 201.
[ Footnote 5 ]
Morris R. Cohen, " Jus Naturale Redivivum, " 25
Philosophical Review 761 (1916), and "Natural Rights and Positive
Law," Reason and Nature 401-426 (1631); F. Pollock, "The History of
the Law of Nature," Essays in the Law 31-79 (1922).
[ Footnote 6 ]
As to the difference between the privilege against
self-crimination protected, in federal prosecutions, under the
Fifth Amendment and the limitations which the Due Process Clause of
the Fourteenth Amendment imposes upon the States against the use of
coerced confessions, see Brown v. Mississippi, supra, 297
U.S. at 297 U. S.
285 .
MR. JUSTICE BLACK, concurring. Adamson v. California, 332 U. S.
46 , 332 U. S.
68 -123, sets out reasons for my belief that state, as
well as federal, courts and law enforcement officers must obey the
Fifth Amendment's command that "No person . . . shall be
compelled Page 342 U. S. 175 in any criminal case to be a witness against himself." I think a
person is compelled to be a witness against himself not only when
he is compelled to testify, but also when as here, incriminating
evidence is forcibly taken from him by a contrivance of modern
science. Cf. Boyd v. United States, 116 U.
S. 616 ; Counselman v. Hitchcock, 142 U.
S. 547 , 142 U. S. 562 ; Bram v. United States, 168 U. S. 532 ; Chambers v. Florida, 309 U. S. 227 .
California convicted this petitioner by using against him evidence
obtained in this manner, and I agree with MR. JUSTICE DOUGLAS that
the case should be reversed on this ground.
In the view of a majority of the Court, however, the Fifth
Amendment imposes no restraint of any kind on the states. They
nevertheless hold that California's use of this evidence violated
the Due Process Clause of the Fourteenth Amendment. Since they hold
as I do in this case, I regret my inability to accept their
interpretation without protest. But I believe that faithful
adherence to the specific guarantees in the Bill of Rights insures
a more permanent protection of individual liberty than that which
can be afforded by the nebulous standards stated by the
majority.
What the majority hold is that the Due Process Clause empowers
this Court to nullify any state law if its application "shocks the
conscience," offends "a sense of justice," or runs counter to the
"decencies of civilized conduct." The majority emphasize that these
statements do not refer to their own consciences, or to their
senses of justice and decency. For we are told that "we may not
draw on our merely personal and private notions"; our judgment must
be grounded on "considerations deeply rooted in reason and in the
compelling traditions of the legal profession." We are further
admonished to measure the validity of state practices not by our
reason or by the traditions of the legal profession, but by "the
community's sense of fair play and decency"; by the "traditions and
conscience of our people"; or by "those canons of decency and
fairness Page 342 U. S. 176 which express the notions of justice of English-speaking
peoples." These canons are made necessary, it is said, because of
"interests of society pushing in opposite directions."
If the Due Process Clause does vest this Court with such
unlimited power to invalidate laws, I am still in doubt as to why
we should consider only the notions of English-speaking peoples to
determine what are immutable and fundamental principles of justice.
Moreover, one may well ask what avenues of investigation are open
to discover "canons" of conduct so universally favored that this
Court should write them into the Constitution? All we are told is
that the discovery must be made by an "evaluation based on a
disinterested inquiry pursued in the spirit of science, on a
balanced order of facts."
Some constitutional provisions are stated in absolute and
unqualified language, such, for illustration, as the First
Amendment, stating that no law shall be passed prohibiting the free
exercise of religion or abridging the freedom of speech or press.
Other constitutional provisions do require courts to choose between
competing policies, such as the Fourth Amendment, which, by its
terms, necessitates a judicial decision as to what is an
"unreasonable" search or seizure. There is, however, no express
constitutional language granting judicial power to invalidate every
state law of every kind deemed "unreasonable" or contrary to the
Court's notion of civilized decencies; yet the constitutional
philosophy used by the majority has, in the past, been used to deny
a state the right to fix the price of gasoline, Williams v.
Standard Oil Co. of Louisiana, 278 U.
S. 235 ; and even the right to prevent bakers from
palming off smaller for larger loaves of bread, Jay Burns
Baking Co. v. Bryan, 264 U. S. 504 .
These cases, and others, [ Footnote
2/1 ] Page 342 U. S. 177 show the extent to which the evanescent standards of the
majority's philosophy have been used to nullity state legislative
programs passed to suppress evil economic practices. What
paralyzing role this same philosophy will play in the future
economic affairs of this country is impossible to predict. Of even
graver concern, however, is the use of the philosophy to nullify
the Bill of Rights. I long ago concluded that the accordion-like
qualities of this philosophy must inevitably imperil all the
individual liberty safeguards specifically enumerated in the Bill
of Rights. [ Footnote 2/2 ]
Reflection and recent decisions [ Footnote 2/3 ] of this Court sanctioning abridgment of
the freedom of speech and press have strengthened this
conclusion.
[ Footnote 2/1 ] See n. 12 of dissenting opinion, Adamson v.
California, supra, at p. 332 U. S.
83 .
[ Footnote 2/2 ] E.g., Adamson v. California, supra, and cases cited in
the dissent.
[ Footnote 2/3 ] American Communications Ass'n v. Douds, 339 U.
S. 382 ; Feiner v. New York, 340 U.
S. 315 ; Dennis v. United States, 341 U.
S. 494 .
MR. JUSTICE DOUGLAS, concurring.
The evidence obtained from this accused's stomach would be
admissible in the majority of states where the question has been
raised. [ Footnote 3/1 ] So far as
the reported cases reveal, the only states which would probably
exclude the evidence would be Arkansas, Iowa, Michigan, and
Missouri. [ Footnote 3/2 ] Page 342 U. S. 178 Yet the Court now says that the rule which the majority of the
states have fashioned violates the "decencies of civilized
conduct." To that, I cannot agree. It is a rule formulated by
responsible courts with judges as sensitive as we are to the proper
standards for law administration.
As an original matter, it might be debatable whether the
provision in the Fifth Amendment that no person "shall be compelled
in any criminal case to be a witness against himself" serves the
ends of justice. Not all civilized legal procedures recognize it.
[ Footnote 3/3 ] But the choice was
made by the Framers, a choice which sets a standard for legal
trials in this country. The Framers made it Page 342 U. S. 179 a standard of due process for prosecutions by the Federal
Government. If it is a requirement of due process for a trial in
the federal courthouse, it is impossible for me to say it is not a
requirement of due process for a trial in the state courthouse.
That was the issue recently surveyed in Adamson v.
California, 332 U. S. 46 . The
Court rejected the view that compelled testimony should be
excluded, and held, in substance, that the accused in a state trial
can be forced to testify against himself. I disagree. Of course, an
accused can be compelled to be present at the trial, to stand, to
sit, to turn this way or that, and to try on a cap or a coat. See Holt v. United States, 218 U.
S. 245 , 218 U. S.
252 -253. But I think that words taken from his lips,
capsules taken from his stomach, blood taken from his veins, are
all inadmissible provided they are taken from him without his
consent. They are inadmissible because of the command of the Fifth
Amendment.
That is an unequivocal, definite and workable rule of evidence
for state and federal courts. But we cannot, in fairness, free the
state courts from that command and yet excoriate them for flouting
the "decencies of civilized conduct" when they admit the evidence.
That is to make the rule turn not on the Constitution, but on the
idiosyncrasies of the judges who sit here.
The damage of the view sponsored by the Court in this case may
not be conspicuous here. But it is part of the same philosophy that
produced Betts v. Brady, 316 U. S. 455 ,
denying counsel to an accused in a state trial against the command
of the Sixth Amendment, and Wolf v. Colorado, 338 U. S.
25 , allowing evidence obtained as a result of a search
and seizure that is illegal under the Fourth Amendment to be
introduced in a state trial. It is part of the process of erosion
of civil rights of the citizen in recent years.
[ Footnote 3/1 ] See People v. One 1941 Mercury Sedan, 74 Cal. App. 2d
199 , 168 P.2d 443 (pumping of accused's stomach to recover
swallowed narcotic); Rochin v. California, 101 Cal. App.
2d 140 , 225 P.2d 1 (pumping of accused's stomach to recover
swallowed narcotic); People v. Tucker, 88 Cal. App. 2d
333 , 198 P.2d 941 (blood test to determine intoxication); State v. Ayres, 70 Idaho 18, 211 P.2d 142 (blood test to
determine intoxication); Davis v. State, 189 Md. 640, 57
A.2d 289 (blood typing to link accused with murder); Skidmore
v. State, 59 Nev. 320, 92 P.2d 979 (examination of accused for
venereal disease); State v. Sturtevant, 96 N.H. 99, 70
A.2d 909 (blood test to determine intoxication); State v.
Alexander, 7 N.J. 585, 83 A.2d
441 (blood typing to establish guilt); State v.
Gatton, 60 Ohio App. 192 (commenting on refusal to submit to
blood test or urinalysis to determine intoxication); State v.
Nutt, 78 Ohio App. 336, 65 N.E.2d 675 (commenting on refusal
to submit to urinalysis to determine intoxication); but cf.
Booker v. City of Cincinnati, 1 Ohio Supp. 152 (examination
and urinalysis to determine intoxication); State v. Cram, 176 Or. 577, 160 P.2d 283 (blood test to determine intoxication); Commonwealth v. Statti, 166 Pa.Super. 577, 73 A.2d 688
(blood typing linking accused to assault).
[ Footnote 3/2 ] Bethel v. State, 178 Ark. 277, 10 S.W.2d 370
(examination for venereal disease); State v. Height, 117
Iowa 650, 91 N.W. 935 (examination for venereal disease); State
v. Weltha, 228 Iowa 519, 292 N.W. 148 (blood test to determine
intoxication, limiting rules on search and seizure); but cf.
State v. Benson, 230 Iowa 1168, 300 N.W. 275 (comment on
refusal to submit to blood test to determine intoxication); People v. Corder, 244 Mich. 274, 221 N.W. 309 (examination
for venereal disease); but see People v. Placido, 310
Mich. 404, 408, 17 N.W.2d 230, 232; State v. Newcomb, 220
Mo. 54, 119 S.W. 405 (examination for venereal disease); State
v. Matsinger, Mo., 180 S.W. 856 (examination for venereal
disease).
[ Footnote 3/3 ] See Ploscowe, The Investigating Magistrate in European
Criminal Procedure, 33 Mich.L.Rev. 1010 (1935). | In Rochin v. California, the Supreme Court reversed the conviction of a man for possessing morphine, as the evidence against him was obtained through forced stomach pumping by police officers. The Court held that the methods used to obtain the evidence violated the Due Process Clause of the Fourteenth Amendment, setting a precedent for protecting civil liberties and rights, even in state trials. |
Criminal Trials & Prosecutions | Johnson v. Zerbst | https://supreme.justia.com/cases/federal/us/304/458/ | U.S. Supreme Court Johnson v. Zerbst, 304
U.S. 458 (1938) Johnson v. Zerbst No. 699 Argued April 4, 1938 Decided May 23, 1938 304
U.S. 458 CERTIORARI TO THE CIRCUIT COURT OF
APPEALS FOR THE FIFTH
CIRCUIT Syllabus 1. A person charged with crime in a federal court is entitled by
the Sixth Amendment to the assistance of counsel for his defense.
P. 304 U. S.
462 .
2. This right may be waived, but the waiver must be an
intelligent one, and whether there was such must depend upon the
particular facts and circumstances, including background,
experience, and conduct of accused. P. 304 U. S.
464 .
3. It is a duty of a federal court in the trial of a criminal
case to protect the right of the accused to counsel, and, if he has
no counsel, to determine whether he has intelligently and
competently waived the right. It would be fitting that such
determination be made a matter of record. P. 304 U. S.
465 .
4. If the accused is not represented by counsel and has not
competently and intelligently waived his constitutional right, the
Sixth Amendment stands as a jurisdictional bar to a valid
conviction and sentence depriving him of his life or his liberty.
P. 304 U. S.
468 .
5. The question whether the assistance of counsel was
intelligently and competently waived by the prisoner at his trial
may be determined in habeas corpus proceedings on proofs aliunde. P. 304 U. S.
467 .
92 F.2d 748, reversed.
CERTIORARI, 303 U.S. 629, to review the affirmance of a judgment
of the District Court discharging a writ of habeas corpus. See 13 F. Supp.
253 .
MR. JUSTICE BLACK delivered the opinion of the Court.
Petitioner, while imprisoned in a federal penitentiary, was
denied habeas corpus by the District Court. [ Footnote 1 ] Later, Page 304 U. S. 459 that court granted petitioner a second hearing, prompted by
"the peculiar circumstances surrounding the case and the desire
of the court to afford opportunity to present any additional facts
and views which petitioner desired to present."
Upon consideration of the second petition, the court found that
it did "not substantially differ from the" first, "and for the
reasons stated in the decision in that case" the second petition
was also denied.
Petitioner is serving sentence under a conviction in a United
States District Court for possessing and uttering counterfeit
money. It appears from the opinion of the District Judge denying
habeas corpus that he believed petitioner was deprived, in the
trial court, of his constitutional right under the provision of the
Sixth Amendment that "In all criminal prosecutions, the accused
shall enjoy the right . . . to have the Assistance of Counsel for
his defence." [ Footnote 2 ]
However, he held that proceedings depriving petitioner of his
constitutional right to assistance of counsel were not
sufficient
"to make the trial void and justify its annulment in a habeas
corpus proceeding, but that they constituted trial errors or
irregularities which could only be corrected on appeal."
The Court of Appeals affirmed, [ Footnote 3 ] and we granted certiorari due to the
importance of the questions involved. [ Footnote 4 ]
The record discloses that:
Petitioner and one Bridwell were arrested in Charleston, South
Carolina, November 21, 1934, charged with Page 304 U. S. 460 feloniously uttering and passing four counterfeit twenty-dollar
Federal Reserve notes and possessing twenty-one such notes. Both
were then enlisted men in the United States Marine Corps, on leave.
They were bound over to await action of the United States Grand
Jury, but were kept in jail due to inability to give bail. January
21, 1935, they were indicted; January 23, 1935, they were taken to
court, and there first given notice of the indictment; immediately
were arraigned, tried, convicted and sentenced that day to four and
one-half years in the penitentiary, and January 25, were
transported to the Federal Penitentiary in Atlanta. While counsel
had represented them in the preliminary hearings before the
commissioner in which they -- some two months before their trial --
were bound over to the Grand Jury, the accused were unable to
employ counsel for their trial. Upon arraignment, both pleaded not
guilty, said that they had no lawyer, and -- in response to an
inquiry of the court -- stated that they were ready for trial. They
were then tried, convicted and sentenced, without assistance of
counsel.
"Both petitioners lived in distant cities of other states, and
neither had relatives, friends, or acquaintances in Charleston.
Both had little education, and were without funds. They testified
that they had never been guilty of nor charged with any offense
before, and there was no evidence in rebuttal of these statements.
[ Footnote 5 ]"
In the habeas corpus hearing, petitioner's evidence developed
that no request was directed to the trial judge to appoint counsel,
but that such request was made to the District Attorney, who
replied that, in the State of trial (South Carolina), the court did
not appoint counsel unless the defendant was charged with a capital
crime. The District Attorney denied that petitioner made
request Page 304 U. S. 461 to him for counsel or that he had indicated petitioner had no
right to counsel. The Assistant District Attorney testified that
Bridwell "cross-examined the witnesses"; and, in his opinion,
displayed more knowledge of procedure than the normal layman would
possess. He did not recall whether Bridwell addressed the jury or
not, but the clerk of the trial court testified "that Mr. Johnson
[Bridwell?] conducted his defence about as well as the average
layman usually does in cases of a similar nature." Concerning what
he said to the jury and his cross-examination of witnesses,
Bridwell testified
"I tried to speak to the jury after the evidence was in during
my trial over in the Eastern District of South Carolina. I told the
jury, 'I don't consider myself a hoodlum as the District Attorney
has made me out several times.' I told the jury that I was not a
native of New York as the District Attorney stated, but was from
Mississippi, and only stationed for government service in New York.
I only said fifteen or twenty words. I said I didn't think I was a
hoodlum, and could not have been one of very long standing because
they didn't keep them in the Marine Corps."
"I objected to one witness' testimony. I didn't ask him any
questions, I only objected to his whole testimony. After the
prosecuting attorney was finished with the witness, he said, 'Your
witness,' and I got up and objected to the testimony on the grounds
that it was all false, and the Trial Judge said any objection I had
I would have to bring proof or disproof."
Reviewing the evidence on the petition for habeas corpus, the
District Court said [ Footnote
6 ] that, after trial, petitioner and Johnson
". . . were remanded to jail, where they asked the jailer to
call a lawyer for them, but were not permitted to contact one. They
did not, however, undertake to get any message to the judge. " Page 304 U. S. 462 ". . . January 25th, they were transported by automobile to the
Federal Penitentiary in Atlanta, Ga. arriving . . . the same
day."
"There, as is the custom, they were placed in isolation and so
kept for sixteen days without being permitted to communicate with
anyone except the officers of the institution, but they did see the
officers daily. They made no request of the officers to be
permitted to see a lawyer, nor did they ask the officers to present
to the trial judge a motion for new trial or application for appeal
or notice that they desired to move for a new trial or to take an
appeal."
"On May 15, 1935, petitioners filed applications for appeal
which were denied because filed too late."
The " . . . time for filing a motion for new trial and for
taking an appeal has been limited to three and five days."
[ Footnote 7 ] One. The Sixth Amendment guarantees that, "In all
criminal prosecutions, the accused shall enjoy the right . . . to
have the Assistance of Counsel for his defence." This is one of the
safeguards of the Sixth Amendment deemed necessary to insure
fundamental human rights of life and liberty. Omitted from the
Constitution as originally adopted, provisions of this and other
Amendments were submitted by the first Congress convened under that
Constitution as essential barriers against arbitrary or unjust
deprivation of human rights. The Sixth Amendment stands as a
constant admonition that, if the constitutional safeguards it
provides be lost, justice will not "still be done." [ Footnote 8 ] It embodies a realistic
recognition of the obvious truth that the average defendant does
not have the professional legal skill to protect Page 304 U. S. 463 himself when brought before a tribunal with power to take his
life or liberty, wherein the prosecution is presented by
experienced and learned counsel. That which is simple, orderly and
necessary to the lawyer, to the untrained layman may appear
intricate, complex and mysterious. Consistently with the wise
policy of the Sixth Amendment and other parts of our fundamental
charter, this Court has pointed to " . . . the humane policy of the
modern criminal law . . ." which now provides that a defendant " .
. . if he be poor, . . . may have counsel furnished him by the
state . . . not infrequently . . . more able than the attorney for
the state." [ Footnote 9 ]
The
". . . right to be heard would be, in many cases, of little
avail if it did not comprehend the right to be heard by counsel.
Even the intelligent and educated layman has small and sometimes no
skill in the science of law. If charged with crime, he is
incapable, generally, of determining for himself whether the
indictment is good or bad. He is unfamiliar with the rules of
evidence. Left without the aid of counsel, he may be put on trial
without a proper charge, and convicted upon incompetent evidence,
or evidence irrelevant to the issue or otherwise inadmissible. He
lacks both the skill and knowledge adequately to prepare his
defence, even though he have a perfect one. He requires the guiding
hand of counsel at every step in the proceedings against him.
[ Footnote 10 ]"
The Sixth Amendment withholds from federal courts, [ Footnote 11 ] in all criminal
proceedings, the power and authority to deprive an accused of his
life or liberty unless he has or waives the assistance of
counsel. Page 304 U. S. 464 Two. There is insistence here that petitioner waived
this constitutional right. The District Court did not so find. It
has been pointed out that "courts indulge every reasonable
presumption against waiver" of fundamental constitutional rights,
[ Footnote 12 ] and that we
"do not presume acquiescence in the loss of fundamental rights."
[ Footnote 13 ] A waiver is
ordinarily an intentional relinquishment or abandonment of a known
right or privilege. The determination of whether there has been an
intelligent waiver of the right to counsel must depend, in each
case, upon the particular facts and circumstances surrounding that
case, including the background, experience, and conduct of the
accused. Patton v. United States, 281 U.
S. 276 , decided that an accused may, under certain
circumstances, consent to a jury of eleven and waive the right to
trial and verdict by a constitutional jury of twelve men. The
question of waiver was there considered on direct appeal from the
conviction, and not by collateral attack on habeas corpus. However,
that decision may be helpful in indicating how, and in what manner,
an accused may -- before his trial results in final judgment and
conviction -- waive the right to assistance of counsel. The Patton ease noted approvingly a state court decision
[ Footnote 14 ] pointing out
that the humane policy of modern criminal law had altered
conditions which had existed in the "days when the accused could
not testify in his own behalf, [and] was not furnished Counsel,"
and which had made it possible to convict a man when he was
"without money, without counsel, without ability to summon
witnesses and not permitted to tell his own story, . . ." Page 304 U. S. 465 The constitutional right of an accused to be represented by
counsel invokes, of itself, the protection of a trial court in
which the accused -- whose life or liberty is at stake -- is
without counsel. This protecting duty imposes the serious and
weighty responsibility upon the trial judge of determining whether
there is an intelligent and competent waiver by the accused. While
an accused may waive the right to counsel, whether there is a
proper waiver should be clearly determined by the trial court, and
it would be fitting and appropriate for that determination to
appear upon the record. Three. The District Court, holding petitioner could not
obtain relief by habeas corpus, said:
"It is unfortunate if petitioners lost their right to a new
trial through ignorance or negligence, but such misfortune cannot
give this Court jurisdiction in a habeas corpus case to review and
correct the errors complained of."
The purpose of the constitutional guaranty of a right to counsel
is to protect an accused from conviction resulting from his own
ignorance of his legal and constitutional rights, and the guaranty
would be nullified by a determination that an accused's ignorant
failure to claim his rights removes the protection of the
Constitution. True, habeas corpus cannot be used as a means of
reviewing errors of law and irregularities -- not involving the
question of jurisdiction -- occurring during the course of trial;
[ Footnote 15 ] and the "writ
of habeas corpus cannot be used as a writ of error." [ Footnote 16 ] These principles,
however, must be construed and applied so as to preserve -- not
destroy -- constitutional safeguards of human life and liberty. The
scope of inquiry in habeas corpus proceedings has been broadened --
not narrowed -- since the adoption of the Sixth Page 304 U. S. 466 Amendment. In such a proceeding, "it would be clearly erroneous
to confine the inquiry to the proceedings and judgment of the trial
court," [ Footnote 17 ] and
the petitioned court has
"power to inquire with regard to the jurisdiction of the
inferior court, either in respect to the subject matter or to the
person, even if such inquiry . . . [involves] an examination of
facts outside of, but not inconsistent with, the record. [ Footnote 18 ]"
Congress has expanded the rights of a petitioner for habeas
corpus, [ Footnote 19 ] and
the
". . . effect is to substitute for the bare legal review that
seems to have been the limit of judicial authority under the common
law practice, and under the Act of 31 Car. II, c. 2, a more
searching investigation, in which the applicant is put upon his
oath to set forth the truth of the matter respecting the causes of
his detention, and the court, upon determining the actual facts, is
to 'dispose of the party as law and justice require.'"
"There being no doubt of the authority of the Congress to thus
liberalize the common law procedure on habeas corpus in order to
safeguard the liberty of all persons within the jurisdiction of the
United States against infringement through any violation of the
Constitution or a law or treaty established thereunder, it results
that, under the sections cited, a prisoner in custody pursuant to
the final judgment of a state court of criminal jurisdiction may
have a judicial inquiry in a court of the United States into the
very truth and substance of the causes of his detention, although
it may become necessary to look behind and beyond the record of his
conviction to a sufficient extent to test the jurisdiction of the
state court to proceed to a judgment against him. . . . " Page 304 U. S. 467 ". . . it is open to the courts of the United States upon an
application for a writ of habeas corpus to look beyond forms and
inquire into the very substance of the matter. . . . [ Footnote 20 ]"
Petitioner, convicted and sentenced without the assistance of
counsel, contends that he was ignorant of his right to counsel, and
incapable of preserving his legal and constitutional rights during
trial. Urging that -- after conviction -- he was unable to obtain a
lawyer; was ignorant of the proceedings to obtain new trial or
appeal and the time limits governing both, and that he did not
possess the requisite skill or knowledge properly to conduct an
appeal, he says that it was -- as a practical matter -- impossible
for him to obtain relief by appeal. If these contentions be true in
fact, it necessarily follows that no legal procedural remedy is
available to grant relief for a violation of constitutional rights
unless the courts protect petitioner's rights by habeas corpus. Of
the contention that the law provides no effective remedy for such a
deprivation of rights affecting life and liberty, it may well be
said -- as in Mooney v. Holohan, 294 U.
S. 103 , 294 U. S. 113 -- that it "falls with the premise." To deprive a citizen of his
only effective remedy would not only be contrary to the
"rudimentary demands of justice," [ Footnote 21 ] but destructive of a constitutional guaranty
specifically designed to prevent injustice.
Since the Sixth Amendment constitutionally entitles one charged
with crime to the assistance of counsel, compliance with this
constitutional mandate is an essential jurisdictional prerequisite
to a federal court's authority to deprive an accused of his life or
liberty. When this Page 304 U. S. 468 right is properly waived, the assistance of counsel is no longer
a necessary element of the court's jurisdiction to proceed to
conviction and sentence. If the accused, however, is not
represented by counsel and has not competently and intelligently
waived his constitutional right, the Sixth Amendment stands as a
jurisdictional bar to a valid conviction and sentence depriving him
of his life or his liberty. A court's jurisdiction at the beginning
of trial may be lost "in the course of the proceedings" due to
failure to complete the court -- as the Sixth Amendment requires --
by providing counsel for an accused who is unable to obtain
counsel, who has not intelligently waived this constitutional
guaranty, and whose life or liberty is at stake. [ Footnote 22 ] If this requirement of the
Sixth Amendment is not complied with, the court no longer has
jurisdiction to proceed. The judgment of conviction pronounced by a
court without jurisdiction is void, and one imprisoned thereunder
may obtain release by habeas corpus. [ Footnote 23 ] A judge of the United States -- to whom a
petition for habeas corpus is addressed -- should be alert to
examine "the facts for himself when if true as alleged they make
the trial absolutely void." [ Footnote 24 ]
It must be remembered, however, that a judgment cannot be
lightly set aside by collateral attack, even on habeas corpus. When
collaterally attacked, the judgment of a court carries with it a
presumption of regularity. [ Footnote 25 ] Where a defendant, without counsel,
acquiesces in a trial resulting in his conviction and later seeks
release by the extraordinary remedy of habeas corpus, the burden of
proof rests upon him to establish that he did not competently and
intelligently waive his constitutional Page 304 U. S. 469 right to assistance of counsel. If, in a habeas corpus hearing,
he does meet this burden and convinces the court by a preponderance
of evidence that he neither had counsel nor properly waived his
constitutional right to counsel, it is the duty of the court to
grant the writ.
In this case, petitioner was convicted without enjoying the
assistance of counsel. Believing habeas corpus was not an available
remedy, the District Court below made no findings as to waiver by
petitioner. In this state of the record, we deem it necessary to
remand the cause. If -- on remand -- the District Court finds from
all of the evidence that petitioner has sustained the burden of
proof resting upon him and that he did not competently and
intelligently waive his right to counsel, it will follow that the
trial court did not have jurisdiction to proceed to judgment and
conviction of petitioner, and he will therefore be entitled to have
his petition granted. If petitioner fails to sustain this burden,
he is not entitled to the writ.
The cause is reversed and remanded to the District Court for
action in harmony with this opinion. Reversed. MR. JUSTICE REED concurs in the reversal.
MR. JUSTICE McREYNOLDS is of opinion that the judgment of the
court below should be affirmed.
MR. JUSTICE BUTLER is of the opinion that the record shows that
petitioner waived the right to have counsel, that the trial court
had jurisdiction, and that the judgment of the Circuit Court of
Appeals should be affirmed.
MR. JUSTICE CARDOZO took no part in the consideration or
decision of this case.
[ Footnote 1 ] 13 F. Supp.
253 .
[ Footnote 2 ]
The Sixth Amendment of the Constitution provides that,
"In all criminal prosecutions, the accused shall enjoy the right
to a speedy and public trial, by an impartial jury of the State and
district wherein the crime shall have been committed, which
district shall have been previously ascertained by law, and to be
informed of the nature and cause of the accusation; to be
confronted with the witnesses against him; to have compulsory
process for obtaining Witnesses in his favor, and to have the
Assistance of Counsel for his defence."
[ Footnote 3 ]
92 F.2d 748.
[ Footnote 4 ]
303 U.S. 629.
[ Footnote 5 ]
Opinion of the District Judge, 13 F. Supp.
253 , 254.
[ Footnote 6 ] 13 F. Supp.
253 , 254.
[ Footnote 7 ]
13 F. Supp. at 256; see Rules of Practice and Procedure
(Criminal Appeals Rules), adopted May 7, 1934, II, III.
[ Footnote 8 ] Cf. Palko v. Connecticut, 302 U.
S. 319 , 302 U. S.
325 .
[ Footnote 9 ] Patton v. United States, 281 U.
S. 276 , 281 U. S.
308 .
[ Footnote 10 ] Powell v. Alabama, 287 U. S. 45 , 287 U. S. 68 ,
69.
[ Footnote 11 ] Cf., 32 U. S. The
Mayor, 7 Pet. 243, 32 U. S. 247 ; Edwards v.
Elliott , 21 Wall. 532, 88 U. S.
557 [ Footnote 12 ] Aetna Ins. Co. v. Kennedy, 301 U.
S. 389 , 301 U. S. 393 ; Hodges v. Easton, 106 U. S. 408 , 106 U. S.
412 .
[ Footnote 13 ] Ohio Bell Telephone Co. v. Public Utilities Comm'n, 301 U. S. 292 , 301 U. S.
307 .
[ Footnote 14 ] Hack v. State, 141 Wis. 346, 351, 124 N.W. 492.
[ Footnote 15 ] Cf. 28 U. S. 3
Pet.193; Knewal v. Egan, 268 U. S. 442 ; Harlan v. McGourin, 218 U. S. 442 .
[ Footnote 16 ] Woolsey v. Best, 299 U. S. 1 , 299 U. S. 2 .
[ Footnote 17 ] Frank v. Mangum, 237 U. S. 309 , 237 U. S.
327 .
[ Footnote 18 ] In re Mayfield, 141 U. S. 107 , 141 U. S. 116 ; Cuddy, Petitioner, 131 U. S. 280 .
[ Footnote 19 ]
28 U.S.C. ch. 14, § 451, et seq. [ Footnote 20 ] Frank v. Mangum, supra, 237 U. S. 330 , 237 U. S. 331 ; cf. Moore v. Dempsey, 261 U. S. 86 ; Mooney v. Holohan, 294 U. S. 103 ; Hans Nielsen, Petitioner, 131 U.
S. 176 .
[ Footnote 21 ] Cf. Mooney v. Holohan, supra, 294 U. S.
112 .
[ Footnote 22 ] Cf., Frank v. Mangum, supra, 237 U. S.
327 .
[ Footnote 23 ] Hans Nielsen, Petitioner, supra. [ Footnote 24 ] Cf. Moore v. Dempsey, 261 U. S. 86 , 261 U. S. 92 ; Patton v. United States, 281 U. S. 276 , 281 U. S. 312 , 281 U. S. 313 .
[ Footnote 25 ] Cuddy, Petitioner, supra. | Here is a summary of the key points from the Johnson v. Zerbst case:
- A person charged with a federal crime has the right to legal assistance for their defense under the Sixth Amendment.
- This right to counsel can be waived, but the waiver must be made knowingly and voluntarily, considering the individual's background, experience, and behavior.
- Federal courts have a duty to ensure that the accused has not waived their right to counsel without a full understanding of the consequences. It is recommended that this determination be formally recorded.
- If the accused has not validly waived their right to counsel, their conviction and sentence may be deemed invalid, and they may be released through a writ of habeas corpus.
- The determination of whether the accused intelligently waived their right to counsel can be made during habeas corpus proceedings, considering evidence from outside the original trial record. |
Criminal Trials & Prosecutions | Powell v. Alabama | https://supreme.justia.com/cases/federal/us/287/45/ | U.S. Supreme Court Powell v. Alabama, 287 U.S.
45 (1932) Powell v. Alabama Nos. 98, 99, and 100 Argued October 10,
1932 Decided November 7,
1932 287 U.S.
45 CERTIORARI TO THE SUPREME COURT OF
ALABAMA Syllabus 1. The rule denying the aid of counsel to persons charged with
felony, which (except as to legal questions) existed in England Page 287 U. S. 46 when our Constitution was formed, was rejected in this country
by the Colonies before the Declaration of Independence, and is not
a test of whether the right to counsel in such cases is embraced in
the guarantee of "due process of law." P. 287 U. S.
65 .
2. The rule that no part of the Constitution shall be treated as
superfluous is an aid to construction which, in some instances, may
be conclusive, but which must yield to more compelling
considerations whenever they exist. P. 287 U. S.
67 .
3. The fact that the right of an accused person to have counsel
for his defense was guaranteed expressly (as respects the federal
Government) by the Sixth Amendment, notwithstanding the presence of
the due process clause in the Fifth Amendment, does not exclude
that right from the concept "due process of law." Pp. 287 U. S.
66 -68.
4. The right of the accused, at least in a capital case, to have
the aid of counsel for his defense, which includes the right to
have sufficient time to advise with counsel and to prepare a
defense, is one of the fundamental rights guaranteed by the due
process clause of the Fourteenth Amendment. Pp. 287 U. S.
68 -71.
5. In a capital case, where the defendant is unable to employ
counsel and is incapable of making his own defense adequately
because of ignorance, feeble-mindedness, illiteracy or the like, it
is the duty of the court, whether requested or not, to assign
counsel for him as a necessary requisite of due process of law, and
that duty is not discharged by an assignment at such a time and
under such circumstances as to preclude the giving of effective aid
in the preparation and trial of the case. P. 287 U. S.
71 .
6. In a case such as this, the right to have counsel appointed,
when necessary, is a logical corollary to the right to be heard by
counsel. P. 287 U. S.
72 .
7. In such circumstances, the trial court has power, even in the
absence of statute, to appoint an attorney for the accused, and the
attorney, as an officer of the court, is bound to serve. P. 287 U. S.
73 .
224 Ala. 524, 531, 540, reversed.
CERTIORARI, 286 U.S. 540, to review judgments affirming
sentences to death based upon convictions for rape. There was one
indictment against these petitioners and two other persons. The
petitioners were tried in three groups, as shown in the caption,
pursuant to an order of severance obtained by the State. Page 287 U. S. 49 MR. JUSTICE SUTHERLAND delivered the opinion of the Court.
These cases were argued together and submitted for decision as
one case.
The petitioners, hereinafter referred to as defendants, are
negroes charged with the crime of rape, committed upon the persons
of two white girls. The crime is said to have been committed on
March 25, 1931. The indictment was returned in a state court of
first instance on March 31, and the record recites that, on the
same day, the defendants were arraigned and entered pleas of not
guilty. There is a further recital to the effect that, upon the
arraignment, they were represented by counsel. But no counsel had
been employed, and aside from a statement made by the trial judge
several days later during a colloquy immediately preceding the
trial, the record does not disclose when, or under what
circumstances, an appointment of counsel was made, or who was
appointed. During the colloquy referred to, the trial judge, in
response to a question, said that he had appointed all the members
of the bar for the purpose of arraigning the defendants, and then,
of course, anticipated that the members of the bar would continue
to help the defendants if no counsel appeared. Upon the argument
here, both sides accepted that as a correct statement of the facts
concerning the matter.
There was a severance upon the request of the state, and the
defendants were tried in three several groups, as indicated above.
As each of the three cases was called for trial, each defendant was
arraigned, and, having the Page 287 U. S. 50 indictment read to him, entered a plea of not guilty. Whether
the original arraignment and pleas were regarded as ineffective is
not shown. Each of the three trials was completed within a single
day. Under the Alabama statute, the punishment for rape is to be
fixed by the jury, and, in its discretion, may be from ten years'
imprisonment to death. The juries found defendants guilty and
imposed the death penalty upon all. The trial court overruled
motions for new trials and sentenced the defendants in accordance
with the verdicts. The judgments were affirmed by the state supreme
court. Chief Justice Anderson thought the defendants had not been
accorded a fair trial, and strongly dissented. 224 Ala. 524; id., 531; id., 540, 141 So. 215, 195, 201.
In this court, the judgments are assailed upon the grounds that
the defendants, and each of them, were denied due process of law
and the equal protection of the laws in contravention of the
Fourteenth Amendment, specifically as follows: (1) they were not
given a fair, impartial and deliberate trial; (2) they were denied
the right of counsel, with the accustomed incidents of consultation
and opportunity of preparation for trial, and (3) they were tried
before juries from which qualified members of their own race were
systematically excluded. These questions were properly raised and
saved in the courts below.
The only one of the assignments which we shall consider is the
second, in respect of the denial of counsel, and it becomes
unnecessary to discuss the facts of the case or the circumstances
surrounding the prosecution except insofar as they reflect light
upon that question.
The record shows that, on the day when the offense is said to
have been committed, these defendants, together with a number of
other negroes, were upon a freight train on its way through
Alabama. On the same train were seven white boys and the two white
girls. A fight took Page 287 U. S. 51 place between the negroes and the white boys in the course of
which the white boys, with the exception of one named Gilley, were
thrown off the train. A message was sent ahead, reporting the fight
and asking that every negro be gotten off the train. The
participants in the fight, and the two girls, were in an open
gondola car. The two girls testified that each of them was
assaulted by six different negroes in turn, and they identified the
seven defendants as having been among the number. None of the white
boys was called to testify, with the exception of Gilley, who was
called in rebuttal.
Before the train reached Scottsboro, Alabama, a sheriff's posse
seized the defendants and two other negroes. Both girls and the
negroes then were taken to Scottsboro, the county seat. Word of
their coming and of the alleged assault had preceded them, and they
were met at Scottsboro by a large crowd. It does not sufficiently
appear that the defendants were seriously threatened with, or that
they were actually in danger of, mob violence, but it does appear
that the attitude of the community was one of great hostility. The
sheriff thought it.necessary to call for the militia to assist in
safeguarding the prisoners. Chief Justice Anderson pointed out in
his opinion that every step taken from the arrest and arraignment
to the sentence was accompanied by the military. Soldiers took the
defendants to Gadsden for safekeeping, brought them back to
Scottsboro for arraignment, returned them to Gadsden for
safekeeping while awaiting trial, escorted them to Scottsboro for
trial a few days later, and guarded the courthouse and grounds at
every stage of the proceedings. It is perfectly apparent that the
proceedings, from beginning to end, took place in an atmosphere of
tense, hostile and excited public sentiment. During the entire
time, the defendants were closely confined or were under military
guard. The record does not disclose their ages, except that one of
them was nineteen; but the Page 287 U. S. 52 record clearly indicates that most, if not all, of them were
youthful, and they are constantly referred to as "the boys." They
were ignorant and illiterate. All of them were residents of other
states, where alone members of their families or friends
resided.
However guilty defendants, upon due inquiry, might prove to have
been, they were, until convicted, presumed to be innocent. It was
the duty of the court having their cases in charge to see that they
were denied no necessary incident of a fair trial. With any error
of the state court involving alleged contravention of the state
statutes or constitution we, of course, have nothing to do. The
sole inquiry which we are permitted to make is whether the federal
Constitution was contravened ( Rogers v. Peck, 199 U.
S. 425 , 199 U. S. 434 ; Hebert v. Louisiana, 272 U. S. 312 , 272 U. S.
316 ), and as to that, we confine ourselves, as already
suggested, to the inquiry whether the defendants were in substance
denied the right of counsel, and, if so, whether such denial
infringes the due process clause of the Fourteenth Amendment. First. The record shows that, immediately upon the
return of the indictment, defendants were arraigned, and pleaded
not guilty. Apparently they were not asked whether they had, or
were able to, employ counsel, or wished to have counsel appointed,
or whether they had friends or relatives who might assist in that
regard if communicated with. That it would not have been an idle
ceremony to have given the defendants reasonable opportunity to
communicate with their families and endeavor to obtain counsel is
demonstrated by the fact that, very soon after conviction, able
counsel appeared in their behalf. This was pointed out by Chief
Justice Anderson in the course of his dissenting opinion. "They
were nonresidents," he said,
"and had little time or opportunity to get in touch with their
families and friends who were scattered throughout two other
states, and time has demonstrated Page 287 U. S. 53 that they could or would have been represented by able counsel
had a better opportunity been given by a reasonable delay in the
trial of the cases, judging from the number and activity of counsel
that appeared immediately or shortly after their conviction."
224 Ala. at pp. 554-555, 141 So. 201.
It is hardly necessary to say that, the right to counsel being
conceded, a defendant should be afforded a fair opportunity to
secure counsel of his own choice. Not only was that not done here,
but such designation of counsel as was attempted was either so
indefinite or so close upon the trial as to amount to a denial of
effective and substantial aid in that regard. This will be amply
demonstrated by a brief review of the record.
April 6, six days after indictment, the trials began. When the
first case was called, the court inquired whether the parties were
ready for trial. The state's attorney replied that he was ready to
proceed. No one answered for the defendants or appeared to
represent or defend them. Mr. Roddy, a Tennessee lawyer not a
member of the local bar, addressed the court, saying that he had
not been employed, but that people who were interested had spoken
to him about the case. He was asked by the court whether he
intended to appear for the defendants, and answered that he would
like to appear along with counsel that the court might appoint. The
record then proceeds:
"The Court: If you appear for these defendants, then I will not
appoint counsel; if local counsel are willing to appear and assist
you under the circumstances, all right, but I will not appoint
them."
"Mr. Roddy: Your Honor has appointed counsel, is that
correct?"
"The Court: I appointed all the members of the bar for the
purpose of arraigning the defendants, and then, of course, I
anticipated them to continue to help them if no counsel appears.
" Page 287 U. S. 54 "Mr Roddy: Then I don't appear then as counsel, but I do want to
stay in, and not be ruled out in this case."
"The Court: Of course, I would not do that --"
"Mr. Roddy: I just appear here through the courtesy of Your
Honor."
"The Court: Of course, I give you that right; . . ."
And then, apparently addressing all the lawyers present, the
court inquired:
". . . well, are you all willing to assist?"
"Mr. Moody: Your Honor appointed us all, and we have been
proceeding along every line we know about it under Your Honor's
appointment."
"The Court: The only thing I am trying to do is, if counsel
appears for these defendants, I don't want to impose on you all,
but if you feel like counsel from Chattanooga --"
"Mr. Moody: I see his situation, of course, and I have not run
out of anything yet. Of course, if Your Honor purposes to appoint
us, Mr. Parks, I am willing to go on with it. Most of the bar have
been down and conferred with these defendants in this case; they
did not know what else to do."
"The Court: The thing, I did not want to impose on the members
of the bar if counsel unqualifiedly appears; if you all feel like
Mr. Roddy is only interested in a limited way to assist, then I
don't care to appoint --"
"Mr. Parks: Your Honor, I don't feel like you ought to impose on
any member of the local bar if the defendants are represented by
counsel."
"The Court: That is what I was trying to ascertain, Mr.
Parks."
"Mr. Parks: Of course, if they have counsel, I don't see the
necessity of the Court appointing anybody; if they haven't counsel,
of course, I think it is up to the Court to appoint counsel to
represent them. " Page 287 U. S. 55 "The Court: I think you are right about it, Mr. Parks, and that
is the reason I was trying to get an expression from Mr.
Roddy."
"Mr. Roddy: I think Mr. Parks is entirely right about it, if I
was paid down here and employed, it would be a different thing, but
I have not prepared this case for trial, and have only been called
into it by people who are interested in these boys from
Chattanooga. Now, they have not given me an opportunity to prepare
the case, and I am not familiar with the procedure in Alabama, but
I merely came down here as a friend of the people who are
interested, and not as paid counsel, and certainly I haven't any
money to pay them, and nobody I am interested in had me to come
down here has put up any fund of money to come down here and pay
counsel. If they should do it, I would be glad to turn it over -- a
counsel but I am merely here at the solicitation of people who have
become interested in this case without any payment of fee and
without any preparation for trial, and I think the boys would be
better off if I step entirely out of the case according to my way
of looking at it and according to my lack of preparation of it and
not being familiar with the procedure in Alabama, . . ."
Mr. Roddy later observed:
"If there is anything I can do to be of help to them, I will be
glad to do it; I am interested to that extent."
"The Court: Well gentlemen, if Mr. Roddy only appears as
assistant that way, I think it is proper that I appoint members of
this bar to represent them, I expect that is right. If Mr. Roddy
will appear, I wouldn't of course, I would not appoint anybody. I
don't see, Mr. Roddy, how I can make a qualified appointment or a
limited appointment. Of course, I don't mean to cut off your
assistance in any way -- Well gentlemen, I think you understand it.
" Page 287 U. S. 56 "Mr. Moody: I am willing to go ahead and help Mr. Roddy in
anything I can do about it, under the circumstances."
"The Court: All right, all the lawyers that will; of course, I
would not require a lawyer to appear if --"
"Mr. Moody: I am willing to do that for him as a member of the
bar; I will go ahead and help do anything I can do."
"The Court: All right."
And in this casual fashion, the matter of counsel in a capital
case was disposed of.
It thus will be seen that, until the very morning of the trial,
no lawyer had been named or definitely designated to represent the
defendants. Prior to that time, the trial judge had "appointed all
the members of the bar" for the limited "purpose of arraigning the
defendants." Whether they would represent the defendants thereafter
if no counsel appeared in their behalf was a matter of speculation
only, or, as the judge indicated, of mere anticipation on the part
of the court. Such a designation, even if made for all purposes,
would, in our opinion, have fallen far short of meeting, in any
proper sense, a requirement for the appointment of counsel. How
many lawyers were members of the bar does not appear, but, in the
very nature of things, whether many or few, they would not, thus
collectively named, have been given that clear appreciation of
responsibility or impressed with that individual sense of duty
which should and naturally would accompany the appointment of a
selected member of the bar, specifically named and assigned.
That this action of the trial judge in respect of appointment of
counsel was little more than an expansive gesture, imposing no
substantial or definite obligation upon any one, is borne out by
the fact that, prior to the calling of the case for trial on April
6, a leading member of the local bar accepted employment on the
side of the prosecution Page 287 U. S. 57 and actively participated in the trial. It is true that he said
that, before doing so, he had understood Mr. Roddy would be
employed as counsel for the defendants. This the lawyer in
question, of his own accord, frankly stated to the court, and no
doubt he acted with the utmost good faith. Probably other members
of the bar had a like understanding. In any event, the circumstance
lends emphasis to the conclusion that, during perhaps the most
critical period of the proceedings against these defendants, that
is to say, from the time of their arraignment until the beginning
of their trial, when consultation, thoroughgoing investigation and
preparation were vitally important, the defendants did not have the
aid of counsel in any real sense, although they were as much
entitled to such aid during that period as at the trial itself. People ex rel. Burgess v. Risley, 66 How.Pr. (N.Y.) 67; Batchelor v. State, 189 Ind. 69, 76, 125 N.E. 773.
Nor do we think the situation was helped by what occurred on the
morning of the trial. At that time, as appears from the colloquy
printed above, Mr. Roddy stated to the court that he did not appear
as counsel, but that he would like to appear along with counsel
that the court might appoint; that he had not been given an
opportunity to prepare the case; that he was not familiar with the
procedure in Alabama, but merely came down as a friend of the
people who were interested; that he thought the boys would be
better off if he should step entirely out of the case. Mr. Moody, a
member of the local bar, expressed a willingness to help Mr. Roddy
in anything he could do under the circumstances. To this, the court
responded, "All right, all the lawyers that will; of course, I
would not require a lawyer to appear if -- ." And Mr. Moody
continued, "I am willing to do that for him as a member of the bar;
I will go ahead and help do anything I can do." With this dubious
understanding, the trials immediately proceeded. The defendants,
young, ignorant, Page 287 U. S. 58 illiterate, surrounded by hostile sentiment, haled back and
forth under guard of soldiers, charged with an atrocious crime
regarded with especial horror in the community where they were to
be tried, were thus put in peril of their lives within a few
moments after counsel for the first time charged with any degree of
responsibility began to represent them.
It is not enough to assume that counsel thus precipitated into
the case thought there was no defense, and exercised their best
judgment in proceeding to trial without preparation. Neither they
nor the court could say what a prompt and thoroughgoing
investigation might disclose as to the facts. No attempt was made
to investigate. No opportunity to do so was given. Defendants were
immediately hurried to trial. Chief Justice Anderson, after
disclaiming any intention to criticize harshly counsel who
attempted to represent defendants at the trials, said: " . . . the
record indicates that the appearance was rather pro forma than zealous and active. . . ." Under the circumstances disclosed,
we hold that defendants were not accorded the right of counsel in
any substantial sense. To decide otherwise would simply be to
ignore actualities. This conclusion finds ample support in the
reasoning of an overwhelming array of state decisions, among which
we cite the following: Sheppard v. State, 165 Ga. 460,
464, 141 S.E. 196; Reliford v. State, 140 Ga. 777, 79 S.E.
1128; McArver v. State, 114 Ga. 514, 40 S.E. 779; Sanchez v. State, 199 Ind. 235, 246, 157 N.E. l; Batchelor v. State, 189 Ind. 69, 76, 125 N.E. 773; Mitchell v. Commonwealth, 225 Ky. 83, 7 S.W. (2d) 823; Jackson v. Commonwealth, 215 Ky. 800, 287 S.W. 17; State v. Collins, 104 La. 629, 29 So. 180; State v.
Pool, 50 La.Ann. 449, 23 So. 503; People ex rel. Burgess
v. Risley, 66 How.Pr.(N.Y.) 67; State ex rel. Tucker v.
Davis, 9 Okla.Cr. 94, 130 Pac. 962; Commonwealth v.
O'Keefe, 298 Pa. 169, Page 287 U. S. 59 148 Atl. 73; Shaffer v. Territory, 14 Ariz. 329, 333,
127 Pac. 746.
It is true that great and inexcusable delay in the enforcement
of our criminal law is one of the grave evils of our time.
Continuances are frequently granted for unnecessarily long periods
of time, and delays incident to the disposition of motions for new
trial and hearings upon appeal have come in many cases to be a
distinct reproach to the administration of justice. The prompt
disposition of criminal cases is to be commended and encouraged.
But, in reaching that result, a defendant, charged with a serious
crime, must not be stripped of his right to have sufficient time to
advise with counsel and prepare his defense. To do that is not to
proceed promptly in the calm spirit of regulated justice, but to go
forward with the haste of the mob.
As the court said in Commonwealth v. O'Keefe, 298 Pa.
169, 173, 148 Atl. 73:
"It is vain to give the accused a day in court with no
opportunity to prepare for it, or to guarantee him counsel without
giving the latter any opportunity to acquaint himself with the
facts or law of the case."
" * * * *" "A prompt and vigorous administration of the criminal law is
commendable, and we have no desire to clog the wheels of justice.
What we here decide is that to force a defendant, charged with a
serious misdemeanor, to trial within five hours of his arrest is
not due process of law, regardless of the merits of the case." Compare Reliford v. State, 140 Ga. 777, 778, 79 S.E.
1128. Second. The Constitution of Alabama provides that, in
all criminal prosecutions the accused shall enjoy the right to have
the assistance of counsel, and a state statute requires the court
in a capital case where the defendant Page 287 U. S. 60 is unable to employ counsel to appoint counsel for him. The
state supreme court held that these provisions had not been
infringed, and with that holding we are powerless to interfere. The
question, however, which it is our duty, and within our power, to
decide is whether the denial of the assistance of counsel
contravenes the due process clause of the Fourteenth Amendment to
the federal Constitution.
If recognition of the right of a defendant charged with a felony
to have the aid of counsel depended upon the existence of a similar
right at common law as it existed in England when our Constitution
was adopted, there would be great difficulty in maintaining it as
necessary to due process. Originally, in England, a person charged
with treason or felony was denied the aid of counsel, except in
respect of legal questions which the accused himself might suggest.
At the same time, parties in civil cases and persons accused of
misdemeanors were entitled to the full assistance of counsel. After
the revolution of 1688, the rule was abolished as to treason, but
was otherwise steadily adhered to until 1836, when, by act of
Parliament, the full right was granted in respect of felonies
generally. 1 Cooley's Const.Lim., 8th ed., 698, et seq., and notes.
An affirmation of the right to the aid of counsel in petty
offenses, and its denial in the case of crimes of the gravest
character, where such aid is most needed, is so outrageous and so
obviously a perversion of all sense of proportion that the rule was
constantly, vigorously, and sometimes passionately assailed by
English statesmen and lawyers. As early as 1758, Blackstone,
although recognizing that the rule was settled at common law,
denounced it as not in keeping with the rest of the humane
treatment of prisoners by the English law. "For upon what face of
reason," he says, "can that assistance be denied Page 287 U. S. 61 to save the life of a man which yet is allowed him in
prosecutions for every petty trespass?" 4 Blackstone 355. One of
the grounds upon which Lord Coke defended the rule was that, in
felonies, the court itself was counsel for the prisoner. 1 Cooley's
Const.Lim., supra. But how can a judge, whose functions
are purely judicial, effectively discharge the obligations of
counsel for the accused? He can and should see to it that, in the
proceedings before the court, the accused shall be dealt with
justly and fairly. He cannot investigate the facts, advise and
direct the defense, or participate in those necessary conferences
between counsel and accused which sometimes partake of the
inviolable character of the confessional.
The rule was rejected by the colonies. Before the adoption of
the federal Constitution, the Constitution of Maryland had declared
"That, in all criminal prosecutions, every man hath a right . . .
to be allowed counsel; . . ." (Art. XIX, Constitution of 1776). The
Constitution of Massachusetts, adopted in 1780 (Part the First,
Art. XII), the Constitution of New Hampshire, adopted in 1784 (Part
I, Art. XV), the Constitution of New York of 1777 (Art. XXXIV), and
the Constitution of Pennsylvania of 1776 (Art. IX), had also
declared to the same effect. And, in the case of Pennsylvania, as
early as 1701, the Penn Charter (Art. V) declared that "all
Criminals shall have the same Privileges of Witnesses and Council
as their Prosecutors", and there was also a provision in the
Pennsylvania statute of May 31, 1718 (Dallas, Laws of Pennsylvania,
1700-1781, Vol. 1, p. 134) that, in capital cases, learned counsel
should be assigned to the prisoners.
In Delaware, the Constitution of 1776 (Art. 25), adopted the
common law of England, but expressly excepted such parts as were
repugnant to the rights and privileges contained in the Declaration
of Rights, and the Declaration of Rights, which was adopted on
September Page 287 U. S. 62 11, 1776, provided (Art. 14) "That in all Prosecutions for
criminal Offences, every Man hath a Right . . . to be allowed
Counsel, . . ." In addition, Penn's Charter, already referred to,
was applicable in Delaware. The original Constitution of New Jersey
of 1776 (Art. XVI) contained a provision like that of the Penn
Charter, to the effect that all criminals should be admitted to the
same privileges of counsel as their prosecutors. The original
Constitution of North Carolina (1776) did not contain the
guarantee, but c. 115, § 85, Sess.Laws, N.Car., 1777
(N.Car.Rev.Laws, 1715-1796, Vol. 1, 316), provided
". . . That every person accused of any crime or misdemeanor
whatsoever shall be entitled to council in all matters which may be
necessary for his defence, as well to facts as to law; . . ."
Similarly, in South Carolina, the original Constitution of 1776
did not contain the provision as to counsel, but it was provided as
early as 1731 (Act of August 20, 1731, § XLIII, Grimke,
S.Car.Pub.Laws, 1682-1790, p. 130) that every person charged with
treason, murder, felony, or other capital offense should be
admitted to make full defense by counsel learned in the law. In
Virginia, there was no constitutional provision on the subject,
but, as early as August, 1734 (c. VII, § III, Laws of Va. 8th Geo.
II, Hening's Stat. at Large, Vol. 4, p. 404), there was an act
declaring that, in all trials for capital offenses, the prisoner,
upon his petition to the court, should be allowed counsel.
The original Constitution of Connecticut (Art. I, § 9) contained
a provision that, "In all criminal prosecutions, the accused shall
have the right to be heard by himself and by counsel"; but this
constitution was not adopted until 1818. However, it appears that
the English common law rule had been rejected in practice long
prior to 1796. See Zephaniah Swift's "A System of the Laws
of the State of Connecticut," printed at Windham by John Page 287 U. S. 63 Byrne, 1795-1796, Vol. II, Bk. 5, "Of Crimes and Punishments,"
c. XXIV, "Of Trials," pp. 398-399. * The original Constitution of Georgia (1777) did not contain a
guarantee in respect of counsel, but the Constitution of 1798 (Art.
III, § 8) provided that
". . . no person shall be debarred from advocating or defending
his cause before any court or tribunal, either by himself or
counsel, or both."
What the practice was prior to 1798 we are unable to discover.
The first constitution adopted by Rhode Island was in 1842, and
this constitution contained the usual guarantee in respect of the
assistance of counsel in criminal prosecutions. As early as 1798,
it was provided by statute, in the very language of the Sixth
Amendment to the Federal Constitution, that, "In all criminal
prosecutions, the accused shall enjoy the right . . . to have the
assistance of counsel for his defence; . . ." Page 287 U. S. 64 An Act Declaratory of certain Rights of the People of this
State, § 6, Rev.Pub.Laws, Rhode Island and Providence Plantations,
1798. Furthermore, while the statute itself is not available, it is
recorded as a matter of history that, in 1668 or 1669, the colonial
assembly enacted that any person who was indicted might employ an
attorney to plead in his behalf. 1 Arnold, History of Rhode Island,
336.
It thus appears that, in at least twelve of the thirteen
colonies, the rule of the English common law, in the respect now
under consideration, had been definitely rejected, and the right to
counsel fully recognized in all Page 287 U. S. 65 criminal prosecutions, save that, in one or two instances, the
right was limited to capital offenses or to the more serious
crimes, and this court seems to have been of the opinion that this
was true in all the colonies. In Holden v. Hardy, 169 U. S. 366 , 169 U. S. 386 ,
Mr. Justice Brown, writing for the court, said:
"The earlier practice of the common law, which denied the
benefit of witnesses to a person accused of felony, had been
abolished by statute, though, so far as it deprived him of the
assistance of counsel and compulsory process for the attendance of
his witnesses, it had not been changed in England. But to the
credit of her American colonies, let it be said that so oppressive
a doctrine had never obtained a foothold there."
One test which has been applied to determine whether due process
of law has been accorded in given instances is to ascertain what
were the settled usages and modes of proceeding under the common
and statute law of England before the Declaration of Independence,
subject, however, to the qualification that they be shown not to
have been unsuited to the civil and political conditions of our
ancestors by having been followed in this country after it became a
nation. Lowe v. Kansas, 163 U. S. 81 , 163 U. S. 85 . Compare 59 U. S. Hoboken
Land & Improvement Co., 18 How. 272, 59 U. S.
276 -277; Twining v. New Jersey, 211 U. S.
78 , 211 U. S.
100 -101. Plainly, as appears from the foregoing, this
test, as thus qualified, has not been met in the present case.
We do not overlook the case of Hurtado v. California, 110 U. S. 516 ,
where this court determined that due process of law does not
require an indictment by a grand jury as a prerequisite to
prosecution by a state for murder. In support of that conclusion
the court (pp. 110 U. S.
534 -535) referred to the fact that the Fifth Amendment,
in addition to containing the due process of law clause,
provides Page 287 U. S. 66 in explicit terms that "No person shall be held to answer for a
capital, or otherwise infamous crime, unless on a presentment or
indictment of a grand jury, . . . ", and said that, since no part
of this important amendment could be regarded as superfluous, the
obvious inference is that, in the sense of the Constitution, due
process of law was not intended to include, ex vi termini, the institution and procedure of a grand jury in any case, and that
the same phrase, employed in the Fourteenth Amendment to restrain
the action of the states, was to be interpreted as having been used
in the same sense and with no greater extent, and that, if it had
been the purpose of that Amendment to perpetuate the institution of
the grand jury in the states, it would have embodied, as did the
Fifth Amendment, an express declaration to that effect.
The Sixth Amendment, in terms, provides that, in all criminal
prosecutions, the accused shall enjoy the right "to have the
assistance of counsel for his defense." In the face of the
reasoning of the Hurtado case, if it stood alone, it would
be difficult to justify the conclusion that the right to counsel,
being thus specifically granted by the Sixth Amendment, was also
within the intendment of the due process of law clause. But the Hurtado case does not stand alone. In the later case of Chicago, Burlington & Quincy R. Co. v. Chicago, 166 U. S. 226 , 166 U. S. 241 ,
this court held that a judgment of a state court, even though
authorized by statute, by which private property was taken for
public use without just compensation, was in violation of the due
process of law required by the Fourteenth Amendment notwithstanding
that the Fifth Amendment explicitly declares that private property
shall not be taken for public use without just compensation. This
holding was followed in Norwood v. Baker, 172 U.
S. 269 , 172 U. S. 277 ; Smyth v. Ames, 169 U. S. 466 , 169 U. S. 524 ,
and San Diego Land Co. v. National City, 174 U.
S. 739 , 174 U. S.
754 . Page 287 U. S. 67 Likewise, this court has considered that freedom of speech and
of the press are rights protected by the due process clause of the
Fourteenth Amendment, although in the First Amendment, Congress is
prohibited in specific terms from abridging the right. Gitlow
v. New York, 268 U. S. 652 , 268 U. S. 666 ; Stromberg v. California, 283 U. S. 359 , 283 U. S. 368 ; Near v. Minnesota, 283 U. S. 697 , 283 U. S.
707 .
These later cases establish that, notwithstanding the sweeping
character of the language in the Hurtado case, the rule
laid down is not without exceptions. The rule is an aid to
construction, and in some instances may be conclusive, but it must
yield to more compelling considerations whenever such
considerations exist. The fact that the right involved is of such a
character that it cannot be denied without violating those
"fundamental principles of liberty and justice which lie at the
base of all our civil and political institutions" ( Hebert v.
Louisiana, 272 U. S. 312 , 272 U. S.
316 ), is obviously one of those compelling
considerations which must prevail in determining whether it is
embraced within the due process clause of the Fourteenth Amendment,
although it be specifically dealt with in another part of the
federal Constitution. Evidently this court, in the later cases
enumerated, regarded the rights there under consideration as of
this fundamental character. That some such distinction must be
observed is foreshadowed in Twining v. New Jersey, 211 U. S. 78 , 211 U. S. 99 ,
where Mr. Justice Moody, speaking for the court, said that
". . . it is possible that some of the personal rights
safeguarded by the first eight Amendments against National action
may also be safeguarded against state action, because a denial of
them would be a denial of due process of law. Chicago,
Burlington & Quincy R. Co. v. Chicago, 166 U. S.
226 . If this is so, it is not because those rights are
enumerated in the first eight Amendments, but because they are of
such a nature that they are included in Page 287 U. S. 68 the conception of due process of law."
While the question has never been categorically determined by
this court, a consideration of the nature of the right and a review
of the expressions of this and other courts, makes it clear that
the right to the aid of counsel is of this fundamental
character.
It never has been doubted by this court, or any other, so far as
we know, that notice and hearing are preliminary steps essential to
the passing of an enforceable judgment, and that they, together
with a legally competent tribunal having jurisdiction of the case,
constitute basic elements of the constitutional requirement of due
process of law. The words of Webster, so often quoted, that, by
"the law of the land" is intended "a law which hears before it
condemns" have been repeated in varying forms of expression in a
multitude of decisions. In Holden v. Hardy, 169 U.
S. 366 , 169 U. S. 389 ,
the necessity of due notice and an opportunity of being heard is
described as among the "immutable principles of justice which
inhere in the very idea of free government which no member of the
Union may disregard." And Mr. Justice Field, in an earlier case, Galpin v.
Page , 18 Wall. 350, 85 U. S.
368 -369, said that the rule that no one shall be
personally bound until he has had his day in court was as old as
the law, and it meant that he must be cited to appear and afforded
an opportunity to be heard.
"Judgment without such citation and opportunity wants all the
attributes of a judicial determination; it is judicial usurpation
and oppression, and never can be upheld where justice is justly
administered."
Citations to the same effect might be indefinitely multiplied,
but there is no occasion for doing so.
What, then, does a hearing include? Historically and in
practice, in our own country, at least, it has always included the
right to the aid of counsel when desired and provided by the party
asserting the right. The right Page 287 U. S. 69 to be heard would be, in many cases, of little avail if it did
not comprehend the right to be heard by counsel. Even the
intelligent and educated layman has small and sometimes no skill in
the science of law. If charged with crime, he is incapable,
generally, of determining for himself whether the indictment is
good or bad. He is unfamiliar with the rules of evidence. Left
without the aid of counsel, he may be put on trial without a proper
charge, and convicted upon incompetent evidence, or evidence
irrelevant to the issue or otherwise inadmissible. He lacks both
the skill and knowledge adequately to prepare his defense, even
though he have a perfect one. He requires the guiding hand of
counsel at every step in the proceedings against him. Without it,
though he be not guilty, he faces the danger of conviction because
he does not know how to establish his innocence. If that be true of
men of intelligence, how much more true is it of the ignorant and
illiterate, or those of feeble intellect. If in any case, civil or
criminal, a state or federal court were arbitrarily to refuse to
hear a party by counsel, employed by and appearing for him, it
reasonably may not be doubted that such a refusal would be a denial
of a hearing, and, therefore, of due process in the constitutional
sense.
The decisions all point to that conclusion. In Cooke v.
United States, 267 U. S. 517 , 267 U. S. 537 ,
it was held that, where a contempt was not in open court, due
process of law required charges and a reasonable opportunity to
defend or explain. The court added, "We think this includes the
assistance of counsel, if requested, . . ." In numerous other
cases, the court, in determining that due process was accorded, has
frequently stressed the fact that the defendant had the aid of
counsel. See, for example, Felts v. Murphy, 201 U.
S. 123 , 201 U. S. 129 ; Frank v. Mangum, 237 U. S. 309 , 237 U. S. 344 ; Kelley v. Oregon, 273 U. S. 589 , 273 U. S. 591 .
In Ex parte Hidekuni Iwata, 219 Fed. 610, 611, the federal
district Page 287 U. S. 70 judge enumerated among the elements necessary to due process of
law in a deportation case the opportunity at some stage of the
hearing to secure and have the advice and assistance of counsel. In Ex parte Chin Loy You, 223 Fed. 833, also a deportation
case, the district judge held that, under the particular
circumstances of the case, the prisoner, having seasonably made
demand, was entitled to confer with and have the aid of counsel.
Pointing to the fact that the right to counsel as secured by the
Sixth Amendment relates only to criminal prosecutions, the judge
said,
". . . but it is equally true that that provision was inserted
in the Constitution because the assistance of counsel was
recognized as essential to any fair trial of a case against a
prisoner."
In Ex parte Riggins, 134 Fed. 404, 418, a case
involving the due process clause of the Fourteenth Amendment, the
court said, by way of illustration, that, if the state should
deprive a person of the benefit of counsel, it would not be due
process of law. Judge Cooley refers to the right of a person
accused of crime to have counsel as perhaps his most important
privilege, and, after discussing the development of the English law
upon that subject, says: "With us, it is a universal principle of
constitutional law that the prisoner shall be allowed a defense by
counsel." 1 Cooley's Const.Lim., 8th ed., 700. The same author, as
appears from a chapter which he added to his edition of Story on
the Constitution, regarded the right of the accused to the
presence, advice and assistance of counsel a necessarily included
in due process of law. 2 Story on the Constitution, 4th ed., §
1949, p. 668. The state decisions which refer to the matter
invariably recognize the right to the aid of counsel as fundamental
in character. E.g., People v. Napthaly, 105 Cal. 641, 644,
39 Pac. 29; Cutts v. State, 54 la. 21, 23, 45 So. 491; Martin v. State, 51 Ga. 567, 568; Sheppard v.
State, 165 Ga. 460, 464, 141 S.E. 196; State v.
Moore, 61 Kan. 732, 734, 60 Pac. 748; Page 287 U. S. 71 State v. Ferris, 16 La.Ann. 424; State v.
Simson, 38 La.Ann. 23, 24; State v. Briggs, 58 W.Va.
291, 292, 52 S.E. 218.
In the light of the facts outlined in the forepart of this
opinion -- the ignorance and illiteracy of the defendants, their
youth, the circumstances of public hostility, the imprisonment and
the close surveillance of the defendants by the military forces,
the fact that their friends and families were all in other states
and communication with them necessarily difficult, and, above all,
that they stood in deadly peril of their lives -- we think the
failure of the trial court to give them reasonable time and
opportunity to secure counsel was a clear denial of due
process.
But passing that, and assuming their inability, even if
opportunity had been given, to employ counsel, as the trial court
evidently did assume, we are of opinion that, under the
circumstances just stated, the necessity of counsel was so vital
and imperative that the failure of the trial court to make an
effective appointment of counsel was likewise a denial of due
process within the meaning of the Fourteenth Amendment. Whether
this would be so in other criminal prosecutions, or under other
circumstances, we need not determine. All that it is necessary now
to decide, as we do decide, is that, in a capital case, where the
defendant is unable to employ counsel and is incapable adequately
of making his own defense because of ignorance, feeble mindedness,
illiteracy, or the like, it is the duty of the court, whether
requested or not, to assign counsel for him as a necessary
requisite of due process of law, and that duty is not discharged by
an assignment at such a time or under such circumstances as to
preclude the giving of effective aid in the preparation and trial
of the case. To hold otherwise would be to ignore the fundamental
postulate, already adverted to,
"that there are certain immutable principles of justice which
inhere in the very idea of free government which Page 287 U. S. 72 no member of the Union may disregard." Holden v. Hardy, supra. In a case such as this,
whatever may be the rule in other cases, the right to have counsel
appointed, when necessary, is a logical corollary from the
constitutional right to be heard by counsel. Compare Carpenter
& Sprague v. Dane County, 9 Wis. 274; Dane County v.
Smith, 13 Wis. 585, 586. Hendryx v. State, 130 Ind.
265, 268-269, 29 N.E. 1131; Cutts v. State, 54 Fla. 21,
23, 45 So. 491; People v. Goldenson, 76 Cal. 328, 344, 19
Pac. 161; Delk v. State, 99 Ga. 667, 669-670, 26 S.E.
752.
In Hendryx v. State, supra, there was no statute
authorizing the assignment of an attorney to defend an indigent
person accused of crime, but the court held that such an assignment
was necessary to accomplish the ends of public justice, and that
the court possessed the inherent power to make it. "Where a
prisoner," the court said (p. 269),
"without legal knowledge, is confined in jail, absent from his
friends, without the aid of legal advice or the means of
investigating the charge against him, it is impossible to conceive
of a fair trial where he is compelled to conduct his cause in
court, without the aid of counsel. . . . Such a trial is not far
removed from an ex parte proceeding."
Let us suppose the extreme case of a prisoner charged with a
capital offense who is deaf and dumb, illiterate and feeble minded,
unable to employ counsel, with the whole power of the state arrayed
against him, prosecuted by counsel for the state without assignment
of counsel for his defense, tried, convicted and sentenced to
death. Such a result, which, if carried into execution, would be
little short of judicial murder, it cannot be doubted would be a
gross violation of the guarantee of due process of law, and we
venture to think that no appellate court, state or federal, would
hesitate so to decide. See Stephenson v. State, 4 Ohio
App. 128; Williams v. State, 163 Ark. 623, Page 287 U. S.
73 628, 260 S.W. 721; Grogan v. Commonwealth, 222 Ky.
484, 485, 1 S.W.2d 779; Mullen v. State, 28 Okla.Cr. 218, 230,
230 Pac. 285; Williams v. Commonwealth, (Ky.), 110 S.W.
339, 340. The duty of the trial court to appoint counsel under such
circumstances is clear, as it is clear under circumstances such as
are disclosed by the record here, and its power to do so, even in
the absence of a statute, cannot be questioned. Attorneys are
officers of the court, and are bound to render service when
required by such an appointment. See Cooley, Const.Lim., supra, 700 and note.
The United States, by statute, and every state in the Union, by
express provision of law or by the determination of its courts,
make it the duty of the trial judge, where the accused is unable to
employ counsel, to appoint counsel for him. In most states, the
rule applies broadly to all criminal prosecutions; in others, it is
limited to the more serious crimes; and in a very limited number,
to capital cases. A rule adopted with such unanimous accord
reflects, if it does not establish, the inherent right to have
counsel appointed, at least in cases like the present, and lends
convincing support to the conclusion we have reached as to the
fundamental nature of that right.
The judgments must be reversed, and the causes remanded for
further proceedings not inconsistent with this opinion. Judgments reversed. * This ancient work, consisting of six books, has long been out
of print. A copy of it is preserved in the locked files of the
Library of Congress. The following extract from the pages cited is
both interest ing and instructive:
"The attorney for the state then proceeds to lay before the jury
all the evidence against the prisoner, without any remarks or
arguments. The prisoner by himself, or counsel, is then allowed to
produce witnesses to counteract and obviate the testimony against
him, and to exculpate himself with the same freedom as in civil
cases. We have never admitted that cruel and illiberal principle of
the common law of England that, when a man is on trial for his
life, he shall be refused counsel, and denied those means of
defence, which are allowed when the most trifling pittance of
property is in question. The flimsy pretence that the court are to
be counsel for the prisoner will only heighten our indignation at
the practice, for it is apparent to the least consideration that a
court can never furnish a person accused of a crime with the advice
and assistance necessary to make his defence. This doctrine might
with propriety have been advanced at the time when, by the common
law of England, no witnesses could be adduced on the part of the
prisoner to manifest his innocence, for he could then make no
preparation for his defense. One cannot read without horror and
astonishment the abominable maxims of law which deprived persons
accused and on trial for crimes of the assistance of counsel,
except as to points of law, and the advantage of witnesses to
exculpate themselves from the charge. It seems by the ancient
practice that, whenever a person was accused of a crime, every
expedient was adopted to convict him and every privilege denied him
to prove his innocence. In England, however, as the law now stands,
prisoners are allowed the full advantage of witnesses, but
excepting in a few cases, the common law is enforced in denying
them counsel except as to points of law"
"Our ancestors, when they first enacted their laws respecting
crimes, influenced by the illiberal principles which they had
imbibed in their native country, denied counsel to prisoners to
plead for them to anything but points of law. It is manifest that
there is as much necessity for counsel to investigate matters of
fact as points of law if truth is to be discovered."
"The legislature has become so thoroughly convinced of the
impropriety and injustice of shackling and restricting a prisoner
with respect to his defence that they have abolished all those
odious laws, and every person, when he is accused of a crime, is
entitled to every possible privilege in making his defence and
manifesting his innocence by the instrumentality of counsel and the
testimony of witnesses."
The early statutes of Connecticut, upon examination, do not seem
to be as clear as this last paragraph would indicate; but Mr.
Swift, writing in 1796, was in a better position to know how the
statutes had been interpreted and applied in actual practice than
the reader of today, and we see no reason to reject his
statement.
MR. JUSTICE BUTLER, dissenting.
The Court, putting aside -- they are utterly without merit --
all other claims that the constitutional rights of petitioners were
infringed, grounds its opinion and judgment upon a single assertion
of fact. It is that petitioners "were denied the right of counsel,
with the accustomed incidents of consultation and opportunity of
preparation for trial." If that is true, they were denied due
process Page 287 U. S. 74 of law and are entitled to have the judgments against them
reversed.
But no such denial is shown by the record.
Nine defendants, including Patterson, were accused in one
indictment, and he was also separately indicted. Instead of trying
them en masse, the State gave four trials, and so lessened
the danger of mistake and injustice that inevitably attends an
attempt in a single trial to ascertain the guilt or innocence of
many accused. Weems and Norris were tried first. Patterson was
tried next on the separate indictment. Then five were tried. These
eight were found guilty. The other defendant, Roy Wright, was tried
last, and not convicted. The convicted defendants took the three
cases to the state supreme court, where the judgment as to Williams
was reversed and those against the seven petitioners were
affirmed.
There were three painstaking opinions, a different justice
writing for the court in each case. 224 Ala. 524, 531, 540, 141 So.
215, 195, 201. Many of the numerous questions decided were raised
at the trial, and reflect upon defendants' counsel much credit for
zeal and diligence on behalf of their clients. Seven justices heard
the cases. The chief justice, alone dissenting, did not find any
contention for the accused sufficient, in itself, to warrant a
reversal, but alluded to a number of considerations which he deemed
sufficient, when taken together, to warrant the conclusion that the
defendants did not have a fair trial. The court said (p. 553):
"We think it a bit inaccurate to say Mr. Roddy appeared only as amicus curiae. [This refers to a remark in the dissenting
opinion.] He expressly announced he was there from the beginning at
the instance of friends of the accused; but not being paid counsel
asked to appear not as employed counsel, but to aid local counsel
appointed by the court, and was permitted so to appear. The
defendants were represented as shown by the record and pursuant to
appointment of the Page 287 U. S. 75 court by Hon. Milo Moody, an able member of the local bar of
long and successful experience in the trial of criminal, as well as
civil, cases. We do not regard the representation of the accused by
counsel as pro forma. A very rigorous and rigid
cross-examination was made of the state's witnesses, the alleged
victims of rape, especially in the cases first tried. A reading of
the records discloses why experienced counsel would not travel over
all the same ground in each case."
The informality disclosed by the colloquy between court and
counsel, which is quoted in the opinion of this Court and so
heavily leaned on, is not entitled to any weight. It must be
inferred from the record that Mr. Roddy at all times was in touch
with the defendants and the people who procured him to act for
them. Mr. Moody and others of the local bar also acted for
defendants at the time of the first arraignment, and, as appears
from the part of the record that is quoted in the opinion,
thereafter proceeded in the discharge of their duty, including
conferences with the defendants. There is not the slightest ground
to suppose that Roddy or Moody were by fear or in any manner
restrained from full performance of their duties. Indeed, it
clearly appears that the State, by proper and adequate show of its
purpose and power to preserve order, furnished adequate protection
to them and the defendants.
When the first case was called for trial, defendants' attorneys
had already prepared, and then submitted, a motion for change of
venue, together with supporting papers. They were ready to, and did
at once, introduce testimony of witnesses to sustain that demand.
They had procured, and were ready to offer, evidence to show that
the defendants Roy Wright and Eugene Williams were under age. The
record shows that the State's evidence was ample to warrant a
conviction. And three defendants each, while asserting his own
innocence, testified that he Page 287 U. S. 76 saw others accused commit the crime charged. When regard is had
to these and other disclosures that may have been, and probably
were, made by petitioners to Roddy and Moody before the trial, it
would be difficult to think of anything that counsel erroneously
did or omitted for their defense.
If there had been any lack of opportunity for preparation, trial
counsel would have applied to the court for postponement. No such
application was made. There was no suggestion, at the trial or in
the motion for a new trial which they made, that Mr. Roddy or Mr.
Moody was denied such opportunity, or that they were not, in fact,
fully prepared. The amended motion for new trial, by counsel who
succeeded them, contains the first suggestion that defendants were
denied counsel or opportunity to prepare for trial. But neither Mr.
Roddy nor Mr. Moody has given any support to that claim. Their
silence requires a finding that the claim is groundless, for if it
had any merit, they would be bound to support it. And no one has
come to suggest any lack of zeal or good faith on their part.
If correct, the ruling that the failure of the trial court to
give petitioners time and opportunity to secure counsel was denial
of due process is enough, and with this, the opinion should end.
But the Court goes on to declare that
"the failure of the trial court to make an effective appointment
of counsel was likewise a denial of due process within the meaning
of the Fourteenth Amendment."
This is an extension of federal authority into a field hitherto
occupied exclusively by the several States. Nothing before the
Court calls for a consideration of the point. It was not suggested
below, and petitioners do not ask for its decision here. The Court,
without being called upon to consider it, adjudges without a
hearing an important constitutional question concerning criminal
procedure in state courts. Page 287 U. S. 77 It is a wise rule, firmly established by a long course of
decisions here, that constitutional questions -- even when properly
raised and argued -- are to be decided only when necessary for a
determination of the rights of the parties in controversy before
it. Thus, in the Charles River Bridge
Case , 11 Pet. 420, the Court said (p. 36 U. S.
553 ):
"Many other questions of the deepest importance have been raised
and elaborately discussed in the argument. It is not necessary, for
the decision of this case, to express our opinion upon them, and
the Court deem it proper to avoid volunteering an opinion on any
question involving the construction of the constitution where the
case itself does not bring the question directly before them, and
make it their duty to decide upon it." And see Davidson v. New Orleans, 96 U. S.
97 , 96 U. S. 103 , et seq. Haguenstein v. Lynham, 100 U.
S. 483 , 100 U. S. 490 . Blair v. United States, 250 U. S. 273 , 250 U. S. 279 . Adkins v. Children's Hospital, 261 U.
S. 525 , 261 U. S.
544 .
The record wholly fails to reveal that petitioners have been
deprived of any right guaranteed by the Federal Constitution, and I
am of opinion that the judgment should be affirmed.
MR. JUSTICE McREYNOLDS concurs in this opinion. | In Powell v. Alabama, the United States Supreme Court held that the right to counsel in a criminal case is a fundamental right guaranteed by the Due Process Clause of the Fourteenth Amendment, especially in capital cases. The Court ruled that it is the duty of the court to assign counsel for defendants who are unable to employ their own, and this right to counsel includes the right to have sufficient time to prepare a defense. The Court also stated that the trial court has the power to appoint an attorney for the accused, even in the absence of a statute. |
Criminal Trials & Prosecutions | Brady v. Maryland | https://supreme.justia.com/cases/federal/us/373/83/ | U.S. Supreme Court Brady v. Maryland, 373 U.S.
83 (1963) Brady v. Maryland No. 490 Argued March 18-19, 1963 Decided May 13, 1963 373 U.S.
83 CERTIORARI TO THE COURT OF APPEALS OF MARYLAND Opinion of the Court by MR. JUSTICE DOUGLAS, announced by MR.
JUSTICE BRENNAN.
Petitioner and a companion, Boblit, were found guilty of murder
in the first degree and were sentenced to death, their convictions
being affirmed by the Court of Appeals of Maryland. 220 Md. 454,
154 A.2d 434. Their trials were separate, petitioner being tried
first. At his trial, Brady took the stand and admitted his
participation in the crime, but he claimed that Boblit did the
actual killing. And, in his summation to the jury, Brady's counsel
conceded that Brady was guilty of murder in the first degree,
asking only that the jury return that verdict "without capital
punishment." Prior to the trial, petitioner's counsel had requested
the prosecution to allow him to examine Boblit's extrajudicial
statements. Several of those statements were shown to him, but one
dated July 9, 1958, in which Boblit admitted the actual homicide,
was withheld by the prosecution, and did not come to petitioner's
notice until after he had been tried, convicted, and sentenced, and
after his conviction had been affirmed.
Petitioner moved the trial court for a new trial based on the
newly discovered evidence that had been suppressed by the
prosecution. Petitioner's appeal from a denial of that motion was
dismissed by the Court of Appeals without prejudice to relief under
the Maryland [85 ]
Post-Conviction Procedure Act. 222 Md. 442, 160 A.2d 912. The
petition for post-conviction relief was dismissed by the trial
court, and, on appeal, the Court of Appeals held that suppression
of the evidence by the prosecution denied petitioner due process of
law, and remanded the case for a retrial of the question of
punishment, not the question of guilt. 226 Md. 422, 174 A.2d 167.
The case is here on certiorari, 371 U.S. 812. [ Footnote 1 ]
The crime in question was murder committed in the perpetration
of a robbery. Punishment for that crime in Maryland is life
imprisonment or death, the jury being empowered to restrict the
punishment to life by addition of the words "without capital
punishment." 3 Md.Ann.Code, 1957, Art. 27, § 413. In Maryland, by
reason of the state constitution, the jury in a criminal case are
"the Judges of Law, as well as of fact." Art. XV, § 5. The question
presented is whether petitioner was denied a federal right when the
Court of Appeals restricted the new trial to the question of
punishment. [86 ]
We agree with the Court of Appeals that suppression of this
confession was a violation of the Due Process Clause of the
Fourteenth Amendment. The Court of Appeals relied, in the main, on
two decisions from the Third Circuit Court of Appeals United States
ex rel. Almeida v. Baldi , 195 F.2d 815, 33 A.L.R.2d 1407,
and United States ex rel. Thompson v. Dye , 221 F.2d 763
which, we agree, state the correct constitutional rule.
This ruling is an extension of Mooney v. Holohan , 294 U. S. 103 ,
112, where the Court ruled on what nondisclosure by a prosecutor
violates due process: "It is a requirement that cannot be deemed to be satisfied by
mere notice and hearing if a state has contrived a conviction
through the pretense of a trial which, in truth, is but used as a
means of depriving a defendant of liberty through a deliberate
deception of court and jury by the presentation of testimony known
to be perjured. Such a contrivance by a state to procure the
conviction and imprisonment of a defendant is as inconsistent with
the rudimentary demands of justice as is the obtaining of a like
result by intimidation." In Pyle v. Kansas , 317 U. S. 213 , 215-216,
we phrased the rule in broader terms: "Petitioner's papers are inexpertly drawn, but they do set forth
allegations that his imprisonment resulted from perjured testimony,
knowingly used by the State authorities to obtain his conviction,
and from the deliberate suppression by those same authorities of
evidence favorable to him. These allegations sufficiently charge a
deprivation of rights guaranteed by the Federal Constitution, and,
if proven, would entitle petitioner to release from his present
custody. Mooney v. Holohan , 294 U. S. 103 . " [87 ]
The Third Circuit, in the Baldi case, construed that
statement in Pyle v. Kansas to mean that the "suppression
of evidence favorable" to the accused was itself sufficient to
amount to a denial of due process. 195 F.2d at 820. In Napue v.
Illinois , 360 U.
S. 264 , 269, we extended the test formulated in Mooney v.
Holohan when we said: "The same result obtains when the State,
although not soliciting false evidence, allows it to go uncorrected
when it appears." And see Alcorta v. Texas , 355 U. S. 28 ; Wilde v.
Wyoming ,. Cf. Durley v. Mayo , 351 U. S. 277 , 285
(dissenting opinion).
We now hold that the suppression by the prosecution of evidence
favorable to an accused upon request violates due process where the
evidence is material either to guilt or to punishment, irrespective
of the good faith or bad faith of the prosecution.
The principle of Mooney v. Holohan is not punishment of
society for misdeeds of a prosecutor, but avoidance of an unfair
trial to the accused. Society wins not only when the guilty are
convicted, but when criminal trials are fair; our system of the
administration of justice suffers when any accused is treated
unfairly. An inscription on the walls of the Department of Justice
states the proposition candidly for the federal domain: "The United
States wins its point whenever justice is done its citizens in the
courts." [ Footnote 2 ] A
prosecution that withholds evidence on demand of an accused which,
if made avail- [88 ]
able, would tend to exculpate him or reduce the penalty helps
shape a trial that bears heavily on the defendant. That casts the
prosecutor in the role of an architect of a proceeding that does
not comport with standards of justice, even though, as in the
present case, his action is not "the result of guile," to use the
words of the Court of Appeals. 226 Md. at 427, 174 A.2d at 169.
The question remains whether petitioner was denied a
constitutional right when the Court of Appeals restricted his new
trial to the question of punishment. In justification of that
ruling, the Court of Appeals stated: "There is considerable doubt as to how much good Boblit's
undisclosed confession would have done Brady if it had been before
the jury. It clearly implicated Brady as being the one who wanted
to strangle the victim, Brooks. Boblit, according to this
statement, also favored killing him, but he wanted to do it by
shooting. We cannot put ourselves in the place of the jury, and
assume what their views would have been as to whether it did or did
not matter whether it was Brady's hands or Boblit's hands that
twisted the shirt about the victim's neck. . . . [I]t would be 'too
dogmatic' for us to say that the jury would not have attached any
significance to this evidence in considering the punishment of
the defendant Brady. "
"Not without some doubt, we conclude that the withholding of
this particular confession of Boblit's was prejudicial to the
defendant Brady. . . . "
"The appellant's sole claim of prejudice goes to the punishment
imposed. If Boblit's withheld confession had been before the
jury, nothing in it could have reduced the appellant Brady's
offense below murder in the first degree. We therefore see no
occasion to retry that issue." 226 Md. at 429 430, 174 A.2d at 171.
(Italics added.) [89 ]
If this were a jurisdiction where the jury was not the judge of
the law, a different question would be presented. But since it is,
how can the Maryland Court of Appeals state that nothing in the
suppressed confession could have reduced petitioner's offense
"below murder in the first degree"? If, as a matter of Maryland
law, juries in criminal cases could determine the admissibility of
such evidence on the issue of innocence or guilt, the question
would seem to be foreclosed.
But Maryland's constitutional provision making the jury in
criminal cases "the Judges of Law" does not mean precisely what it
seems to say. [ Footnote 3 ] The
present status of that provision was reviewed recently in Giles
v. State , 229 Md. 370, 183 A.2d 359, appeal
dismissed , 372
U. S. 767 , where the several exceptions, added by statute or
carved out by judicial construction, are reviewed. One of those
exceptions material here is that "Trial courts have always passed,
and still pass, upon the admissibility of evidence the jury may
consider on the issue of the innocence or guilt of the accused."
229 Md. at 383, 183 A.2d at 365. The cases cited make up a long
line going back nearly a century. Wheeler v. State , 42 Md.
563, 570, stated that instructions to the jury were advisory only,
"except in regard to questions as to what shall be considered as
evidence." And the court "having such right, it follows of course,
that it also has the right to prevent counsel from arguing against
such an instruction." Bell v. State , 57 Md. 108, 120. And see Beard v. State , 71 Md. 275, 280, 17 A. 1044, 1045; Dick v. State , 107 Md. 11, 21, 68 A. 286, 290. Cf.
Vogel v. State , 163 Md. 267, 162 A. 705. [90 ]
We usually walk on treacherous ground when we explore state law,
[ Footnote 4 ] for state courts,
state agencies, and state legislatures are its final expositors
under our federal regime. But, as we read the Maryland decisions,
it is the court, not the jury, that passes on the "admissibility of
evidence" pertinent to "the issue of the innocence or guilt of the
accused." Giles v. State, supra. In the present case, a
unanimous Court of Appeals has said that nothing in the suppressed
confession "could have reduced the appellant Brady's offense below
murder in the first degree." We read that statement as a ruling on
the admissibility of the confession on the issue of innocence or
guilt. A sporting theory of justice might assume that, if the
suppressed confession had been used at the first trial, the judge's
ruling that it was not admissible on the issue of innocence or
guilt might have been flouted by the jury just as might have been
done if the court had first admitted a confession and then stricken
it from the record. [ Footnote
5 ] But we cannot raise that trial strategy to the dignity of a
constitutional right and say that the deprival of this defendant of
that sporting chance through the use of a [91 ]
bifurcated trial ( cf. Williams v. New York , 337 U. S. 241 ) denies him
due process or violates the Equal Protection Clause of the
Fourteenth Amendment. Affirmed. Separate opinion of MR. JUSTICE WHITE.
1. The Maryland Court of Appeals declared, "The suppression or
withholding by the State of material evidence exculpatory to an
accused is a violation of due process" without citing the United
States Constitution or the Maryland Constitution, which also has a
due process clause. [ Footnote
* ] We therefore cannot be sure which Constitution was invoked
by the court below, and thus whether the State, the only party
aggrieved by this portion of the judgment, could even bring the
issue here if it desired to do so. See New York City v. Central
Savings Bank , 306 U.S. 661; Minnesota v. National Tea
Co. , 309 U. S.
551 . But, in any event, there is no cross-petition by the
State, nor has it challenged the correctness of the ruling below
that a new trial on punishment was called for by the requirements
of due process. In my view, therefore, the Court should not reach
the due process question which it decides. It certainly is not the
case, as it may be suggested, that, without it, we would have only
a state law question, for, assuming the court below was correct in
finding a violation of petitioner's rights in the suppression of
evidence, the federal question he wants decided here still remains,
namely, whether denying him a new trial on guilt as well as
punishment deprives him of equal protection. There is thus a
federal question to deal with in this Court, cf. Bell v.
Hood , 327 U. S.
678 , [92 ]
wholly aside from the due process question involving the
suppression of evidence. The majority opinion makes this
unmistakably clear. Before dealing with the due process issue, it
says, "The question presented is whether petitioner was denied a
federal right when the Court of Appeals restricted the new trial to
the question of punishment." After discussing at some length and
disposing of the suppression matter in federal constitutional
terms, it says the question still to be decided is the same as it
was before: "The question remains whether petitioner was denied a
constitutional right when the Court of Appeals restricted his new
trial to the question of punishment."
The result, of course, is that the due process discussion by the
Court is wholly advisory.
2. In any event, the Court's due process advice goes
substantially beyond the holding below. I would employ more
confining language, and would not cast in constitutional form a
broad rule of criminal discovery. Instead, I would leave this task,
at least for new, to the rulemaking or legislative process after
full consideration by legislators, bench, and bar.
3. I concur in the Court's disposition of petitioner's equal
protection argument.
MR. JUSTICE HARLAN, whom MR. JUSTICE BLACK joins,
dissenting.
I think this case presents only a single federal question: did
the order of the Maryland Court of Appeals granting a new trial,
limited to the issue of punishment, violate petitioner's Fourteenth
Amendment right to equal protection? [ Footnote 1 ] In my opinion, an affirmative answer
would [93 ]
be required if the Boblit statement would have been admissible
on the issue of guilt at petitioner's original trial. This indeed
seems to be the clear implication of this Court's opinion.
The Court, however, holds that the Fourteenth Amendment was not
infringed because it considers the Court of Appeals' opinion, and
the other Maryland cases dealing with Maryland's constitutional
provision making juries in criminal cases "the Judges of Law, as
well as of fact," as establishing that the Boblit statement would
not have been admissible at the original trial on the issue of
petitioner's guilt.
But I cannot read the Court of Appeals' opinion with any such
assurance. That opinion can as easily, and perhaps more easily, be
read as indicating that the new trial limitation followed from the
Court of Appeals' concept of its power, under § 645G of the
Maryland Post Conviction Procedure Act, Md.Code, Art. 27 (1960
Cum.Supp.) and Rule 870 of the Maryland Rules of Procedure, to
fashion appropriate relief meeting the peculiar circumstances of
this case, [ Footnote 2 ]
rather than from the view that the Boblit statement would have been
relevant at the original trial only on the issue of punishment. 226
Md. at 430, 174 A.2d at 171. This interpretation is indeed
fortified by the Court of Appeals' earlier general discussion as to
the admissibility of third-party confessions, which falls short of
saying anything that is dispositive [94 ]
of the crucial issue here. 226 Md. at 427 429, 174 A.2d at 170.
[ Footnote 3 ]
Nor do I find anything in any of the other Maryland cases cited
by the Court (ante, p. 89) which bears on the admissibility vel
non of the Boblit statement on the issue of guilt. None of
these cases suggests anything more relevant here than that a jury
may not "overrule" the trial court on questions relating to the
admissibility of evidence. Indeed, they are by no means clear as to
what happens if the jury in fact undertakes to do so. In this very
case, for example, the trial court charged that, "in the final
analysis the jury are the judges of both the law and the facts, and
the verdict in this case is entirely the jury's
responsibility." (Emphasis added.)
Moreover, uncertainty on this score is compounded by the State's
acknowledgment at the oral argument here that the withheld Boblit
statement would have been admissible at the trial on the issue of
guilt. [ Footnote 4 ]
In this state of uncertainty as to the proper answer to the
critical underlying issue of state law, and in view of the fact
that the Court of Appeals did not, in terms, [95 ]
address itself to the equal protection question, I do not see
how we can properly resolve this case at this juncture. I think the
appropriate course is to vacate the judgment of the State Court of
Appeals and remand the case to that court for further consideration
in light of the governing constitutional principle stated at the
outset of this opinion. Cf. Minnesota v. National Tea Co. , 309 U. S.
551 . Footnotes [ Footnote 1 ]
Neither party suggests that the decision below is not a "final
judgment" within the meaning of 28 U.S.C. § 1257(3), and no attack
on the reviewability of the lower court's judgment could be
successfully maintained. For the general rule that "Final judgment
in a criminal case means sentence. The sentence is the judgment"
( Berman v. United States , 302 U. S. 211 , 212)
cannot be applied here. If, in fact, the Fourteenth Amendment
entitles petitioner to a new trial on the issue of guilt as well as
punishment, the ruling below has seriously prejudiced him. It is
the right to a trial on the issue of guilt "that presents a serious
and unsettled question" ( Cohen v. Beneficial Industrial Loan
Corp. , 337 U. S.
541 , 547) that "is fundamental to the further conduct of the
case" ( United States v. General Motors Corp. , 323 U. S. 373 , 377). This
question is "independent of, and unaffected by" ( Radio Station
WOW v. Johnson , 326 U. S. 120 , 126) what
may transpire in a trial at which petitioner can receive only a
life imprisonment or death sentence. It cannot be mooted by such a
proceeding. See Largent v. Texas , 318 U. S. 418 , 421-422. Cf. Local No. 438 v. Curry , 371 U. S. 542 , 549.
[ Footnote 2 ]
Judge Simon E. Sobeloff, when Solicitor General, put the idea as
follows in an address before the Judicial Conference of the Fourth
Circuit on June 29, 1954:
"The Solicitor General is not a neutral; he is an advocate, but
an advocate for a client whose business is not merely to prevail in
the instant case. My client's chief business is not to achieve
victory, but to establish justice. We are constantly reminded of
the now classic words penned by one of my illustrious predecessors,
Frederick William Lehmann, that the Government wins its point when
justice is done in its courts."
[ Footnote 3 ] See Dennis, Maryland's Antique Constitutional Thorn, 92
U. of Pa.L.Rev. 34, 39, 43; Prescott, Juries as Judges of the Law:
Should the Practice be Continued, 60 Md.St.Bar Assn.Rept. 246, 253
254.
[ Footnote 4 ]
For one unhappy incident of recent vintage see Oklahoma
Packing Co. v. Oklahoma Gas & Electric Co. , 309 U. S. 4 , that replaced
an earlier opinion in the same case, 309 U.S. 703.
[ Footnote 5 ]
"In the matter of confessions, a hybrid situation exists. It is
the duty of the Court to determine from the proof, usually taken
out of the presence of the jury, if they were freely and
voluntarily made, etc., and admissible. If admitted, the jury is
entitled to hear and consider proof of the circumstances
surrounding their obtention, the better to determine their weight
and sufficiency. The fact that the Court admits them clothes them
with no presumption for the jury's purposes that they are either
true or were freely and voluntarily made. However, after a
confession has been admitted and read to the jury, the judge may
change his mind and strike it out of the record. Does he strike it
out of the jury's mind?"
Dennis, Maryland's Antique Constitutional Thorn, 92 U. of
Pa.L.Rev. 34, 39. See also Bell v. State, supra , 57 Md. at
120; Vogel v. State , 163 Md. at 272, 162 A. at 706
707.
[ Footnote * ]
Md.Const., Art. 23; Home Utilities Co., Inc., v. Revere
Copper & Brass, Inc. , 209 Md. 610, 122 A.2d 109; Raymond v. State ex rel. Szydlouski , 192 Md. 602, 65 A.2d
285; County Comm'rs of Anne Arundel County v. English , 182
Md. 514, 35 A.2d 135; Oursler v. Tawes , 178 Md. 471, 13
A.2d 763.
[ Footnote 1 ]
I agree with my Brother WHITE that there is no necessity for
deciding in this case the broad due process questions with which
the Court deals at pp. 86-88 of its opinion.
[ Footnote 2 ]
Section 645G provides in part:
"If the court finds in favor of the petitioner, it shall enter
an appropriate order with respect to the judgment or sentence in
the former proceedings, and any supplementary orders as to
rearraignment, retrial, custody, bail, discharge, correction of
sentence, or other matters that may be necessary and proper."
Rule 870 provides that the Court of Appeals
"will either affirm or reverse the judgment from which the
appeal was taken, or direct the manner in which it shall be
modified, changed or amended."
[ Footnote 3 ]
It is noteworthy that the Court of Appeals did not indicate that
it was limiting in any way the authority of Day v. State ,
196 Md. 384, 76 A.2d 729. In that case, two defendants were jointly
tried and convicted of felony murder. Each admitted participating
in the felony, but accused the other of the homicide. On appeal,
the defendants attacked the trial court's denial of a severance,
and the State argued that neither defendant was harmed by the
statements put in evidence at the joint trial because admission of
the felony amounted to admission of guilt of felony murder.
Nevertheless, the Court of Appeals found an abuse of discretion and
ordered separate new trials on all issues.
[ Footnote 4 ]
In response to a question from the Bench as to whether Boblit's
statement, had it been offered at petitioner's original trial,
would have been admissible for all purposes, counsel for the State,
after some colloquy, stated: "It would have been, yes." | The Supreme Court ruled that the prosecution's suppression of a confession that may have mitigated the defendant's role in a crime violated the Due Process Clause of the Fourteenth Amendment, granting a new trial for the petitioner. |
Criminal Trials & Prosecutions | Betts v. Brady | https://supreme.justia.com/cases/federal/us/316/455/ | U.S. Supreme Court Betts v. Brady, 316
U.S. 455 (1942) Betts v. Brady No. 837 Argued April 13, 14, 1942 Decided June 1, 1942 316
U.S. 455 CERTIORARI TO HON. CARROLL T. BOND, A JUDGE OF THE STATE OF MARYLAND, BEING A JUDGE OF THE COURT OF APPEALS OF MARYLAND FROM THE CITY OF BALTIMORE. Syllabus 1. In the light of the applicable law of Maryland, an order of
the Chief Judge of the Court of Appeals, he being also the judge of
that court from the City of Baltimore, denying petitioner's release
upon a writ of habeas corpus held reviewable here by
certiorari under Jud.Code § 237, as a "final judgment" of the
"highest court" in which a decision of the federal question
involved could be had. P. 316 U. S.
458 .
2. A judgment of a state tribunal denying release on habeas
corpus, which is not reviewable in any other state court and ends
the particular proceeding, is a final judgment within the meaning
of Jud.Code § 237, notwithstanding that, under the state law, the
prisoner retains the right to seek discharge by applications to
other courts and judges successively. P. 316 U. S.
460 .
3. The due process clause of the Fourteenth Amendment does not
incorporate, as such, the specific guarantees found in the Sixth
Amendment, although a denial by a State of rights or privileges
specifically embodied in that and others of the first eight
amendments may, in certain circumstances, or in connection with
other elements, operate, in a given case, to deprive a litigant of
due process of law in violation of the Fourteenth. P. 316 U. S.
461 . Page 316 U. S. 456 4. The application of the due process clause to State criminal
proceedings is not governed by hard and fast rule. Asserted denial
of due process is to be tested by appraisal of all facts in the
case, and that which in one setting may constitute a denial of due
process because it is a denial of fundamental fairness shocking to
the universal sense of justice may, in other circumstances, and in
the light of other considerations, fall short of such a denial. P. 316 U. S.
462 .
5. Decisions of this Court do not lay down a rule that, in every
case, whatever the circumstances, one charged with crime who is
unable to obtain counsel must be furnished counsel by the State. P. 316 U. S.
462 .
6. A review of state constitutional and statutory provisions on
the subject in connection with the common law demonstrates that, in
the great majority of the States, it has been the considered
judgment of the people, their representatives, and their courts
that an appointment of counsel for indigent defendants in criminal
cases is not a fundamental right, essential to a fair trial, and
that the matter has generally been deemed one of legislative
policy. In the light of this evidence, it cannot be said that the
concept of due process incorporated in the Fourteenth Amendment
obliges the State, whatever may be their own views, to furnish
counsel in every such case. P. 316 U. S.
471 .
7. Upon the facts of this case, the refusal of a state court to
appoint counsel to represent an indigent defendant at a trial in
which he was connected of robbery did not deny him due process of
law in violation of the Fourteenth Amendment. P. 316 U. S.
472 .
Affirmed.
CERTIORARI, 315 U.S. 791, to review an order of a judge of the
Court of Appeals of Maryland from the City of Baltimore, denying
petitioner's release upon a writ of habeas corpus.
MR. JUSTICE ROBERTS delivered the opinion of the Court.
The petitioner was indicted for robbery in the Circuit Court of
Carroll County, Maryland. Due to lack of funds, Page 316 U. S. 457 he was unable to employ counsel, and so informed the judge at
his arraignment. He requested that counsel be appointed for him.
The judge advised him that this would not be done, as it was not
the practice in Carroll County to appoint counsel for indigent
defendants, save in prosecutions for murder and rape.
Without waiving his asserted right to counsel, the petitioner
pleaded not guilty and elected to be tried without a jury. At his
request, witnesses were summoned in his behalf. He cross-examined
the State's witnesses and examined his own. The latter gave
testimony tending to establish an alibi. Although afforded the
opportunity, he did not take the witness stand. The judge found him
guilty, and imposed a sentence of eight years.
While serving his sentence, the petitioner filed with a judge of
the Circuit Court for Washington County, Maryland, a petition for a
writ of habeas corpus alleging that he had been deprived of the
right to assistance of counsel guaranteed by the Fourteenth
Amendment of the Federal Constitution. The writ issued, the cause
was heard, his contention was rejected, and he was remanded to the
custody of the prison warden.
Some months later, a petition for a writ of habeas corpus was
presented to Hon. Carroll T. Bond, Chief Judge of the Court of
Appeals of Maryland, setting up the same grounds for the prisoner's
release as the former petition. The respondent answered, a hearing
was afforded, at which an agreed statement of facts was offered by
counsel for the parties, the evidence taken at the petitioner's
trial was incorporated in the record, and the cause was argued.
Judge Bond granted the writ, but, for reasons set forth in an
opinion, denied the relief prayed and remanded the petitioner to
the respondent's custody.
The petitioner applied to this court for certiorari directed to
Judge Bond. The writ was issued on account of the importance of the
jurisdictional questions involved Page 316 U. S. 458 and conflicting decisions [ Footnote 1 ] upon
the constitutional question presented. In awarding the writ, we
requested counsel to discuss the jurisdiction of this court,
"particularly (1) whether the decision below is that of a court
within the meaning of § 237 [ Footnote 2 ] of the
Judicial Code, and (2) whether state remedies, either by appeal or
by application to other judges or any other state court, have been
exhausted."
1. Sec. 237 of the Judicial Code declares this court competent
to review, upon certiorari, "any cause wherein a final judgment . .
. has been rendered . . . by the highest court" of a State "in
which a decision could be had" on a federal question. Was Judge
Bond's judgment that of a court within the meaning of the statute?
Answer must be made in the light of the applicable law of
Maryland.
Art. 4, § 6 of the State Constitution provides: "All Judges
shall by virtue of their offices be Conservators of the Peace
throughout the State; . . ." Sec. 1 of Art. 42 of the Public
General Laws of Maryland (Flack's 1939 Edition) invests the Court
of Appeals and the Chief Judge thereof, the Circuit Courts for the
respective counties, and the several judges thereof, the Superior
Court of Baltimore City, the Court of Common Pleas of that city,
the Circuit Court and Circuit Court No. 2 of Baltimore City, the
Baltimore City Court, and the judges of the said courts, out of
court, and the Judge of the Court of Appeals from the City of
Baltimore, with power to grant writs of habeas corpus and to
exercise jurisdiction in all matters pertaining thereto. Page 316 U. S. 459 Although it is settled that the grant to the Court of Appeals of
the power to issue the writ is unconstitutional and void, [ Footnote 3 ] and although the statute does not confer on
individual judges of the Court of Appeals the power to issue a writ
and proceed thereon, nevertheless those judges, as conservators of
the peace, have the power under the quoted section of the
Constitution. [ Footnote 4 ] In any event, Judge
Bond is the Chief Judge of the Court of Appeals and the judge of
that court from the City of Baltimore, and, as such, is empowered
to act.
Sections 2 to 6, inclusive, 9 to 12 inclusive, and 17 of the
statute prescribe the procedure governing the issue of the writ,
its service, the return, and the hearing. No question is made but
that Judge Bond complied with these provisions. It is, therefore,
apparent that, in all respects, he acted in a judicial capacity,
and that, in his proper person, he was a judicial tribunal having
jurisdiction, upon pleadings and proofs, to hear and to adjudicate
the issue of the legality of the petitioner's detention. If Judge
Bond had been sitting in term time as a member of a court, clothed
with power to act as one of the members of that court, his judgment
would be that of a court within the scope of § 237. Doubt that his
judgment in the present instance is such arises out of our decision
in McKnight v. James, 155 U. S. 685 ,
where we refused to review the denial of a discharge by a judge of
an inferior court of Ohio who issued the writ and heard the case at
chambers. It appeared that the petitioner had addressed his
petition to a judge of the Circuit Court, instead of the court
itself, and that, for this reason, the order of the judge was not
reviewable by the Supreme Court of Ohio as it would have been had
the writ been addressed Page 316 U. S. 460 to the Circuit Court, though heard by a single judge. The
petitioner had not exhausted his state remedy since, though he
could have obtained a decision by the highest Court of the State,
he had avoided doing so, and then sought to come to this court
directly from the order of the Circuit Judge on the theory that
that judge's order was the final order of the highest court of the
State which could decide his case. In a later decision, we referred
to this and other cognate cases as deciding that appeals do not lie
to this court from orders by judges at chambers, [ Footnote 5 ] but the fundamental reason for denying our
jurisdiction was that the appellant had not exhausted state
remedies.
In view of what has been said of the power of Judge Bond as a
judicial tribunal to hear and finally decide the cause, and of the
judicial quality of his action, we are of opinion that his judgment
was that of a court within the intendment of § 237.
2. Did the judgment entered comply with the requirement of § 237
that it must be a final judgment rendered by the highest court in
which a decision could be had? Again, answer must be made in the
light of the applicable law of Maryland. The judgment was final in
the sense that an order of a Maryland judge in a habeas corpus
case, whatever the court to which he belongs, is not reviewable by
any other court of Maryland except in specific instances named in
statutes which are here inapplicable. [ Footnote
6 ] It is true that the order was not final, and the petitioner
has not exhausted state remedies in the sense that, in Maryland, as
in England, in many of the States, and in the federal courts, a
prisoner may apply successively Page 316 U. S. 461 to one judge after another and to one court after another
without exhausting his right. [ Footnote 7 ] We
think this circumstance does not deny to the judgment in a given
case the quality of finality requisite to this court's
jurisdiction. Although the judgment is final in the sense that it
is not subject to review by any other court of the State, we may,
in our discretion, refuse the writ when there is a higher court of
the State to which another petition for the relief sought could be
addressed, [ Footnote 8 ] but this is not such a
case. To hold that, since successive applications to courts and
judges of Maryland may be made as of right, the judgment in any
case is not final would be to deny all recourse to this court in
such cases.
Since Judge Bond's order was a final disposition by the highest
court of Maryland in which a judgment could be had of the issue
joined on the instant petition, we have jurisdiction to review
it.
3. Was the petitioner's conviction and sentence a deprivation of
his liberty without due process of law, in violation of the
Fourteenth Amendment, because of the court's refusal to appoint
counsel at his request?
The Sixth Amendment of the national Constitution applies only to
trials in federal courts. [ Footnote 9 ] The due
process clause of the Fourteenth Amendment does not
incorporate, Page 316 U. S. 462 as such, the specific guarantees found in the Sixth Amendment,
[ Footnote 10 ] although a denial by a State of
rights or privileges specifically embodied in that and others of
the first eight amendments may, in certain circumstances, or in
connection with other elements, operate, in a given case, to
deprive a litigant of due process of law in violation of the
Fourteenth. [ Footnote 11 ] Due process of law is
secured against invasion by the federal Government by the Fifth
Amendment, and is safeguarded against state action in identical
words by the Fourteenth. The phrase formulates a concept less rigid
and more fluid than those envisaged in other specific and
particular provisions of the Bill of Rights. Its application is
less a matter of rule. Asserted denial is to be tested by an
appraisal of the totality of facts in a given case. That which may,
in one setting, constitute a denial of fundamental fairness,
shocking to the universal sense of justice, may, in other
circumstances and in the light of other considerations, fall short
of such denial. [ Footnote 12 ] In the application
of such a concept, there is always the danger of falling into the
habit of formulating the guarantee into a set of hard and fast
rules the application of which, in a given case, may be to ignore
the qualifying factors therein disclosed.
The petitioner, in this instance, asks us, in effect, to apply a
rule in the enforcement of the due process clause. He says the rule
to be deduced from our former decisions is that, in every case,
whatever the circumstances, one charged with crime who is unable to
obtain counsel must be furnished counsel by the State. Expressions
in the Page 316 U. S. 463 opinions of this court lend color to the argument, [ Footnote 13 ] but, as the petitioner admits, none of our
decisions squarely adjudicates the question now presented.
In Powell v. Alabama, 287 U. S. 45 ,
ignorant and friendless negro youths, strangers in the community,
without friends or means to obtain counsel, were hurried to trial
for a capital offense without effective appointment of counsel on
whom the burden of preparation and trial would rest, and without
adequate opportunity to consult even the counsel casually appointed
to represent them. This occurred in a State whose statute law
required the appointment of counsel for indigent defendants
prosecuted for the offense charged. Thus, the trial was conducted
in disregard of every principle of fairness and in disregard of
that which was declared by the law of the State a requisite of a
fair trial. This court held the resulting convictions were without
due process of law. It said that, in the light of all the facts,
the failure of the trial court to afford the defendants reasonable
time and opportunity to secure counsel was a clear denial of due
process. The court stated further that,
"under the circumstances . . . , the necessity of counsel was so
vital and imperative that the failure of the trial court to make an
effective appointment of counsel was likewise a denial of due
process,"
but added:
"Whether this would be so in other criminal prosecutions, or
under other circumstances, we need not determine. All that it is
necessary now to decide, as we do decide, is that, in a capital
case, where the defendant is unable to employ counsel and is
incapable adequately of making his own defense because of
ignorance, feeble-mindedness, illiteracy, or the like, it is the
duty of the court, whether requested or not, to assign Page 316 U. S. 464 counsel for him as a necessary requisite of due process of law,
. . ."
Likewise, in Avery v. Alabama, 308 U.
S. 444 , the state law required the appointment of
counsel. The claim which we felt required examination, as in the Powell case, was that the purported compliance with this
requirement amounted to mere lip service. Scrutiny of the record
disclosed that counsel had been appointed, and the defendant had
been afforded adequate opportunity to prepare his defense with the
aid of counsel. We therefore overruled the contention that due
process had been denied.
In Smith v. O'Grady, 312 U. S. 329 , the
petition for habeas corpus alleged a failure to appoint counsel,
but averred other facts which, if established, would prove that the
trial was a mere sham and pretense, offensive to the concept of due
process. There also, state law required the appointment of counsel
for one on trial for the offense involved.
Those cases, which are the petitioner's chief reliance, do not
rule this. The question we are now to decide is whether due process
of law demands that, in every criminal case, whatever the
circumstances, a State must furnish counsel to an indigent
defendant. Is the furnishing of counsel in all cases whatever
dictated by natural, inherent, and fundamental principles of
fairness? The answer to the question may be found in the common
understanding of those who have lived under the Anglo-American
system of law. By the Sixth Amendment, the people ordained that, in
all criminal prosecutions, the accused should "enjoy the right . .
. to have the assistance of counsel for his defence." We have
construed the provision to require appointment of counsel in all
cases where a defendant is unable to procure the services of an
attorney, and where the right has not been intentionally and Page 316 U. S. 465 competently waived. [ Footnote 14 ] Though, as
we have noted, the Amendment lays down no rule for the conduct of
the States, the question recurs whether the constraint laid by the
Amendment upon the national courts expresses a rule so fundamental
and essential to a fair trial, and so to due process of law, that
it is made obligatory upon the States by the Fourteenth Amendment.
Relevant data on the subject are afforded by constitutional and
statutory provisions subsisting in the colonies and the States
prior to the inclusion of the Bill of Rights in the national
Constitution, and in the constitutional, legislative, and judicial
history of the States to the present date. These constitute the
most authoritative sources for ascertaining the considered judgment
of the citizens of the States upon the question.
The Constitutions of the thirteen original States, as they were
at the time of federal union, exhibit great diversity in respect of
the right to have counsel in criminal cases. Rhode Island had no
constitutional provision on the subject until 1843, North Carolina
and South Carolina had none until 1868. Virginia has never had any.
Maryland, in 1776, and New York, in 1777, adopted provisions to the
effect that a defendant accused of crime should be "allowed"
counsel. A constitutional mandate that the accused should have a
right to be heard by himself and by his counsel was adopted by
Pennsylvania in 1776, New Hampshire in 1774, by Delaware in 1782,
and by Connecticut in 1818. In 1780, Massachusetts ordained that
the defendant should have the right to be heard by himself or his
counsel at his election. In 1798, Georgia provided that the accused
might be heard by himself or counsel, or both. In 1776, New Jersey
guaranteed the accused the same privileges of witnesses and counsel
as their prosecutors "are or shall be entitled to." Page 316 U. S. 466 The substance of these provisions of colonial and early state
constitutions is explained by the contemporary common law.
Originally, in England, a prisoner was not permitted to be heard by
counsel upon the general issue of not guilty on any indictment for
treason or felony. [ Footnote 15 ] The practice of
English judges, however, was to permit counsel to advise with a
defendant as to the conduct of his case and to represent him in
collateral matters and as respects questions of law arising upon
the trial. [ Footnote 16 ] In 1695, the rule was
relaxed by statute [ Footnote 17 ] to the extent
of permitting one accused of treason the privilege of being heard
by counsel. The rule forbidding the participation of counsel stood,
however, as to indictments for felony until 1836, when a statute
accorded the right to defend by counsel against summary convictions
and charges of felony. [ Footnote 18 ] In
misdemeanor cases and, after 1695, in prosecutions for treason, the
rule was that the defense must be conducted either by the defendant
in person or by counsel, but that both might not participate in the
trial. [ Footnote 19 ]
In the light of this common law practice, it is evident that the
constitutional provisions to the effect that a defendant should be
"allowed" counsel or should have a right "to be heard by himself
and his counsel," or that he might be heard by "either or both," at
his election, were intended to do away with the rules which denied
representation, in whole or in part, by counsel in criminal
prosecutions, but were not aimed to compel the State to provide
counsel for a defendant. At the least, such a construction by State
courts and legislators cannot be said to lack reasonable basis. Page 316 U. S. 467 The statutes in force in the thirteen original States at the
time of the adoption of the Bill of Rights are also illuminating.
It is of interest that the matter of appointment of counsel for
defendants, if dealt with at all, was dealt with by statute, rather
than by constitutional provision. The contemporary legislation
exhibits great diversity of policy. [ Footnote
20 ]
The constitutions of all the States, presently in force, save
that of Virginia, contain provisions with respect to the assistance
of counsel in criminal trials. Those of nine Page 316 U. S. 468 States [ Footnote 21 ] may be said to embody a
guarantee textually the same as that of the Sixth Amendment, or of
like import. In the fundamental law of most States, however, the
language used indicates only that a defendant is not to be denied
the privilege of representation by counsel of his choice. [ Footnote 22 ]
In three States, the guarantee, whether or not in the exact
phraseology of the Sixth Amendment, has been held to require
appointment in all cases where the defendant Page 316 U. S. 469 is unable to procure counsel. [ Footnote 23 ]
In six, the provision (one of which is like the Sixth Amendment)
have been held not to require the appointment of counsel for
indigent defendants. [ Footnote 24 ] In eight,
provisions, one of which is the same as that of the Sixth
Amendment, have evidently not been viewed as requiring such
appointment, since the courts have enforced statutes making
appointment discretionary, or obligatory only in prosecutions for
capital offenses or felonies. [ Footnote 25 ]
In twelve States, it seem to be understood that the
constitutional provision does not require appointment of Page 316 U. S. 470 counsel, since statute of greater or less antiquity call for
such appointment only in capital cases or cases of felony or other
grave crime, [ Footnote 26 ] or refer the matter
to the discretion of the court. [ Footnote 27 ] In
eighteen States, the statutes now require the court to appoint in
all cases where defendants are unable to procure counsel. [ Footnote 28 ] But this has not always been Page 316 U. S. 471 the statutory requirement in some of those States. [ Footnote 29 ] And it seems to have been assumed by many
legislatures that the matter was one for regulation from time to
time as deemed necessary, since laws requiring appointment in all
cases have been modified to require it only in the case of certain
offenses. [ Footnote 30 ]
This material demonstrates that, in the great majority of the
States, it has been the considered judgment of the people, their
representatives, and their courts that appointment of counsel is
not a fundamental right, essential to a fair trial. On the
contrary, the matter has generally been deemed one of legislative
policy. In the light of this evidence, we are unable to say that
the concept of due process incorporated in the Fourteenth Amendment
obligates the States, whatever may be their own views, to furnish
counsel in every such case. Every court has power, if it deems Page 316 U. S. 472 proper, to appoint counsel where that course seems to be
required in the interest of fairness.
The practice of the courts of Maryland gives point to the
principle that the States should not be straight-jacketed in this
respect by a construction of the Fourteenth Amendment. Judge Bond's
opinion states, and counsel at the bar confirmed the fact, that, in
Maryland, the usual practice is for the defendant to waive a trial
by jury. This the petitioner did in the present case. Such trials,
as Judge Bond remarks, are much more informal than jury trials, and
it is obvious that the judge can much better control the course of
the trial, and is in a better position to see impartial justice
done, than when the formalities of a jury trial are involved.
[ Footnote 31 ]
In this case, there was no question of the commission of a
robbery. The State's case consisted of evidence identifying the
petitioner as the perpetrator. The defense was an alibi. Petitioner
called and examined witnesses to prove that he was at another place
at the time of the commission of the offense. The simple issue was
the veracity of the testimony for the State and that for the
defendant. As Judge Bond says, the accused was not helpless, but
was a man forty-three years old, of ordinary intelligence and
ability to take care of his own interests on the trial of that
narrow issue. He had once before been in a criminal court, pleaded
guilty to larceny, and served a sentence, and was not wholly
unfamiliar with criminal procedure. It is quite clear that, in
Maryland, if the situation had been otherwise and it had appeared
that the petitioner was, for any reason, at a serious disadvantage
by reason of the lack Page 316 U. S. 473 of counsel, a refusal to appoint would have resulted in the
reversal of a judgment of conviction. Only recently, the Court of
Appeals has reversed a conviction because it was convinced on the
whole record that an accused, tried without counsel, had been
handicapped by the lack of representation. [ Footnote
32 ]
To deduce from the due process clause a rule binding upon the
States in this matter would be to impose upon them, as Judge Bond
points out, a requirement without distinction between criminal
charges of different magnitude or in respect of courts of varying
jurisdiction. As he says:
"Charges of small crimes tried before justices of the peace and
capital charges tried in the higher courts would equally require
the appointment of counsel. Presumably it would be argued that
trials in the Traffic Court would require it."
And, indeed, it was said by petitioner's counsel both below and
in this court that, as the Fourteenth Amendment extends the
protection of due process to property as well as to life and
liberty, if we hold with the petitioner, logic would require the
furnishing of counsel in civil cases involving property.
As we have said, the Fourteenth Amendment prohibits the
conviction and incarceration of one whose trial is offensive to the
common and fundamental ideas of fairness and right, and, while want
of counsel in a particular case may result in a conviction lacking
in such fundamental fairness, we cannot say that the Amendment
embodies an inexorable command that no trial for any offense, or in
any court, can be fairly conducted and justice accorded a defendant
who is not represented by counsel.
The judgment is Affirmed. Page 316 U. S. 474 [ Footnote 1 ] In re McKnight, 52 F. 799; Wilson v. Lanagan, 99 F.2d 544; Boyd v. O'Grady, 121 F.2d 146; Carey v.
Brady, 125 F.2d 253; Commonwealth ex rel. Schultz v.
Smith, 139 Pa.Super.Ct. 357, 11 A.2d 656; Commonwealth ex
rel. McGlinn v. Smith, 344 Pa. 41, 24 A.2d 1.
[ Footnote 2 ]
28 U.S.C. § 344(b).
[ Footnote 3 ] State v. Glenn, 54 Md. 572, 596; Sevinskey v.
Wagus, 76 Md. 335, 25 A. 468.
[ Footnote 4 ] Ex parte O'Neill, 8 Md. 227; Ex parte Maulsby, 13 Md. 625.
[ Footnote 5 ] Craig v. Hecht, 263 U. S. 255 , 263 U. S.
276 .
[ Footnote 6 ] Bell v. State, 4 Gill. 301; Ex parte O'Neill, 8 Md. 227; In re Coston, 23 Md. 271; Coston v.
Coston, 25 Md. 500; State v. Glenn, 54 Md. 572; Annapolis v. Howard, 80 Md. 244, 30 A. 910; Petition
of Otho Jones, 179 Md. 240, 16 A.2d 901.
[ Footnote 7 ]
Judge Bond intimates that § 3 of Art. 42, as amended by Laws
1941, c. 484 permits the use of a rule to show cause ( cf.
Holiday v. Johnston, 313 U. S. 342 ) or
other form of preliminary inquiry to avoid the necessity of the
issue of a writ and a hearing where a redundant petition is filed
disclosing no new matter. See, Salinger v. Loisel, 265 U. S. 224 , 265 U. S.
231 -232. He determined, however, in this case to issue
the writ and afford a hearing.
[ Footnote 8 ] Tenner v. Dulles, 314 U.S. 692.
[ Footnote 9 ] United States v.
Dawson , 15 How. 467, 56 U. S. 487 ; Twitchell v.
Pennsylvania , 7 Wall. 321, 74 U. S. 325 ; Spies v. Illinois, 123 U. S. 131 , 123 U. S. 166 ; In re Sawyer, 124 U. S. 200 , 124 U. S. 219 ; Brooks v. Missouri, 124 U. S. 394 , 124 U. S. 397 ; Eilenbecker v. District Court, 134 U. S.
31 , 134 U. S. 34 ,
35; West v. Louisiana, 194 U. S. 258 , 194 U. S. 263 ; Howard v. Kentucky, 200 U. S. 164 , 200 U. S.
172 .
[ Footnote 10 ] Hurtado v. California, 110 U.
S. 516 ; Macwell v. Dow, 176 U.
S. 581 ; West v. Louisiana, 194 U.
S. 258 ; Twining v. New Jersey, 211 U. S.
78 ; Frank v. Mangum, 237 U.
S. 309 ; Snyder v. Massachusetts, 291 U. S.
97 ; Palko v. Connecticut, 302 U.
S. 319 .
[ Footnote 11 ] Compare Twining v. New Jersey, 211 U. S.
78 , 211 U. S. 98 ; Powell v. Alabama, 287 U. S. 45 ; Palko v. Connecticut, 302 U. S. 319 , 302 U. S. 323 ff.
[ Footnote 12 ] Compare Lisenba v. California, 314 U.
S. 219 , 314 U. S.
236 -237.
[ Footnote 13 ] Powell v. Alabama, 287 U. S. 45 , 287 U. S. 73 ; Grosjean v. American Press Co., 297 U.
S. 233 , 297 U. S. 243 , 304 U. S. 244 ; Johnson v. Zerbst, 304 U. S. 458 , 304 U. S. 462 ; Avery v. Alabama, 308 U. S. 444 , 308 U. S.
447 .
[ Footnote 14 ] Johnson v. Zerbst, 304 U. S. 458 .
[ Footnote 15 ]
Chitty Criminal Law (5th Am.Ed.) Vol. 1, p. 406.
[ Footnote 16 ]
Chitty, supra, Vol. I, p. 407; Rex v. Parkins, 1 C. & P. 314.
[ Footnote 17 ]
7 Will. 3, c. 3, § 1.
[ Footnote 18 ]
6 & 7 Will. 4, c. 114, §§ I and II.
[ Footnote 19 ] Rex v. White, 3 Camp. N.P. 97; Regina v.
Boucher, 8 C. & P. 655.
[ Footnote 20 ]
Connecticut had no statute, although it was the custom of the
courts to assign counsel in all criminal cases. Swift, "System of
Laws, Connecticut," 1796, Vol. II, p. 392. In Delaware Penn's Laws
of 1719, c. XXII, and in Pennsylvania the Act of May 31, 1718, §
III (Mitchell and Flanders' Statutes at Large of Penna., 1682-1801,
Vol. III, p. 201) provided for appointment only in case of
"felonies of death." Georgia has never had any law on the subject.
Maryland had no such law at the time of the adoption of the Bill of
Rights. An Act of 1777 in Massachusetts gave the right to have
counsel appointed in cases of treason or misprision of treason.
Laws of the Commonwealth of Massachusetts from Nov. 28, 1780 to
Feb. 28, 1807, c. LXXI, Vol. II, Appendix, p. 1049. By an Act of
Feb. 8, 1791, New Hampshire required appointment in all cases where
the punishment was death. Metcalf's Laws of New Hampshire, 1916,
Vol. 5, pp. 596, 599. An Act of New Jersey of March 6, 1795, § 2,
required appointment in the case of any person tried upon an
indictment. Acts of the General Assembly of the Session of 1794, c.
DXXXII, p. 1012. New York apparently had no statute on the subject. See Act. Feb. 20, 1787, Laws of New York, Sessions 1st to
20th (1798), Vol. I, pp. 356-7. An Act of 1777 of North Carolina
made no provision for appointment, but accorded defendants the
right to have counsel. Laws of North Carolina, 1789, pp. 40, 56.
Rhode Island had no statute until 1798, when one was passed in the
words of the Sixth Amendment. Laws 1798, p. 80. South Carolina, by
Act of August 20, 1731, limited appointment to capital cases.
Grimke's So.Car.Pub.Laws, 1682-1790, p. 130. Virginia, by Act of
Oct. 1786, enacted with respect to one charged with treason or
felony that "the court shall allow him counsel . . . if he desire
it." Hening's Statutes of Virginia, 1785-1788, Vol. 12, p. 343.
[ Footnote 21 ] Georgia (Art. I, Par. V); Iowa (Art. I, § 10); Louisiana (Art. I, § 9); Michigan (Dec. of Rights, Art.
II, § 19); Minnesota (Art. I, § 6); New Jersey (Art. I, § 8); North Carolina (Art. I, § 11); Rhode
Island (Art. I, § 10); West Virginia (Art. III, §
14).
[ Footnote 22 ]
Some assert the right of a defendant "to appear and defend in
person and by counsel." Arizona (Art. II, § 24); Colorado (Art. II, § 16); Illinois (Art. II, §
9); Missouri (Art. II, § 22); Montana (Art. III,
§ 16); New Mexico (Art. II, § 14); South Dakota (Art. VI, § 7); Utah (Art. I, § 12); Wyoming (Art. I, § 10). Others phrase the right as that "to be heard by
himself and [his] counsel": Arkansas (Art. II, § 10); Delaware (Art. I, § 7); Indiana (Art. I, § 13); Kentucky (Bill of Rights, § 11); Pennsylvania (Art. I, § 9); Tennessee (Art. I, § 9); Vermont (Ch. I, Art. 10th); or "by himself and by counsel": Connecticut (Art. I, § 9); or "by himself and counsel": New Hampshire (Bill of Rights, 15th); Oklahoma (Art. II, § 20); Oregon (Art. I, § 11); Wisconsin (Art. I, § 7); or "by himself and counsel or either": Alabama (Art. I, § 6); "by himself or counsel or [by]
both": Florida (Dec. of Rights, § 11); Mississippi (Art. III, § 26); South Carolina (Art. I, § 18); Texas (Art. I, § 10). The verbiage sometimes
employed is: "to appear and defend in person and with counsel": California (Art. I, § 13), Idaho, (Art. I, § 13); North Dakota (Art. I, § 13); Ohio (Art. I, § 10);
or "in person or by counsel"; Kansas (Bill of Rights, §
10); Nebraska (Art. I, § 11); Washington (Art. I,
§ 22). Nevada (Art. I, § 8) and New York (Art. I,
§ 6) add: "as in civil actions." Some constitutions formulate the
right as one "to be heard by himself and his counsel at his
election" or "himself and his counsel or either at his election": Massachusetts (Part I, § 12), Maine (Art. I, §
6). Maryland (Dec. of Rights, Art. 21) states the right as
that "to be allowed counsel."
[ Footnote 23 ] Elam v. Johnson, 48 Ga. 348; Delk v. State, 99
Ga. 667, 26 S.E. 752; Fugate v. Commonwealth, 254 Ky. 663,
72 S.W.2d 47; Carperter v. Dane County, 9 Wis. 274.
[ Footnote 24 ] Cutts v. State, 54 Fla. 21, 45 So. 491; McDonald v.
Commonwealth, 173 Mass. 322, 53 N.E. 874; People v.
Dudley, 173 Mich. 389, 138 N.W. 1044; People v.
Williams, 225 Mich. 133, 195 N.W. 818; People v.
Harris, 266 Mich. 317, 253 N.W. 312; People v.
Crandell, 270 Mich. 124, 258 N.W. 224; Commonwealth v.
Smith, 344 Pa. 41, 24 A.2d 1; State v. Sweeney, 48
S.D. 248, 203 N.W. 460; State v. Yoes, 67 W.Va. 546, 68
S.E. 181; cf. Pardee v. Salt Lake County, 39 Utah 482, 118
P. 122.
[ Footnote 25 ] Alabama: Code (1940) Tit. 15, § 318; Campbell v.
State, 182 Ala. 18, 62 So. 57; Gilchrist v. State, 234 Ala. 73, 173 So. 651; Clark v. State, 239 Ala. 380,
195 So. 260. Louisiana: Code Crim.Proc. (Dart, 1932) Tit.
XIII, Art. 143; State v. Davis, 171 La. 449, 131 So. 295. Maryland: Annotated Code (Flack, 1939), Art. 26, Par. 7,
p. 1060; cf. the decision below and Coates v.
Maryland, 180 Md. 502, 25 A.2d 676. Mississippi: Annotated Code (1930) Crim.Proc., c. 21, § 1262; Laws 1934, c. 303; Reed v. State, 143 Miss. 686, 109 So. 715; Robinson v.
State, 178 Miss. 568, 173 So. 451. Rhode Island: General Laws 1938, c. 625, § 62; Acts & Resolves, 1891, c. 921,
p. 165; State v. Hudson, 55 R.I. 141, 179 A. 130. South Carolina: Code 1932, Vol. 1, § 979; State v.
Jones, 172 S.C. 129, 173 S.E. 77. Texas: Lopez v.
State, 46 Tex.Cr. 473, 80 S.W. 1016; Faggett v.
State, 122 Tex.Cr. 399, 55 S.W.2d 842; Thomas v.
State, 132 Tex.Cr. 549, 106 S.W.2d 289; Austin v.
State, 51 S.W. 249. Vermont: Public Laws (1933) c.
57, § 1424; c. 101, § 2327; c. 102, § 2370; State v.
Gomez, 89 Vt. 490, 96 A. 190.
[ Footnote 26 ] Arkansas: Steel & McCampbell's Compiled Laws of
Arkansas Territory, 1835, "Crimes and Misdemeanors," § 37, p. 194;
Gantt's Digest of Ark. Stats. 1874, Crim.Proc. c. 43, Art. XII, §
1824, p. 410; Pope's Digest (1937), Vol. 1, c. 43, § 3877, p. 1180. Delaware: Penn's Laws, c. XXII (1719); Rev.Code (1935) c.
114, 4305-6. Kansas: Gen.Stats. 1868, c. 82, § 160, p.
845; Gen.Stats.1935, c. 62, § 1304, p. 1449. Maine: Act of
March 8, 1826, § 6, p. 146; R.S. Apr. 17, 1857, c. 134, § 12, p.
713; R.S. 1030, c. 146, § 14, p. 1655. Minnesota: Act of
March 5, 1869, G.L. 1869, c. LXXII, § 1; Mason's Minn.Stats. (1927)
Vol. 2, c. 94, § 9957. Missouri: Casselberry's Rev.Stats.
1845, pp. 434, 443-4, 458; Rev.Stats. (1939) Crim.Proc. § 4003. Nebraska: Gen.Stats. 1873, c. 58, § 437, p. 821;
Comp.Stat. (1929) Crim.Proc. Art. 18, § 29-1803. New
Hampshire: R.S. 1843, Tit. XXVII, c. 225, p. 457; Pub.Laws
(1926), c. 368, Laws 1937, c. 22. Washington: Territorial
Stats. 1881, c. LXXXV, § 1063; Rem.Rev.Stats. Vol. 4, c. 2, §
2305.
[ Footnote 27 ] Arizona: Code (1939) Art. 9, §§ 44-904, 44-906. Colorado: Colo.Stats. Annotated (1935), Vol. 2, c. 48, §
502, p. 1148. Maryland: Laws 1886, c. 46, p. 66; Anno.Code
(Flack, 1939), Art. 26, par. 7.
[ Footnote 28 ]
California, Penal Code, Deering (1937), Pt. 2, Tit. 6, c. 1, §
987; Idaho, Code Anno. (1932) § 19-1412; Illinois, R.S.1935, c. 38,
¶ 754; Iowa, Code 1939, c. 640, § 13773; Kansas, Laws 1941, c. 291;
Michigan, Statutes Ann. § 28.1253; Montana, Rev.Codes Ann. (1935)
c. 73, § 11886; Nevada, Comp.Laws (1929) Cr.L. & Proc. § 10883;
New Jersey, N.J.Stat.Ann. § 2:190-3; New York, Thompson's Laws
(1939) Pt. II, Code of Crim.Proc. § 308; North Dakota, Comp.Laws
(1913) Vol. II, § 8965; Ohio, Throckmorton's Code Ann. (1940) §
13439-2; Oklahoma, Stats.Ann. Tit. 22, § 1271; Oregon, Comp.Laws
Ann. Vol. 3, § 26-804; South Dakota, Code (1939) § 34.1901;
Tennessee, Michie's Code (1938) § 11734; Utah, R.S. (1938) Code
Cr.Proc. § 105-22-12; Wyoming, R.S. (1931) § 33-501. Connecticut
provides official public defenders available to all persons unable
to retain counsel. G.S. (Revision of 1930), c. 335, § 6476.
At least as early as 1903 (3 Edw. 7, c. 38), England adopted a
Poor Prisoners' Defence Act, under which a rule was adopted whereby
an accused might defend by counsel assigned by the court.
Bowen-Rowlands, Criminal Proceedings, London (1904) pp. 46-47. The
existing statute is the Poor Prisoners' Defence Act (1930) 20 &
21 Geo. 5, c. 32. See Archbold's Criminal Pleading, Evidence and
Practice, 30th Ed. (1938) p. 167. Under this act, a poor defendant
is entitled as of right to counsel on a charge of murder, but
assignment of counsel is discretionary in other cases.
[ Footnote 29 ]
See, e.g., earlier and more restricted statutes: Idaho,
Terr.Laws, 2d Sess., 1864, c. II, p. 246; Iowa, Act of January 4,
1839, § 64; Korf v. Jasper County, 132 Ia. 682, 108 N.W. 1031;
Michigan, Laws 1857, Act No. 109, p. 239; Montana, Act January 12,
1872, c. IX, § 196; Nevada, Comp.L. 1861-73, c. LIII. Changes in
the statutes of other States might be cited. Compare Notes 20 and
28.
[ Footnote 30 ]
Louisiana. Compare Laws, 1855, Act No. 121; State v. Ferris, 16
La.Ann. 424; State v. Bridges, 109 La. 530, 33 So. 589, with
La.Code Crim.Proc. (Dart) 1932, Tit. XIII, Art. 143. Nebraska.
Compare Laws of 1869, p. 163, with Comp.Stats. (1929) § 29-1803.
Washington. Compare Code of Washington Terr. (1881) c. L316V, §
1063, with Rem.Rev.Stats. Vol. 4, c. 2, § 2305. And compare Texas
Code Crim.Proc. (1856), Pt. III, Arts. 466-7 with Vernon's Stats.
(1936), Art. 1917, and Lopez v. State, 46 Tex.Cr. 473, 80 S.W.
1016, and Thomas v. State, 132 Tex.Cr. 549, 106 S.W.2d 289.
[ Footnote 31 ]
Judge Bond adds: Certainly, my own experience in criminal trials over
which I have presided (over 2000, as I estimate it), has
demonstrated to me that there are fair trials without counsel
employed for the prisoner. [ Footnote 32 ]
Coates v. State, 180 Md. 502, 25 A.2d 676.
MR. JUSTICE BLACK, dissenting, with whom MR. JUSTICE DOUGLAS and
MR. JUSTICE MURPHY concur.
To hold that the petitioner had a constitutional right to
counsel in this case does not require us to say that "no trial for
any offense, or in any court, can be fairly conducted and justice
accorded a defendant who is not represented by counsel." This case
can be determined by a resolution of a narrower question: whether,
in view of the nature of the offense and the circumstances of his
trial and conviction, this petitioner was denied the procedural
protection which is his right under the Federal Constitution. I
think he was.
The petitioner, a farm hand, out of a job and on relief, was
indicted in a Maryland state court on a charge of robbery. He was
too poor to hire a lawyer. He so informed the court, and requested
that counsel be appointed to defend him. His request was denied.
Put to trial without a lawyer, he conducted his own defense, was
found guilty, and was sentenced to eight years' imprisonment. The
court below found that the petitioner had "at least an ordinary
amount of intelligence." It is clear from his examination of
witnesses that he was a man of little education.
If this case had come to us from a federal court, it is clear we
should have to reverse it, because the Sixth Amendment makes the
right to counsel in criminal cases inviolable by the Federal
Government. I believe that the Fourteenth Amendment made the Sixth
applicable to the states.[ Footnote 1 ] But this view, although often urged in
dissents, has never been accepted by a majority of this Court [p475] and is not accepted today. A statement of
the grounds supporting it is, therefore, unnecessary at this time.
I believe, however, that, under the prevailing view of due process,
as reflected in the opinion just announced, a view which gives this
Court such vast supervisory powers that I am not prepared to accept
it without grave doubts, the judgment below should be reversed.
This Court has just declared that due process of law is denied
if a trial is conducted in such manner that it is "shocking to the
universal sense of justice" or "offensive to the common and
fundamental ideas of fairness and right." On another occasion, this
Court has recognized that whatever is "implicit in the concept of
ordered liberty" and "essential to the substance of a hearing" is
within the procedural protection afforded by the constitutional
guaranty of due process. Palko v. Connecticut , 302 U.S.
319 , 325, 327.
The right to counsel in a criminal proceeding is "fundamental." Powell v. Alabama , 287 U.S. 45"] 287 U.S.
45 , 70; 287 U.S.
45 , 70; Grosjean v. American Press Co. , 297 U.S.
233"] 297 U.S.
233 , 243-244. It is guarded from invasion by the Sixth
Amendment, adopted to raise an effective barrier against arbitrary
or unjust deprivation of liberty by the Federal Government. 297 U.S.
233 , 243-244. It is guarded from invasion by the Sixth
Amendment, adopted to raise an effective barrier against arbitrary
or unjust deprivation of liberty by the Federal Government. Johnson v. Zerbst , 304 U.S.
458 , 462.
An historical evaluation of the right to a full hearing in
criminal cases, and the dangers of denying it, were set out in the Powell case, where this Court said: What . . . does a hearing include? Historically and in
practice, in our own country, at least, it has always included the
right to the aid of counsel when desired and provided by the person
asserting the right . . . Even the intelligent [p476] and educated layman . . . lacks both the
skill and knowledge adequately to prepare his defense, even though
he have a perfect one. He requires the guiding hand of counsel in
every step in the proceedings against him. Without it, though he be
not guilty, he faces the danger of conviction because he does not
know how to establish his innocence. Powell v. Alabama, supra , 68-89. Cf. Johnson v.
Zerbst, supra , 462-463.
A practice cannot be reconciled with "common and fundamental
ideas of fairness and right," which subjects innocent men to
increased dangers of conviction merely because of their poverty.
Whether a man is innocent cannot be determined from a trial in
which, as here, denial of counsel has made it impossible to
conclude, with any satisfactory degree of certainty, that the
defendant's case was adequately presented. No one questions that
due process requires a hearing before conviction and sentence for
the serious crime of robbery. As the Supreme Court of Wisconsin
said, in 1859, . . . would it not be a little like mockery to secure
to a pauper these solemn constitutional guaranties for a fair and
full trial of the matters with which he was charged, and yet say to
him, when on trial, that he must employ his own counsel, who could
alone render these guaranties of any real permanent value to him. .
. . Why this great solicitude to secure him a fair trial if he
cannot have the benefit of counsel? Carpenter v. Dane County , 9 Wis. 274, 276-277.
Denial to the poor of the request for counsel in proceedings
based on charges of serious crime has long been regarded as
shocking to the "universal sense of justice" throughout this
country. In 1854, for example, the Supreme Court of Indiana
said: It is not to be thought of, in a civilized community,
for a moment, that any citizen put in jeopardy of life or liberty
should be debarred of counsel because he was too poor to employ
such aid. No Court could be respected, or respect itself, to sit
and hear [p477] such a trial. The defence of the
poor in such cases is a duty resting somewhere, which will be at
once conceded as essential to the accused, to the Court, and to the
public. Webb v. Baird , 6 Ind. 13, 18. And most of the other
States have shown their agreement by constitutional provisions,
statutes, or established practice judicially approved, which assure
that no man shall be deprived of counsel merely because of his
poverty.[ Footnote 2 ] Any
other practice seems to me to defeat the promise of our democratic
society to provide equal justice under the law.
APPENDIX
Rev.Stat. 1874, Criminal Code, § 422; Jones' Ill.Stat.Ann.1936,
§ 37.707. [p478] Cf.Laws, 1933, 430-431. See also
Vise v. County of Hamilton, 19 Ill. 78, 79 (1857). IOWA:
Territorial Laws, 1839, Courts, § 64; Iowa Code, 1939, § 13773.
KANSAS: See Compilation published in 1856 as S.Doc. No. 23, 34th
Cong., 1st Sess., 520 (c. 129, Art. V, § 4). Laws, 1941, c. 291.
LOUISIANA: Act of May 4, 1805, of the Territory of Orleans, § 35;
Dart's Louisiana Code of Criminal Procedure, 1932, Title XIII, Art.
143. MINNESOTA: Minnesota General Laws, 1869, c. LXXII, § 1;
Mason's Minnesota Statutes, 1927, §§ 9957, 10667. MISSOURI: Digest
of Laws of Missouri Territory, 1818, Crimes and Misdemeanours, §
35; Rev.Stat. 1939, § 4003. MONTANA: Montana Territory Criminal
Practice Act of 1872, § 196 (Laws of Montana, Codified Stat.
1871-1872, 220); Revised Code, 1935, § 11886. NEBRASKA: General
Statutes, 1873, c. 58, § 437; Compiled Stat. 1929, § 29-1803.
NEVADA: Act of November 26, 1861 (Compiled Laws, 1861-1873, Vol. I,
477, 493); Compiled Laws, 1929, Vol. 5, § 10883. NEW HAMPSHIRE:
Laws, 1907, c. 136; Laws, 1937, c. 22. NEW JERSEY: Act of March 6,
1795, § 2; New Jersey Stat. § 2.190-3. NEW YORK: Code of Criminal
Procedure, § 308 (enacted in 1881, still in force). See People v.
Supervisors of Albany County, 28 How.Pr. 22, 24 (1864). NORTH
DAKOTA: Dakota Territory Code of Procedure, 1863, § 249 (Rev.Codes,
1877, Criminal Procedure, 875); Compiled Laws, 1913, Vol. II, §§
8965, 10721. OHIO: Act of February 26, 1816, § 14 (Chase, Statutes
of Ohio, 1788-1833, Vol. II, 982); Throckmorton's Ohio Code
Ann.1940, Vol. II, § 13439-2. OKLAHOMA: Oklahoma Territorial Stat.
1890, c. 70, § 10; Stat.Ann.1941 Supp., Title 22, 464. OREGON: Act
of October 19, 1864 (General Laws, 1845-1864, c. 37, § 381; Laws
1837, c. 406 (Compiled Laws Ann, Vol. III, § 26-804). SOUTH DAKOTA:
Dakota Territory Code of Procedure, 1863, § 249 (Rev.Codes, 1877,
Criminal Procedure 875); Code of 1939, Vol. II, § 34.1901.
TENNESSEE: Code of 1857-1858, §§ 5205, 5206; Code of 1938, [p479] §§ 11733, 11734. UTAH: Laws of Territory of
Utah, 1878, Criminal Procedure, § 181; Rev.Stat. 1933, § 105-22-12.
WASHINGTON: Statutes of Territory of Washington, 1854, Criminal
Practice Act, § 89; Remington's Revised Statutes, 1932, Vol. IV, §§
2095, 2305. WYOMING: Laws of Wyoming Territory, 1869, Criminal
Procedure, § 98; Rev.Stat. 1931, § 33-501.
B. By judicial decision or established practice judicially
approved. CONNECTICUT: for an account of early practice in
Connecticut, see Zephaniah Swift "A System of the Laws of the State
of Connecticut," Vol. II, 392: The chief justice then, before the prisoner is called
upon to plead, asks the prisoner if he desires counsel, which, if
requested, is always granted as a matter of course. On his naming
counsel, the court will appoint or assign them. If, from any cause,
the prisoner decline to request or name counsel and a trial is had,
especially in the case of minors, the court will assign proper
counsel. When counsel are assigned, the court will enquire of them
whether they have advised with the prisoner, so that he is ready to
plead, and if not, will allow them proper time for that purpose.
But it is usually the case that the prisoner has previously
employed and consulted counsel and, of course, is prepared to
plead. See Powell v. Alabama, 287 U.S.
45 , footnote, 63-64. See also Connecticut General Statutes,
Revision of 1930, § 2267, 6476. FLORIDA: Cutts v. State, 54 Fla.
21, 23, 45 So. 491 (1907). See Compiled General Laws, 1927, § 8375
(capital crimes). INDIANA: Webb v. Baird, 6 Ind. 13, 18 (1854). See
also Knox County Council v. State ex rel. McCormick, 217 Ind. 493,
497-498, 29 N.E.2d 405 (1940); State v. Hilgemann, 218 Ind. 572, 34
N.E.2d 129, 131 (1941). MICHIGAN: People v. Crandell, 270 Mich.
124, 127, 258 N.W. 224 (1935). PENNSYLVANIA: Commonwealth v.
Richards, 111 Pa.Super. 124, 169 A. 464 (1933). See Commonwealth ex
rel. McGlinn v. Smith, 344 Pa. 41, 49, 59, 24 A.2d 1. VIRGINIA:
Watkins v. Commonwealth, 174 Va. 518, 521-525, 6 S.E.2d 670 (1940).
[p480] WEST VIRGINIA: State v. Kellison, 56 W.Va. 690, 692-693, 47
S.E. 166 (1904). WISCONSIN: Carpenter v. Dane County, 9 Wis. 274
(1859). See Stat. 1941, § 357.26.
C. By constitutional provision. GEORGIA: Constitution of 1865,
Art. 1, Par. 8. See Martin v. Georgia, 51 Ga. 567, 568 (1874).
KENTUCKY: Kentucky Constitution, § 11. See Fugate v. Commonwealth,
254 Ky. 663, 665, 72 S.W.2d 47 (1934).
II. States which are without constitutional provision, statutes,
or judicial decisions clearly establishing this requirement:
COLORADO: General Laws, 1877, §§ 91916; Colorado Stat.Ann.1935,
Vol. 2, c. 48, §§ 502, 505, as amended by Laws of 1937, 498, § 1.
See Abshier v. People, 87 Colo. 507, 517, 289 P. 1081. DELAWARE:
See 6 Laws of Delaware 741; 7 id. 410; Rev.Code, 1935, §§ 4306,
4310. MAINE: See Rev.Stat. 1857, 713; Rev.Stat. 1930, C. 146, § 14.
MASSACHUSETTS: See McDonald v. Commonwealth, 173 Mass. 322, 327, 53
N.E. 874 (1899). NEW MEXICO. NORTH CAROLINA. RHODE ISLAND: See
State v. Hudson, 55 R.I. 141, 179 A. 130 (1935); General Laws,
1938, c. 625, § 62. SOUTH CAROLINA: See State v. Jones, 172 S.C.
129, 130, 173 S.E. 77 (1934); Code, 1932, Vol. I, § 980.
VERMONT.
III. States in which dicta of judicial opinions are in harmony
with the decision by the court below in this case:
ALABAMA: Gilchrist v. State, 234 Ala. 73, 74, 173 So. 651.
MISSISSIPPI: Reed v. State, 143 Miss. 686, 689, 109 So. 715.
IV. States in which the requirement of counsel for indigent
defendants in noncapital cases has been affirmatively rejected:
MARYLAND: See, however, Coates v. State, 180 Md. 502, 25 A.2d
676. TEXAS: Gilley v. State, 114 Tex.Cr. 548, 26 S.W.2d 1070. But
cf. Brady v. State, 122 Tex.Cr. 275, 278, 54 S.W.2d 513.
Notes
[ Footnote 1 ]
Discussion of the Fourteenth Amendment by its sponsors in the
Senate and House shows their purpose to make secure against
invasion by the states the fundamental liberties and safeguards set
out in the Bill of Rights. The legislative history and subsequent
course of the amendment to its final adoption have been discussed
in Flack, "The Adoption of the Fourteenth Amendment." Flack cites
the Congressional debates, committee reports, and other data on the
subject. Whether the amendment accomplished the purpose its
sponsors intended has been considered by this Court in the
following decisions, among others: O'Neil v. Vermont, 144 U.S.
323 , dissent, 337; Maxwell v. Dow, 176
U.S. 581 , dissent, 605; Twining v. New Jersey, 211 U.S.
78 , 98-99, dissent, 114.
[ Footnote 2 ]
In thirty-five states, there is some clear legal requirement or
an established practice that indigent defendants in serious
noncapital as well as capital criminal cases (e.g., where the crime
charged is a felony, a "penitentiary offense," an offense
punishable by imprisonment for several years) be provided with
counsel on request. In nine states, there are no clearly
controlling statutory or constitutional provisions, and no decisive
reported cases on the subject. In two states, there are dicta in
judicial decisions indicating a probability that the holding of the
court below in this case would be followed under similar
circumstances. In only two states (including the one in which this
case arose) has the practice here upheld by this Court been
affirmatively sustained. Appended to this opinion is a list of the
several states divided into these four categories. | In Betts v. Brady, the U.S. Supreme Court ruled that the Due Process Clause of the Fourteenth Amendment does not require states to provide counsel for indigent defendants in criminal cases unless there are special circumstances. The Court held that the specific guarantees of the Sixth Amendment do not apply to state criminal proceedings and that the appointment of counsel for indigent defendants is generally a matter of legislative policy. The Court also established a flexible standard for determining whether due process has been denied, considering the totality of the circumstances in each case. |
Criminal Trials & Prosecutions | Glasser v. U.S. | https://supreme.justia.com/cases/federal/us/315/60/ | U.S. Supreme Court Glasser v. United States, 315 U.S.
60 (1942) Glasser v. United
States No. 30 Argued November 13, 14,
1941 Decided January 19, 1942 315 U.S.
60 ast|>* 315 U.S.
60 CERTIORARI TO THE CIRCUIT COURT OF
APPEALS FOR THE SEVENTH
CIRCUIT Syllabus 1. Jud.Code § 275 provides that jurors in a federal court shall
have the qualifications of jurors in the highest court of the
State. Acts of the State of Illinois providing for jury service by
women became effective before a grand jury in a federal court in
that State was drawn from a box from which the names of women had
been excluded. Under the state legislation, the making of state
lists including women could be delayed for some time later. Held, that the jury was not illegally constituted, in
view of the short time Page 315 U. S. 61 elapsed since the state law came in force, and the absence of
any showing that women's names had appeared on the state jury lists
in the counties comprising the federal district. P. 315 U. S.
64 .
2. The record in this case shows adequately, though informally,
that the indictment was returned by the grand jury in open court.
P. 315 U. S.
65 .
3. An indictment which is sufficiently definite to inform the
defendants of the charges against them and shows certainty to a
common intent, is good against demurrer. P. 315 U. S.
66 .
4. Depriving the United States of lawful governmental functions
by dishonest means is a "defrauding" within the meaning of § 37 of
the Criminal Code. P. 315 U. S.
66 .
5. A charge of conspiracy to defraud the United States of lawful
governmental functions by bribery of a Government officer is
distinct from a charge of bribery or of conspiracy to commit
bribery. P. 315 U. S.
66 .
6. Error which might be overlooked as harmless where the case is
strong against the accused may be ground for reversal where the
question of guilt or innocence is close. P. 315 U. S.
67 .
7. A defendant in a conspiracy case is deprived of the
assistance of counsel, contrary to the Sixth Amendment, where, over
his objection, the court appoints his counsel to represent also a
codefendant, where this is done with notice to the judge that their
interests may be inconsistent, and where the counsel's defense of
the first defendant is less effective than it might have been if he
had represented that defendant alone. P. 315 U. S.
76 .
8. Every reasonable presumption is indulged against a waiver of
fundamental rights such as the right of the accused to have the
full and untrammeled assistance of counsel in the trial of a
criminal case. P. 315 U. S.
70 .
9. The fact that a defendant in a criminal case is an
experienced lawyer may be a factor in determining whether he waived
his right to assistance of counsel, but it is not conclusive. P. 315 U. S.
70 .
10. The trial judge should protect the right of an accused to
have the assistance of counsel. P. 315 U. S.
71 .
11. The right to have the assistance of counsel is too
fundamental to be made to depend upon nice calculations by courts
of the degree of prejudice arising from its denial. P. 315 U. S.
76 .
12. The declarations of a conspirator are not admissible against
an alleged coconspirator, who was not present when they were made,
unless there is proof aliunde connecting the latter with
the conspiracy. P. 315 U. S.
74 . Page 315 U. S. 62 13. Person connected as conspirators cannot have a new trial
because of error prejudicial to a codefendant but not to
themselves. P. 315 U. S.
76 .
14. A verdict of conviction must be sustained if, taking the new
most favorable to the Government, there is substantial evidence to
support it. P. 315 U. S.
80 .
15. Participation in a criminal conspiracy may be inferred from
circumstance. P. 315 U. S.
80 .
16. Defendants in a criminal case cannot complain of error in
the introduction of reports a to which, when they were admitted in
evidence, the trial judge informed the jury that they were admitted
against another defendant only. P. 315 U. S.
81 .
17. A district judge conducting jury trial in a criminal case
has a sound discretion to interrogate witnesses and to limit their
cross-examination. P. 315 U. S.
82 .
18. Acts of the trial judge, complained of as lacking
impartiality, were not such as to prejudice substantial rights of
defendants. P. 315 U. S.
83 .
19. Acts of alleged misconduct of the prosecuting attorney -- held not such as to call for reversal of convictions. P. 315 U. S.
83 .
20. A motion for a new trial in a criminal case upon the ground
that the jury was illegally constituted must be supported by the
introduction or offer of distinct evidence; a formal affidavit, in
the absence of a stipulation that it may be accepted as proof, is
not enough, although it be uncontroverted. P. 315 U. S.
87 .
116 F.2d 690, reversed in part; affirmed in part.
CERTIORARI, 313 U.S. 551, in three cases, to review a judgment
sustaining convictions for conspiracy. Page 315 U. S. 63 MR. JUSTICE MURPHY delivered the opinion of the Court.
Petitioners, together with Anthony Horton and Louis Kaplan, were
found guilty upon an indictment charging them with a conspiracy to
defraud the United States, under § 37 of the Criminal Code (R.S. §
5440; 18 U.S.C. 88). [ Footnote
1 ] Judgment was entered on the verdict and Glasser, Kretaske
and Kaplan were sentenced to imprisonment for a term of 14 months.
Roth was ordered to pay a fine of $500, and Horton was placed on
probation. On appeal, the convictions of Glasser, Kretaske and Roth
were affirmed. [ Footnote 2 ] We
brought the case here because of the important constitutional
issues involved. 313 U.S. 551.
Glasser was the assistant United States attorney in charge of
liquor cases in the Northern District of Illinois from about March,
1935, to April, 1939. Kretaske was an assistant United States
attorney in the same district from October, 1934, until April,
1937. He assisted Glasser in the prosecution of liquor cases. After
his resignation, he entered private practice in Chicago. Roth was
an attorney in private practice. Kaplan was an automobile dealer
reputed to be engaged in the illicit alcohol traffic around
Chicago. Horton was a professional bondsman.
The indictment was originally in two counts, but only the second
survives here, as the Government elected to Page 315 U. S. 64 proceed on that count alone at the close of its case. That
count, after alleging that, during certain periods, Glasser and
Kretaske were assistant United States attorneys for the Northern
District of Illinois, employed to prosecute all delinquents for
crimes and offenses cognizable under the authority of the United
States, and, more particularly, violations of the federal internal
revenue laws relating to liquor, charged in substance that the
defendants conspired to
"defraud the United States of and concerning its governmental
function to be honestly, faithfully and dutifully represented in
the courts of the United States"
in such matters "free from corruption, improper influence,
dishonesty, or fraud." The means by which the conspiracy was to be
accomplished was alleged to be by the defendants' soliciting
certain persons charged, or about to be charged, with violating the
laws of the United States, to promise or cause to be promised
certain sums to be paid or pledged to the defendants, to be used to
corrupt and influence the defendants Glasser and Kretaske, and the
defendant Glasser alone, in the performance of their and his
official duties.
All the defendants filed a motion to quash the indictment on the
grounds (a) that the grand jury was illegally constituted because
women were excluded therefrom, and (b) that the indictment was not
properly returned in open court. Glasser, Kretaske and Roth also
filed demurrers to the indictment. The motion to quash and the
demurrers were overruled, and petitioners here renew their
objections.
On July 1, 1939, two Acts of the State of Illinois providing for
women jurors became effective. [ Footnote 3 ] Section 275 of the Judicial Code (28 U.S.C. §
411) provides in substance that jurors in a federal court are to
have the qualifications of jurors in the highest court of the
State. Petitioners Page 315 U. S. 65 contend that the grand jury, composed entirely of men, and
summoned on August 25, 1939, was illegally constituted because, at
the time it was drawn, Illinois law required state jury lists to
contain the names of women. However, in 17 of the 18 counties
comprising the Northern District of Illinois, the county boards
could wait until September, 1939, to include women on their jury
lists. [ Footnote 4 ] Of course,
for women to serve as federal jurors in Illinois, it is not
necessary that their names appear on a county list, but we are of
opinion that, in view of the short time elapsing between the
effective date of the Illinois Acts and the summoning of the grand
jury, it was not error to omit the names of women from federal jury
lists where it was not shown that women's names had yet appeared on
the state jury lists.
The record here adequately disposes of petitioners' contention
that there is no showing that the indictment was returned in open
court by the grand jury. It contains a placitum in regular
form which recites the convening of a regular term of the District
Court for the Eastern Division of the Northern District of
Illinois, "on the first Monday of September [1939] (it being the
twenty-ninth day of September the indictment was filed)," and
discloses the presence of the judges of that court, the marshal and
the clerk. The indictment bears the notation: "A true bill, George
A. Hancock, Foreman", and the endorsement: "Filed in open court
this 29th day of Sept., Page 315 U. S. 66 A.D.1939, Hoyt King, Clerk." Immediately following the
indictment in the record is the motion-slip discharging the
September grand jury, dated September 29, 1939, initialled by Judge
Wilkerson and containing: "The Grand Jury return 4 Indictments in
open Court. Added 10/30/39." The presence of this notation in the
record is meaningless unless the indictment in this case is one of
the four mentioned. The addition was obviously made to clarify the
indorsement of the clerk so as to show clearly the return by the
grand jury, and thus avert the technical argument here advanced.
While a formal nunc pro tunc order would have been the
more correct procedure, especially since a new term of court had
begun, we do not think that this informal clarification of the
record amounts to such error as requires reversal. Cf. Breese
v. United States, 226 U. S. 1 .
The demurrers to the indictment were properly overruled. The
indictment is sufficiently definite to inform petitioners of the
charges against them. It shows "certainty, to a common intent." Williamson v. United States, 207 U.
S. 425 , 207 U. S. 447 .
The particularity of time, place, circumstances, causes, etc., in
stating the manner and means of effecting the object of a
conspiracy, for which petitioners contend, is not essential to an
indictment. Crawford v. United States, 212 U.
S. 183 ; Dealy v. United States, 152 U.
S. 539 . Such specificity of detail falls rather within
the scope of a bill of particulars, which petitioners requested and
received.
The indictment charges that the United States was defrauded by
depriving it of its lawful governmental functions by dishonest
means; it is settled that this is a "defrauding" within the meaning
of § 37 of the Criminal Code. Hammerschmidt v. United
States, 265 U. S. 182 .
It is unnecessary to explore the merits of the argument that the
indictment is defective on the ground that it Page 315 U. S. 67 charges a conspiracy to commit a substantive offense requiring
concerted action, namely, bribery, because
"The indictment does not charge as a substantive offense the
giving or receiving of bribes; nor does it charge a conspiracy to
give or accept bribes. It charges a conspiracy to . . . defraud the
United States, the scheme of resorting to bribery being averred
only to be a way of consummating the conspiracy and which, like the
use of a gun to effect a conspiracy to murder, is purely ancillary
to the substantive offense." United States v. Manton, 107 F.2d 834, 839.
Petitioners Glasser and Roth claim that the evidence was
insufficient to support the verdict. Kretaske makes no such
argument, but merely contends that the Government's testimony was
largely that of accomplices "to emphasize the inescapable
conclusion that the evidence against petitioner (Kretaske) was of a
borderline character." Since we are of opinion that a new trial
must be ordered as to Glasser, we do not at this time feel that it
is proper to comment on the sufficiency of the evidence against
Glasser.
Admittedly, the case against Glasser is not a strong one. The
Government frankly concedes that the case with respect to
Glasser
"depends in large part . . . upon a development and collocation
of circumstances tending to sustain the inferences necessary to
support the verdict."
This is significant in relation to Glasser's contention that he
was deprived of the assistance of counsel contrary to the Sixth
Amendment. In all cases, the constitutional safeguards are to be
jealously preserved for the benefit of the accused, but especially
is this true where the scales of justice may be delicately poised
between guilt and innocence. Then error, which under some
circumstances would not be ground for reversal, cannot be brushed
aside as immaterial, since there is a real chance that it might
have provided the slight impetus which swung the scales toward
guilt. Page 315 U. S. 68 On November 1, 1939, George Callaghan entered the appearance of
himself and Glasser as attorneys for Glasser. On January 29, 1940,
William Scott Stewart entered his appearance as associate counsel
for Glasser. "Harrington & McDonnell" had entered an appearance
for Kretaske. On February 5, 1940, the day set for trial,
Harrington asked for a continuance. The motion was overruled, and
McDonnell was appointed Kretaske's attorney. On February 6,
McDonnell informed the court that Kretaske did not wish to be
represented by him. The court then asked if Stewart could act as
Kretaske's attorney. The following discussion then took place:
"Mr. Stewart: May I make this statement about that, judge? We
were talking about it -- we were all trying to get along together.
I filed an affidavit, or I did on the behalf of Mr. Glasser,
pointing out some little inconsistency in the defense, and the main
part of it is this: there will be conversations here where Mr.
Glasser wasn't present, where people have seen Mr. Kretaske and
they have talked about, that they gave money to take care of
Glasser, that is not binding on Mr. Glasser, and there is a
divergency there, and Mr. Glasser feels that, if I would represent
Mr. Kretaske, the jury would get an idea that they are together,
and all the evidence --"
"The Court: How would it be if I appointed you as attorney for
Kretaske?"
"Mr. Stewart: That would be for your Honor to decide."
"The Court: I know you are looking out for every possible
legitimate defense there is. Now, if the jury understood that,
while you were retained by Mr. Glasser, the Court appointed you at
this late hour to represent Kretaske, what would be the effect of
the jury on that?"
"Mr. Stewart: Your Honor could judge that as well as I could.
" Page 315 U. S. 69 "The Court: I think it would be favorable to the defendant
Kretaske."
"Mr. Glasser: I think it would be too, if he had Mr. Stewart.
That's the reason I got Mr. Stewart, but if a defendant who has a
lawyer representing him is allowed to enter an objection, I would
like to enter my objection. I would like to have my own lawyer
representing me."
"The Court: Mr. McDonnell, you will have to stay in it until Mr.
Kretaske gets another lawyer, if he isn't satisfied with you."
"(To Mr. Kretaske) Mr. Kretaske, if you are not satisfied with
Mr. McDonnell, you will have to hire another lawyer. We will
proceed with the selection of the jury now."
A colloquy then ensued between the court, McDonnell and Kretaske
when the following occurred:
"Mr. Kretaske: I can end this. I just spoke to Mr. Stewart, and
he said if your Honor wishes to appoint him, I think we can accept
the appointment."
"Mr. Stewart: As long as the Court knows the situation. I think
there is something to the fact that the jury knows we can't control
that."
"Mr. McDonnell: Then the order is vacated?"
"The Court: The order appointing Mr. McDonnell is vacated, and
Mr. Stewart is appointed attorney for Mr. Kretaske."
Glasser remained silent. Stewart thereafter represented Glasser
and Kretaske throughout the trial, and was the most active of the
array of defense counsel.
The guarantees of the Bill of Rights are the protecting bulwarks
against the reach of arbitrary power. Among those guarantees is the
right granted by the Sixth Amendment to an accused in a criminal
proceeding in a federal court "to have the assistance of counsel
for his defense." "This is one of the safeguards deemed necessary
to insure fundamental human rights of life and liberty," and a Page 315 U. S. 70 federal court cannot constitutionally deprive an accused, whose
life or liberty is at stake, of the assistance of counsel. Johnson v. Zerbst, 304 U. S. 458 , 304 U. S. 462 , 304 U. S. 463 .
Even as we have held that the right to the assistance of counsel is
so fundamental that the denial by a state court of a reasonable
time to allow the selection of counsel of one's own choosing, and
the failure of that court to make an effective appointment of
counsel, may so offend our concept of the basic requirements of a
fair hearing as to amount to a denial of due process of law
contrary to the Fourteenth Amendment, Powell v. Alabama, 287 U. S. 45 , so
are we clear that the "assistance of counsel" guaranteed by the
Sixth Amendment contemplates that such assistance be untrammeled
and unimpaired by a court order requiring that one lawyer shall
simultaneously represent conflicting interests. If the right to the
assistance of counsel means less than this, a valued constitutional
safeguard is substantially impaired.
To preserve the protection of the Bill of Rights for
hard-pressed defendants, we indulge every reasonable presumption
against the waiver of fundamental rights. Aetna Insurance Co.
v. Kennedy, 301 U. S. 389 ; Ohio Bell Telephone Co. v. Public Utilities Commission, 301 U. S. 292 .
Glasser never affirmatively waived the objection which he initially
advanced when the trial court suggested the appointment of Stewart.
We are told that, since Glasser was an experienced attorney, he
tacitly acquiesced in Stewart's appointment because he failed to
renew vigorously his objection at the instant the appointment was
made. The fact that Glasser is an attorney is, of course,
immaterial to a consideration of his right to the protection of the
Sixth Amendment. His professional experience may be a factor in
determining whether he actually waived his right to the assistance
of counsel. Johnson v. Zerbst, 304 U.
S. 458 , 304 U. S. 464 .
But it is by no means conclusive. Page 315 U. S. 71 Upon the trial judge rests the duty of seeing that the trial is
conducted with solicitude for the essential rights of the accused.
Speaking of the obligation of the trial court to preserve the right
to jury trial for an accused, Mr. Justice Sutherland said that such
duty
"is not to be discharged as a matter of rote, but with sound and
advised discretion, with an eye to avoid unreasonable or undue
departures from that mode of trial or from any of the essential
elements thereof, and with a caution increasing in degree as the
offenses dealt with increase in gravity." Patton v. United States, 281 U.
S. 276 , 281 U. S.
312 -313. The trial court should protect the right of an
accused to have the assistance of counsel.
"This protecting duty imposes the serious and weighty
responsibility upon the trial judge of determining whether there is
an intelligent and competent waiver by the accused. While an
accused may waive the right to counsel, whether there is a proper
waiver should be clearly determined by the trial court, and it
would be fitting and appropriate for that determination to appear
upon the record." Johnson v. Zerbst, 304 U. S. 458 ,4 304 U. S.
65 .
No such concern on the part of the trial court for the basic
rights of Glasser is disclosed by the record before us. The
possibility of the inconsistent interests of Glasser and Kretaske
was brought home to the court, but, instead of jealously guarding
Glasser's rights, the court may fairly be said to be responsible
for creating a situation which resulted in the impairment of those
rights. For the manner in which the parties accepted the
appointment indicates that they thought they were acceding to the
wishes of the court. Kretaske said the appointment could be
accepted "if your Honor wishes to appoint him [Stewart] ," and
Stewart immediately replied: "As long as the Court knows the
situation. I think there is something in the fact that the jury
knows we can't control that." The court made no effort to
reascertain Glasser's attitude or Page 315 U. S. 72 wishes. Under these circumstances, to hold that Glasser freely,
albeit tacitly, acquiesced in the appointment of Stewart is to do
violence to reality and to condone a dangerous laxity on the part
of the trial court in the discharge of its duty to preserve the
fundamental rights of an accused.
Glasser urges that the court's appointment of Stewart as counsel
for Kretaske embarrassed and inhibited Stewart's conduct of his
defense, in that it prevented Stewart from adequately safeguarding
Glasser's right to have incompetent evidence excluded and from
fully cross-examining the witnesses for the prosecution.
One Brantman, an accountant known to Kretaske and recommended
professionally by him to a client, testified that he gave Kretaske
$3000 on behalf of one Abosketes. He further testified that he did
not know Glasser. Stewart secured a postponement of
cross-examination for "In view of the fact that your Honor
appointed me for Mr. Kretaske, I am not prepared to
cross-examine."
Abosketes took the stand immediately after Brantman and
testified that Brantman told him that he was about to be indicted,
and offered to "fix" the case with someone in the Federal Building
for $5000. About the time of this meeting, Glasser and investigator
Bailey were questioning one Brown, who had been convicted for
operating a still, to determine whether Abosketes was connected
with that still. Abosketes referred frequently to Glasser in his
testimony, and indicated that Glasser and Brantman were linked
together. Thus, he testified that Brantman told him "They have got
the goods on you, Mr. Glasser has got it out of Brown." When
questioned as to his knowledge of Brantman's connections, Abosketes
replied: "There was more than a fix, if indictment was stopped. He
[Brantman] knows Mr. Glasser, and that was all there was to it."
And, later: "He had connections to stop things like that, he had
connections in the Federal Building." Page 315 U. S. 73 And, again:
"I could not be sure that this man [Brantman] was not putting a
shake on me and be honest about it. I could not go over and ask Mr.
Glasser if Mr. Brantman was able to fix him. I thought Brantman
could, though. I was kind of hoping he could. If I did not think he
could, I would not have given him the money."
Brantman was recalled three days later. Stewart declined
cross-examination. That this decision was influenced by a desire to
protect Kretaske can reasonably be inferred from the colloquy
between the court and Stewart before sentence was imposed. At that
time, Stewart told the court that, lest his failure to
cross-examine Brantman reflect on Kretaske, the reason for his
forbearance was that he feared that Brantman would tell worse lies.
But, especially after the intervening testimony of Abosketes, a
thorough cross-examination was indicated in Glasser's interest to
fully develop Brantman's lack of reference to, or knowledge of
Glasser. Stewart's failure to undertake such a cross-examination
luminates the cross-purposes under which he was laboring.
Glasser also argues that certain testimony, inadmissible as to
him, was allowed without objection by Stewart on his behalf because
of Stewart's desire to avoid prejudice to Kretaske. The testimony
complained of is that of Elmer Swanson, Frank Hodorowicz, Edward
Dewes, and Stanley Wasielewski as to statements made by Kretaske,
not in the presence of Glasser, and heard by them which implicated
Glasser. Glasser has red hair, and the statements made by Kretaske
were that he would have to see "Red," or send the money over to the
"redhead," etc., in connection with "fixing" cases. [ Footnote 5 ]
Glasser contends that such statements constituted inadmissible
hearsay as to him, and that Stewart forewent Page 315 U. S. 74 this obvious objection lest an objection on behalf of Glasser
alone leave with the jury the impression that the testimony was
true as to Kretaske. The Government attacks this argument as
unsound, and, relying on the doctrine that the declarations of one
conspirator in furtherance of the objects of the conspiracy made to
a third party are admissible against his co-conspirators, Logan
v. United States, 144 U. S. 263 ,
contends that the declarations of Kretaske were admissible against
Glasser, and hence no prejudice could arise from Stewart's failure
to object. However, such declarations are admissible over the
objection of an alleged co-conspirator, who was not present when
they were made, only if there is proof aliunde that he is
connected with the conspiracy. Minner v. United States, 57
F.2d 506, and see Nudd v. Burrows, 91 U. S.
426 . Page 315 U. S. 75 Otherwise, hearsay would lift itself by its own bootstraps to
the level of competent evidence.
Glasser urges that, independently of the statements complained
of, there is no proof connecting him with the conspiracy. Clearly
the statements were damaging. Other evidence tending to connect
Glasser with the conspiracy is rather meagre by comparison. Frank
Hodorowicz testified that Glasser apologized to him after his
indictment because he, Glasser, could do nothing for Hodorowicz.
Hodorowicz also testified that he sent a case of whiskey to Glasser
for Christmas, 1937. Victor Raubunas testified that he saw Glasser,
Kretaske and Kaplan meet on three occasions. An alcohol agent,
Dowd, testified that Glasser expelled him from the courtroom during
the trial of a libel case in which Roth represented the successful
claimant. Glasser released Raubunas and one Joppek, who were picked
up on different occasions for suspected liquor violations, without
extensive questioning. Whether testimony such as this was
sufficient to establish the participation of Glasser in the
conspiracy we need not decide. That is beside the point. The
important fact is that no objection was offered by Stewart on
Glasser's behalf to the statements complained of, and this despite
the fact that, when the court broached the possibility of Stewart's
appointment, Stewart told the court that statements of this nature
were not binding on Glasser. That this is indicative of Stewart's
struggle to serve two masters cannot seriously be doubted.
There is yet another consideration. Glasser wished the benefit
of the undivided assistance of counsel of his own choice. We think
that such a desire on the part of an accused should be respected.
Irrespective of any conflict of interest, the additional burden of
representing another party may conceivably impair counsel's
effectiveness.
To determine the precise degree of prejudice sustained by
Glasser as a result of the court's appointment of Page 315 U. S. 76 Stewart as counsel for Kretaske is at once difficult and
unnecessary. The right to have the assistance of counsel is too
fundamental and absolute to allow courts to indulge in nice
calculations as to the amount of prejudice arising from its denial. Cf. Snyder v. Massachusetts, 291 U. S.
97 , 291 U. S. 116 ; Tumey v. Ohio, 273 U. S. 510 , 273 U. S. 535 ; Patton v. United States, 281 U. S. 276 , 281 U. S. 292 . And see McCandless v. United States, 298 U.
S. 342 , 298 U. S. 347 .
Of equal importance with the duty of the court to see that an
accused has the assistance of counsel is its duty to refrain from
embarrassing counsel in the defense of an accused by insisting, or
indeed even suggesting, that counsel undertake to concurrently
represent interests which might diverge from those of his first
client when the possibility of that divergence is brought home to
the court. In conspiracy cases, where the liberal rules of evidence
and the wide latitude accorded the prosecution may, and sometimes
do, operate unfairly against an individual defendant, it is
especially important that he be given the benefit of the undivided
assistance of his counsel without the court's becoming a party to
encumbering that assistance. Here, the court was advised of the
possibility that conflicting interests might arise which would
diminish Stewart's usefulness to Glasser. Nevertheless, Stewart was
appointed as Kretaske's counsel. Our examination of the record
leads to the conclusion that Stewart's representation of Glasser
was not as effective as it might have been if the appointment had
not been made. We hold that the court thereby denied Glasser his
right to have the effective assistance of counsel, guaranteed by
the Sixth Amendment. This error requires that the verdict be set
aside and a new trial ordered as to Glasser.
But this error does not require that the convictions of the
other petitioners be set aside. To secure a new trial, they must
show that the denial of Glasser's constitutional rights prejudiced
them in some manner, for where error Page 315 U. S. 77 as to one defendant in a conspiracy case requires that a new
trial be granted him, the rights of his codefendants to a new trial
depend upon whether that error prejudiced them. Agnello v.
United States, 269 U. S. 20 ; United States v. Socony-Vacuum Oil Co., 310 U.
S. 150 ; Rossi v. United States, 278 F. 349; Belfi v. United States, 259 F. 822; Browne v. United
States, 145 F. 1; Dufour v. United States, 37
App.D.C. 497. Kretaske does not contend that he was prejudiced by
the appointment, and we are clear from the record that no prejudice
is disclosed as to him. Roth argues the point, but he was
represented throughout the case by his own attorney. We fail to see
that the denial of Glasser's right to have the assistance of
counsel affected Roth.
Turning now to the contentions of Kretaske and Roth, we are
clear that substantial evidence supports the verdict against both.
As noted before, Kretaske does not raise the point other than to
mention that the testimony against him was largely that of
accomplices and unsavory characters. The short answer to this is
that the credibility of a witness is a question for the jury.
The evidence against Roth discloses the following salient facts.
Elmer Swanson, Clem Dowiat and Anthony Hodorowicz were arrested in
connection with a still on Stony Island Avenue. Frank Hodorowicz,
the head of the Hodorowicz crowd, arranged a meeting with Kretaske
at his hardware store to "take care" of the case. Horton was
present, and Kretaske told the group that there "was a lot of heat"
on the case, but that it could be arranged so that nobody "would go
to jail" for $1200, part of which "Red" was to get. A downpayment
of $500 was made. When a lawyer was sought, Kretaske referred the
prospective defendants to Roth. He represented them at the hearing
before the Commissioner, which was continued at the request of
Glasser. After an indictment was returned, Roth appeared for trial
to find that the case had Page 315 U. S. 78 been stricken from the docket with leave to reinstate it. The
defendants were never brought to trial. None of the Hodorowiczes or
their associates paid Roth for his services. Roth testified that he
received his fee from Kretaske
In June, 1938, Glasser secured two indictments -- one against
Frank, Mike, and Peter Hodorowicz and Clem Dowiat and the other
against Frank and Peter Hodorowicz and Dowiat -- for the sale of
illicit alcohol. Frank paid Kretaske $250 after the indictments.
Kretaske later told him that nothing could be done, as investigator
Bailey was pressing Glasser. Frank then went to see Roth, who, with
Kretaske, went to see Glasser. Roth later told Frank that nothing
could be done, and suggested that he get an attorney and prepare to
defend himself. Roth's explanation of this was that he went to
Glasser to learn the latter's attitude toward clemency for Frank,
and that he suggested the retention of two lawyers, one to defend
Frank and the other to represent the remaining defendants. Frank
dispensed with Roth's services, and was represented at the trial by
one Hess. Frank paid Roth $50, but this was in connection with
substituting some securities on his bond.
Edward Dewes had been associated with the defendant Kaplan in a
still at Spring Grove. That case was twice presented to a grand
jury by Glasser, but withdrawn on each occasion. Two days before it
was presented a third time, the defendant Horton told Dewes that
Kretaske wished to see him. Dewes went to Kretaske's office and
paid him $100 so that he would not be indicted. Dewes was no-billed
in that case. Dewes was also involved in a still on the farm of one
Beisner. It was raided, and several were arrested. Dewes, Victor
Raubunas and Edward Farber asked Horton to "fix" that case, but,
when his price was thought too high, Farber, who had known Kretaske
for some time, took Dewes and Raubunas to Kretaske's Page 315 U. S. 79 office. Kretaske offered to take care of the case for $1200.
Raubunas paid $300, and they were told they would need no lawyer at
the preliminary hearing. Eventually Raubunas, Dewes and Beisner
were indicted. Dewes thereafter paid Kretaske $275 to "fix" his
case. Kretaske referred the matter to Roth, who represented Dewes
throughout his trial. Dewes testified that he neither retained nor
paid Roth.
Paul Svec, an associate of one Yarrio, was arrested in 1937 for
a liquor violation. Horton arranged his bond. In Svec's presence,
Horton picked up Kretaske and Yarrio. They told Svec not to worry.
He was thereafter indicted and convicted. While at liberty pending
an appeal, he was again arrested. This time, he called Glasser,
and, according to the latter, offered him money. The following
morning, Glasser interrogated Svec in the hearing of a secreted
agent of the Federal Bureau of Investigation and secured admissions
that Svec had never paid Glasser money or received any promises
from him, and that the call had been at the instigation of the
arresting investigators. Svec testified that Roth told him that he
"stood up o.k." under Glasser's questioning. Svec was discharged at
the Commissioner's hearing.
Glasser prosecuted Leo Vitale for the operation of a still. He
was convicted and received a sentence of one hour in the custody of
the marshal. Vitale's wife, Rose, was the claimant in a subsequent
libel action against a car allegedly used to transport illicit
liquor. The case was referred to Roth by Kretaske. Roth informed
the court that Vitale was "o. k." and that the car was not used for
illegal purposes. As was the custom, the case was tried on the
agent's report. It was dismissed. Investigator Dowd later informed
Glasser that he had heard that Vitale had boasted that "he got out
of this for nine hundred dollars."
In April 1938, Edward and William Wroblewski were indicted in
the Northern District of Indiana. They engaged Page 315 U. S. 80 Roth as their counsel. They did not remember how they met Roth.
When asked by the court if anyone recommended Roth to him, Edward
answered: "No, sir, I don't remember whether it was a rumor about
his name." According to Alexander Campbell, an assistant United
States attorney in that district, Roth appeared in his office in
September, 1938, and asked if the Wroblewskis had been indicted.
Campbell replied that he did not know offhand, but would check the
files. Roth then asked, if the files showed no indictment, whether
some arrangement could be made so that no indictment would be
returned. He offered Campbell $500 or $1000. When Campbell refused,
Roth said: "Well, that is the way we handle cases in Chicago
sometimes." The Wroblewskis were convicted. Subsequently, Roth
asked Campbell to use his influence to stop the investigation in
Chicago by Bailey which resulted in the instant case.
It is not for us to weigh the evidence or to determine the
credibility of witnesses. The verdict of a jury must be sustained
if there is substantial evidence, taking the view most favorable to
the Government, to support it. United States v. Manton, 107 F.2d 834, 839, and cases cited. Participation in a criminal
conspiracy need not be proved by direct evidence; a common purpose
and plan may be inferred from a "development and a collocation of
circumstances." United States v. Manton, supra. We are
clear that, from the circumstances outlined above, the jury could
infer the existence of a conspiracy and the participation of Roth
in it. Roth's statements to Campbell in the Wroblewski matter, his
suggestion to Frank Hodorowicz that he should get a lawyer and
prepare to defend himself when the case could not be "fixed," the
fact that he received no fees from the Hodorowiczes with the
exception of $50 in connection with Frank's bond, Dewes' testimony
that he neither retained nor paid Roth, Roth's commendation of
Svec's bearing under Glasser's Page 315 U. S. 81 interrogation, all furnish the necessary support for the jury's
verdict.
The objections of Kretaske and Roth with regard to the admission
of certain evidence are without merit. The reports of investigators
of the Alcohol Tax Unit on stills at Western Avenue and at Spring
Grove, operated by the defendant Kaplan and his associates, were
admitted as Government exhibits 81A and 113. Each contained
statements taken from prospective witnesses by the investigators,
and each gave a description of the prospective defendants. Kaplan
was referred to as of Jewish descent, a bootlegger by reputation,
and mention was made of the arrest of Kaplan and Edward Dewes in
connection with the killing of one Pinna. At the time each report
was admitted, the trial judge informed the jury that it was
admitted only against Glasser, and continued:
"At some further stage of the proceedings, I may advise you with
reference to its competency as to the other defendants, but, for
the time being, it will be admissible only against the defendant
Glasser."
The record before us contains no indication that the jury was
later informed that the exhibits were evidence against the
defendants other than Glasser. The claim of Kretaske and Roth, that
the admission of these reports was prejudicial to Kaplan and that
they are entitled to take advantage of that error, ignores the fact
that they were admitted against Glasser alone.
No reversible error was committed by overruling objections to
the testimony of Alexander Campbell with relation to his dealings
with Roth. Trial judges have a measure of discretion in allowing
testimony which discloses the purpose, knowledge, or design of a
particular person. Butler v. United States, 53 F.2d 800;
Simpkins v. United States, 78 F.2d 594, 598. We do not think
the bounds of that discretion were exceeded here. The statements of
Roth were not in furtherance of the conspiracy, but they Page 315 U. S. 82 did tend to connect Roth with it by explaining his state of
mind.
The judge conducting a jury trial in a federal court is "not a
mere moderator, but is the governor of the trial for the purpose of
assuring its proper conduct." Quercia v. United States, 289 U. S. 466 , 289 U. S. 469 .
Upon him rests the responsibility of striving for that atmosphere
of perfect impartiality which is so much to be desired in a
judicial proceeding. Petitioners contend that the trial judge made
remarks prejudicial to them, committed acts of advocacy, questioned
them in a hostile manner, unduly limited cross-examination, and in
general failed to maintain an impartial attitude. Various incidents
in support of those contentions are brought to our attention.
The court did interrogate several witnesses, but, in the main,
such interrogation was within its power to elicit the truth by an
examination of the witnesses. United States v. Gross, 103
F.2d 11; United States v. Breen, 96 F.2d 782. In asking
Anthony Hodorowicz whether there had been a full disclosure of his
connection with the Stony Island still when he appeared before
Judge Woodward, the court obviously was under a misapprehension of
the nature of the appearance. It was simply for the purpose of
arraignment, and, of course, no testimony was offered. Much is made
of this, but, at the time, no one attempted to explain to the court
the nature of the appearance. Stewart later brought out on
cross-examination that it was only an arraignment, and that there
was no necessity for testimony on that day.
After the testimony of Abosketes, the court read into the record
the fact that Abosketes was indicted in Wisconsin in 1936 and 1938,
and that he pleaded guilty to one indictment and that the other was
dismissed. It is, of course, improper for a judge to assume the
role of a witness, but we cannot here conclude that prejudicial
error Page 315 U. S. 83 resulted. Abosketes had briefly referred to his troubles in
Wisconsin in his testimony.
The alleged undue limitation of cross-examination merits scant
attention. The extent of such examination rests in the sound
discretion of the trial court. Alford v. United States, 282 U. S. 687 . We
find no abuse of that discretion.
Perhaps the court did not attain at all times that thoroughgoing
impartiality which is the ideal, but our examination of the record
as a whole leads to the conclusion that the substantial rights of
the petitioners were not affected. The trial was long and the
incidents relied on by petitioners few. We must guard against the
magnification on appeal of instances which were of little
importance in their setting. Cf. United States v. Socony-Vacuum
Oil Co., 310 U. S. 150 , 310 U. S. 240 ; Goldstein v. United States, 63 F.2d 609; United States
v. Warren, 120 F.2d 211.
Separate consideration of the numerous instances of alleged
prejudicial misconduct on the part of the prosecuting attorney
would unduly extend this opinion. Suffice it to say that, after due
consideration, we conclude that no one instance, nor the
combination of them all, constitutes reversible error.
All the petitioners contend that they were denied an impartial
trial because of the alleged exclusion from the petit jury panel of
all women not members of the Illinois League of Women Voters. In
support of their motions for a new trial, Glasser and Roth filed
affidavits which are the basis of petitioners' present contentions.
Kretaske did not file an affidavit, but he urges the point
here.
Glasser swore on information and belief that all the names of
women placed in the box from which the panel was drawn were taken
from a list furnished the clerk of the court by the Illinois League
of Women Voters, and prepared Page 315 U. S. 84 exclusively from its membership, that the women on that list had
attended "jury classes whose lecturers presented the views of the
prosecution," and that women not members of the League, but
otherwise qualified, were systematically excluded, by reason of
which affiant
"did not have a trial by a jury free from bias, prejudice, and
prior instructions, and, as a result thereof, the jury was
disqualified and this affiant's rights were prejudiced in that he
was deprived of a trial by jury guaranteed to him by the laws and
the constitution of the United States of America, and particularly
the 5th and 6th amendment, all of which he offers to prove."
The source of Glasser's information was stated to be a then
current article, "Women and the Law," in the American Bar
Association Journal for April, 1940 (Vol. 26, No. 4). Roth's
affidavit merely gave Glasser as his source of information, and
made no offer of proof. The court overruled the motions for a new
trial. The record discloses that the jury was composed of six men
and six women.
Since it was first recognized in Magna Carta, trial by jury has
been a prized shield against oppression, but, while proclaiming
trial by jury as "the glory of the English law," Blackstone was
careful to note that it was but a "privilege." Commentaries, Book
3, p. 379. Our Constitution transforms that privilege into a right
in criminal proceedings in a federal court. This was recognized by
Justice Story:
"When our more immediate ancestors removed to America, they
brought this great privilege [trial by jury in criminal cases] with
them, as their birthright and inheritance, as a part of that
admirable common law which had fenced round and interposed barriers
on every side against the approaches of arbitrary power. It is now
incorporated into all our State constitutions as a fundamental
right, and the Constitution of the United States would have been
justly obnoxious to the most conclusive Page 315 U. S. 85 objection if it had not recognized and confirmed it on the most
solemn terms."
2 Story, Const. § 1779.
Lest the right of trial by jury be nullified by the improper
constitution of juries, the notion of what a proper jury is has
become inextricably intertwined with the idea of jury trial. When
the original Constitution provided only that "The trial of all
crimes, except in cases of impeachment, shall be by jury,"
[ Footnote 6 ] the people and
their representatives, leaving nothing to chance, were quick to
implement that guarantee by the adoption of the Sixth Amendment
which provides that the jury must be impartial.
For the mechanics of trial by jury, we revert to the common law
as it existed in this country and in England when the Constitution
was adopted. Patton v. United States, 281 U.
S. 276 . But, even as jury trial, which was a privilege
at common law, has become a right with us, so also, whatever
limitations were inherent in the historical common law concept of
the jury as a body of one's peers do not prevail in this country.
Our notions of what a proper jury is have developed in harmony with
our basic concepts of a democratic society and a representative
government. For
"It is part of the established tradition in the use of juries as
instruments of public justice that the jury be a body truly
representative of the community." Smith v. Texas, 311 U. S. 128 , 311 U. S.
130 .
Jurors in a federal court are to have the qualifications of
those in the highest court of the State, and they are to be
selected by the clerk of the court and a jury commissioner. §§ 275,
276 Jud.Code; 28 U.S.C. §§ 411, 412. This duty of selection may not
be delegated. United States v. Murphy, 224 F. 554; In
re Petition For Special Grand Jury, 50 F.2d 973. And, its
exercise must always Page 315 U. S. 86 accord with the fact that the proper functioning of the jury
system, and, indeed, our democracy itself, requires that the jury
be a "body truly representative of the community," and not the
organ of any special group or class. If that requirement is
observed, the officials charged with choosing federal jurors may
exercise some discretion to the end that competent jurors may be
called. But they must not allow the desire for competent jurors to
lead them into selections which do not comport with the concept of
the jury as a cross-section of the community. Tendencies, no matter
how slight, toward the selection of jurors by any method other than
a process which will insure a trial by a representative group are
undermining processes weakening the institution of jury trial, and
should be sturdily resisted. That the motives influencing such
tendencies may be of the best must not blind us to the dangers of
allowing any encroachment whatsoever on this essential right. Steps
innocently taken may, one by one, lead to the irretrievable
impairment of substantial liberties.
The deliberate selection of jurors from the membership of
particular private organizations definitely does not conform to the
traditional requirements of jury trial. No matter how
high-principled and imbued with a desire to inculcate public virtue
such organizations may be, the dangers inherent in such a method of
selection are the more real when the members of those
organizations, from training or otherwise, acquire a bias in favor
of the prosecution. The jury selected from the membership of such
an organization is then not only the organ of a special class, but,
in addition, it is also openly partisan. If such practices are to
be countenanced, the hard-won right of trial by jury becomes a
thing of doubtful value, lacking one of the essential
characteristics that have made it a cherished feature of our
institutions. Page 315 U. S. 87 So, if the picture in this case actually is as alleged in
Glasser's affidavit, we would be compelled to set aside the trial
court's denial of the motion for a new trial as a clear abuse of
discretion, and order a new trial for all the petitioners. But,
from the record before us, we must conclude that petitioners'
showing is insufficient. The Government did not controvert the
affidavits by counteraffidavits or formal denial, and it does not
appear from the record that any argument was heard on them. From
this, petitioners argue that the allegations of the affidavits are
to be taken as true for the purpose of the motion. However, this is
not a case where the prosecution has impliedly, Neal v.
Delaware, 103 U. S. 370 , or
actually, Hale v. Kentucky, 303 U.
S. 613 , stipulated that affidavits in support of a
motion alleging the improper constitution of a jury may be accepted
as proof. In the absence of such a stipulation, it is incumbent on
the moving party to introduce, or to offer, distinct evidence in
support of the motion; the formal affidavit alone, even though
uncontroverted, is not enough. Smith v. Mississippi, 162 U. S. 592 ; Tarrance v. Florida, 188 U. S. 519 ; cf. Brownfield v. South Carolina, 189 U.
S. 426 . Glasser, in his affidavit, offered to prove the
allegations contained therein, but the record is barren of any
actual tender of proof on his part. Furthermore, there is no
indication that the court refused to entertain such an offer, if it
were, in fact, made. Roth did not even make an offer of proof in
his affidavit, and Kretaske did not file one. While it is error to
refuse to hear evidence offered in support of allegations that a
jury was improperly constituted, Carter v. Texas, 177 U. S. 442 ,
there is, and, on the state of this record, can be, no assertion
that such error was here committed. The failure of petitioners to
prove their contention is fatal.
We conclude that the conviction of Glasser must be set aside and
the cause as to him remanded to the District Page 315 U. S. 88 Court for the Eastern Division of the Northern District of
Illinois for a new trial. The convictions of petitioners Kretaske
and Roth are in all respects upheld. No. 30, reversed. Nos. 31 and 32, affirmed. MR. JUSTICE JACKSON took no part in the consideration or
decision of these cases.
* Together with No. 31, Kretaske v. United States, and
No. 32, Roth v. United States, also on writs of
certiorari, 313 U.S. 551, to the Circuit Court of Appeals for the
Seventh Circuit.
[ Footnote 1 ]
"If to or more person conspire either to commit any offense
against the United States, or to defraud the United States in any
manner or for any purpose, and one or more of such parties do any
act to effect the object of the conspiracy, each of the parties to
such conspiracy shall be fined not more than $10,000, or imprisoned
not more than two years, or both."
[ Footnote 2 ]
116 F.2d 690.
[ Footnote 3 ]
Ill.Rev.Stat., 1939, c. 78, §§ 1 and 25.
[ Footnote 4 ]
Section 1 of Chapter 78 of the Illinois Revised Statutes, 1939,
applies to counties not having jury commissioners (into which class
the 17 counties fall), and provides:
"The county board of each county shall, at or before the time of
its meeting, in September in each year, or at any time thereafter,
when necessary for the purpose of this Act, make a list of
sufficient number, not less than one-tenth of the legal voters of
each sex of each town or precinct of the County, giving the place
of residence of each name an the list, to be known as a jury
list."
[ Footnote 5 ]
Elmer Swanson testified that, when money was paid to Kretaske in
connection with the Stony Island still case, Kretaske said that
part of it would go to "Red or Dan." The witness understood this to
refer to Glasser.
Frank Hodorowicz testified that he gave $800 in currency to
Kretaske to secure favorable action with regard to a still at 124
East 118th Place. Kretaske told Frank he "had to deliver the money
to Red." Hodorowicz knew this meant Glasser. Frank attempted to
"fix" a case for Albina Zarrattini through Kretaske, who declined
after "he talked to Red" because Zarrattini talked too much.
After Frank Hodorowicz was himself indicted, he went to Kretaske
to "fix" his case. Kretaske told him there was "a lot of heat" on
the case, and "They got Glasser over a barrel, he can't do
anything. He has to put you in jail."
When Edward Dewes gave Kretaske $100 so that he would not be
indicted in connection with a still at Spring Grove, Kretaske told
him "he would send it over to the red-head in the Federal
Building." The witness knew this meant Glasser. Dewes also
testified that Kretaske told him that he, Kretaske, had resigned
from the United States attorney's office under pressure, and that,
"for holding the bag," he was to receive favors from the
"red-head."
Stanley Wasielewski testified that he heard Kretaske tell
Stanley Slesur that "I will take care of everything between me and
the redhead." Both Wasielewski and Slesur were involved in a still
at Downers Grove.
[ Footnote 6 ]
Const., Art. III, § 2, cl. 3.
MR. JUSTICE FRANKFURTER:
The CHIEF JUSTICE and I are of opinion that the conviction of
Glasser, as well as that of his codefendants, should stand.
It is a commonplace in the administration of criminal justice
that the actualities of a long trial are too often given a
meretricious appearance on appeal; the perspective of the living
trial is lost in the search for error in a dead record. To set
aside the conviction of Glasser (a lawyer who served as an
Assistant United States Attorney for more than four years) after a
trial lasting longer than a month, on the ground that he was denied
the basic constitutional right "to have the assistance of counsel
for his defence," is to give fresh point to this regrettably
familiar phenomenon. For Glasser himself made no such claim at any
of the critical occasions throughout the proceedings. Neither when
the judge appointed Stewart to act as counsel for both Kretaske and
Glasser, nor at any time during the long trial, nor in his motions
to set aside the verdict and to arrest judgment, nor in his plea to
the court before sentence was passed, nor in setting forth his
grounds for appeal, did Glasser assert, or manifest in any way a
belief, that he was denied the effective assistance of counsel. Not
until twenty weeks after Stewart had become counsel for the
codefendant Kretaske, and fifteen weeks after the trial had ended,
did Glasser discover that he had been Page 315 U. S. 89 deprived of his constitutional rights. This was obviously a
lawyer's afterthought. It does not promote respect for the Bill of
Rights to turn such an afterthought into an imaginary injury that
is reflected nowhere in the contemporaneous record of the trial,
and make it the basis for reversal.
The guarantees of the Bill of Rights are not abstractions.
Whether their safeguards of liberty and dignity have been infringed
in a particular case depends upon the particular circumstances. The
fact that Glasser is an attorney, of course, does not mean that he
is not entitled to the protection which is afforded all persons by
the Sixth Amendment. But the fact that he is an attorney with
special experience in criminal cases, and not a helpless
illiterate, may be -- as we believe it to be here -- extremely
relevant in determining whether he was denied such protection.
In this light, what does the record show? Before the trial got
under way, the trial judge was presented with a problem created by
the inability of one of Kretaske's lawyers to try the case in his
behalf. Kretaske was dissatisfied with his other lawyer, who
professed to be unfamiliar with the many details of the case. Upon
Kretaske's motion for a continuance, the judge was faced with the
difficulty of avoiding either delay of the trial or an undesirable
severance as to Kretaske. All the defendants, including Glasser,
and their counsel were present in court. The judge asked whether
Stewart, who had been retained by Glasser, would be prepared to act
also for Kretaske. The record gives no possible ground for any
inference other than that this suggestion came from the judge as a
fair and disinterested proposal to solve a not unfamiliar trial
problem. It is not, and indeed could not be, contended that the
judge's suggestion, addressed to the consideration of the
defendants, was not wholly proper. And so, Page 315 U. S. 90 when Stewart raised the question of a possible conflict of
interest, and Glasser himself objected, saying "I would like to
have my own lawyer representing me," the judge neither remonstrated
nor argued. He promptly dropped his suggestion and directed
Kretaske's other lawyer, who was present but with whom Kretaske was
dissatisfied, to stay in the case until Kretaske could hire someone
to his satisfaction. The footnote sets forth the full text of this
episode. [ Footnote 2/1 ]
There ensued a long discussion relating to the representation of
Kretaske. During this discussion, the judge never Page 315 U. S. 91 again adverted to his original suggestion that Stewart also
represent Kretaske. Kretaske interrupted, and there then occurred
in Glasser's presence what is now made the basis for reversal:
"Mr. Kretaske: I can end this. I just spoke to Mr. Stewart, and
he said if your Honor wishes to appoint him, I think we can accept
the appointment."
"Mr. Stewart: As long as the Court knows the situation. I think
there is something to the fact that the jury knows we can't control
that."
"Mr. McDonnell: Then the order is vacated?"
"The Court: The order appointing Mr. McDonnell is vacated and
Mr. Stewart is appointed attorney for Mr. Kretaske."
It is clear, therefore, that this arrangement was voluntarily
assumed by the parties, and was not pressed upon them by the judge.
Glasser, who was present, raised no objection, and made no
comment.
The requirement that timely objections be made to prejudicial
rulings of a trial judge often has the semblance of traps for the
unwary and uninformed. But Glasser was neither unwary nor
uninformed. His experience in the prosecution of criminal cases
makes his silence here most significant. Nor was this the last
opportunity he had to indicate that embarrassment was being caused
him by Stewart's representation of Kretaske, let alone that he
deemed it a denial of his constitutional rights. If he were
laboring under a handicap, he would have made it known at the times
when he felt it most -- during the long course of the trial, in his
motions for new trial and in arrest of judgment, in his extended
plea to the court before sentence was passed, and finally when, on
April 26, 1940, over his own signature, he gave twenty grounds for
appeal but did not mention this one. The long period of
uninterrupted silence concerning his after-discovered injury
negatives its existence. We find it difficult to know what
acquiescence Page 315 U. S. 92 in a judge's ruling could be if this record does not show it.
[ Footnote 2/2 ]
A fair reading of the record thus precludes the inference that
the judge forced upon Glasser a situation which hobbled him in his
defense. To be sure, he did say at first that he would like his
lawyer to represent him alone. But he plainly acquiesced in the
arrangement which, after consultation at the defense table, was
proposed to the trial judge and which the judge accepted. A
conspiracy trial presents complicated questions of strategy for the
defense. There are advantages and disadvantages in having separate
counsel for each defendant or a single counsel for more than one.
Joint representation is a means of insuring against reciprocal
recrimination. A common defense often gives strength against a
common attack. These considerations could not have escaped a lawyer
of Glasser's experience. His thorough acquiescence in the
proceedings cannot be reconciled with a denial of his
constitutional rights.
A belated showing that Glasser was actually prejudiced by the
judge's action is now attempted. This has two aspects: (1)
Stewart's failure to cross-examine the witness Brantman, and (2)
his failure to make objections on behalf of Glasser to the
admission of certain evidence. Page 315 U. S. 93 (1) The Brantman episode evaporates upon examination. His only
testimony relating to Glasser was that he did not know him. This
was brought out fully and distinctly on direct examination.
[ Footnote 2/3 ] That it had been
amply established, Glasser himself recognized in his address to the
court before sentence. It is difficult to understand how
cross-examination would have been of any further benefit to
Glasser. In any event, the record shows that Stewart abstained from
cross-examining Brantman not because he felt himself inhibited by
any conflict of interest, but because, as he told the judge after
verdict, he thought that, on cross-examination, Brantman "would be
telling worse lies."
(2) It is said that Stewart's failure to object, on behalf of
Glasser, to certain evidence, in itself, proves that Stewart felt
himself restricted -- wholly regardless of the admissibility of
such evidence. No evidence inadmissible against Glasser is
avouched. Indeed, we are told that it is "beside the point" that
the evidence is admissible. Can it be that a lawyer who fails to
make frivolous objections to admissible evidence is thereby denying
his client the constitutional right to the assistance of
counsel?
[ Footnote 2/1 ]
"Mr. Stewart: May I make this statement about that, judge? We
were talking about it -- we were all trying to get along together.
I filed an affidavit, or I did on the behalf of Mr. Glasser,
pointing out some little inconsistency in the defense, and the main
part of it is this: there will be conversations here where Mr.
Glasser wasn't present, where people have seen Mr. Kretaske and
they have talked about, that they gave money to take care of
Glasser, that is not binding on Mr. Glasser, and there is a
divergency there, and Mr. Glasser feels that, if I would represent
Mr. Kretaske, the jury would get an idea that they are together,
and all the evidence --"
"The Court: How would it be if I appointed you as attorney for
Mr. Kretaske?"
"Mr. Stewart: That would be for your Honor to decide."
"The Court: I know you are looking out for every possible
legitimate defense there is. Now, if the jury understood that,
while you were retained by Mr. Glasser, the Court appointed you at
this late hour to represent Kretaske, what would be the effect of
the jury on that?"
"Mr. Stewart: Your Honor could judge that as well as I
could."
"The Court: I think it would be favorable to the defendant
Kretaske."
"Mr. Glasser: I think it would be too, if he had Mr. Stewart.
That's the reason I got Mr. Stewart, but if a defendant who has a
lawyer representing him is allowed to enter an objection, I would
like to enter my objection. I would like to have my own lawyer
representing me."
"The Court: Mr. McDonnell, you will have to stay in it until Mr.
Kretaske gets another lawyer, if he isn't satisfied with you. (To
Mr. Kretaske) Mr. Kretaske, if you are not satisfied with Mr.
McDonnell, you will have to hire another lawyer. We will proceed
with the selection of the jury now."
[ Footnote 2/2 ]
Stewart was designated to represent Kretaske on February 6,
1940, when the trial began. The jury brought in its verdict on
March 8. The motions for new trial and in arrest of judgment were
denied on April 23, and, on the same day, the defendants were
sentenced. On April 26, Glasser filed a notice setting forth twenty
grounds of appeal without suggesting that he had been denied his
right to the assistance of counsel. On June 27, Glasser and the two
other petitioners filed a "joint and several assignment of errors,"
for the first time asserting that:
"The court erred in appointing the employed counsel of defendant
Daniel D. Glasser to represent defendant Norton I. Kretaske, to the
prejudice of the defendants."
[ Footnote 2/3 ]
"Q. Do you know Mr. Glasser?"
"A. No, sir."
"Q. Did you ever see him before the time you got this
money?"
"A. I have seen him, I think I might have been introduced to the
man once, but I don't think it was before I got that money."
"Q. You never had any conversation with him in any event?"
"A. No, sir."
"Q. What?"
"A. No, sir. " | The Supreme Court ruled on several issues in Glasser v. United States. Firstly, they found that the jury was not illegally constituted due to the short time since the state law on jury service by women came into force and the absence of women's names on state jury lists. They also decided that the indictment was adequately returned by the grand jury and was sufficiently clear to inform defendants of the charges.
The Court further held that depriving the government of lawful functions through bribery constitutes "defrauding" and is a distinct offense from bribery itself. Regarding the conspiracy charge, the Court found that an error in a close case may be grounds for reversal, especially when a defendant is deprived of their right to effective assistance of counsel due to a potential conflict of interest.
The Court emphasized the importance of the right to counsel and the need to protect it, even if the defendant is a lawyer themselves. In this case, the defendant's objection to his lawyer representing a codefendant should have been heeded, and the judge's failure to do so was a violation of the defendant's Sixth Amendment rights.
Overall, the case emphasizes the importance of ensuring a fair trial and the right to effective assistance of counsel, even when defendants may have legal knowledge themselves. |
Taxes | Moore v. U.S. | https://supreme.justia.com/cases/federal/us/602/22-800/ | NOTICE: This opinion is subject to
formal revision before publication in the United States Reports.
Readers are requested to notify the Reporter of Decisions, Supreme
Court of the United States, Washington, D. C. 20543,
pio@supremecourt.gov, of any typographical or other formal
errors.
SUPREME COURT OF THE UNITED STATES
_________________
No. 22–800
_________________
CHARLES G. MOORE, et ux., PETITIONERS v. UNITED STATES
on writ of certiorari to the united states
court of appeals for the ninth circuit
[June 20, 2024]
Justice Kavanaugh delivered the opinion of the
Court.
For tax purposes, Congress has long treated some
corporations and partnerships as pass-throughs: Congress does not
tax the entity on its income, but instead attributes the
undistributed income of the entity to the shareholders or partners
and then taxes the shareholders or partners on that income. This
Court has long upheld those taxes.
Since 1962, Congress has likewise treated
American-controlled foreign corporations as pass-throughs. That
1962 law (known as subpart F) attributes certain income, mostly
passive income, of American-controlled foreign corporations to
their American shareholders and then taxes those shareholders on
that income.
In 2017, Congress enacted a new law that
attributes more income, including active business income, of
American-controlled foreign corporations to their American
shareholders and then taxes those shareholders on that income. The
question is whether that 2017 tax (known as the Mandatory
Repatriation Tax or MRT) is constitutional under Article I, §§8 and
9 and the Sixteenth Amendment. This Court’s longstanding precedents
establish that the answer is yes.
I
A
In general, Congress taxes the income of
American business entities such as corporations and partnerships in
one of two ways.
First, some entities such as S corporations and
partnerships are taxed on a pass-through basis. (S corporations are
corporations with 100 or fewer shareholders where the shareholders
have elected to be taxed on a pass-through basis. 26 U. S. C.
§§1361–1362.) Instead of the entity itself paying taxes, income is
attributed to the entity’s owners, such as shareholders or
partners, who then pay taxes on the income of the entity even if
the entity has not distributed any money or property to them.
§§61(a)(12), 701, 1366(a)–(c).
Second, other entities are taxed directly on
their income. For example, some corporations file a return and pay
taxes each year just like individual taxpayers. §11(a). When a
corporation pays taxes on its income, its shareholders are
ordinarily not taxed on that income. Instead, the shareholders
typically pay taxes either when the corporation distributes money,
stock, or other property to them as a dividend or when the
shareholders sell their shares and have capital gains. §§61(a)(7),
1001. But the shareholders are not taxed on the corporate income
itself.
Congress has devised more nuanced rules for
foreign entities such as foreign corporations. For legal and
practical reasons, Congress generally does not directly tax foreign
corporations, including American-controlled foreign corporations,
on the income that they earn outside of the United States. Instead,
Congress has imposed some taxes on income of those corporations on
a pass-through basis.
Most notably, starting in 1962, in what is known
as subpart F of the Internal Revenue Code, Congress has treated
American-controlled foreign corporations as pass-through entities:
Subpart F attributes income of the corporation to American
shareholders, and taxes those American shareholders on that income.
26 U. S. C. §§951–952. But subpart F applies only to a
small portion of the foreign corporation’s income, mostly passive
income.
In 2017, Congress passed and President Trump
signed the Tax Cuts and Jobs Act. 131Stat. 2054. In a variety of
ways not relevant to this case, the Act altered the United States’
approach to international corporate taxation. The primary goal was
to encourage Americans who controlled foreign corporations to
invest earnings from their foreign investments back in the United
States instead of abroad.
As relevant here, one piece of that intricate
and multi-faceted 2017 Act imposed a new, one-time pass-through tax
on some American shareholders of American-controlled foreign
corporations. That one-time tax addressed one of the problems that
had arisen under the old system: For decades before the 2017 Act,
American-controlled foreign corporations had earned and accumulated
trillions of dollars in income abroad that went almost entirely
untaxed by the United States. The foreign corporations themselves
were not taxed on their income. And other than subpart F, which
applies mostly to passive income, the undistributed income of those
foreign corporations was not attributed to American shareholders
for the shareholders to be taxed.
As part of the complicated transition to a more
territorial system, the 2017 Act imposed a one-time,
backward-looking tax on that accumulated income. That
backward-looking tax is known as the Mandatory Repatriation Tax or
MRT. §965. Similar in structure to subpart F, the MRT attributed
the long-accumulated and undistributed income of
American-controlled foreign corporations to American shareholders,
and then taxed those American shareholders on their pro rata
shares of that long-accumulated income at a rate from 8 to 15.5
percent. §§965(a), (c), (d).[ 1 ]
B
In 2006, Charles and Kathleen Moore invested
$40,000 in an American-controlled foreign corporation that one of
their friends had started in India. In return, the Moores received
a 13-percent ownership share. The company, KisanKraft, generated a
great deal of income. But as of 2017, KisanKraft had not
distributed that income to its American shareholders, including the
Moores, meaning that neither KisanKraft nor the Moores had paid
U. S. taxes on that income.
The MRT applied to the Moores because of their
investment in KisanKraft. By the end of the 2017 tax year, the
Moores’ pro rata share of KisanKraft’s accumulated income from
2006 to 2017 totaled about $508,000. After factoring in a deduction
that is not relevant here, the Moores declared $132,512 in income
under the MRT based on their KisanKraft shares. They owed $14,729
in taxes on that income.
The Moores paid that amount, then sued for a
refund. They claimed that the MRT was unconstitutional for two
reasons. First, they argued that the MRT violated the Direct Tax
Clause of the Constitution because, in their view, the MRT was an
unapportioned direct tax on their shares of KisanKraft stock.
Second, they contended that the MRT violated the Due Process Clause
of the Fifth Amendment because it applied retroactively to past
income.
The District Court dismissed the suit, and the
U. S. Court of Appeals for the Ninth Circuit affirmed. The
Court of Appeals held that the MRT constitutes a tax on income
within the meaning of the Constitution because “KisanKraft earned
significant income, and the MRT assigns only a pro-rata share of
that income to the Moores.” 36 F. 4th 930, 936–937 (2022). The
Court of Appeals also rejected the Moores’ due process claim
regarding retroactivity. Id. , at 938–939.
The Moores sought review in this Court, raising
only their Direct Tax Clause argument. This Court granted
certiorari. 599 U. S. ___ (2023).
II
We must decide whether the 2017 Mandatory
Repatriation Tax, or MRT, exceeds Congress’s constitutional
authority. To analyze that question, we begin with a brief review
of Congress’s taxing power under the Constitution.
After Independence in 1776 and under the
Articles of Confederation in effect from 1781 to 1789, the Federal
Government relied primarily on contributions from the States for
revenue. The Federal Government’s expenses and needs sometimes far
outpaced the contributions that the States were willing to provide.
As George Washington famously recognized during the Revolutionary
War, reliance on the States to fund the National Government
hampered important national priorities—including the war against
the British. 12 Papers of George Washington: Revolutionary War
Series 683–687 (P. Chase & F. Grizzard eds. 2002) (letter from
Valley Forge).
The National Government’s continuing revenue
problems under the Articles of Confederation helped prompt the
Constitutional Convention that convened in Philadelphia in the
summer of 1787. The Federalist No. 30 (A. Hamilton). The Framers
responded to the revenue problem by granting Congress an expansive
taxing power.
Article I of the Constitution affords Congress
broad “Power To lay and collect Taxes, Duties, Imposts and
Excises.” Art. I, §8, cl. 1. That power includes “ ‘two great
classes of’ ” taxes—direct taxes and indirect taxes. Brushaber v. Union Pacific R. Co. , 240 U.S.
1 , 13 (1916).
Generally speaking, direct taxes are
those taxes imposed on persons or property. See National
Federation of Independent Business v. Sebelius , 567 U.S.
519 , 570–571 (2012). As a practical matter, however, Congress
has rarely enacted direct taxes because the Constitution requires
that direct taxes be apportioned among the States. To be
apportioned, direct taxes must be imposed “in Proportion to the
Census of Enumeration.” U. S. Const., Art. I, §9, cl. 4; see also
§2, cl. 3. In other words, direct taxes must be apportioned among
the States according to each State’s population.
So if Congress imposed a property tax on every
American homeowner, the citizens of a State with five percent of
the population would pay five percent of the total property tax,
even if the value of their combined property added up to only three
percent of the total value of homes in the United States. To pay
five percent, the tax rate on the citizens of that State would need
to be substantially higher than the tax rate in a neighboring State
with the same population but more valuable homes.
To state the obvious, that kind of complicated
and politically unpalatable result has made direct taxes difficult
to enact. Indeed, the parties have cited no apportioned direct
taxes in the current Internal Revenue Code, and it appears that
Congress has not enacted an apportioned tax since the Civil War.
See 12Stat. 297; E. Jensen, The Taxing Power: A Reference Guide to
the United States Constitution 89 (2005).
By contrast, indirect taxes are the
familiar federal taxes imposed on activities or transactions. That
category of taxes includes duties, imposts, and excise taxes, as
well as income taxes. U. S. Const., Art. I, §8, cl. 1;
Amdt. 16. Under the Constitution, indirect taxes must “be uniform
throughout the United States.” Art. I, §8, cl. 1. A
“ ‘tax is uniform when it operates with the same force and
effect in every place where the subject of it is found.’ ” United States v. Ptasynski , 462 U.S.
74 , 82 (1983).
Because income taxes are indirect taxes, they
are permitted under Article I, §8 without apportionment. As this
Court has said, Article I, §8’s grant of taxing power “is
exhaustive,” meaning that it could “never” reasonably be
“questioned from the” Founding that it included the power “to lay
and collect income taxes.” Brushaber , 240 U. S., at
12–13. In 1861, Congress enacted the Nation’s first unapportioned
income tax. 12Stat. 309. The Civil War income tax was recognized as
an indirect tax “under the head of excises, duties and imposts.” Brushaber , 240 U. S., at 15; see also Springer v. United States , 102 U.S.
586 , 598, 602 (1881).
In 1895, however, in Pollock v. Farmers’ Loan & Trust Co. , this Court held that a tax on
income from property equated to a tax on the property itself, and
thus was a direct tax that had to be apportioned among the States. 158 U.S.
601 , 627–628. The Pollock decision sparked significant
confusion and controversy throughout the United States.
Congress and the States responded to Pollock by approving a new constitutional amendment.
Ratified in 1913, the Sixteenth Amendment rejected Pollock ’s
conflation of (i) income from property and (ii) the property
itself. The Amendment provides: “The Congress shall have power to
lay and collect taxes on incomes, from whatever source
derived , without apportionment among the several States, and
without regard to any census or enumeration.” U. S. Const., Amdt.
16 (emphasis added).
Therefore, the Sixteenth Amendment expressly
confirmed what had been the understanding of the Constitution
before Pollock : Taxes on income—including taxes on income
from property—are indirect taxes that need not be apportioned. Brushaber , 240 U. S., at 15, 18. Meanwhile, property
taxes remain direct taxes that must be apportioned. See Helvering v. Independent Life Ins. Co. , 292 U.S.
371 , 378–379 (1934).
III
With that background, we turn to the 2017
Mandatory Repatriation Tax. The MRT is not apportioned among the
States. The Government argues that the MRT is a tax on income and
therefore need not be apportioned. The Moores contend that the MRT
is a tax on property, rather than a tax on income, and that the tax
is therefore unconstitutional because it is not apportioned.
What distinguishes income from property? The
Moores argue that income requires realization. The Moores say that
realization occurs when gains come into the taxpayer’s coffers—for
example, through wages, sales, or dividends, as distinct from
appreciation in the value of a home, stock investment, or other
property. And the Moores contend that the MRT does not tax any
income that they have realized.
Critically, however, the MRT does tax
realized income—namely, income realized by the corporation,
KisanKraft. The MRT attributes the income of the corporation to the
shareholders, and then taxes the shareholders (including the
Moores) on their share of that undistributed corporate income.
So the precise and narrow question that the
Court addresses today is whether Congress may attribute an entity’s
realized and undistributed income to the entity’s shareholders or
partners, and then tax the shareholders or partners on their
portions of that income. This Court’s longstanding precedents,
reflected in and reinforced by Congress’s longstanding practice,
establish that the answer is yes.[ 2 ]
A
Congress sometimes chooses to tax a business
entity itself on the income that the entity earns. Alternatively,
Congress sometimes elects to treat an entity as a
pass-through—attributing the entity’s undistributed income to the
shareholders or partners and then taxing the shareholders or
partners on that income. Either way, this Court has held that the
tax remains a tax on income—and thus an indirect tax that need not
be apportioned.
In 1925, in Burk-Waggoner Oil Assn. v. Hopkins , the Court articulated that fundamental principle. 269 U.S.
110 . The case involved a tax on the income of an entity that
state law treated as a partnership. Under state law, the
partnership’s property was considered the property of the partners.
For that reason, the partnership argued that Congress had to tax
the partners on the income and could not tax the partnership.
This Court rejected that argument. The Court
stated: “Neither the conception of unincorporated associations
prevailing under the local law, nor the relation under that law of
the association to its shareholders, nor their relation to each
other and to outsiders, is of legal significance as bearing upon
the power of Congress to determine how and at what rate the income
of the joint enterprise shall be taxed.” Id. , at 114. In
other words, Congress could tax the income as it chose, taxing
either the partnership or the partners on the partnership’s
undistributed income. So the tax on the partnership was proper.
In 1932, in Burnet v. Leininger ,
the Court reiterated that principle. 285 U.S.
136 . There, the Court considered “the validity” of a tax
attributing partnership income to partners. Id. , at 142. The
Court again held that “Congress, having the authority to tax the
net income of partnerships, could impose the liability upon the
partnership directly,” or it could impose tax liability “upon the
individuals carrying on business in partnership.” Ibid. (quotation marks omitted).
Next, in 1938 in Heiner v. Mellon ,
the Court again addressed a situation closely akin to the Moores’
case here—a tax on partners for the undistributed income of their
partnership. 304 U.S.
271 . In that case, the partnership earned income, but state law
did not allow the partners to personally receive the income.
Nonetheless, under the relevant federal tax law, the individual
partners owed taxes on the partnership’s income. The partners
argued that Congress could not tax them on income that they did not
and could not personally receive.
This Court upheld the tax on the partners,
reasoning that it was immaterial that the partners did not actually
receive the income earned by the partnership. The Court reaffirmed
that Congress may choose to tax either the partnership or the partners on the partnership’s undistributed income.
The principle articulated by this Court in Heiner v. Mellon also applies to corporations and
their shareholders. On the same day in 1938 that the Court decided Heiner v. Mellon , the Court also decided Helvering v. National Grocery Co. In that case, the
Court ruled that the controlling shareholder of a corporation could
not “prevent Congress, if it chose to do so, from laying on him
individually the tax on the year’s profits.” 304 U.S.
282 , 288. Citing Heiner v. Mellon , the Court
stated that Congress may tax shareholders of the corporation on the
corporation’s undistributed income, in much the same way that
Congress can tax the partners of a partnership on the partnership’s
undistributed income. 304 U. S., at 288–289.
So by 1938, this Court’s precedents had
established a clear rule that directly contradicts the Moores’
argument in this case. That line of precedent remains good law to
this day. Indeed, since then, it has gone without serious question
in both Congress and the federal courts that Congress can attribute
the undistributed income of an entity to the entity’s shareholders
or partners, and tax the shareholders or partners on their pro rata
share of the entity’s undistributed income.
Most notably, the courts have repeatedly invoked
that principle in upholding subpart F, which Congress enacted in
1962. Like the MRT, subpart F treats certain foreign corporations
as pass-throughs by attributing undistributed income of foreign
corporations to their American shareholders, and then taxing the
American shareholders on their pro rata shares of the income.
As the Second Circuit concluded in a leading case upholding subpart
F: The constitutional challenge to subpart F “borders on the
frivolous” in light of Heiner v. Mellon . Garlock,
Inc. v. Commissioner , 489 F.2d 197, 202–203, and
n. 5 (1973); see also Estate of Whitlock v. Commissioner , 59 T.C. 490, 507 (1972) (The “Supreme Court’s
pronouncements have been to the effect that taxation of
undistributed current corporate income at the stockholder level
rather than at the corporate level is within the congressional
power”), aff’d in relevant part, 494 F.2d 1297, 1301 (CA10 1974)
(adopting the Tax Court’s analysis); B. Bittker & L. Lokken,
Federal Taxation of Income, Estates and Gifts ¶1.2.4 (2024) (noting
the consensus in favor of Congress’s power to tax foreign
corporations as pass-through businesses); cf. Eder v. Commissioner , 138 F.2d 27, 28 (CA2 1943) (“In a variety of
circumstances it has been held that the fact that the distribution
of income is prevented by operation of law, or by agreement among
private parties, is no bar to its taxability”).
In response to that dispositive line of
precedents against them, the Moores invoke the Court’s earlier 1920
decision in Eisner v. Macomber , 252 U.S.
189 . The Moores argue that some language in Eisner v. Macomber is inconsistent with the rule subsequently
established in Burk-Waggoner Oil Assn. v. Hopkins , Heiner v. Mellon , and Helvering v. National
Grocery Co. and followed ever since by Congress and the federal
courts.
The Moores’ reliance on Eisner v. Macomber with respect to the attribution issue is misplaced.
Importantly, Eisner v. Macomber was not a case
about Congress’s power to attribute the income of an entity to the
entity’s shareholders or partners. Rather, the Court in Eisner v. Macomber addressed a situation where a
corporation created and distributed additional stock to existing
shareholders. 252 U. S., at 200. The corporation distributed
the additional shares of stock in proportion to each shareholder’s
percentage of ownership. Id. , at 210–211. So the actual
value of the shareholders’ total stock holdings in the corporation
did not change. Ibid. The question in Eisner v. Macomber was whether the new stock was nonetheless taxable income for the
shareholders. Id. , at 199. The Court said no. Id. , at
212. The Court reasoned that there was no change in the value of
the shareholders’ total stock holdings in the corporation before
and after the stock distribution. Id. , at 210–211. So the
new stock did not represent any kind of economic gain to the
shareholders. Ibid. And the Court further stated that income
requires realization. Id. , at 207, 211–212. Yet neither the
corporation nor the shareholders had realized income from the
corporation’s creation and distribution of additional stock. Id. , at 210–213.[ 3 ]
Separate from that analysis, the Court went on
to say in dicta that “what is called the stockholder’s share in the
accumulated profits of the company is capital, not income.” Id. , at 219. Because the corporation had already paid taxes
on its income, that statement and the surrounding discussion may
have been designed to cast doubt on the legality of double
taxation—taxing both the corporation and its shareholders on the
corporation’s undistributed income. See, e.g. , Brief for
American College of Tax Counsel as Amicus Curiae 16–17;
Brief for Tax Law Center at NYU Law et al. as Amici
Curiae 6–7.
But the Moores interpret that language in Eisner v. Macomber to mean that a tax attributing an
entity’s undistributed income to its shareholders or partners is
not an income tax. The Moores’ reading is implausible. The Court in Eisner v. Macomber did not purport to address
attribution, no doubt because the tax at issue there did not
attribute income of the corporation to the shareholders. And if
there were any ambiguity on that point, it was quickly eliminated
by this Court’s clear and definitive holdings in Burk-Waggoner
Oil Assn. v. Hopkins , Heiner v. Mellon ,
and Helvering v. National Grocery Co. In those three
cases, unlike in Eisner v. Macomber , the Court
squarely addressed attribution—and allowed it. None of those cases
so much as mentioned Eisner v. Macomber , which is not
surprising because, to reiterate, Eisner v. Macomber did not address attribution. So whatever else Eisner v. Macomber might stand for, it does not proscribe attribution
and thus has no bearing on the attribution issue in this case.
To sum up: The Court’s longstanding precedents
plainly establish that, when dealing with an entity’s undistributed
income, Congress may tax either (i) the entity or (ii) its
shareholders or partners.[ 4 ]
B
Consistent with this Court’s case law, Congress
has long taxed the shareholders and partners of business entities
on the entities’ undistributed income. That longstanding
congressional practice reflects and reinforces this Court’s
precedents upholding those kinds of taxes.
In 1864, for example, Congress passed and
President Lincoln signed an income-tax law that taxed individuals
on “the gains and profits of all companies, whether incorporated or
partnership,” in which they were shareholders or partners. 13Stat.
282. In 1871, the Court upheld the constitutionality of that tax. Collector v. Hubbard , 12 Wall. 1, 18.[ 5 ]
In 1913, soon after the Sixteenth Amendment was
ratified, Congress enacted a new income tax on shareholders for
their share of the incomes of corporations formed or used to evade
taxes. 38Stat. 166. That 1913 law also taxed partners on each
partner’s “share of the profits of a partnership.” Id. , at
169. As explained above, the Court upheld that approach to
partnership taxation in Burnet v. Leininger , 285
U. S., at 142, and Heiner v. Mellon , 304
U. S., at 280. Ever since that 1913 law and those cases, the
basic partnership-tax rule has been settled: It “is axiomatic that
each partner must pay taxes on his distributive share of the
partnership’s income without regard to whether that amount is
actually distributed to him.” United States v. Basye , 410 U.S.
441 , 453 (1973).
As new kinds of corporate entities arose,
Congress employed a similar approach. For example, in the 1918
Revenue Act, Congress decided to tax shareholders of personal
service corporations—that is, shareholders of closely held
corporations that earn most of their income from the work of their
principal owners and shareholders—“in the same manner as the
members of partnerships.” 40Stat. 1070.
And since 1958, the Internal Revenue Code has
also taxed the shareholders of S corporations in the same way as
partnerships—by taxing the shareholders on their share of the
undistributed income of the corporation. See Bufferd v. Commissioner , 506 U.S.
523 , 524–525 (1993). S corporations are corporations with 100
or fewer shareholders where the shareholders have elected to be
taxed directly on the corporate income. 26 U. S. C. §§1361–1362. A
majority of the corporations in the United States are S
corporations, so the taxation of individual shareholders of S
corporations is widespread.
In addition, Congress has long taxed major
American shareholders of foreign business entities on some
of the income of those entities. For example, in 1937, Congress
taxed American shareholders of foreign personal holding companies
on those companies’ undistributed income. 50Stat. 822.
And in 1962, Congress enacted subpart F, which
remains in place to this day. 76Stat. 1006, 26 U. S. C.
§951 et seq. To reiterate, subpart F taxes American
shareholders of American-controlled foreign corporations on several
kinds of undistributed corporate income, mostly passive income.
§§951, 952, 957. And as noted above, in light of this Court’s
precedents, the Courts of Appeals have uniformly rejected
constitutional challenges to subpart F. See Garlock , 489
F. 2d, at 202–203, and n. 5 (the constitutional challenge to
subpart F “borders on the frivolous” in light of Heiner v. Mellon ); Estate of Whitlock , 494 F. 2d, at 1301.
In short, before and after ratification of the
Sixteenth Amendment, Congress has often taxed the shareholders or
partners of a business entity on the entity’s undistributed income.
Such a “[l]ong settled and established practice” can carry “great
weight in” resolving constitutional questions—and here it reflects
and reinforces this Court’s precedents. Chiafalo v. Washington , 591 U.S. 578, 592 (2020) (quotation marks
omitted); see also Moore v. Harper , 600 U.S. 1, 32
(2023) (The Court has “long looked to ‘settled and established
practice’ to interpret the Constitution” (quoting The Pocket
Veto Case , 279 U.S.
655 , 689 (1929))); Walz v. Tax Comm’n of City of New
York , 397 U.S.
664 , 678 (1970) (An “unbroken
practice . . . is not something to be lightly
cast aside”); The Federalist No. 37, p. 229 (C. Rossiter ed. 1961)
(J. Madison).
IV
The Moores are obviously aware of those
longstanding congressional practices and Supreme Court precedents,
so they had two choices of how to deal with that stark reality in
this Court. They could have argued that all of those taxes are
unconstitutional and that all of those precedents should be
overruled. Or in an effort to contain the blast radius of their
legal theory, they could have tried to distinguish the MRT from
those other taxes and argue that only the MRT is unconstitutional.
They chose the latter approach.
To be specific: The Moores explicitly concede
that partnership taxes, S-corporation taxes, and subpart F taxes
are income taxes that are constitutional and need not be
apportioned. Tr. of Oral Arg. 9, 48; Brief for Petitioners 50–51.
The Moores likewise do not ask the Court to overrule any of the
precedents that we have discussed above, which upheld the
attribution of entities’ undistributed income. Id. , at
49–52.
Instead, the Moores seek to differentiate the
MRT from all of those other taxes long imposed by Congress and long
upheld by this Court. The Moores have advanced an array of ad hoc
distinctions to try to explain why those longstanding taxes are
constitutional and why those precedents are correct, and to
simultaneously try to explain why those taxes and precedents do not
eviscerate their argument that the MRT is unconstitutional. But the
Moores’ effort to thread that needle, although inventive, is
unavailing.
According to the Moores: (1) taxes on
partnerships are distinguishable from the MRT and not controlled by
precedent because partnerships are not separate entities from their
partners; (2) taxes on S corporations are distinguishable from the
MRT and not controlled by precedent because shareholders of S
corporations choose to be taxed directly on corporate income; and
(3) subpart F taxes on American shareholders’ portions of
undistributed foreign corporate income are distinguishable from the
MRT and not controlled by precedent because those taxes apply what
the Moores call “constructive realization.”
To begin, and perhaps most importantly, the
Moores’ set of ad hoc distinctions does not undermine the clear
rule established by this Court’s precedents: Congress can choose
either to tax the entity on its income or to tax the entity’s
shareholders or partners on their share of the entity’s
undistributed income. Burk-Waggoner Oil Assn. v. Hopkins , 269 U.S.
110 , 114 (1925).
In any event, the Moores’ attempted distinctions
of the various taxes fail on their own terms. First, the Moores contend that partners
can be taxed on a partnership’s income only because, as of the time
that the Sixteenth Amendment was ratified in 1913, partnerships
were not seen as legal entities separate from the partners. But
that assertion is incorrect. When the Sixteenth Amendment was
ratified, the courts, Congress, and state legislatures treated
partnerships as separate entities in many contexts. See, e.g. , Forsyth v. Woods , 11 Wall. 484, 486
(1871) (“The partnership is a distinct thing from the partners
themselves . . . ”); W. Cowles, The Firm as a Legal Person, 57
Central L. J. 343 (1903) (citing many additional
ratification-era cases); see also H. Black, Law of Income Taxation
Under Federal and State Laws 100 (1913) (The “undivided earnings of
a partnership . . . properly constitute income
of the firm but not of the individual partners”); 30Stat. 545,
547–548 (1898) (federal bankruptcy law that treated partnerships as
separate entities); F. Burdick, Law of Partnership, ch. 3, §1, pp.
85–86 (rev. 2d ed. 1906) (It “is becoming more and more customary
for legislation and judicial decisions to treat a partnership as an
entity”).
During the time period around ratification of
the Sixteenth Amendment, moreover, numerous States imposed taxes
directly on partnerships for partnership income. 1 S. Rowley, The
Modern Law of Partnership §306 (1916); 2 id. , §935, at 1295,
and n. 1 (collecting 21 state laws); Black 146. And during
World War I, Congress enacted the Revenue Act of 1917, which also
imposed a tax directly on partnerships. 40Stat. 303. The federal
and state treatment of partnerships as separate legal entities for
tax purposes contravenes the Moores’ theory that pass-through
taxation is inherent in the nature of partnerships rather than a
legislative choice.
In short, the Moores are incorrect to claim that
partnerships were not historically seen as separate taxable
entities.
To be sure, courts declined to recognize
partnerships as separate entities in certain common-law contexts. 1
Rowley §118; Burdick, ch. 3, §1. But those cases simply demonstrate
that partnerships were (and are) flexible entities that can receive
flexible legal treatment. Those cases are consistent with the
longstanding principle recognized by this Court that “Congress,
having the authority to tax the net income of partnerships, could
impose the liability upon the partnership directly, as it did under
the Revenue Act of 1917, or upon the ‘individuals carrying on
business in partnership.’ ” Burnet v. Leininger , 285 U.S.
136 , 142 (1932) (citation omitted). As with other business
entities, Congress may choose whether to tax (i) the entity or
(ii) its shareholders or partners on the entity’s undistributed
income. Second , the Moores seek to distinguish
the taxation of S corporations by saying that shareholders’ choice
to become an S corporation necessarily means that the S
corporation’s income is truly the shareholders’ income. But consent
cannot explain S-corporation taxation; after all, consent to
taxation as an S corporation can be revoked only if shareholders
who hold a majority of the corporation’s shares agree. 26 U. S. C.
§1362(d)(1)(B). So, for example, if shareholders who hold 49
percent of the shares no longer consent to paying taxes on
undistributed earnings, they nonetheless still must do so.
Moreover, there is no reason to think that shareholder consent can
eliminate the apportionment requirement (which is a structural
requirement of the Constitution) and allow Congress to enact an
otherwise unconstitutional tax.
In short, the Moores’ consent theory does not
explain Congress’s authority to tax the shareholders of S
corporations directly on corporate income. Rather, S corporations
are another example of Congress’s authority to either tax the
corporation itself on corporate income or attribute the
undistributed income to the shareholders and tax the
shareholders. Third , the Moores try to distinguish
Congress’s long history of taxing shareholders of closely held
foreign corporations—including through subpart F—on the ground that
those laws apply “the doctrine of constructive realization.” Brief
for Petitioners 47.
The Moores have not pointed to any use of the
phrase “constructive realization” in this Court’s case law or the
Internal Revenue Code. Instead, the term seems to be a one-off
label woven out of whole cloth by the Moores to allow them to
sidestep any existing tax, especially subpart F, that does not
accord with their proposed constitutional rule. See Brief for
American Tax Policy Institute as Amicus Curiae 28 (noting
that “ ‘constructive realization’ actually is a new, amorphous
phrase of petitioners’ devising”).
In any event, whatever its label, the Moores’
constructive-realization theory does not distinguish the MRT from
subpart F and other pass-through taxes. For example, the Moores
claim that constructive realization turns on a sufficient degree of
control over the entity. But the level of shareholder control with
the MRT (at least 10 percent) is the same as under the longstanding
subpart F tax. (And control provides an even less persuasive
distinction for partners and for shareholders of S corporations,
who may have even less than a 10 percent share and still have the
entity’s income attributed to them.)
As part of their effort to distinguish the MRT
from subpart F, the Moores also argue that subpart F is limited to
taxing “ ‘movable income’ ” that may have been shifted
abroad to avoid taxes. Brief for Petitioners 45. But that is not
accurate. Subpart F also includes income from doing business in a
country under certain sanctions. §952(a)(5). Moreover, like subpart
F, the MRT responds to concerns that the owners of
American-controlled foreign corporations keep money offshore to
defer taxation. So it is not clear why the MRT would not also
satisfy the Moores’ requirement of an anti-tax-avoidance
purpose.
Therefore, even if we were to accept the Moores’
constructive-realization nomenclature and theory, the Moores’
concession that subpart F imposes taxes on so-called constructively
realized income would necessarily mean that the MRT likewise
imposes taxes on constructively realized income. After all, the MRT
is integrated into subpart F’s framework, and it has the same
essential features as subpart F. If subpart F is not
unconstitutional under the “constructive realization” theory—and
the Moores explicitly concede that it is not, Tr. of Oral Arg.
9—then the MRT is likewise not unconstitutional on that theory.
In short, the Moores cannot meaningfully
distinguish the MRT from similar taxes such as taxes on
partnerships, on S corporations, and on subpart F income.[ 6 ] The upshot is that the Moores’
argument, taken to its logical conclusion, could render vast swaths
of the Internal Revenue Code unconstitutional. See, e.g. , 26
U. S. C. §305(c) (deemed stock distributions); §§446, 448
(accrual accounting); §701 (partnership taxation); §§951–965
(subpart F); §951A (pass-through tax on global intangible low-taxed
income); §1256(a) (certain futures contracts); §1272(a)
(original-issue discount instruments); §§1361–1379 (S
corporations); §§2501–2524 (gift taxes).
And those tax provisions, if suddenly
eliminated, would deprive the U. S. Government and the
American people of trillions in lost tax revenue. The logical
implications of the Moores’ theory would therefore require Congress
to either drastically cut critical national programs or
significantly increase taxes on the remaining sources available to
it—including, of course, on ordinary Americans. The Constitution
does not require that fiscal calamity.[ 7 ]
* * *
The MRT attributes the undistributed income of
American-controlled foreign corporations to their American
shareholders, and then taxes the American shareholders on that
income. By doing so, the MRT operates in the same basic way as
Congress’s longstanding taxation of partnerships, S corporations,
and subpart F income. And the MRT is consistent with the principles
that this Court articulated in upholding those kinds of taxes in
cases such as Burk-Waggoner Oil Assn. v. Hopkins , Heiner v. Mellon , and Helvering v. National
Grocery Co. The MRT therefore falls squarely within Congress’s
constitutional authority to tax.
For their part, the dissent and the opinion
concurring in the judgment focus primarily on the realization
issue—namely, whether realization is required for an income tax. We
do not decide that question today. When they reach the attribution
question that we do decide, the separate opinions disagree with our
reading of some of the Court’s precedents. We respect their views.
But as we thoroughly explained above, we read the Court’s
precedents differently.
That said, we emphasize that our holding today
is narrow. It is limited to: (i) taxation of the shareholders
of an entity, (ii) on the undistributed income realized by the
entity, (iii) which has been attributed to the shareholders,
(iv) when the entity itself has not been taxed on that income.
In other words, our holding applies when Congress treats the entity
as a pass-through.[ 8 ]
To be clear, as we indicated earlier, the Due
Process Clause proscribes arbitrary attribution. See supra ,
at 14, n. 4. And nothing in this opinion should be read to
authorize any hypothetical congressional effort to tax both an
entity and its shareholders or partners on the same undistributed
income realized by the entity. In such a scenario, the entity would
not simply be a traditional pass-through.[ 9 ]
In addition, as the Government explains, other
kinds of taxes could of course raise different issues. See Tr. of
Oral Arg. 58–59, 62, 127–128. In its brief and at oral argument,
for example, the Government indicated that a hypothetical
unapportioned tax on an individual’s holdings or property (for
example, on one’s wealth or net worth) might be considered a tax on
property, not income. See Brief for United States 19
(distinguishing an income tax from a tax on wealth or net worth
because “an income tax targets economic gain ‘between two points of
time’ ”); Tr. of Oral Arg. 69, 127–128.
And the Government further acknowledges that the
constitutionality of a hypothetical unapportioned tax on
appreciation may depend on, among other things, whether realization
is a constitutional requirement for an income tax. See id. ,
at 58–59, 62, 70, 93–95, 106–108, 126–127; see also Brief for
United States 32. The Moores argue that realization is a
constitutional requirement; the Government argues that it is not.
To decide this case, we need not resolve that disagreement over
realization.
Those are potential issues for another day, and
we do not address or resolve any of those issues here. As to the
Moores’ case, Congress has long taxed shareholders of an entity on
the entity’s undistributed income, and it did the same with the
MRT. This Court has long upheld taxes of that kind, and we do the
same today with the MRT. We affirm the judgment of the U. S.
Court of Appeals for the Ninth Circuit.
It is so ordered. Notes 1 The Act also imposed a
similar pass-through tax going forward. §951A. That tax applies to
what is referred to as “global intangible low-taxed income.”
§951A(a). That tax is not at issue in this case. 2 As discussed below, infra , at 22–24, our analysis today does not address the
distinct issues that would be raised by (i) an attempt by Congress
to tax both the entity and the shareholders or partners on the
entity’s undistributed income; (ii) taxes on holdings, wealth, or
net worth; or (iii) taxes on appreciation. 3 The Government argues
that a gain does not need to be realized to constitute income under
the Constitution. The Government contends that Eisner v. Macomber ’s discussion of realization was dicta because the
stock dividend did not represent any kind of economic gain
(realized or unrealized) for the shareholders. The
Government further contends that Eisner v. Macomber ’s
discussion of realization has, in any event, been abrogated by
later decisions of this Court, such as Helvering v. Bruun , 309 U.S.
461 (1940), Helvering v. Griffiths , 318 U.S.
371 (1943), and Commissioner v. Glenshaw Glass
Co. , 348 U.S.
426 (1955). Because the MRT taxes realized income—namely,
income realized by the corporation and attributed to the
shareholders—we do not address the Government’s argument that a
gain need not be realized to constitute income under the
Constitution. See also infra , at 22–24. 4 The Government
acknowledges that there are due process limits on attribution to
ensure that the attribution is not arbitrary—for example, limits
based on the taxpayer’s relationship to the underlying income. Tr.
of Oral Arg. 66–67, 96–97; see also Burnet v. Wells , 289 U.S.
670 , 678–679 (1933). In this Court, the Moores have not raised
a due process issue regarding the attribution of KisanKraft’s
income to them. 5 This Court’s 1895
decision in Pollock v. Farmers’ Loan & Trust Co. , 158 U.S.
601 , later proscribed unapportioned federal taxation of income
from property, and therefore overruled that holding of Hubbard . See supra , at 7. But in 1913, the Sixteenth
Amendment then overruled that aspect of Pollock . 6 The MRT applies to income
that was realized and accumulated in the past by foreign
corporations, but not taxed by the United States. In the lower
courts, the Moores raised a due process retroactivity argument—that
the MRT taxes income that was earned too far in the past. The Ninth
Circuit rejected that argument based on this Court’s decision in United States v. Carlton , 512 U.S.
26 , 30 (1994). And the Moores did not seek certiorari on that
issue. “We do not normally consider a separate legal question not
raised in the certiorari briefs,” and “see no reason to make an
exception here.” Kasten v. Saint-Gobain Performance
Plastics Corp. , 563 U.S.
1 , 17 (2011); see also this Court’s Rule 14.1(a). 7 According to the Moores,
because the Internal Revenue Code’s “definition of ‘gross income’
exerts the full measure of Congress’s taxing power,” a ruling
against them would instantly subject all American stockholders to
taxes on corporate income. Tr. of Oral Arg. 4–5. That claim is
entirely incorrect. Congress has chosen to directly tax some
corporations on their income. See 26 U. S. C. §11.
Congress’s choice to tax the entity rather than the shareholders
controls in that context, just as its contrary choice to tax
certain shareholders or partners, not the entity, on the entity’s
undistributed income controls for the MRT, partnerships, S
corporations, and subpart F. 8 The opinion concurring in
the judgment reads the Court’s attribution precedents to draw a
line that might call for a “different” conclusion for “a tax on
shareholders of a widely held or domestic corporation.” Post , at 1 (opinion of Barrett, J.). We do not agree that
the Court’s precedents draw such a line. Nor does our opinion today
draw such a line. 9 That issue is distinct
from Congress’s well-established practice of taxing the corporation
on corporate income and then taxing shareholders when they receive
a dividend. See Hellmich v. Hellman , 276 U.S.
233 , 237–238 (1928); see also United States v. Hemme , 476 U.S.
558 , 572 (1986). SUPREME COURT OF THE UNITED STATES
_________________
No. 22–800
_________________
CHARLES G. MOORE, et ux., PETITIONERS v. UNITED STATES
on writ of certiorari to the united states
court of appeals for the ninth circuit
[June 20, 2024]
Justice Jackson, concurring.
Our Constitution grants Congress “plenary power”
over taxation. Brushaber v. Union Pacific R. Co. , 240 U.S.
1 , 13 (1916). The text supplies only two relevant conditions:
Direct taxes must be apportioned among the States based on
population, see Art. I, §9; all other taxes must “be uniform
throughout the United States,” §8. During the century after our
Nation’s founding, the Court repeatedly recognized that, in matters
of tax policy, Congress’s view was controlling. See, e . g ., Pacific Ins. Co. v. Soule , 7
Wall. 433, 443 (1869) (“Where the power of taxation, exercised by
Congress, is warranted by the Constitution . . . it is,
necessarily, unlimited in its nature”); Collector v. Hubbard , 12 Wall. 1, 18 (1871) (upholding a tax on
undistributed corporate earnings because “it is as competent for
Congress to tax annual gains and profits before they are divided
among the holders of the stock as afterwards”).
Then came Pollock v. Farmers’ Loan
& Trust Co. , 158 U.S.
601 (1895). In that case, the Court invalidated a federal
income tax, holding that a tax on income derived from property was
a direct tax requiring apportionment. See id ., at 637. Pollock provoked immediate outcry. President Taft, later
Chief Justice of this Court, said, “ ‘Nothing has ever injured
the prestige of the Supreme Court more.’ ” B. Ackerman,
Taxation and the Constitution, 99 Colum. L. Rev. 1, 5 (1999).
In 1913, the People’s representatives responded, using their power
to overturn Pollock via constitutional amendment. The
Sixteenth Amendment restored to Congress the power to tax “incomes,
from whatever source derived, without apportionment.”
Against that stark backdrop, the Court wisely
takes a restrained approach today. Petitioners allege that the
Mandatory Repatriation Tax (MRT) exceeded Congress’s power by
taxing shareholders on the undistributed income of a corporation;
such a tax, petitioners argue, is really a direct tax requiring
apportionment. The majority opinion rightly rejects that challenge,
thoroughly explaining why the MRT falls within Congress’s
long-recognized, oft-exercised power to tax shareholders on the
undistributed income of a business entity. See ante, at 22.
I write separately to emphasize that, before taking up petitioners’
invitation to strike down a lawfully enacted tax, the Court would
need to be persuaded of several additional arguments that we wisely
do not reach. I highlight two.
First, we would need to agree with petitioners
that Congress can tax income only if it is actually received or
“realized.” That alleged requirement appears nowhere in the text of
the Sixteenth Amendment. See Brief for John R. Brooks et al. as Amici Curiae 14–21 (explaining that the phrase “from
whatever source derived” served only to overrule Pollock ).
Moreover, both before and after the Sixteenth Amendment was
adopted, the term “income” was widely recognized as flexible enough
to include both realized and unrealized gains. See Brief for United
States 14–26 (collecting sources); Brief for Professors of Tax Law
et al. as Amici Curiae 6–20 (same).
The alleged realization requirement is, instead,
drawn from a decision of this Court, Eisner v. Macomber , 252 U.S.
189 (1920). Macomber struck down a tax on stock
dividends, ostensibly because the taxpayer “ha[d] not realized or
received any income in the transaction.” Id ., at 212. Like Pollock , Macomber was “promptly and sharply
criticised.” Helvering v. Griffiths , 318 U.S.
371 , 373 (1943). Over the two decades that followed our
pronouncement, we “limited” Macomber ’s realization
requirement “to the kind of dividend there dealt with,” 318
U. S., at 375, while also “undermin[ing] . . . the
original theoretical bases of the decision in” other contexts, id ., at 394.
Thus, there is no constitutional requirement,
from Macomber or otherwise, that a taxpayer “be able to
sever . . . the gain from his original capital” in order
to be taxed on it. Helvering v. Bruun , 309 U.S.
461 , 469 (1940); see also Cottage Savings Assn. v. Commissioner , 499 U.S.
554 , 559 (1991) (explaining that, properly understood, “the
concept of realization is ‘founded on administrative
convenience,’ ” compared to the “ ‘cumbersome’ ”
process of “valuing assets on an annual basis to determine . . .
appreciat[ion]”). In the lower courts too, Macomber ’s
definition of income has long been deemed outmoded, if not
overruled.[ 1 ] Any litigant
seeking to sustain her case on the basis of Macomber would
have to bring back from the dead its Court-created limit on
Congress’s power.[ 2 ]
Second, even if we were to hold that a uniform
tax violated the Sixteenth Amendment, we would still need to
confirm that the tax was a direct tax before requiring
apportionment. The Constitution does not exhaustively define direct
taxes, though it appears the category was originally intended to
encompass only land and head taxes. See, e . g ., Hylton v. United States , 3 Dall. 171, 175 (1796)
(opinion of Chase, J.); id ., at 177 (opinion of Paterson,
J.); id. at 183 (opinion of Iredell, J.). But the
Constitution does expressly exclude certain taxes—“Duties, Imposts
and Excises”—from apportionment, and we have long interpreted those
categories of taxes broadly. Art. I, §8; see also Steward
Machine Co. v. Davis , 301 U.S.
548 , 581–582 (1937). Indeed, we have upheld uniform taxes as
excises, even when predicated on something that, if taxed on its
own, might require apportionment or even be nontaxable. See Flint v. Stone Tracy Co. , 220
U.S. 107 , 150–152, 165 (1911). In this case, the Government
argues that the MRT can be understood as an excise tax on the
privilege of doing business through a controlled foreign
corporation. See Brief for United States 46–49. That argument, too,
would need to be considered before we could strike down a uniform
tax like the MRT.
* * *
I have no doubt that future Congresses will
pass, and future Presidents will sign, taxes that outrage one group
or another—taxes that strike some as demanding too much, others as
asking too little. There may even be impositions that, as a matter
of policy, all can agree are wrongheaded. However, Pollock teaches us that this Court’s role in such disputes should be
limited. “[T]he remedy for such abuses is to be found at the
ballot-box, and in a wholesome public opinion which the
representatives of the people will not long, if at all, disregard,
and not in the disregard by the judiciary of powers that have been
committed to another branch of the government.” Pollock , 158
U. S., at 680 (Harlan, J., dissenting).
With that understanding, I join the Court’s
opinion in full. Notes 1 See, e . g ., Commissioner v. Obear-Nester Glass Co. , 217 F.2d 56,
60 (CA7 1954) (“Even as to income derived from capital
[ Macomber ] has been limited to its specific facts”); United States v. James , 333 F.2d 748, 752 (CA9 1964)
(“[I]nsofar as [ Macomber ] purported to offer a comprehensive
definition of the term income as used in the Sixteenth Amendment,
it has been discarded”); Prescott v. Commissioner ,
561 F.2d 1287, 1293 (CA8 1977) (“[T]he Supreme Court has found it
necessary to abandon [ Macomber ’s] attempt at an
all-inclusive definition of income”). 2 To be sure, Macomber is
a hard decision to parse, and it might be read to allow taxation of
an asset only if the owner receives some new, increased value. See Eisner v. Macomber , 252 U.S.
189 , 211 (1920) (emphasizing that a stock dividend does not
necessarily “increase the intrinsic value of [the taxpayer’s]
holding”); see also Koshland v. Helvering , 298 U.S.
441 , 445–446 (1936). If that reading is correct, Macomber would not preclude taxation of unrealized gains.
See Brief for United States 33–34; Brief for Alex Zhang as Amicus Curiae 26. SUPREME COURT OF THE UNITED STATES
_________________
No. 22–800
_________________
CHARLES G. MOORE, et ux., PETITIONERS v. UNITED STATES
on writ of certiorari to the united states
court of appeals for the ninth circuit
[June 20, 2024]
Justice Barrett, with whom Justice Alito
joins, concurring in the judgment.
This case comes down to two questions. Have the
Moores realized income from their KisanKraft shares? And if they
have not, may Congress attribute KisanKraft’s income to the
Moores?
Our precedent already decides the first
question: Shareholders receive income when they sell their shares
or when a corporation distributes profits back to its investors by
declaring a dividend. Notwithstanding this precedent, the
Government asserts its power to tax without apportionment all economic gains, including appreciation in property
value. The Court does not address this issue. Ante , at 8. It
focuses on the second instead, and, casting our precedent as well
settled, holds that Congress can attribute KisanKraft’s income to
the Moores. As I explain below, I think the issue is more complex
than the Court lets on. But whatever my disagreement with the
Court’s reasoning, it bears emphasis that the Moores’ case involves
the Mandatory Repatriation Tax (MRT), which is a specific tax
imposed upon the American shareholders of a closely held foreign
corporation. A different tax—for example, a tax on shareholders of
a widely held or domestic corporation—would present a different
case.
I
The question on which we granted review is
“[w]hether the Sixteenth Amendment authorizes Congress to tax
unrealized sums without apportionment among the states.” Pet. for
Cert. i. The answer is straightforward: No.
A
The Constitution distinguishes between taxes
on income and taxes on property. Income taxes must apply uniformly
across the country, Art. I, §8, cl. 1, while “direct”
taxes—like property taxes—must be apportioned among the States, §2,
cl. 3; §9, cl. 4.[ 1 ]
Apportionment is an onerous burden, both technically and
politically, because it requires Congress to allocate the total tax
liability to each State according to its population. There have
been very few federal property taxes in this nation’s history (and
none in the modern era). By design and in fact, the apportionment
rule has left property taxation primarily to the States. See post , at 7–12 (Thomas, J., dissenting).
In Pollock v. Farmers’ Loan &
Trust Co. , the Court held that the apportionment rule applies
not only to taxes on real and personal property, but also to taxes
on income “derived” from that property—say, rents from leasing
farmland. 158 U.S.
601 , 618 (1895). The decision left Congress effectively unable
to tax most nonlabor income. The Sixteenth Amendment overruled Pollock ’s second holding, stating that “Congress shall have
power to lay and collect taxes on incomes, from whatever source
derived, without apportionment.” But it did not overrule Pollock ’s first holding that taxes on personal property are
direct taxes. See Brushaber v. Union Pacific
R. Co. , 240 U.S.
1 , 19 (1916); National Federation of Independent
Business v. Sebelius , 567 U.S.
519 , 571 (2012).
As the text of the Sixteenth Amendment
indicates, income is financial gain that “derive[s]” from property
or another source. See, e . g ., United States v. Phellis , 257 U.S.
156 , 168–169 (1921); Stratton’s Independence , Ltd. v. Howbert , 231 U.S.
399 , 415 (1913); Webster’s New International Dictionary 1089
(1909) (Webster’s) (“income” is “[t]hat gain or recurrent benefit
(usually measured in money) which proceeds from labor, business, or
property”). To capture the distinction between property and income,
we have described property as the “seed” and income as the “fruit
that it will yield.” United States v. Safety Car Heating
& Lighting Co. , 297 U.S.
88 , 99 (1936). Thus, a condominium is a landlord’s property,
and rents are the income she receives from leasing it. A patent is
an inventor’s property, and royalties are the income she receives
from licensing it. A capital fund is a banker’s property, and
interest is the income she receives from lending it.
The Sixteenth Amendment’s reference to income
“derived” from any source encompasses a requirement that income, to
be taxed without apportionment, must be realized . See post , at 23–25 (Thomas, J., dissenting). While the
Government stresses that the Amendment did not include a
“realization” requirement, Brief for United States 15–16, “realize”
and “derive” have long referred to the same concept. Compare
Webster’s 1778 (“realize” means to “convert an intangible right or
property into real (tangible) property”; to “convert any kind of
property (considered as fluctuating or uncertain in value) into
money”), with id ., at 601 (“derivation” is the “[a]ct of
receiving anything from a source, as profits from capital”). The
Court has used “realization” this way (including in today’s
opinion) when discussing income taxes on corporate shareholders.
See, e . g ., ante , at 8; Cullinan v. Walker , 262 U.S.
134 , 138 (1923). And we have also used the term “realized” in cases
involving a tax on accumulated corporate earnings, Ivan Allen
Co . v. United States , 422 U.S.
617 , 627–629 (1975), debt discharge, United States v. Kirby Lumber Co. , 284 U.S.
1 , 3 (1931), real estate improvements, Helvering v. Bruun , 309 U.S.
461 , 469 (1940), punitive damages, Commissioner v. Glenshaw Glass Co. , 348 U.S.
426 , 431 (1955), and meal allowances, Commissioner v. Kowalski , 434 U.S.
77 , 83 (1977), to name a few. Many opinions use “derived” and
“realized” more or less interchangeably. See, e . g ., Diedrich v. Commissioner , 457
U.S. 191 , 199 (1982); Commissioner v. Jacobson , 336 U.S.
28 , 39 (1949); Helvering v. Horst , 311 U.S.
112 , 118 (1940); Goodrich v. Edwards , 255 U.S.
527 , 535 (1921); Gray v. Darlington , 15 Wall. 63,
65–66 (1872); Pollock , 158 U. S., at 696 (Jackson, J.,
dissenting).
The “commonly understood meaning of the term”
income when the Sixteenth Amendment was ratified requires that a
gain be “realized” or “derived”— e . g ., through a sale
or other transaction—to be taxed without apportionment. Merchants’ Loan & Trust Co. v. Smietanka , 255 U.S.
509 , 519–520 (1921); see post , at 23–25
(Thomas, J., dissenting) . “Income within the meaning of
the Sixteenth Amendment . . . is income as the word is
known in the common speech of men.” Safety Car , 297
U. S., at 99. And in the years surrounding the ratification of
the Sixteenth Amendment, income “was used in ordinary parlance to
refer only to realized gains.” Brief for Professors of Law and
Linguistics as Amicus Curiae 17; see id. , at
18–22 (instances of the word “income” between 1900 and 1912 in the
Corpus of Historical American English referred to “economic gain
tied to a realization event”).
Regardless of whether one uses the term
“derived” or “realized,” the important point is this: The Sixteenth
Amendment and the Direct Tax Clause distinguish between taxes on
property, which are subject to apportionment, and taxes on income
derived or realized from that property, which are not.
B
The Moores have not realized income from their
KisanKraft shares. Shares yield income when the corporation
declares a dividend— i . e ., when the corporation
distributes its profits to shareholders. See Lynch v. Hornby , 247 U.S.
339 , 344 (1918) (“Dividends are the appropriate fruit of stock
ownership [and] are commonly reckoned as income”); Gibbons v. Mahon , 136 U.S.
549 , 557–558 (1890). But KisanKraft has never declared a
dividend. Nor have the Moores realized income by selling or
otherwise disposing of their shares. See Taft v. Bowers , 278 U.S.
470 , 481–482 (1929). Because they have not received a dividend,
profit from selling their shares, or any other pecuniary benefit
from their stock ownership, the Moores have not yet received a
return on their original investment in the company. In short, they
have not “derived” income from their shares because nothing has come in .
The Government resists this conclusion. It
concedes, as it must, that a tax on the “total value of ” the
shares “at a particular point [in] time” is a “quintessential tax
on property” that must be apportioned. Tr. of Oral Arg. 127–128;
see NFIB , 567 U. S., at 571; Brushaber , 240
U. S., at 19. But looking at property value across two
points in time makes a difference, the Government says, because
then the tax targets appreciation rather than the asset’s
value. As the Government sees it, Congress may tax without
apportionment “ all economic gains” measured “ ‘between
two points in time.’ ” Brief for United States 9, 15. And the
increase in value between Time A and Time B is “income.”
The Government is unable to cite a single
decision upholding an unapportioned tax on appreciation. Tr. of
Oral Arg. 89, 91–92. That is no surprise, because our precedent
forecloses the Government’s argument. We have explained that income
includes neither “a gain accruing to capital” nor “a growth or
increment of value in the investment.” Phellis , 257
U. S., at 169; see also Safety Car , 297 U. S., at
99 (income is the “fruit that is born of capital, not the potency
of fruition”). And we have stressed that “economic gain is not always taxable as income.” Bruun , 309 U. S.,
at 469 (emphasis added); see also Commissioner v. Indianapolis Power & Light Co. , 493
U.S. 203 , 214 (1990) (“[A] taxpayer does not realize taxable
income from every event that improves his economic condition”).
Although appreciation looks valuable on paper, “the stockholder has
received nothing out of the company’s assets for his separate use
and benefit,” and market fluctuations could “wip[e] out the entire
investment” before the owner ever receives a dime of “income within
the meaning of the Sixteenth Amendment.” Eisner v. Macomber , 252 U.S.
189 , 211 (1920).
If the Government were right that appreciation
is income, it is hard to make sense of our decision in Ivan
Allen Co . There, we considered a tax on accumulated
earnings— i . e ., income that the corporation retains as
assets on its balance sheet instead of distributing to its
shareholders. 422 U. S., at 624–625. Because corporate tax
rates were generally lower than individuals’ marginal tax rates,
Congress was concerned that corporations would be used to reduce
their “shareholders’ overall tax liability by accumulating earnings
beyond the reasonable needs of the business.” Id., at 624.
So Congress imposed a tax on earnings that corporations allowed to
accumulate “beyond the reasonable and reasonably anticipated needs
of the business.” Id. , at 621, 624. In upholding the tax, we
took great care to explain that the tax “is not directed at the
unrealized appreciation of liquid assets”; “any unrealized
appreciation in the value of the taxpayer’s portfolio
. . . does not enter into the computation” of the tax. Id ., at 627–628. The tax took into account the value and
appreciation of the corporation’s assets “only in measuring
reasonableness of accumulation of the earnings and profits that
otherwise independently exist.” Id ., at 628. In other words,
asset appreciation was only relevant with respect to how much of
the corporation’s income could be taxed under the statute.
More assets meant less income reasonably could be accumulated. If
asset appreciation itself were just as taxable as income, there
would have been no reason for the Court’s painstaking efforts to
explain the scope of the tax. See id ., at 627–629.[ 2 ]
C
In upholding the tax, the Ninth Circuit opined
that “[w]hether the taxpayer has realized income does not determine
whether a tax is constitutional.” 36 F. 4th 930, 935 (2022). In its
view, the “Supreme Court has made clear that realization of income
is not a constitutional requirement.” Id. , at 936. The Ninth
Circuit misread our cases. Contrary to its assertion, this Court
has “never abandoned the core requirement that income must be
realized to be taxable without apportionment.” 53 F. 4th 507, 508
(CA9 2022) (Bumatay, J., dissenting from denial of rehearing en
banc). What we have done is reject efforts to narrow what it
means to realize income.
For example, in Helvering v. Bruun —one of the cases on which the Ninth Circuit relied—we
clarified that “the realization of gain need not be in cash derived
from the sale of an asset” but can also “result [from] exchange of
property, payment of the taxpayer’s indebtedness, relief from a
liability, or other profit realized from the completion of a
transaction.” 309 U. S., at 469. In that case, a tenant built
a valuable building on the landlord’s property. Upon termination of
the lease, the landlord regained possession of the property—and
acquired the building too. When the Internal Revenue Service came
calling, the landlord protested that he had realized no taxable
gain from the building in the year that the lease ended. We sided
with the IRS. Gain from a contributed building is not like
an “accrua[l] of value due to extraneous and adventitious
circumstances”—for example, appreciation from a booming real estate
market. Id ., at 467. Nor does realization require the
ability to “sever the improvement begetting the gain from [the]
original capital.” Id ., at 469. “If that were necessary,” we
said, “no income could arise from the exchange of property; whereas
such gain has always been recognized as taxable gain.” Ibid. None of that remotely suggests, however, that realization is not
required or (relatedly) that appreciation counts as taxable income.
Instead, it explains that profit (there, the building) is realized
when received, even if it cannot be physically separated from the
capital (there, the land).
In dispensing with the realization requirement,
the Ninth Circuit also cited Helvering v. Horst . But Horst , like Bruun , emphasizes that realization does
not require cash in hand— not that realization is irrelevant.
In Horst , “the owner of negotiable bonds . . .
detached from them negotiable interest coupons shortly before their
due date and delivered them as a gift to his son who in the same
year collected them at maturity.” 311 U. S., at 114. The bond
owner insisted that the interest coupons were not income taxable to him , because his son owned them at the time they came due.
See id ., at 114–115. We rejected the argument that the bond
owner could “escape all tax by giving away his right to income in
advance of payment.” Id ., at 116. “The power to dispose of
income is the equivalent of ownership of it.” Id ., at 118.
And while the donor chose not to take the interest itself, he still
“ realized the fruits of his investment.” Id ., at 117
(emphasis added). Realization does not depend on how the user
chooses to enjoy the income—whether through “the purchase of goods
at the corner grocery, the payment of his debt there, or such
non-material satisfactions as may result from . . . a
gift to his favorite son.” Ibid . Far from disavowing the
realization requirement, the Court emphasized that a taxpayer
cannot escape realization (and therefore tax liability) by giving
away the fruit of his capital.
In sum, realization may take many forms, but our
precedent uniformly holds that it is required before the Government
may tax financial gain without apportionment. Realization is a
question of substance, not form. Diedrich , 457 U. S.,
at 195. In general, realization is “the last step . . .
by which [one] obtains the fruition of the economic gain which has
already accrued to him.” Horst , 311 U. S., at 115. Our
cases describe many ways income might be realized; a rigid
definition does not capture them all. See, e . g ., MacLaughlin v. Alliance Ins. Co. , 286 U.S.
244 , 249 (1932) (“sale or other disposition of property”); Safety Car , 297 U. S., at 93 (“profits owing to a
patentee by the infringer of a patent”); Kirby Lumber , 284
U. S., at 2–3 (“clear gain” resulting from corporation
repurchasing bonds it issued for less than the corporation had
initially “received [for] their par value”). The common thread is
that to realize income, one must receive something new and valuable
beyond the property she already owns.
II
Though the Moores did not realize income as
shareholders, KisanKraft realized income as a corporation—profits
from supplying farm equipment to customers in India. The Government
argues that, because the MRT targets KisanKraft’s realized income,
it falls within the Sixteenth Amendment and is not subject to the
apportionment rule. Brief for United States 42. But the question is
not whether some taxable person or entity has realized
income at some point. Rather, as the Court emphasizes, we
must determine whether Congress has the power to tax the Moores on
income that KisanKraft realized. Ante , at 8. Put
differently, can Congress disregard KisanKraft’s corporate form,
attribute KisanKraft’s income to its shareholders, and tax its
shareholders on that income?
The Court concludes that it can, describing our
case law as “clear and definitive” in the Government’s favor. Ante , at 13. I read our cases differently. As I understand
our precedent, it leaves room for Congress to disregard the
corporate form in some circumstances. But that is not because
Congress—as the Court suggests—can treat corporations
interchangeably with partnerships, whose partners have always been
subject to pass-through taxation on the partnership’s income. See United States v. Basye , 410 U.S.
441 , 453–454 (1973). Rather, our cases allow Congress to
disregard the corporate form to determine whether the shareholder
received income in substance , if not in form.
A
Our precedent suggests that Congress’s power
to attribute a corporation’s income to its shareholders for tax
purposes is limited. Eisner v. Macomber is the most
recent case addressing this issue—and it was decided more than a
century ago. There, the Standard Oil Company of California chose to
reinvest its profits back into the corporation rather than
distributing them to shareholders. 252 U. S., at 200. Those
retained earnings caused an imbalance in the corporation’s capital
account. So to adjust its books, Standard Oil declared a stock
dividend that issued new shares to existing shareholders while
diluting the value of their previous shares—which left the
shareholders in the same financial position as before the
transaction. See id ., at 200–201, 212. The Court held that
shareholder Myrtle Macomber did not realize income from the
stock dividend because she “received nothing out of the company’s
assets for [her] separate use and benefit.” Id ., at 211. The
shareholder’s original investment “still remains the property of
the company, and subject to business risks which may result in
wiping out the entire investment.” Ibid . The stock dividends
were “evidenc[e]” that her capital previously had appreciated , but the dividends themselves “added nothing to”
her property and were therefore not income derived from it. Id ., at 212 (while the “shareholder is the richer because of
an increase of his capital . . . he has not realized or
received any income in the transaction”).[ 3 ]
Importantly for our purposes, the Court also
rejected the Government’s theory that Congress could attribute the corporation’s income to its shareholders. See id ., at
213. The Court expressed “no doubt of the power or duty of a court
to look through the form of the corporation and determine the
question of the stockholder’s right, in order to ascertain whether he has received income taxable by Congress without
apportionment.” Ibid . (emphasis added). But the Court would
not “disregard the essential truth disclosed”: It would not “ignore
the substantial difference between corporation and stockholder” and
“treat the entire organization as unreal; look upon stockholders as
partners, when they are not such . . . and indulge the
fiction that they have received and realized a share of the profits
of the company which in truth they have neither received nor
realized.” Id. , at 214. The Court therefore refused to
uphold the tax as a tax on attributed corporate income.
That left one potential justification for the
tax—that the Direct Tax Clause’s apportionment requirement did not
apply to taxes on the stockholder’s undivided interest in the
corporation. The Court rejected that argument too, adhering to Pollock ’s holding that a tax on a shareholder’s ownership
interest is a tax on property. The Court explained that Pollock “overruled” the holding of Collector v. Hubbard , 12 Wall. 1 (1871), that Congress could “tax without
apportionment a stockholder’s interest in accumulated earnings
prior to dividend declared,” Macomber , 252 U. S., at
218. The Court acknowledged that the Sixteenth Amendment had
overruled Pollock ’s holding that a tax on income
derived from property must be apportioned. 252
U. S., at 219. But it stressed that the Sixteenth Amendment
did not otherwise disturb the law concerning the Direct Tax
Clause—including Pollock ’s holding that the Clause applies
to “property, real and personal.” Id. , at 206; see id ., at 219 (“[T]he Amendment applies to income only”).
Because a stockholder’s ownership interest in the corporation is
personal property—“capital, not income”—Congress must apportion any
tax on it. Ibid .
Today, the Court does not dispute either that
income requires realization or that a tax on stock ownership must
be apportioned. Instead, it says that the income of a closely held
foreign corporation can be attributed to its shareholders for tax
purposes. That might be right, but the Court’s reasons for saying
so are wrong: It dismisses the “attribution” portion of Macomber as dicta and argues that four subsequent cases
undercut it. Ante , at 13. I disagree. None of these cases
contradicts Macomber ’s admonition that Congress cannot “look
upon stockholders as partners . . . when they are not”;
Congress may not “indulge the fiction that they have received and
realized a share of the profits of the company” when they have not.
252 U. S., at 214; see also Helvering v. Griffiths , 318 U.S.
371 , 376–377, and n. 11 (1943). Rather, the Court’s cases
all illustrate the principle that the validity of an income tax
must be assessed “according to truth and substance, [not] form.” Macomber , 252 U. S., at 206. Burk-Waggoner Oil Assn. v. Hopkins upheld Congress’s power to tax an “unincorporated joint stock
association” as a corporation even though state law treated it as a
partnership. 269 U.S.
110 , 110–111 (1925). We disregarded the state-law label because
the associations acted as corporations: They had “a fixed capital
stock divided into shares,” they “manage[d] their affairs by a
board of directors and executive officers,” and they “conduct[ed]
their business in the general form and mode of procedure of a
corporation.” Id ., at 113–114. “[N]othing in the
Constitution,” we explained, “precludes Congress from taxing as a
corporation an association which, although unincorporated,
transacts its business as if it were.” Id ., at 114. Burk-Waggoner thus held that for tax purposes, Congress
could treat a partnership like a corporation when it acts like a
corporation. We did not decide whether Congress may treat a corporation like a partnership — e . g .,
attributing its income to shareholders—when, in truth and
substance, it operates as a corporation.
Next up is Burnet v. Leininger , 285 U.S.
136 (1932). Although that case involved a partnership, the
issue was about the “anticipatory assignment of income doctrine.”
See Commissioner v. Banks , 543
U.S. 426 , 433–434 (2005) (“A taxpayer cannot exclude an
economic gain from gross income by assigning the gain in advance to
another party” (citing, inter alia , Lucas v. Earl , 281 U.S.
111 , 114–115 (1930)); 1 B. Bittker, J. Eustice, G. Goldstein,
& T. Brantley, Federal Income Taxation of Corporations and
Shareholders ¶2.07[3] (2024). The taxpayer, who happened to be
one-half partner in a laundry business, tried to reduce his tax
liability by assigning a portion of his income to his wife. 285
U. S., at 141. We rejected that artifice and affirmed
Congress’s ability to “ta[x] the salary and fees of the person who
earned them.” Id ., at 141–142 (citing Lucas , 281
U. S., at 114). This case, too, is about classifying taxes
according to substance rather than form.
The Court also invokes Heiner v. Mellon , which blesses Congress’s power to tax “partners” on
their “proportionate share of the net income of the partnership”
even where the partnership’s income is not “currently
distributable” to the partners under state law. 304 U.S.
271 , 280–281 (1938). The case rests on the “axiomatic” and
“firmly established” rule of partnership taxation that “each
partner must pay taxes on his distributive [ i . e .,
proportional] share of the partnership’s income without regard to
whether that amount is actually distributed to him.” Basye ,
410 U. S., at 453–454 (discussing Heiner ). Given the
unique partnership context, Heiner sheds no light on
Congress’s power to tax shareholders on a corporation’s income.[ 4 ]
Finally, in Helvering v. National
Grocery Co. , 304 U.S.
282 (1938), the Court sustained a deficiency tax imposed on a
corporation that was used to shelter the income of its sole
shareholder. (Notably, the corporation, not the shareholder, was
the taxpayer.) In the course of rejecting the corporation’s various
challenges to the tax, the Court opined that “Kohl, the sole owner
of the business, could not by conducting it as a corporation,
prevent Congress, if it chose to do so, from laying on him
individually the tax on the year’s profits.” Id ., at 288.
That dictum, if correct, is consistent with Macomber ’s
recognition that courts can look through the corporate form to
determine the substance of the shareholder’s relationship to the
income. Because National Grocery’s income was really just the
income of Kohl, its sole owner, the Court suggested that
attributing it to him for tax purposes would be permissible.
Thus, in matters of corporate form and income
attribution—as in the definition of income—labels do not control.
But acknowledging that substance controls is a far cry from
asserting that Congress is free to wholly disregard the corporate
form. That would permit Congress to tax the shareholder without
regard to the substance of her relationship to the corporation and
would contradict Macomber ’s holding that Standard Oil’s
income could not be attributed to its shareholders. See 252
U. S., at 213–214. Our precedent does not give Congress carte
blanche to attribute corporate income to a shareholder. Instead, it
suggests that Congress has a limited power to do so that depends on
the relationship between the shareholder and the income.[ 5 ]
B
Although I believe that the Court today is too
quick to bless the attribution of corporate income to shareholders,
its holding is narrow. The Court affirms Congress’s power to tax
shareholders on “the undistributed income of American-controlled
foreign corporations,” but it says that the Due Process Clause
cabins that power by requiring income attributions not to be
“arbitrary.” Ante , at 22–23. The arbitrariness inquiry, the
Court previews, turns on “the taxpayer’s relationship to the
underlying income.” Ante , at 14, n. 4 (citing Burnet v. Wells , 289 U.S.
670 , 678–679 (1933)).
I agree that the Constitution prohibits Congress
from arbitrarily attributing to the taxpayer someone else’s income.
Our cases have located that limit in the Due Process Clause. See Burnet , 289 U. S., at 678–679; Hoeper v . Tax
Comm’n of Wis. , 284 U.S.
206 , 215 (1931) (“That which is not in fact the taxpayer’s
income cannot be made such by calling it income”). But an
arbitrariness limit is implicit in the Sixteenth Amendment too.
Virtually all property was income at some point. Ford Motor Company
uses its income to buy steel for making trucks. But surely Congress
cannot attribute Ford’s earnings to anyone who owns an F–250. The
Amendment’s reference to “derived” income presupposes that the
income belongs to the taxpayer, or is at least fairly attributable
to her. Otherwise the taxpayer’s property ( e.g. , the truck
she drives) could be taxed without apportionment just because it
was once somebody else’s income ( e.g. , the
earnings Ford used to purchase the steel).
While an arbitrariness limit on income
attribution surely exists, its contours are uncertain. We have
never before applied the arbitrariness test to a tax law that
attributes a corporation’s income to its shareholders. At oral
argument, the Government identified a series of factors that the
Court has considered in attribution cases involving license
agreements and trusts. See Tr. of Oral Arg. 119–123. One is whether
the taxpayer has “sufficient power and control over . . .
the income” that it is “reasonable to treat him as the recipient of
the income for tax purposes.” Commissioner v. Sunnen , 333 U.S.
591 , 604 (1948). Another is whether the taxpayer receives a
special “privilege or benefit” from the entity that earns the
income. Burnet , 289 U. S., at 679. A third is whether
the corporation is foreign and thus outside the reach of an
accumulated earnings tax. Cf. Ivan Allen Co. , 422
U. S., at 624. These factors may serve as a useful guide for
lower courts when applying today’s decision to taxes that attribute
income from other types of corporations to an individual taxpayer.
Just because Congress can attribute income of a closely held
foreign corporation like KisanKraft to its shareholders does not
mean it has equal power to attribute the income of a publicly
traded domestic corporation to anyone holding a few shares in her
retirement account.
C
Congress’s power to attribute the income of
closely held corporations to their shareholders is a difficult
question—and unfortunately, the parties barely addressed it.
Without focused briefing on the attribution question, I would not
resolve it. Subpart F and the MRT may or may not be constitutional,
nonarbitrary attributions of closely held foreign corporations’
income to their shareholders. In this litigation, however, the
Moores have conceded that subpart F is constitutional. Tr. of Oral
Arg. 9. And I agree with the Court that subpart F is not
meaningfully different from the MRT in how it attributes corporate
income to shareholders. Ante , at 20–21. Taxpayers generally
bear the burden to show they are entitled to a refund. United
States v. Janis , 428 U.S.
433 , 440 (1976); see also Haaland v. Brackeen ,
599 U.S. 255, 277–278 (2023) (burden to show unconstitutionality).
Given the Moores’ concession, they have not met that burden here.
For that reason, I concur in the Court’s judgment affirming the
judgment below. Notes 1 Direct taxes also include
a capitation tax, which imposes a tax on every person “without
regard to property, profession, or any other circumstance.” National Federation of Independent Business v. Sebelius , 567 U.S.
519 , 571 (2012) ( NFIB ) (internal quotation marks
omitted; emphasis deleted). 2 Although Ivan Allen
Co. involved the interpretation of a tax statute, our analysis
sheds light on the Constitution’s definition of income because we
have long interpreted “gross income” in the Internal Revenue Code
to reach “ ‘the full measure of [Congress’s] taxing
power.’ ” Commissioner v. Kowalski , 434 U.S.
77 , 82 (1977) (quoting Helvering v. Clifford , 309 U.S.
331 , 334 (1940)). 3 The Court today does not
cast doubt on Macomber ’s holding that appreciation is not
income. See ante , at 23. 4 Partnerships are distinct
from corporations in many other fundamental ways. For example,
partnerships traditionally do not have a legal identity distinct
from the partners and do not enjoy the limited liability
characteristic of the corporate form. They are instead “an
aggregation of individuals operating the business as co-owners with
individual rights and duties.” 1 J. Cox & T. Hazen, Law of
Corporations §1.07 (3d ed. 2010). For purposes of federal diversity
jurisdiction, partnerships are citizens wherever their partners
are, whereas corporations have citizenship distinct from their
shareholders. See Carden v. Arkoma Associates , 494 U.S.
185 , 187–189 (1990). 5 The Court asserts that
Congress no longer observes Macomber ’s distinction between
shareholders and the corporate entity for tax purposes. Ante , at 11. That paints an incomplete picture. After Macomber , Congress ended its longstanding practice of
attributing corporate income to shareholders when the corporation
operated as a tax shelter. See Ivan Allen Co. , 422
U. S., at 624–626, and n. 8; Griffiths , 318
U. S., at 377 n. 12, 385. That practice reemerged in the
1930s when Congress began taxing shareholders of closely held
foreign corporations on undistributed corporate earnings.
Revenue Act of 1937, §201, 50Stat. 822. To my knowledge, Congress
has not returned to that approach for domestic or widely held
corporations of the kind Macomber considered. And while
Congress continues to attribute income of certain closely held
foreign corporations to their U. S. shareholders today, see 26
U. S. C. §951 et seq . (“subpart F”), doing so
might be consistent with Macomber ’s recognition that
Congress can disregard the corporate form when, in substance, it is
reasonable to treat the income of the corporation as that of the
shareholders. The Court’s “arbitrariness” test seems to get at a
similar point, but, by dismissing the relevance of the corporate
form altogether, it confuses the analysis. SUPREME COURT OF THE UNITED STATES
_________________
No. 22–800
_________________
CHARLES G. MOORE, et ux., PETITIONERS v. UNITED STATES
on writ of certiorari to the united states
court of appeals for the ninth circuit
[June 20, 2024]
Justice Thomas, with whom Justice Gorsuch
joins, dissenting.
Charles and Kathleen Moore paid $14,729 in taxes
on an investment that never yielded them a penny. They challenge
that tax—the Mandatory Repatriation Tax (MRT)—as unconstitutional.
As relevant, they argue that a tax on unrealized investment gains
is not a tax on “incomes” within the meaning of the Sixteenth
Amendment, and it therefore cannot be imposed “without
apportionment among the several States.”
The Moores are correct. Sixteenth Amendment
“incomes” include only income realized by the taxpayer. The text
and history of the Amendment make clear that it requires a
distinction between “income” and the “source” from which that
income is “derived.” And, the only way to draw such a distinction
is with a realization requirement. Our precedent says as much. In Eisner v. Macomber , 252 U.S.
189 (1920), the Court explained that “the characteristic and
distinguishing attribute of income,” as the term is used in the
Sixteenth Amendment, is that it is “ received or drawn by the recipient (the taxpayer) for his separate use,
benefit and disposal.” Id. , at 207. Because the Moores never
actually received any of their investment gains, those unrealized
gains could not be taxed as “income” under the Sixteenth
Amendment.
The Ninth Circuit wrongly rejected the Moores’
challenge on the ground that “realization of income is not a
constitutional requirement.” 36 F. 4th 930, 936 (2022). That
conclusion cannot be reconciled with the Sixteenth Amendment as the
Court correctly interpreted it in Macomber . We therefore
granted certiorari to answer the question “[w]hether the Sixteenth
Amendment authorizes Congress to tax unrealized sums without
apportionment among the states,” i . e ., as “incomes.”
Pet. for Cert. i.
Today, the Court upholds the MRT only by
ignoring the question presented. It does “not address the
Government’s argument that a gain need not be realized to
constitute income under the Constitution.” Ante , at 12–13,
n. 3. Instead, the Court answers the question “whether
Congress may attribute an entity’s realized and undistributed
income to the entity’s shareholders or partners, and then tax the
shareholders or partners on their portions of that income.” Ante , at 8. After changing the subject, the majority upholds
the MRT by relying on unrelated precedent to derive a “clear rule”
that “Congress can attribute the undistributed income of an entity
to the entity’s shareholders or partners.” Ante , at
10–11.
I respectfully dissent. The Ninth Circuit erred
by concluding that realization is not a constitutional requirement
for income taxes. And, the majority’s “attribution” doctrine is an
unsupported invention.
I
The Sixteenth Amendment provides: “The
Congress shall have power to lay and collect taxes on incomes, from
whatever source derived, without apportionment among the several
States, and without regard to any census or enumeration.” The
central dispute in this case—at least, in the case briefed by the
parties—concerns the meaning of the word “incomes” in the
Amendment. The Moores define “income” as “ ‘a gain, a profit,
[or] something of exchangeable value’ [that] is ‘ received or drawn by the recipient (the taxpayer) for his separate use, benefit and disposal.’ ” Brief for
Petitioners 1 (quoting Macomber , 252 U. S., at 207).
This idea—that “income” is only something actually available for
the taxpayer’s use—is known as “realization.” The Government
rejects the realization requirement, arguing instead that “income”
captures “all economic gains” whether or not they are actually
realized. Brief for United States 14 (internal quotation marks
omitted).
“Income” in the Sixteenth Amendment refers only
to income realized by the taxpayer. The Amendment resolved a
long-running conflict over the scope of the Federal Government’s
taxing power. It paved the way for a federal income tax by creating
a new constitutional distinction between “income” and the “source”
from which that income is “derived.” Drawing that distinction
necessitates a realization requirement.
A
To understand the text of the Sixteenth
Amendment—and, in particular, the meaning of the word “income”—one
must first understand how the Amendment came about. The
Constitution’s original taxing provisions divided taxes into two
classes: direct and indirect taxes. And, as part of a delicate
constitutional compromise, the original taxing provisions required
direct taxes to be apportioned among the States based on
population. Disputes about the scope of the direct-tax category
came to a head in Pollock v. Farmers’ Loan & Trust
Co. , 158 U.S.
601 (1895), when this Court held that many income taxes were
direct taxes subject to the apportionment requirement. In reaching
this conclusion, the Court held that income could not be
distinguished from its source for purposes of classifying an income
tax as direct or indirect. The Sixteenth Amendment was ratified to
overrule that holding from Pollock , and it can therefore be
understood only in the context of Pollock and the preceding
history.
1
The Sixteenth Amendment modified the
Constitution’s original regulations of Congress’s taxing power. The
text of those provisions is therefore the natural starting point
for interpreting the Sixteenth Amendment. The Taxing Clause
provides Congress with broad authority to impose taxes. Other
Clauses, including the Direct Tax Clause, classify different kinds
of taxes and set corresponding limitations on Congress’s power to
impose them. The Sixteenth Amendment alters those rules by making
clear that taxes on income are not subject to the limitations
imposed on direct taxes.
The Constitution gives Congress the power to
impose “Taxes” of any kind, including income taxes. The Taxing
Clause provides that “Congress shall have Power To lay and collect
Taxes, Duties, Imposts and Excises, to pay the Debts and provide
for the common Defence and general Welfare of the United States;
but all Duties, Imposts and Excises shall be uniform throughout the
United States.” Art. I, §8, cl. 1. This Clause is the
sole source of Congress’s authority to impose taxes. And, that
authority is broad. Nothing in the Constitution limits the kinds of
taxes that Congress may impose. As the Court has explained, “the
authority conferred upon Congress by” the Taxing Clause “is
exhaustive and embraces every conceivable power of taxation.” Brushaber v. Union Pacific R. Co. , 240 U.S.
1 , 12 (1916).
But, the Constitution restricts the manner in
which Congress may impose taxes. It accomplishes this by dividing
taxes into two classes—direct and indirect taxes—and imposing a
distinct limitation applicable to each of those classes.[ 1 ]
Start with the class of direct taxes. The Direct
Tax Clause provides: “No Capitation, or other direct, Tax shall be
laid, unless in Proportion to the Census or Enumeration herein
before directed to be taken.” Art. I, §9, cl. 4. The
Constitution does not expressly identify any tax as direct other
than a “Capitation.” A “capitation”—also called a “poll tax”—is
“[a] fixed tax levied on each person within a jurisdiction.”
Black’s Law Dictionary 1760 (11th ed. 2019) (defining “tax”). At
the founding, the class of direct taxes was also understood to
include taxes on real property, and perhaps taxes on personal
property. See infra , at 14–15.
Indirect taxes, on the other hand, include
“Duties, Imposts and Excises.” Art. I, §8, cl. 1. These
were taxes that people could avoid by adjusting their
behavior—generally, taxes on articles of consumption. See The
Federalist No. 21, p. 116 (E. Scott ed. 1898) (A. Hamilton).
“Indirect taxes” are not identified by that name in the
Constitution. But, the Constitution’s delineation of a direct-tax
category signals the existence of a complementary indirect-tax
category.
For each class of taxes, the Constitution limits
Congress’s power with a distinct rule. Direct taxes are subject to
the rule of apportionment. The Constitution twice specifies that
“direct Taxes shall be apportioned among the several States
. . . according to their respective Numbers.”[ 2 ] Art. I, §2, cl. 3; see
also §9, cl. 4. A tax is apportioned among the States if “each
State pays in proportion to its population.” National Federation
of Independent Business v. Sebelius , 567 U.S.
519 , 570 (2012). An example best demonstrates what
apportionment requires. Suppose that Congress imposed a direct tax
on houses, and apportioned the tax such that two States of equal
population were both responsible for paying $100 in taxes. If the
first State contained 100 houses and the second State only 10,
houses in the first State would be taxed at $1 each ($100 divided
by 100 houses), whereas houses in the second State would be taxed
at $10 each ($100 divided by 10 houses).
Indirect taxes are subject to the rule of
uniformity: “[A]ll Duties, Imposts and Excises shall be uniform
throughout the United States.” Art. I, §8, cl. 1. The
Court has explained that “the words ‘uniform throughout the United
States’ . . . signify . . . a geographical
uniformity.” Knowlton v. Moore , 178 U.S.
41 , 106 (1900). In other words, a “tax is uniform when it
operates with the same force and effect in every place where the
subject of it is found.” Head Money Cases , 112 U.S.
580 , 594 (1884). So, a duty on the importation of tea must
impose the same rate on imports coming through Boston as those
coming through Savannah.[ 3 ]
The Sixteenth Amendment, on its face, narrows
the scope of the apportionment requirement. While direct taxes must
be apportioned, the Sixteenth Amendment allows Congress to tax
incomes “without apportionment.” But, it did not remove the Direct
Tax Clause or the apportionment requirement from the Constitution
entirely. To appreciate the extent of the change, and its
implications for the meaning of the word “incomes,” it is necessary
to examine the origins of the Direct Tax Clause and how disputes
about the Clause’s scope led to the Sixteenth Amendment.
2
The Direct Tax Clause was a critical aspect of
the balance between state and federal power in the original design
of the Constitution. It is easy today to take the federal taxing
power for granted. But, at the founding, allowing the National
Government to exercise such a power was a radical proposal. The
importance of the limitations imposed by the Direct Tax Clause to
the compromise struck by the Constitution has significant
implications for the meaning of “incomes” in the Sixteenth
Amendment.
The American colonial experience inspired
widespread distrust of taxation. See, e . g .,
Declaration of Independence ¶19. The Articles of Confederation
reflected that distrust. Under the Articles, the entire taxing
power was exclusive to the States. The National Government had no
power to impose taxes of any kind. The only revenue for the
National Government was funds “supplied by the several States”
pursuant to requisitions “in proportion to the value of all land
within each State.” Articles of Confederation, Art. 8. And,
the taxes for paying those requisitions were imposed solely by the
States themselves.
The requisition system showed immediate signs of
inadequacy. Raising funds through requisitions was often
ineffective because States felt little urgency to pay their
obligations. See Federalist No. 30, at 160 (A. Hamilton)
(explaining that requisitions were formally “obligatory upon the
States,” but that “in practice” the right to disregard them was
“constantly exercised”). And, the financial strain placed on the
National Government by the Revolutionary War made that inefficiency
an existential threat to the fledgling Nation.
The Continental Congress quickly concluded that
financing the war effort would require another source of revenue
for the National Government. “[T]o establish the national credit,”
the Congress’s finance Committee reported in December 1780, “it
will be necessary” for the States to “vest[t] in Congress” “[t]he
exclusive right to duties arising on certain imported articles.” 18
Journals of the Continental Congress 1774–1789, p. 1157 (G.
Hunt ed. 1910). The Congress therefore proposed the Impost of 1781,
“recommend[ing] to the several states, as indispensably necessary,
that they . . . vest a power in Congress, to levy for the
use of the United States, a duty of five per cent.” on most
imports. 19 Journals of the Continental Congress 112 (1912)
(footnote omitted). The President of the Continental Congress
transmitted the proposal to the States on February 8, 1781, under a
cover letter stressing the “precarious Manner” in which Congress
had to fund the Army under the requisition system. 5 Letters of
Members of the Continental Congress 564 (E. Burnett ed. 1931).
Every State but Rhode Island approved the Impost
of 1781. See 1 Documentary History of the Ratification of the
Constitution 63 (M. Jensen ed. 1976) (Documentary History). But,
because the Articles of Confederation required amendments like the
impost to be approved unanimously, Rhode Island’s refusal defeated
the amendment. Articles of Confederation, Art. 13; see also 23
Journals of the Continental Congress 783–784 (1914). In a letter to
the Confederation Congress,[ 4 ]
the Rhode Island Legislature explained that it rejected the impost
“[b]ecause it would be unequal in its operation, bearing hardest on
the most commercial states,” including Rhode Island. Id ., at
788. One State’s jealousy of its lucrative tax base prevented the
reform of the Articles’ flawed requisition system.
A year later, the Confederation Congress again
proposed a national taxing power with the Impost of 1783. The
proposal languished for years, and then failed after New York
refused its consent in February 1787. See 1 Documentary History
190, n. 3. As the second impost awaited its slow death, the
Confederation Congress issued a dire warning about the financial
condition of the National Government in February 1786. See 30
Journals of the Continental Congress 70, 75 (J. Fitzpatrick ed.
1934). Faced with mounting threats to the security of the country,
and requisitions that had become “so irregular in their operation”
as to be “dangerous to the welfare and peace of the Union,”
Congress asserted “that the crisis has arrived” when the people of
the United States must decide whether, “for want of a timely
exertion in establishing a general revenue,” they will risk both
the existence of the Union and the liberty that they won in the
Revolution. Id ., at 72, 75.
The practical impossibility of reforming the
Articles to include a national taxing power was among the primary
reasons for the Constitutional Convention of 1787. John Adams later
reflected as Vice President: “The opposition of Rhode Island to the
impost seems to have been the instrument which providence thought
fit to use for the great purpose of establishing the present
constitution.” 26 Documentary History 743 (J. Kaminski et al.
eds. 2013). In February 1787, the Continental Congress endorsed the
call for a convention of delegates in Philadelphia. See 32 Journals
of the Continental Congress 74 (R. Hill ed. 1936). Virginia had
been the first State to answer that call, and in appointing
delegates, made prominent reference to the Confederation Congress’s
“alarming representations” about the poor state of public finance.
1 Documentary History 196–198 (discussing Congress’s warning of
February 1786). The Virginia delegation likewise emphasized the
“inefficiency of requisitions” when it opened the proceedings at
the Convention. 1 Records of the Federal Convention of 1787, pp.
18–19 (M. Farrand ed. 1911) (Farrand’s Records).
The possibility of a federal taxing power was
highly controversial at the Constitutional Convention, despite
widespread acknowledgment of the need to reform public finance. The
Virginia plan—a broad outline that was selected as the basis for
the new Government—did not go so far as to include a federal taxing
power. The Virginia delegation apparently considered it less
controversial to open the Convention with a proposal that gave the
Federal Government the ability to enforce requisitions against the
States by military force. Id., at 21. The New Jersey plan,
by contrast, did include federal taxing powers. Id ., at 243.
Reason prevailed, and the Convention judged it more prudent to risk
a federal taxing power than the extraction of federal revenue by
the use of military force against the States. See id ., at 54
(“[Madison] observed that the more he reflected on the use of force
[against delinquent States], the more he doubted the
practicability, the justice and the efficacy of it”). The
Convention proposed the Constitution with its taxing provisions as
described above; they would be ratified unchanged. See 2 id., at 590, 594, 596; supra, at 4–6.
Unsurprisingly, the proposed creation of a
federal taxing power provoked many of the most passionate
criticisms by opponents of ratification. The Antifederalists warned
that a federal taxing power would destroy the state governments.
Brutus wrote that the central question presented by ratification
was “whether the thirteen United States should be reduced to one
great republic . . . or whether they should continue
thirteen confederated republics.” Brutus No. 1 (Oct. 18,
1787), in 2 The Complete Anti-Federalist 364 (H. Storing ed. 1981).
In support of his dramatic thesis, Brutus asserted that “the
individual states must very soon be annihilated,” in part by the
federal taxing power. Id ., at 365.
The destructive force of the federal taxing
power, as Brutus explained it, arose from the fact that it forced
the States to compete with the Federal Government for a tax base.
Because the Constitution prevented the States from emitting paper
money and laying duties or imposts, “[t]he only mean therefore
left, for any State to support its government and discharge its
debts, is by direct taxation.” Id ., at 366. But, even the
ability to resort to direct taxes would be fruitless, because the
power of direct taxation was shared with the Federal Government. Ibid . Brutus thus argued that once the Federal Government
“begins to exercise the right of taxation in all its parts, the
legislatures of the several states will find it impossible to raise
monies to support their governments” and then “dwindle away.” Ibid. Other Antifederalists sounded the same theme at the
state ratifying conventions. See, e . g ., 3 Debates on
the Constitution 29 (J. Elliot ed. 1836) (Elliot’s Debates) (George
Mason arguing in Virginia that the “two concurrent powers” of the
State and Federal Governments to impose taxes directly upon the
people “cannot exist long together”).
The Federalists’ defense of the new national
taxing power stressed that the Federal Government would impose
direct taxes only sparingly, as needed to supplement the revenue
from imposts in emergencies. Madison explained that “[w]hen
. . . direct taxes are not necessary, they will not be
recurred to. It can be of little advantage to those in power to
raise money in a manner oppressive to the people.” Id ., at
95. And, Federalists highlighted the protection provided by the
rule of apportionment. Hamilton explained that direct taxes “never
can oppress a particular state by an unequal imposition; because
the Constitution has provided a fixed ratio, a uniform rule, by
which this must be regulated.” 2 id ., at 365. Madison argued
that because representation and direct taxation were apportioned by
the same formula, unjust taxes could not feasibly be imposed; those
responsible for paying direct taxes are correspondingly able to
defeat their imposition. See 3 id ., at 256–257.[ 5 ]
With the Constitution’s ratification, the
requisition system was replaced by a system that gave the Federal
Government the taxing power it had lacked under the Articles of
Confederation. That increase in power came at the expense of the
States. The States gave up the power to tax interstate and foreign
commerce, which was expected to be the main source of federal
revenue. They did retain the power of direct taxation, but had to
share it with the Federal Government—an arrangement that motivated
significant opposition to the new Constitution. The limitations on
the Federal Government’s ability to exercise that concurrent power
were thus an essential component of the constitutional
compromise.
3
Postratification disagreement about what
qualified as a “direct tax” would eventually lead to the adoption
of the Sixteenth Amendment. Even though the distinction between
direct and indirect taxes was an important component of the
founding compromise, it was not entirely clear how to distinguish
between the two classes of taxes. The scope of the “direct tax”
category proved immediately controversial. And, that controversy
eventually came to bear on the question of income taxation, with
the Court initially concluding that the Direct Tax Clause was not a
barrier to taxing incomes.
As the Constitution’s text made clear, a
“Capitation” was “direct.” Art. I, §9, cl. 3. And, all
agreed that taxes on land and slaves were considered direct. See 3
Elliot’s Debates 229. But, beyond that, the precise boundary
between direct and indirect taxes was debatable. An exchange at the
Constitutional Convention preserved in Madison’s notes is often
cited on the subject: “Mr King asked what was the precise meaning
of direct taxation? No one answd.” 2 Farrand’s Records
350.
This Court grappled with the question in a
significant case decided soon after ratification. In 1794, the
Third Congress passed “An Act laying duties upon Carriages for the
conveyance of Persons.” Act of June 5, 1794, ch. 45, 1Stat. 373.
The tax was not apportioned among the States. Some opposed the tax
on the theory that a tax on personal property, such as carriages,
was a direct tax that required apportionment.[ 6 ]
When Daniel Hylton failed to pay the tax on his
125 carriages, the United States brought a suit against him, and
the case soon found its way to the Supreme Court. Hylton v. United States , 3 Dall. 171, 171–172 (1796) ( Hylton’s
Case ). “The argument turned entirely upon . . .
whether the tax . . . was a direct tax.” Id ., at
172. The four Justices who sat for the case each agreed that the
tax was constitutional, and the three who offered reasons suggested
that “direct” taxes were limited to capitation and land taxes. But,
they did so with some caution.
Justice Chase was “inclined to think, but [did]
not give a judicial opinion, that the direct taxes
contemplated by the Constitution, are only two , to wit, a capitation, or poll tax, simply , without
regard to property , profession , or any other
circumstance ; and a tax on land.” Id ., at 175. He
“doubt[ed] whether a tax, by a general assessment of personal property, . . . is included within the
term direct tax.” Ibid . Justice Paterson observed
that “[w]hether direct taxes, in the sense of the Constitution,
comprehend any other tax than a capitation tax, and tax on land, is
a questionable point.” Id ., at 177. Justice Iredell opined
that “[p]erhaps a direct tax in the sense of the Constitution, can
mean nothing but a tax on something inseparably annexed to the soil
. . . . A land or poll tax may be considered of this
description.” Id ., at 183.
Additional disputes over what constituted direct
taxation arose when the Government resorted to new forms of
taxation to finance the Civil War. In several cases decided shortly
after the war, the Court relied on Hylton’s Case to conclude
that new taxes were indirect. First, the Court reasoned that “[i]f
a tax upon carriages, kept for his own use by the owner, [was] not
a direct tax,” then “a tax upon the business of an insurance
company” was not a direct tax. Pacific Ins. Co. v. Soule , 7 Wall. 433, 446 (1869). Next, the Court concluded
that a tax on the circulation of bank notes was also indirect, but
it surveyed ratification-era sources to hint at a slightly more
expansive definition of direct taxes. Veazie Bank v. Fenno , 8 Wall. 533, 544 (1869) (“direct taxes were such as
may be levied by capitation, and on lands and appurtenances; or,
perhaps, by valuation and assessment of personal property upon
general lists”). Finally, the Court concluded that a tax on the
devolution of title to real estate was indirect, acknowledging that
“it never ha[d] been decided” whether any taxes besides “[t]axes on
lands . . . and capitation taxes” were “direct taxes.” Scholey v. Rew, 23 Wall. 331, 347 (1875).
The Civil War also prompted Congress to enact
the Nation’s first-ever federal income tax. In 1861, Congress
imposed a tax of three percent “upon the annual income of every
person residing in the United States, whether such income is
derived from any kind of property, or from any profession,
. . . or from any other source whatever,” to the extent
that income exceeded $800. §49, 12Stat. 309. Over the course of the
Civil War, the income tax was paid by as many as 1 in 10 Union
households and accounted for about a fifth of federal revenues. S.
Weisman, The Great Tax Wars 101–102 (2002) (Weisman). The tax
remained in force, with modifications, until it expired in 1871.
§6, 16Stat. 257.
The Court did not consider the constitutionality
of the Civil War income tax until a decade after its expiration, in Springer v. United States , 102
U.S. 586 (1881). The “main question” was whether the tax was an
unapportioned direct tax that violated the Direct Tax Clause. Id ., at 595. The Court held that the income tax was not a
direct tax. Relying heavily on Hylton’s Case , the Court
reasoned “that direct taxes , within the meaning of the
Constitution, are only capitation taxes . . . and taxes
on real estate.” 102 U. S., at 602. Accordingly, the income
tax at issue was “within the category of an excise or duty.” Ibid .[ 7 ]
In summary, after disputes over the scope of the
Direct Tax Clause between the founding and the expiration of the
Civil War income tax, the Court apparently concluded that direct
taxes were limited to poll taxes and taxes on land. Ibid .
But, the Court expressed some doubt as to the proper classification
of taxes “levied by . . . valuation and assessment of
personal property.” Veazie Bank , 8 Wall., at 544. Based on
that narrow reading of the Direct Tax Clause, the Court upheld the
Civil War income tax against a constitutional challenge. But, the
long-running skirmishes about direct taxation would soon come to a
dramatic climax following the imposition of the first federal
income tax in peacetime.
4
I next consider the single most important
piece of context for understanding the Sixteenth Amendment: Pollock v. Farmers’ Loan & Trust Co. , 158 U.S.
601 , the case that the Amendment overruled. In Pollock ,
the Court concluded, for the first time, that a tax was direct, not
apportioned, and therefore unconstitutional. The Court’s reasoning
turned on the premise that the Constitution permits no distinction
between taxing income and taxing the source from which that income
is derived. The holding of Pollock thus meant that most
income taxes would have to be apportioned, a requirement that made
them politically unpalatable. See supra , at 6 (describing
possible state-by-state variations in rates for apportioned taxes).
Because the Sixteenth Amendment overruled the result in Pollock , an accurate understanding of the case is essential
to understanding the Amendment.
Congress imposed the Nation’s first peacetime
income tax as part of the Revenue Act of 1894. The Act paired a new
tax on the incomes of the wealthiest two percent of Americans with
tariff cuts that would benefit less wealthy consumers. See Weisman
132–133, 145. The income-tax component of the Act provided:
“That [from 1895 until 1900] there shall
be assessed, levied, collected, and paid annually upon the gains,
profits, and income received in the preceding calendar year by
[citizens and resident aliens], whether said gains, profits, or
income be derived from any kind of property, rents, interest,
dividends, or salaries, or from any profession, trade, employment,
or vocation . . . , or from any other source
whatever, a tax of two per centum on the amount so derived over and
above four thousand dollars.” §27, 28Stat. 553.
The income tax was not apportioned among the
States by population.
In Pollock v. Farmers’ Loan &
Trust Co. , 157 U.S.
429 (1895), the Court considered whether the 1894 income tax
was a direct tax that failed to satisfy the Direct Tax Clause’s
apportionment requirement. The taxpayer argued that portions of the
tax were direct because “imposing a tax on the income or rents of
real estate, imposes a tax upon the real estate itself.” Id ., at 555. And, taking the position that taxes on personal
property are also direct taxes, the taxpayer argued that “imposing
a tax on the . . . income of bonds or other personal
property . . . imposes a tax on the personal estate
itself.” Ibid .
The Court endeavored to determine what “were
recognized as direct taxes” “at the time the Constitution was
framed and adopted.” Id ., at 558. The Court considered
historical context, the records of the Constitutional Convention,
the Federalist Papers, other documents from the ratification
debates, the 1794 carriage tax, and Hylton’s Case . 157
U. S., at 558–568, 570–572. The Court concluded that “all
taxes on real estate or personal property or the rents or income
thereof were regarded as direct taxes” at the time the Constitution
was ratified. Id ., at 573–574. After reaching a conclusion
about the original meaning of the Constitution, the Court surveyed
its precedents and observed that “in none of them is it determined
that taxes on rents or income derived from land are not taxes on
land,” and that “none . . . discussed the question
whether a tax on the income from personalty is equivalent to a tax
on that personalty.” Id ., at 579. The Court had some
difficulty explaining Springer , which stated that direct
taxes are limited to capitation and land taxes and concluded that a
tax on income was an indirect tax. See supra , at 15. But,
the Court returned to “[t]he original record” in Springer to
review the sources of the taxpayer’s income, and it distinguished
the case on that ground. 157 U. S., at 578–579.
In the end, the Court concluded that income
could not be distinguished from the source from which it was
derived for purposes of determining whether a tax on that income
would be direct or indirect. It was “unable to perceive any ground”
“upon which to rest the contention that real estate belongs to one
of the two great classes of taxes,” i . e ., the
direct-tax class, “and the rent or income which is the incident of
its ownership belongs to the other,” i . e ., the
indirect-tax class. Id ., at 581. It grounded that conclusion
in the fact that the Direct Tax Clause was a federalism provision
at the heart of the constitutional compromise: “If, by calling a
tax indirect when it is essentially direct, the rule of protection
could be frittered away, one of the great landmarks defining the
boundary between the Nation and the States of which it is composed,
would have disappeared, and with it one of the bulwarks of private
rights and private property.” Id. , at 583.
The Court held that the Act was unconstitutional
in part, “so far as it levies a tax on the rents or income of real
estate.” Ibid . But, the Justices divided evenly on the
question whether the tax was unconstitutional “as to the income
from personal property.” Id ., at 586. The case was therefore
scheduled for rehearing.
After rehearing, the Court extended its logic
and held that a tax on income derived from personal property—like a
tax on income derived from real property—was a direct tax. 158
U. S., at 625. The Court offered a more thorough explanation
for why income could not be distinguished from its source when
classifying a tax . It began by observing that the
distinction between direct and indirect taxes was critical to our
system of federalism. By ratifying the Constitution, the States
“gave up the great sources of revenue derived from commerce” and
“retained the power of direct taxation,” but only concurrently with
the Federal Government. Id ., at 620. Limitations on federal
direct taxation offered state governments a fiscal safe haven
against expanding federal authority, in recognition of the fact
“that the power to tax involved the power to destroy.” Id .,
at 621. “[T]he qualified grant” of an apportioned direct-taxation
power built security into the “structure of the government itself
. . . by providing that direct taxation and
representation in the lower house of Congress should be adjusted on
the same measure.” Id ., at 621–622.
The Court relied on those federalism principles
to reject the argument “that income is taxable irrespective of the
source from whence it is derived.” Id. , at 629. It explained
that the Constitution—read “in its plain and obvious sense” and in
the context of “the circumstances attending the formation of the
government”—could not be understood to treat income “as belonging
to a totally different class” of taxation than the class “which
includes the property from whence the income proceeds.” Id .,
at 627–628. Such an interpretation would leave the Direct Tax
Clause “utterly illusory and futile, and the object of its framers
defeated.” Id ., at 628. The Court refused to allow the
effect of the Direct Tax Clause to be “refined away by forced
distinctions between” income and source. Ibid .
5
The Sixteenth Amendment was designed to
overrule Pollock ’s obstacle to an income tax, and it was
understood by the public in those terms. Pollock stood in
some tension with the Civil War tax cases, and it was not well
received. Critics likened it to Dred Scott v. Sandford , 19 How. 393 (1857), and the decision became a
major issue in the 1896 Presidential election. Weisman 148. By the
1908 Presidential election, both major political parties supported
finding a way, Pollock notwithstanding, to impose an income
tax. See E. Seligman, The Income Tax 591–592 (2d ed. 1914).
In 1909, President Taft pledged his support for
an income-tax amendment. In a widely published message to Congress,
he explained that “[t]he decision of the Supreme Court” in Pollock “deprived the national government of a power which”
it “ought to have.” Taft Asks for Tax, Washington Post, June 17,
1909, p. 4. Taft therefore asked Congress to “propose an
amendment to the Constitution conferring the power to levy an
income tax upon the national government without apportionment.” Ibid .
Shortly after the President delivered his
message, Senator Norris Brown of Nebraska proposed an income-tax
amendment providing: “The Congress shall have power to lay and
collect direct taxes on incomes without apportionment among the
several States according to population.” 44 Cong. Rec. 3377 (1909).
The proposed amendment’s narrow focus on an income tax was
significant. After all, a constitutional amendment could have
easily eliminated Pollock ’s obstacle to income taxation by
removing the Constitution’s direct-tax provisions
wholesale.[ 8 ]
A few weeks later, the proposed amendment
emerged from Committee in its modern form. It is not clear how the
original proposal’s reference to “direct taxes” was removed, or how
the phrase “from whatever source derived” was added. See E. Jensen,
The Taxing Power, the Sixteenth Amendment, and the Meaning of
“Incomes,” 33 Ariz. St. L. J. 1057, 1116–1117 (2001). The
Amendment was passed by Congress on July 12, 1909. See 44 Cong.
Rec. 4440. And, the Secretary of State certified that the Amendment
had been ratified by the States on February 25, 1913. 37Stat.
1785.
B
With a full understanding of the context
against which the Sixteenth Amendment was ratified, two conclusions
become clear. First, because the Amendment abolished Pollock ’s rule that an income tax must be classified as
direct or indirect based on whether a tax on the source of
that income would be direct or indirect, the Amendment created a
constitutional distinction between income and its source. Second,
because Sixteenth Amendment “income” must be distinguished from its
source, the Amendment includes a realization requirement.
1
I return, finally, to the text of the
Sixteenth Amendment: “The Congress shall have power to lay and
collect taxes on incomes, from whatever source derived, without
apportionment among the several States, and without regard to any
census or enumeration.” Against the background of Pollock ,
the “power to lay and collect taxes on incomes, from whatever
source derived, without apportionment” under the Sixteenth
Amendment has an obvious and narrow meaning. The only thing the
Amendment changed about the Constitution was to abolish Pollock ’s rule that an income tax is a direct tax if a tax
on the source of the income would be a direct tax. The Sixteenth
Amendment left everything else in place, including the federalism
principles bound up in the division between direct and indirect
taxes.
The Court was first asked to interpret the
Sixteenth Amendment in Brushaber v. Union Pacific
Railroad Co. , 240 U.S.
1 . A taxpayer raised an exhaustive set of “twenty-one
constitutional objections” to the first income tax under the
Sixteenth Amendment. Id ., at 10. Recognizing that the text
of the Amendment could not be understood in a vacuum, the Court
began with the text of the original taxing provisions and the
history of the disputes over direct taxes from Hylton’s Case to Pollock . 240 U. S., at 12–17. I can little improve
on Brushaber ’s explanation of the Sixteenth Amendment.
“[T]he whole purpose of the Amendment was to
relieve all income taxes . . . from apportionment [based
on] a consideration of the source whence the income was derived.” Id ., at 18. Pollock stood for the rule that “whether
a tax on income [is] direct” must be determined based upon a
consideration of “the property from which the income [is] derived.”
240 U. S., at 18. It was by “the rule applied in the Pollock Case . . . alone” that income “taxes were
removed from the great class of [indirect taxes] and were placed
under the . . . direct class.” Id ., at 19. The
Amendment did nothing more than remove that rule. The result was
“the prevention of the resort to the sources from which a taxed
income was derived in order to . . . place [an income
tax] in the class of direct taxes.” Ibid . But, other than
that change, the Amendment “was drawn with the object of
maintaining the limitations of the Constitution,” including Pollock ’s holding that direct taxes included “taxes levied
directly on personal property because of its ownership.” Ibid .
The Sixteenth Amendment thus facilitated an
income tax by creating a new constitutional distinction between
“income” and its “source.” Under the Amendment, “from whatever
source” income is “derived,” a tax on it is indirect and therefore
not subject to the rule of apportionment. But, as to taxes on the
sources of income, the restrictions imposed by the division between
direct and indirect taxes continued to apply with full force. And,
taxes on property continued to be classified as direct taxes.
2
Because the Sixteenth Amendment requires a way
to distinguish between income and source, it includes a realization
requirement. The text of the Amendment incorporates such a
requirement, and the concept of realization was well understood at
the time of ratification. The Constitution thus limits
unapportioned income taxes to taxes on realized income.
The word “income” in the Sixteenth Amendment
must be interpreted in light of the Amendment’s distinction between
income and source. As the Court appreciated in Eisner v. Macomber , failure to understand “income” in this way leads
to an interpretation of the Sixteenth Amendment that mistakenly
displaces aspects of the original taxing provisions that the
Amendment left in place: “In order, therefore, that the clauses
cited from Article I of the Constitution may have proper force and
effect, save only as modified by the Amendment, and that the latter
also may have proper effect, it becomes essential to distinguish
between what is and what is not ‘income.’ ” 252 U. S., at
206.
Without an understanding of “income” that
distinguishes it from “source,” the Sixteenth Amendment undermines
the restriction imposed by the Direct Tax Clause. The Government
asserts that the Sixteenth Amendment uses “ ‘income’
. . . to refer to all economic gains.” Brief for United
States 14 (some internal quotation marks omitted). That
understanding of “income” would allow taxes on real and personal
property without apportionment. To be sure, most of the
Government’s arguments focus on “taxes on individuals’ pro rata
shares of undistributed corporate earnings.” Id ., at 13.
But, the Government is not shy about the fact that its definition
of income includes things such as “increase in the value of a
corporation’s capital assets,” “increase in the value of unsold
property,” and “appreciation in the value of securities.” Id ., at 16 (alterations and internal quotation marks
omitted). Those increases are “income” in a purely economic sense,
but not in a sense that meaningfully distinguishes between “income”
and the “source” from which it is “derived.” A tax on each, whether
it be an increase in assets, unsold property, or securities, would
be a tax on the value of real estate or property, and should
therefore require apportionment under the Direct Tax Clause.
The text of the Sixteenth Amendment points to
the concept of realization, as the Court explained that concept in Macomber . The Amendment is clear that the word “income”
refers to something that is “derived.” Dictionaries at the time of
ratification defined “derive” as “[t]o receive, as from a source or
origin” and “to draw.” Webster’s New International Dictionary 601
(1913) (Webster’s). And, that sense of “derived” maps neatly onto Macomber ’s realization-focused definition of “income” as
being “ received or drawn by the recipient (the
taxpayer) for his separate use.” 252 U. S., at 207.
In fact, the idea of realization as the
distinction between income and source long predates both Macomber and the Sixteenth Amendment. As the Government
acknowledges, “the concept” of “realization . . . was
well established when the Amendment was adopted.” Brief for United
States 15. The term “ realized ” appeared in several Civil War
income tax provisions. Id ., at 16 (citing §116, 13Stat. 281;
§7, 16Stat. 257–258). And, contemporaneous “[d]ictionaries defined
‘realize’ as ‘to convert any kind of property into money.’ ”
Brief for United States 15–16 (quoting Webster’s 1778, and citing
Black’s Law Dictionary 993 (2d ed. 1910); alteration omitted). The
Government argues that the decision to omit the often-used word
“realized” from the Sixteenth Amendment is significant evidence
that the Amendment does not require realization. See Brief for
United States 16. But, the choice to instead use the near-synonym
“derived” merely reflects the repeated use of the word “derive” to
describe the relationship of income to its source in Pollock , to which the Sixteenth Amendment was a direct
response. See 158 U. S., at 618, 629, 635.
The metaphor that the Court famously used in Macomber also shows the deep roots of the realization
concept. To illustrate the “fundamental relation of ‘capital’ to
‘income,’ ” Macomber compared “the former
. . . to the tree or the land, [and] the latter to the
fruit or crop.” 252 U. S., 206. That understanding of income
as being something “ severed from ” its source predated the
Sixteenth Amendment. In a well-cited case from 1878, the Georgia
Supreme Court relied on a tree-and-fruit analogy in a tax case to
explain the difference between income and property: “The fact is,
property is a tree; income is the fruit.” Waring v. Mayor
and Aldermen of Savannah , 60 Ga. 93, 100 (1878); see also
Black’s Law Dictionary, at 612 (defining “income” (citing Waring , 60 Ga., at 99)).
The text of the Sixteenth Amendment, read
against the background of its adoption, confirms that the “incomes”
that the Sixteenth Amendment allows Congress to tax without
apportionment are only realized incomes. We granted
certiorari in this case to answer whether Congress may “tax
unrealized sums without apportionment among the states.” Pet. for
Cert. i. As the Sixteenth Amendment makes clear, the answer to that
question is a resounding “no.” The Court errs today by failing to
correct the Ninth Circuit’s contrary understanding.
* * *
It is imperative to give the original taxing
provisions in Article I their proper effect. Those provisions
reflect a delicate compromise under which the founding generation
took the great risk of ceding much of the States’ exclusive taxing
authority to the Federal Government. Supra , at 7–12. Without
that compromise, the Constitution could easily have been rejected.
To be sure, the States slightly altered the original agreement by
ratifying the Sixteenth Amendment. But, a constitutional amendment
does not affect our duty of fidelity to the aspects of the original
agreement that remain in place—including the Direct Tax Clause. If
a written constitution is to mean anything, the compromises it
records must bind us until we amend them.
II
The Court strains to uphold the Mandatory
Repatriation Tax without addressing whether the Sixteenth Amendment
includes a realization requirement, the question we agreed to
answer in this case. The majority starts by surveying a scattered
sampling of precedents—mostly about tax avoidance—to invent an
“attribution” doctrine that sustains the MRT. The majority also
relies on “longstanding congressional practice” to conclude that
the Moores’ claim fails because they cannot distinguish the MRT
from similar taxes imposed by Congress in the past, which the
Moores concede are constitutional. Neither point can withstand
scrutiny.
A
To avoid the question whether the Sixteenth
Amendment requires realization, the majority reframes the case as
being about whether Congress may attribute an entity’s realized
income to shareholders or partners. Ante , at 8. According to
the majority, our precedents establish a “clear rule” that the
Sixteenth Amendment empowers Congress to choose whether “to tax
[an] entity on its income” or instead “tax the entity’s
shareholders or partners on their share of the entity’s
undistributed income.” Ante , at 17. Applying this rule, the
Court concludes that the MRT permissibly chooses to attribute
undistributed income earned by foreign corporations to their
American shareholders. The Court thus refuses to address the
“Government’s argument that a gain need not be realized to
constitute income under the Constitution” because the foreign
corporation has realized the income. Ante , at 12–13,
n. 3.
The majority’s Sixteenth Amendment “attribution”
doctrine is a new invention. The majority justifies its creation by
plucking superficially supportive phrases from an eclectic
selection of tax cases. But, none of the cases supports the
proposition that the Sixteenth Amendment empowers Congress to
freely attribute income to any taxpayer it reasonably chooses.
The majority begins with Burk-Waggoner Oil
Assn. v. Hopkins , 269 U.S.
110 (1925), a case that it says “articulated [the] fundamental
principle” that “Congress could tax . . . income as it
ch[ooses],” either by taxing an entity or an individual. Ante , at 9. But, Burk-Waggoner merely held that
Congress may tax a de facto corporation on its own
income, even if it is formally a partnership under state law. See
269 U. S., at 114 (“[N]othing in the Constitution precludes
Congress from taxing as a corporation an association which,
although unincorporated, transacts its business as if it were
incorporated”). Tellingly, we have never cited Burk-Waggoner for the proposition derived by the majority, but instead for the
proposition that federal statutes “designed to tax income actually
earned . . . are not to be frustrated by state laws.” Commissioner v. Tower , 327 U.S.
280 , 288 (1946) (citing 269 U. S., at 114); see also Lyeth v. Hoey , 305 U.S.
188 , 194 (1938) (same); Hemphill v. Orloff , 277 U.S.
537 , 550 (1928) (same). Burk-Waggoner thus shows that
state law may not be used as a means of evading federal taxes—not
that Congress may choose whether to attribute income to entities or
individuals.
The majority then cites Burnet v. Leininger , 285 U.S.
136 (1932), which it says “reiterated” that Congress can choose
to impose income-tax liability “ ‘upon [a] partnership
directly’ ” or “ ‘upon the individuals carrying on
business in partnership.’ ” Ante , at 9 (quoting 285
U. S., at 142; internal quotation marks omitted). But, the
majority quotes language that is part of a due process holding, not
an application of the Sixteenth Amendment. Leininger involved a taxpayer’s attempt to evade taxation by assigning half
of his share in a partnership’s income to his wife. Id ., at
138. The taxpayer argued that assessing income taxes against him
based on “a partnership interest owned by his wife” violated the
Fifth Amendment’s Due Process Clause. Brief for Respondent in Burnet v. Leininger , O. T. 1931, No. 426,
p. 24. The Court rejected the argument, concluding that it did
not violate due process to “tax the distributive share of each
partner” by ignoring the taxpayer’s attempt to divert his income to
his wife. 285 U. S., at 142. The majority is clear that it
offers no opinion about due process questions. See supra , at
4–5, nn. 4, 6. Because Leininger is a due process case,
it is unclear how it supports the majority’s Sixteenth Amendment
attribution doctrine.
Next, the majority claims that the Court
“reaffirmed that Congress may choose to tax either [a] partnership or [its] partners” in Heiner v. Mellon , 304 U.S.
271 (1938), when it rejected the argument by members of a
partnership “that Congress could not tax them on income that they
did not and could not personally receive.” Ante , at 10. But, Heiner is a statutory interpretation case. Under the
applicable statute, the taxpayers were subject to a tax on their
“distributive share, whether distributed or not, of the net income
of the partnership.” §218(a), 40Stat. 1070. The taxpayers argued
only that “there was no distributive share” within the meaning of
the statute, because distribution was currently impossible under
state law; they made no argument about the scope of Congress’s
power. Brief for Respondents in Heiner v. Mellon ,
O. T. 1937, No. 144 etc., p. 34. Heiner ’s
interpretation of the statutory phrase “distributive share” cannot
be understood as a holding about the scope of Congress’s supposed
attribution power.
The majority completes its survey of
“attribution” precedents with Helvering v. National
Grocery Co. , 304 U.S.
282 (1938), which it says extended Heiner ’s attribution
principle from partnerships to corporations. Ante , at 10.
But, National Grocery demonstrates Congress’s ability to
legislate against tax-avoidance schemes—not an ability to freely
attribute corporate income to shareholders. The majority
misleadingly describes National Grocery as involving “the
controlling shareholder of a corporation” being taxed “individually
. . . on the year’s profits.” Ante , at 10
(internal quotation marks omitted). In reality, the case involved a
tax paid by a corporation—owned 100% by one person—after the
corporation permitted profits to accumulate without distribution
“ ‘for the purpose of preventing the imposition of [a] surtax
upon [the] sole stockholder.’ ” 304 U. S., at 285. In
essence, the sole stockholder used the corporation as a tax-free
bank account to hold what was really his income. The Court
concluded that Congress may legislate to prevent “the sole owner of
[a] business” from “conducting it as a corporation” to avoid the
tax consequences that would attach if the business had “been
carried on as a partnership.” Id ., at 288. The Court cited Heiner merely to explain those tax consequences, not to
support an attribution principle. National Grocery is yet
another tax-evasion case, not an application of an attribution
principle.
At most, the cases cited by the majority
demonstrate that Congress may attribute income to the entity or
individual who actually controlled it when necessary to defeat
attempts to evade tax liability. They do not suggest that Congress
may freely choose whether to impose an income tax on a corporation
or on its shareholders. The “clear rule” that the majority relies
on to sidestep the realization question is thus a mirage. Ante , at 17.
B
The majority separately concludes that the
Moores’ claim fails because they cannot distinguish the MRT from
other longstanding taxes that they concede are constitutional. The
majority sees no distinction between the MRT and older taxes on
partnerships, “S corporations,” and closely held foreign
corporations under other parts of subpart F. Ante , at 16–21.
But, the majority’s insistence that the MRT is just like other
forms of pass-through taxation is not convincing.
First, the MRT’s taxation of corporate
shareholders is not like pass-through taxation of partners. The
Moores are correct that the Sixteenth Amendment allows Congress to
tax partners on partnership income because “partnerships hav[e] no
existence separate from their partners.” Brief for Petitioners 51.
A partner’s share of partnership income is therefore understood to
be his own income. The majority quibbles with the Moores’
understanding of early-20th century partnership law and points out
that “legislatures treated partnerships as separate entities in
many contexts,” including for some tax purposes. Ante , at
17–18. But, the fact that a partnership can sometimes be treated as
an entity is beside the point. The significant fact is that
partners had long been considered to be subject to income taxes
without consideration of the partnership; longstanding taxes based
on that understanding are not implicated by the Moores’ challenge
to the MRT.
Second, and for similar reasons, the MRT’s
taxation of corporate shareholders is not like pass-through
taxation of shareholders of “S corporations.” An S corporation is a
corporation that does not have more than 100 shareholders, does not
have any shareholder who is not an individual or who is a
nonresident alien, does not have more than one class of stock, and
which elects to be treated as an S corporation. 26
U. S. C. §§1361(a)(1), (b)(1). These eligibility
requirements make it clear that pass-through taxation of S
corporations is merely an extension of the pass-through taxation of
partnerships. Indeed, for most tax purposes, S corporations are
equivalent to partnerships, not to corporations. “Tax practitioners
often say that an S corporation is taxed like a partnership.” CCH S
Corp. Guide ¶510, p. 505 (2013); see also West’s Tax Law Dictionary
(2024) (defining “S Corporation” as “Corporation which elects S
status and receives tax treatment similar to a partnership”).
Taxing S corporation shareholders on corporate income is
constitutional for the same reasons as taxing partners on
partnership income. To the majority, “S corporations are another
example of Congress’s authority to either tax the corporation
itself on corporate income or attribute the undistributed income to
the shareholders and tax the shareholders.” Ante , at 19.
But, it does not make sense to look to S corporations for
conclusions about the pass-through taxation of corporate
shareholders generally.
Finally, the MRT is unlike other taxes on
shareholders of closely held foreign corporations. The MRT “differs
from other provisions of Subpart F”—the portion of the Internal
Revenue Code dealing with controlled foreign corporations—because
the MRT does not focus on “the corporation’s receipt of investment
earnings while subject to the shareholders’ control.” Brief for
Petitioners 44–45. Subpart F “aligns the corporation’s earning
of the money being taxed with the shareholder’s control in the
same year .” Reply Brief 23. But, “[t]he MRT by its terms takes
no account of whether a shareholder had any interest or control
when the corporation made the earnings that it attributes to her.” Ibid . In fact, the MRT “tags a shareholder with taxable
‘income’ even if ” he purchased shares “long after the
corporation earned the sums being taxed,” and it imposes no
liability on taxpayers who owned shares for years of retained
earnings but sold them before the MRT’s trigger date. Brief for
Petitioners 45. Subpart F includes some minimal requirements to
ensure that taxable “income” belongs to the shareholder in some
way; the MRT abandons that effort entirely.
The majority concludes that “the MRT
. . . has the same essential features as subpart F.” Ante , at 21. But, unlike the rest of subpart F, the MRT has
no connection at all to any “recognition event” or “constructive
receipt of income,” and it offers no “rational basis for Congress
to attribute income to a taxpayer.” S. McElroy, The
Mandatory Repatriation Tax Is Unconstitutional, 36 Yale J. Reg.
Bull. 69, 80–81 (2018). The MRT turns solely on the ownership of
stock on a certain date. That is a significant difference between
the MRT and the rest of subpart F, and one with constitutional
implications.
The fact that the MRT has novel features does
not mean that it is unconstitutional. But, the MRT is undeniably
novel when compared to older income taxes, and many of those
differences are constitutionally relevant. Because the MRT is
imposed merely based on ownership of shares in a corporation, it
does not operate as a tax on income.
C
The majority is not ashamed to lay bare the
consequentialist heart of its opinion. Because it wrongly concludes
that the Moores’ constitutional argument would invalidate not only
the MRT but also other longstanding taxes, the majority frets that
the Moores would “deprive the U. S. Government and the
American people of trillions in lost tax revenue” and “require
Congress to either drastically cut critical national programs or
significantly increase [other] taxes.” Ante , at 21. “The
Constitution does not require that fiscal calamity,” the majority
proclaims. Ibid . I agree. But, if Congress invites calamity
by building the tax base on constitutional quicksand, “[t]he
judicial Power” afforded to this Court does not include the power
to fashion an emergency escape. Art. III, §1, cl. 1.
Even as the majority admits to reasoning from
fiscal consequences, it apparently believes that a generous
application of dicta will guard against unconstitutional taxes in
the future. The majority’s analysis begins with a list of
non-existent taxes that the Court does not today bless, including a
wealth tax. Ante, at 8, n. 2. And, it concludes by
offering a narrow interpretation of its own holding, hinting at
limiting doctrines, prejudging future taxes, cataloguing the
Government’s concessions, and reserving other questions “for
another day.” Ante , at 22–24. Sensing that upholding the MRT
cedes additional ground to Congress, the majority arms itself with
dicta to tell Congress “no” in the future. But, if the Court is not
willing to uphold limitations on the taxing power in expensive
cases, cheap dicta will make no difference.
III
The Court today upholds the MRT, but not
because it endorses the Ninth Circuit’s erroneous view that
“realization of income is not a constitutional requirement.” 36
F. 4th, at 936. The majority acknowledges that the Sixteenth
Amendment draws a distinction between income and its source. Ante , at 7. And, it does not dispute that realization is
what distinguishes income from property. Ante , at 8. Those
premises are sufficient to establish that realization is a
constitutional requirement. Sixteenth Amendment “income” is only
realized income. We should not have hesitated to say so in this
case. I respectfully dissent. Notes 1 The General Welfare
Clause—quoted alongside the rest of the Taxing Clause above—is also
an important “qualification on the substantive taxing power.” Health and Hospital Corporation of Marion Cty. v. Talevski , 599 U.S. 166, 206 (2023) (Thomas, J., dissenting).
But, because this case does not implicate that limitation, I do not
further explore the General Welfare Clause. 2 Those “Numbers,” were
originally “determined by adding to the whole Number of free
Persons . . . three fifths of all other Persons.” Art. I,
§2, cl. 3; but see Amdt. 14, §2. 3 For the sake of
completeness, three remaining taxing provisions in the Constitution
of 1789 bear mentioning. First, “a Tax or duty may be imposed” on
the “Importation of such Persons as any of the States now existing
shall think proper to admit”— i.e. , upon the foreign slave
trade—“not exceeding ten dollars for each Person.” Art. I, §9,
cl. 1. Second, “[n]o Tax or Duty shall be laid on Articles
exported from any State.” Cl. 5. And third, “[n]o State shall,
without the Consent of the Congress, lay any Imposts or Duties on
Imports or Exports” (with limited exceptions). §10, cl. 2.
Together, these provisions define the limits of state and federal
taxing power with respect to foreign and interstate commerce. I
mention them below only in passing. But, like the division between
direct and indirect taxes, these provisions reflect the delicate
balance that the Constitution struck regarding the scope of the
federal taxing power. 4 After the ratification of
the Articles of Confederation in March 1781, the Continental
Congress became the Confederation Congress. See 1 Documentary
History 136. 5 Several state ratifying
conventions proposed amendments to strengthen the protection
provided by the Direct Tax Clause. For example, the Massachusetts
ratifying convention proposed that the Constitution be modified to
allow direct taxes only “when the moneys arising from the impost
and excise are insufficient for the public exigencies,” and even
then only after Congress first attempted to obtain such funds
through requisitions. 1 Elliot’s Debates 322–323. The ratifying
conventions of South Carolina, New Hampshire, New York, and Rhode
Island concurred in the proposed amendment. Id. , at 325,
326, 329, 336. Although those proposals never became part of the
Constitution, they demonstrate the importance that many ratifying
States placed upon limitations to Congress’s power to lay direct
taxes. 6 James Madison, for
example, despaired about the unconstitutionality of the tax in a
letter to Thomas Jefferson. See 15 Papers of James Madison 327 (T.
Mason, R. Rutland, & J. Sisson eds. 1985) (“And the tax on
carriages succeeded in spite of the Constitution
. . . . By breaking down the barriers of the
constitution . . . wealth may find a precarious defence
in the shield of justice”). 7 In the case before us,
the Government relies heavily on another case involving the Civil
War income tax, Collector v. Hubbard , 12 Wall. 1
(1871). According to the Government, Hubbard “upheld
[Congress’s] power to” impose “taxes on undistributed corporate
earnings” as “income taxes,” a result that subsequent decisions
“temporarily undermined” until “the Sixteenth Amendment
. . . reinstat[ed]” it. Brief for United States 9. But, Hubbard is of virtually no relevance to the Sixteenth
Amendment. Contrary to the Government’s assertions, the taxpayer in Hubbard made a statutory argument about the meaning of the
word “entitled,” not any argument about the scope of Congress’s
power. See Brief for Respondent in Collector v. Hubbard , O. T. 1870, No. 122, p. 4. Nor did Hubbard uphold the tax as an income tax. Instead, it
interpreted the statute as a tax on a shareholder’s property
rights in undistributed profits. 12 Wall., at 18. Because the
taxpayer did not bring a constitutional challenge based on the
Direct Tax Clause, the Court had no occasion to consider the
potential implications of treating the tax as a property
tax. 8 In fact, that possibility
was suggested on the Senate floor as soon as the proposed amendment
was read. 44 Cong. Rec. 3377 (“[I]f the Senator from Nebraska will
change his amendment to the Constitution so as to strike out” all
references to direct taxes, “he will accomplish all that his
amendment proposes to accomplish and not make a constitutional
amendment for the enacting of a single act of legislation”). But,
Senator Brown responded that his “purpose [was] to confine it to
income taxes alone.” Ibid . SUPREME COURT OF THE UNITED STATES
CHARLES G. MOORE, et ux. v. UNITED
STATES
on petition for writ of certiorari to the
united states court of appeals for the ninth circuit
No. 22–800. Decided September 8, 2023
The motion of petitioners to dispense with
printing the joint appendix is granted.
Statement of Justice Alito.
In a letter to The Chief Justice dated August
3, 2023, Senator Richard Durbin, the Chair of the Senate Judiciary
Committee, “urge[d]” The Chief Justice “to take appropriate steps
to ensure” that I recuse in this case.[ 1 ] Recusal is a personal decision for each Justice, and
when there is no sound reason for a Justice to recuse, the Justice
has a duty to sit.[ 2 ] Because
this case is scheduled to be heard soon, and because of the
attention my planned participation in this case has already
received, I respond to these concerns now.
There is no valid reason for my recusal in this
case. Senator Durbin’s letter expressed the view that recusal is
necessary because I participated in two interviews that resulted in
two articles about my work that appeared in the Wall Street
Journal. The interviews were jointly conducted, and the resulting
articles were jointly written, by James Taranto and David B.
Rivkin, Jr. Mr. Taranto, a prominent journalist, presumably either
wrote or approved everything that appeared in the articles under
his byline, and Senator Durbin’s letter makes no objection relating
to his participation in this project. Senator Durbin argues,
however, that Mr. Rivkin’s participation requires me to recuse
because Mr. Rivkin, who is both a much-published
opinion-journalist[ 3 ] and a
practicing attorney, is one of the attorneys in this case.
This argument is unsound. When Mr. Rivkin
participated in the interviews and co-authored the articles, he did
so as a journalist, not an advocate. The case in which he is
involved was never mentioned; nor did we discuss any issue in that
case either directly or indirectly. His involvement in the case was
disclosed in the second article, and therefore readers could take
that into account.
There was nothing out of the ordinary about the
interviews in question. Over the years, many Justices have
participated in interviews with representatives of media entities
that have frequently been parties in cases before the Court,
including NPR,[ 4 ] the New York
Times,[ 5 ] CBS,[ 6 ] Fox News,[ 7 ] National Review,[ 8 ]
and ABC.[ 9 ] Similarly, many of
my colleagues have been interviewed by attorneys who have also
practiced in this Court,[ 10 ]
and some have co-authored books with such attorneys.[ 11 ] Those interviews did not result in or
require recusal.
Senator Durbin’s request for my recusal is
presumably based on the theory that my vote in Moore will be
affected in some way by the content of the articles that resulted
from the interviews, but that theory fundamentally misunderstands
the circumstances under which Supreme Court Justices must work. We
have no control over the attorneys whom parties select to represent
them, and as a result, we are often presented with cases in which
one of the attorneys has spoken favorably or unfavorably about our
work or character. Similarly, we regularly receive briefs filed by
or on behalf of Members of Congress who have either supported or
opposed our confirmations, or who have made either favorable or
unfavorable comments about us or our work.[ 12 ] We participate in cases in which one or more
of the attorneys is a former law clerk, a former colleague, or an
individual with whom we have long been acquainted. If we recused in
such cases, we would regularly have less than a full bench, and the
Court’s work would be substantially disrupted and distorted.
In all the instances mentioned above, we are
required to put favorable or unfavorable comments and any personal
connections with an attorney out of our minds and judge the cases
based solely on the law and the facts. And that is what we do.
For these reasons, there is no sound reason for
my recusal in this case, and in accordance with the duty to sit, I
decline to recuse. Notes 1 Letter from R. Durbin to
J. Roberts (Aug. 3, 2023). 2 See attachment to letter
from The Chief Justice to R. Durbin (Apr. 25, 2023). 3 Mr. Rivkin has published
hundreds of articles, op-eds, and book reviews on a wide variety of
subjects in newspapers and magazines, including the Wall Street
Journal, the Washington Post, the New York Times, USA Today, and
the Los Angeles Times. 4 Justices Breyer and
Sotomayor have interviewed with NPR and did not recuse from a case
in which NPR was respondent. See Yeager v. National Pub.
Radio , No. 19–6442; A. Chang, Justice Stephen Breyer on What
the Court Does Behind Closed Doors, and Hamilton, NPR (Dec. 13,
2015); N. Totenberg, A Justice Deliberates: Sotomayor on Love,
Health and Family, NPR (Jan. 12, 2013). 5 Justice Sotomayor has
interviewed with a journalist for the New York Times and did not
recuse in a case in which the Times was a party. See Brimelow v. The New York Times Co. , No. 21–1030;
Justice S. Sotomayor & L. Greenhouse, A Conversation with
Justice Sotomayor, 123 Yale L. J. Forum 375
(2014). 6 Justices Breyer and
Sotomayor interviewed with CBS News and did not recuse in cases in
which CBS News was a party. See Personal Audio, LLC v. CBS Corp. , No. 20–260; Vernon v. CBS Television
Studios , No. 19–5161; Den Hollander v. CBS News
Inc. , No. 17–1452; Moline v. CBS News Inc. , No.
14–9173; CBS News, Justice Sotomayor Prefers “Sonia from the Bronx”
(Jan. 29, 2013); CBS News, Q&A: Justice Stephen Breyer (Sept.
13, 2015). 7 Justice Gorsuch
interviewed with Fox News and did not recuse in a case in which Fox
News was a party. See Bralich v. Fox News Network,
LLC , No. 21–7528; Fox News, Justice Neil Gorsuch in “Fox &
Friends” Interview: Pay Attention to “Separation of Powers” (Dec.
17, 2019). 8 Justice Gorsuch has
interviewed with National Review and did not recuse in a case in
which National Review was petitioner. See National Review,
Inc. v. Mann , No. 18–1451; C. Cooke, A Conversation with
Justice Neil Gorsuch, Nat. Rev. (Oct. 10, 2019). 9 Chief Justice Roberts
interviewed with ABC and did not recuse in a case in which ABC was
petitioner. See American Broad. Cos., Inc. v. Aereo,
Inc. , No. 13–461; ABC News, Interview with Chief Justice
Roberts (Nov. 13, 2006). 10 For
instance, Bryan Garner has interviewed several Justices, and he
argued a case three Terms ago. See LawProse with Bryan A. Garner,
YouTube, https://www.youtube.com/@lawprosewithbryana.garner6732; T.
Mauro, How Grammar Guru Bryan Garner Made His Way to the Supreme
Court, Nat. L. J. (Dec. 11, 2020); Facebook, Inc. v. Duguid , No. 19–511. 11 See , e.g. , R. Ginsburg &
A. Tyler, Justice, Justice Thou Shalt Pursue: A Life’s Work
Fighting for a More Perfect Union (2021); Brief for Federal Courts
Scholars as Amici Curiae in McDonough v. Smith , O. T. 2018, No. 18–485; N. Gorsuch, A Republic,
If You Can Keep It (2019) (with J. Nitze & D. Feder); Brief for
The Rutherford Institute as Amicus Curiae in Sorenson v. Massachusetts , O. T. 2020, No. 20–1747 (signed by D.
Feder). 12 See , e.g. , Brief for Appellees
in FEC v. Ted Cruz for Senate , O. T. 2021, No. 21–12;
Brief on Jurisdiction for Respondent The Bipartisan Legal Advisory
Group of the U. S. House of Representatives in United
States v. Windsor , O. T. 2012, No. 12–307; Brief for
Current and Former Members of Congress as Amici Curiae in CFPB v. Community Fin. Servs. Assn. of Am. ,
O. T. 2022, No. 22–448; Brief for Current Members of the
United States Congress as Amici Curiae in Mountain Valley
Pipeline, LLC v. The Wilderness Soc. , O. T. 2023,
No. 23A35; Brief for Members of the United States Senate
et al. as Amici Curiae in Groff v. DeJoy ,
O. T. 2022, No. 22–174; Brief for 228 Members of Congress as Amici Curiae and Brief for 236 Members of Congress as Amici Curiae in Dobbs v. Jackson Women’s Health
Org ., O. T. 2019, No. 19–1392. | The Supreme Court upheld the constitutionality of the 2017 Mandatory Repatriation Tax, which attributes and taxes the income of American-controlled foreign corporations to their American shareholders. This is consistent with long-standing tax practices for pass-through entities like S corporations and partnerships, where income is attributed to and taxed at the owner level, rather than at the entity level. |
Criminal Trials & Prosecutions | Bruton v. U.S. | https://supreme.justia.com/cases/federal/us/391/123/ | U.S. Supreme Court Bruton v. United States, 391
U.S. 123 (1968) Bruton v. United
States No. 705 Argued March 11, 1968 Decided May 20, 1968 391
U.S. 123 CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE EIGHTH
CIRCUIT Syllabus A joint trial of petitioner and one Evans resulted in the
convictions of both for armed postal robbery. Evans did not take
the stand, but a postal inspector testified that Evans confessed
orally that he and petitioner committed the robbery. The trial
judge instructed the jury that, although Evans' confession was
competent evidence against him it was inadmissible hearsay against
petitioner and had to be disregarded in determining petitioner's
guilt or innocence. Evans and petitioner both appealed to the Court
of Appeals. That court set aside Evans' conviction on the ground
that the oral confession should not have been received against him,
but affirmed petitioner's conviction in view of the trial judge's
instructions, relying on Delli Paoli v. United States, 352 U. S. 232 . Held: Because of the substantial risk that the jury,
despite instructions to the contrary, looked to the incriminating
extrajudicial statements in determining petitioner's guilt,
admission of Evans' confession in the joint trial violated
petitioner's right of cross-examination secured by the
Confrontation Clause of the Sixth Amendment. Delli Paoli v.
United States, supra, overruled. Pp. 391 U. S.
126 -137.
375 F.2d 355, reversed.
MR. JUSTICE BRENNAN delivered the opinion of the Court.
This case presents the question, last considered in Delli
Paoli v. United States, 352 U. S. 232 ,
whether the conviction of a defendant at a joint trial should be
set aside Page 391 U. S. 124 although the jury was instructed that a codefendant's confession
inculpating the defendant had to be disregarded in determining his
guilt or innocence.
A joint trial of petitioner and one Evans in the District Court
for the Eastern District of Missouri resulted in the conviction of
both by a jury on a federal charge of armed postal robbery, 18
U.S.C. § 2114. A postal inspector testified that Evans orally
confessed to him that Evans and petitioner committed the armed
robbery. The postal inspector obtained the oral confession, and
another in which Evans admitted he had an accomplice whom he would
not name, in the course of two interrogations of Evans at the city
jail in St. Louis, Missouri, where Evans was held in custody on
state criminal charges. Both petitioner and Evans appealed their
convictions to the Court of Appeals for the Eighth Circuit. That
court set aside Evans' conviction on the ground that his oral
confessions to the postal inspector should not have been received
in evidence against him. 375 F.2d 355, 361. [ Footnote 1 ] However, the court, relying upon Delli Page 391 U. S. 125 Paoli, affirmed petitioner's conviction because the
trial judge instructed the jury that, although Evans' confession
was competent evidence against Evans, it was inadmissible hearsay
against petitioner, and therefore had to be disregarded in
determining petitioner's guilt or innocence. 375 F.2d at 361-363.
[ Footnote 2 ] We granted
certiorari to reconsider Delli Paoli. 389 U.S. 818. The
Solicitor General has since submitted a memorandum stating
that,
"in the light of the record in this particular case and in the
interests of justice, the judgment below should be reversed and the
cause remanded for a new trial."
The Solicitor General states that this disposition is urged in
part because
"[h]ere it has been determined that the confession was wrongly
admitted against [Evans] and his conviction has been reversed,
leading to a new trial at which he was Page 391 U. S. 126 acquitted. To argue, in this situation, that [petitioner's]
conviction should nevertheless stand may be to place too great a
strain upon the [ Delli Paoli ] rule at least, where, as
here, the other evidence against [petitioner] is not strong."
We have concluded, however, that Delli Paoli should be
overruled. We hold that, because of the substantial risk that the
jury, despite instructions to the contrary, looked to the
incriminating extrajudicial statements in determining petitioner's
guilt, admission of Evans' confession in this joint trial violated
petitioner's right of cross-examination secured by the
Confrontation Clause of the Sixth Amendment. We therefore overrule Delli Paoli and reverse.
The basic premise of Delli Paoli was that it is
"reasonably possible for the jury to follow" sufficiently clear
instructions to disregard the confessor's extrajudicial statement
that his codefendant participated with him in committing the crime.
352 U.S. at 352 U. S. 239 .
If it were true that the jury disregarded the reference to the
codefendant, no question would arise under the Confrontation
Clause, because by hypothesis, the case is treated as if the
confessor made no statement inculpating the nonconfessor. But since Delli Paoli was decided, this Court has effectively
repudiated its basic premise. Before discussing this, we pause to
observe that, in Pointer v. Texas, 380 U.
S. 400 , we confirmed "that the right of
cross-examination is included in the right of an accused in a
criminal case to confront the witnesses against him" secured by the
Sixth Amendment, id. at 380 U. S.
404 ;
"a major reason underlying the constitutional confrontation rule
is to give a defendant charged with crime an opportunity to
cross-examine the witnesses against him." Id. at 380 U. S.
406 -407.
We applied Pointer in Douglas v. Alabama, 380 U.
S. 415 , in circumstances analogous to those in the
present case. There two persons, Loyd and Douglas, accused Page 391 U. S. 127 of assault with intent to murder, were tried separately. Loyd
was tried first and found guilty. At Douglas' trial the State
called Loyd as a witness against him. An appeal was pending from
Loyd's conviction and Loyd invoked the privilege against
self-incrimination and refused to answer any questions. The
prosecution was permitted to treat Loyd as a hostile witness. Under
the guise of refreshing Loyd's recollection, the prosecutor
questioned Loyd by asking him to confirm or deny statements read by
the prosecutor from a document purported to be Loyd's confession.
These statements inculpated Douglas in the crime. We held that
Douglas' inability to cross-examine Loyd denied Douglas "the right
of cross-examination secured by the Confrontation Clause." 380 U.S.
at 380 U. S. 419 .
We noted that
"effective confrontation of Loyd was possible only if Loyd
affirmed the statement as his. However, Loyd did not do so, but
relied on his privilege to refuse to answer." Id. at 380 U. S. 420 .
The risk of prejudice in petitioner's case was even more serious
than in Douglas. In Douglas we said,
"Although the Solicitor's reading of Loyd's alleged statement,
and Loyd's refusals to answer, were not technically testimony, the
Solicitor's reading may well have been the equivalent in the jury's
mind of testimony that Loyd, in fact, made the statement, and
Loyd's reliance upon the privilege created a situation in which the
jury might improperly infer both that the statement had been made
and that it was true." Id. at 380 U. S. 419 .
Here Evans' oral confessions were, in fact, testified to, and were
therefore actually in evidence. That testimony was legitimate
evidence against Evans and to that extent was properly before the
jury during its deliberations. Even greater then, was the
likelihood that the jury would believe Evans made the statements
and that they were true -- not just the self-incriminating portions
but those implicating petitioner as well. Plainly, the introduction
of Page 391 U. S. 128 Evans' confession added substantial, perhaps even critical,
weight to the Government's case in a form not subject to
cross-examination, since Evans did not take the stand. Petitioner
thus was denied his constitutional right of confrontation. Delli Paoli assumed that this encroachment on the right
to confrontation could be avoided by the instruction to the jury to
disregard the inadmissible hearsay evidence. [ Footnote 3 ] But, as we have said, that assumption
has since been effectively repudiated. True, the repudiation was
not in the context of the admission of a confession inculpating a
codefendant but in the context of a New York rule which submitted
to the jury the question of the voluntariness of the confession
itself. Jackson v. Denno, 378 U.
S. 368 . Nonetheless the message of Jackson for Delli Paoli was clear. We there held hat a defendant is
constitutionally entitled at least to have the trial judge first
determine whether a confession was made voluntarily Page 391 U. S. 129 before submitting it to the jury for an assessment of its
credibility. More specifically, we expressly rejected the
proposition that a jury, when determining the confessor's guilt,
could be relied on to ignore his confession of guilt should it find
the confession involuntary. Id. at 378 U. S.
388 -389. Significantly, we supported that conclusion in
part by reliance upon the dissenting opinion of Mr. Justice
Frankfurter for the four Justices who dissented in Delli
Paoli. Id. at 378 U. S. 388 ,
n. 15.
That dissent challenged the basic premise of Delli
Paoli that a properly instructed jury would ignore the
confessor's inculpation of the nonconfessor in determining the
latter's guilt.
"The fact of the matter is that, too often, such admonition
against misuse is intrinsically ineffective, in that the effect of
such a nonadmissible declaration cannot be wiped from the brains of
the jurors. The admonition therefore becomes a futile collocation
of words, and fails of its purpose as a legal protection to
defendants against whom such a declaration should not tell."
352 U.S. at 352 U. S. 247 .
The dissent went on to say, as quoted in the cited note in Jackson, "The government should not have the windfall of having the jury
be influenced by evidence against a defendant which, as a matter of
law, they should not consider, but which they cannot put out of
their minds." Id. at 352 U. S. 248 .
To the same effect, and also cited in the Jackson note, is
the statement of Mr. Justice Jackson in his concurring opinion in Krulewitch v. United States, 336 U.
S. 440 , 336 U. S.
453 :
"The naive assumption that prejudicial effects can be overcome
by instructions to the jury . . . all practicing lawyers know to be
unmitigated fiction. . . . [ Footnote 4 ] " Page 391 U. S. 130 The significance of Jackson for Dell Paoli was
suggested by Chief Justice Traynor in People v.
Arand, 63 Cal. 2d
518 , 528-529, 407 P.2d 265 271-27:
"Although Jackson was directly concerned with obviating
any risk that a jury might rely on an unconstitutionally obtained
confession in determining the defendant's guilt, its logic extends
to obviating the risks that the jury may rely on any inadmissible
statements. If it is a denial of due process to rely on a jury's
presumed ability to disregard an involuntary confession, it may
also be a denial of due process to rely on a jury's presumed
ability to disregard a codefendant's confession implicating another
defendant when it is determining that defendant's guilt or
innocence."
"Indeed, the latter task may be an even more difficult one for
the jury to perform than the former. Under the New York procedure,
which Jackson held violated due process, the jury was only
required to Page 391 U. S. 131 disregard a confession it found to be involuntary. If it made
such a finding, then the confession was presumably out of the case.
In joint trials, however, when the admissible confession of one
defendant inculpates another defendant, the confession is never
deleted from the case and the jury is expected to perform the
overwhelming task of considering it in determining the guilt or
innocence of the declarant and then of ignoring it in determining
the guilt or innocence of any codefendants of the declarant. A jury
cannot 'segregate evidence into separate intellectual boxes.' . . .
It cannot determine that a confession is true insofar as it admits
that A has committed criminal acts with B and at the same time
effectively ignore the inevitable conclusion that B has committed
those same criminal acts with A. [ Footnote 5 ]"
In addition to Jackson, our action in 1966 in amending
Rule 14 of the Federal Rules of Criminal Procedure also evidences
our repudiation of Delli Paoli's basic premise. Rule 14
authorizes a severance where it appears that a defendant might be
prejudiced by a joint trial. [ Footnote 6 ] The Rule was amended in 1966 to provide
expressly that,
"[i]n ruling on a motion by a defendant for severance the Page 391 U. S. 132 court may order the attorney for the government to deliver to
the court for inspection in camera any statements or
confessions made by the defendants which the government intends to
introduce in evidence at the trial."
The Advisory Committee on Rules said in explanation of the
amendment:
"A defendant may be prejudiced by the admission in evidence
against a codefendant of a statement or confession made by that
codefendant. This prejudice cannot be dispelled by
cross-examination if the codefendant does not take the stand.
Limiting instructions to the jury may not, in fact, erase the
prejudice. . . ."
"The purpose of the amendment is to provide a procedure whereby
the issue of possible prejudice can be resolved on the motion for
severance. . . . [ Footnote
7 ]"
Those who have defended reliance on the limiting instruction in
this area have cited several reasons in support. Judge Learned
Hand, a particularly severe critic of the proposition that juries
could be counted on to disregard inadmissible hearsay, [ Footnote 8 ] wrote the opinion for
the Page 391 U. S. 133 Second Circuit which affirmed Delli Paoli's conviction. 229 F.2d
319. In Judge Hand's view, the limiting instruction, although not
really capable of preventing the jury from considering the
prejudicial evidence, does as a matter of form provide a way around
the exclusionary rules of evidence that is defensible because it
"probably furthers, rather than impedes, the search for truth. . .
." Nash v. United States, 54 F.2d 1006, 1007. Insofar as
this implies the prosecution ought not to be denied the benefit of
the confession to prove the confessor's guilt, [ Footnote 9 ] however, it overlooks alternative ways
of achieving that benefit without at the same time infringing the
nonconfessor's Page 391 U. S. 134 right of confrontation. [ Footnote 10 ] Where viable alternatives do exist, it is
deceptive to rely on the pursuit of truth to defend a clearly
harmful practice.
Another reason cited in defense of Delli Paoli is the
justification for joint trials in general, the argument being that
the benefits of joint proceedings should not have to be sacrificed
by requiring separate trials in order to use the confession against
the declarant. Joint trials do conserve state funds, diminish
inconvenience to witnesses and public authorities, and avoid delays
in bringing those accused of crime to trial. But the answer to this
argument was cogently stated by Judge Lehman of the New York Court
of Appeals, dissenting in People v. Fisher, 249 N.Y. 419,
432, 164 N.E. 336, 341:
"We still adhere to the rule that an accused is entitled to
confrontation of the witnesses against him and the right to
cross-examine them. . . . We destroy the age-old rule which in the
past has been regarded as a fundamental principle of our
jurisprudence Page 391 U. S. 135 by a legalistic formula, required of the judge, that the jury
may not consider any admissions against any party who did not join
in them. We secure greater speed, economy and convenience in the
administration of the law at the price of fundamental principles of
constitutional liberty. That price is too high."
Finally, the reason advanced by the majority in Delli
Paoli was to tie the result to maintenance of the jury
system.
"Unless we proceed on the basis that the jury will follow the
court's instructions where those instructions are clear and the
circumstances are such that the jury can reasonably be expected to
follow them, the jury system makes little sense."
352 U.S. at 352 U. S. 242 .
We agree that there are many circumstances in which this reliance
is justified. Not every admission of inadmissible hearsay or other
evidence can be considered to be reversible error unavoidable
through limiting instructions; instances occur in almost every
trial where inadmissible evidence creeps in, usually inadvertently.
"A defendant is entitled to a fair trial but not a perfect one." Lutwak v. United States, 344 U. S. 604 , 344 U. S. 619 ; see Hopt v. Utah, 120 U. S. 430 , 120 U. S. 438 ; cf. Fed.Rule Crim.Proc. 52(a). It is not unreasonable to
conclude that, in many such cases the jury can and will follow the
trial judge's instructions to disregard such information.
Nevertheless, as was recognized in Jackson v. Lenno,
supra, there are some contexts in which the risk that the jury
will not, or cannot, follow instructions is so great, and the
consequences of failure so vital to the defendant, that the
practical and human limitations of the jury system cannot be
ignored. Compare Hopt v. Utah, supra; Throckmorton v.
Holt, 180 U. S. 552 , 180 U. S. 567 ; Mora v. United States, 190 F.2d 749; Holt v. United
States, 94 F.2d 90. Such a context is presented here, where
the powerfully incriminating extrajudicial statements of a
codefendant, Page 391 U. S. 136 who stands accused side-by-side with the defendant, are
deliberately spread before the jury in a joint trial. Not only are
the incriminations devastating to the defendant, but their
credibility is inevitably suspect, a fact recognized when
accomplices do take the stand and the jury is instructed to weigh
their testimony carefully given the recognized motivation to shift
blame onto others. [ Footnote
11 ] The unreliability of such evidence is intolerably
compounded when the alleged accomplice, as here, does not testify
and cannot be tested by cross-examination. It was against such
threats to a fair trial that the Confrontation Clause was directed.
[ Footnote 12 ] Pointer v.
Texas, supra. We, of course, acknowledge the impossibility of
determining whether, in fact, the jury did or did not ignore Evans'
statement inculpating petitioner in determining petitioner's guilt.
But that was also true in the analogous situation in Jackson v.
Denno, and was not regarded as militating against striking
down the New York procedure Page 391 U. S. 137 there involved. It was enough that that procedure posed
"substantial threats to a defendant's constitutional rights to
have an involuntary confession entirely disregarded and to have the
coercion issue fairly and reliably determined. These hazards we
cannot ignore."
378 U.S. at 378 U. S. 389 .
Here, the introduction of Evans' confession posed a substantial
threat to petitioner's right to confront the witnesses against him,
and this is a hazard we cannot ignore. Despite the concededly clear
instructions to the jury to disregard Evans' inadmissible hearsay
evidence inculpating petitioner, in the context of a joint trial we
cannot accept limiting instructions as an adequate substitute for
petitioner's constitutional right of cross-examination. The effect
is the same as if there had been no instruction at all. See
Anderson v. United States, 318 U. S. 350 , 318 U. S.
356 -357; cf. Burgett v. Texas, 389 U.
S. 109 , 389 U. S.
115 . Reversed. MR. JUSTICE BLACK concurs in the result for the reasons stated
in the dissent in Delli Paoli v. United States, 352 U. S. 232 , 352 U. S.
46 .
MR. JUSTICE MARSHALL took no part in the consideration or
decision of this case.
[ Footnote 1 ]
The trial began June 20, 1966, one week after the decision in Miranda v. Arizona, 384 U. S. 436 . T
he Court of Appeals held, 375 F.2d at 357, that Miranda and its companion cases were therefore applicable and controlling
on the question of the admissibility in evidence of the postal
inspector's testimony as to Evans' admissions. Johnson v. New
Jersey, 384 U. S. 719 . On
April 8, 1966, St. Louis police officers, without giving Evans
preliminary warnings of any kind and in the absence of counsel,
obtained an oral confession during an interrogation at the city
jail. The police informed the postal inspector, who interrogated
Evans at the jail on April 11 and May 4, 1966; he obtained the oral
confession expressly implicating petitioner on the latter date. On
the merits, the Court of Appeals held, 375 F.2d at 361, that Evans'
admissions to the postal inspector "were tainted and infected by
the poison of the prior, concededly unconstitutional confession
obtained by the local officer," and were therefore inadmissible
under Westover v. United States, decided with Miranda, 384 U.S. at 384 U. S.
494 -497. On the retrial, Evans was acquitted.
[ Footnote 2 ]
At the close of the Government's direct case, the trial judge
cautioned the jury that Evans' admission implicating
petitioner,
"if used, can only be used against the defendant Evans. It is
hearsay insofar as the defendant George William Bruton is
concerned, and you are not to consider it in any respect to the
defendant Bruton, because, insofar as he is concerned, it is
hearsay."
The instructions to the jury included the following:
"A confession made outside of court by one defendant may not be
considered as evidence against the other defendant, who was not
present and in no way a party to the confession. Therefore, if you
find that a confession was, in fact, voluntarily and intentionally
made by the defendant Evans, you should consider it as evidence in
the case against Evans, but you must not consider it, and should
disregard it, in considering the evidence in the case against the
defendant Bruton."
" * * * *" "It is your duty to give separate, personal consideration to the
cause of each individual defendant. When you do so, you should
analyze what the evidence shows with respect to that individual,
leaving out of consideration entirely any evidence admitted solely
against some other defendant. Each defendant is entitled to have
his case determined from his own acts and statements and the other
evidence in the case which may be applicable to him."
[ Footnote 3 ]
We emphasize that the hearsay statement inculpating petitioner
was clearly inadmissible against him under traditional rules of
evidence, see Krulewitch v. United States, 336 U.
S. 440 ; Fiswick v. United States, 329 U.
S. 211 , the problem arising only because the statement
was (but for the violation of Westover, supra, n 1) admissible against the declarant
Evans. See C. McCormick, Evidence § 239 (1954); 4 J.
Wigmore, Evidence §§ 1048-1049 (3d ed.1940); Morgan, Admissions as
an Exception to the Hearsay Rule, 30 Yale L.J. 355 (1921). See
generally Levie, Hearsay and Conspiracy, 52 Mich.L.Rev. 1159
(1954); Comment, Post-Conspiracy Admissions in Joint Prosecutions,
24 U.Chi.L.Rev. 710 (1957); Note, Criminal Conspiracy, 72
Harv.L.Rev. 920, 984-990 (1959). There is not before us, therefore,
any recognized exception to the hearsay rule insofar as petitioner
is concerned and we intimate no view whatever that such exceptions
necessarily raise questions under the Confrontation Clause. See
Pointer v. Texas, 380 U. S. 400 ; Barber v. Page, 390 U. S. 719 ; Mattox v. United States, 156 U. S. 237 . See generally McCormick, supra, § 224; 5 Wigmore, supra, §§ 1362-1365, 1397; Morgan, Hearsay Dangers and the
Application of the Hearsay Concept, 62 Harv.L.Rev. 177 (1948).
[ Footnote 4 ]
Several cases since Delli Paoli have refused to
consider an instruction as inevitably sufficient to avoid the
setting aside of convictions. See, e.g., United States ex rel.
Floyd v. Wilkins, 367 F.2d 990; United States v.
Bozza, 365 F.2d 206; Greenwell v. United States, 119
U.S.App.D.C. 43, 336 F.2d 962; Jones v. United States, 119
U.S.App.D.C. 284, 342 F.2d 863; Barton v. United States, 263 F.2d 894; United States ex rel. Hill v.
Deegan, 268 F.
Supp. 580 . In Bozza the Court of Appeals for the
Second Circuit stated:
"It is impossible realistically to suppose that, when the twelve
good men and women had Jones' confession in the privacy of the jury
room, not one yielded to the nigh irresistible temptation to fill
in the blanks with the keys Kuhle had provided and ask himself the
intelligent question to what extent Jones' statement supported
Kuhle's testimony, or that, if anyone did yield, his colleagues
effectively persuaded him to dismiss the answers from his
mind."
365 F.2d at 215.
State decisions which have rejected Delli Paoli include People v. Aranda, 63 Cal. 2d
518 , 407 P.2d 265; State v. Young, 46 N.J. 152, 215
A.2d 352. See also People v. Barbaro, 395 Ill. 264, 69
N.E.2d 692; State v. Rosen, 151 Ohio St. 339, 86 N.E.2d
24.
It has been suggested that the limiting instruction actually
compounds the jury's difficulty in disregarding the inadmissible
hearsay. See Broeder, The University of Chicago Jury
Project, 38 Neb.L.Rev. 744, 753-755 (1959).
[ Footnote 5 ] See Pointer v. Texas, supra, at 380 U. S.
405 :
"Indeed, we have expressly declared that to deprive an accused
of the right to cross-examine the witnesses against him is a denial
of the Fourteenth Amendment's guarantee of due process of law."
[ Footnote 6 ]
Joinder of defendants is governed by Rules 8(b) and 14 of the
Federal Rules of Criminal Procedure.
"The rules are designed to promote economy and efficiency and to
avoid a multiplicity of trials, where these objectives can be
achieved without substantial prejudice to the right of the
defendants to a fair trial." Dale v. United States, 231 F.2d 123, 125. An important
element of a fair trial is that a jury consider only relevant and
competent evidence bearing on the issue of guilt or innocence. See, e.g., Blumenthal v. United States, 332 U.
S. 539 , 332 U. S.
559 -560.
[ Footnote 7 ]
34 F.R.D. 419. See generally Note, Joint and Single
Trials Under Rules 8 and 14 of the Federal Rules of Criminal
Procedure, 74 Yale L.J. 553 (1965).
[ Footnote 8 ]
Judge Hand addressed the subject several times. The limiting
instruction, he said, is a "recommendation to the jury of a mental
gymnastic which is beyond, not only their powers, but anybody's
else," Nash v. United States, 54 F.2d 1006, 1007; "Nobody
can indeed fail to doubt whether the caution is effective, or
whether usually the practical result is not to let in hearsay," United States v. Gottfried, 165 F.2d 360, 367; "it is
indeed very hard to believe that a jury will, or for that matter
can, in practice observe the admonition," Delli Paoli v. United
States, 229 F.2d 319, 321. Judge Hand referred to the
instruction as a "placebo," medically defined as "a medicinal lie."
Judge Jerome Frank suggested that its legal equivalent
"is a kind of 'judicial lie': it undermines a moral relationship
between the courts, the jurors, and the public; like any other
judicial deception, it damages the decent judicial administration
of justice." United States v. Grunewald, 233 F.2d 556, 574. See
also 8 Wigmore, supra, n 3, § 2272, at 416. Compare E. Morgan, Some Problems of Proof Under the
Anglo-American System of Litigation 105 (1956), who suggests that
the use of limiting instructions fosters an inconsistent attitude
toward juries by
"treating them at times as a group of low-grade morons, and at
other times as men endowed with a superhuman ability to control
their emotions and intellects." See also Shepard v. United States, 290 U. S.
96 , 290 U. S. 104 ;
Meltzer, Involuntary Confessions: The Allocation of Responsibility
Between Judge and Jury, 21 U.Chi.L.Rev. 317, 326 (1954).
[ Footnote 9 ]
In this case, however, Evans' conviction was reversed on the
ground that his confessions were inadmissible in evidence even
against him, and, on his retrial, he was acquitted. In People
v. Aranda, supra, 63 Cal. 2d at 526, 407 P.2d at 270, it was
said:
"When, however, the confession implicating both defendants is
not admissible at all, there is no longer room for compromise. The
risk of prejudicing the nonconfessing defendant can no longer be
justified by the need for introducing the confession against the
one who made it. Accordingly, we have held that the erroneous
admission into evidence of a confession implicating both defendants
is not necessarily cured by an instruction that it is to be
considered only against the declarant." See also Jones v. United States and Greenwell v.
United States, both supra, n 4.
[ Footnote 10 ]
Some courts have required deletion of references to codefendants
where practicable. See, e.g., Oliver v. United States, 335
F.2d 724; People v. Vitagliano, 15 N.Y.2d 360, 206 N.E.2d
864; People v. La Belle, 18 N.Y.2d 405, 222 N.E.2d 727.
For criticisms suggesting that deletions (redaction) from the
confession are ineffective, see, e.g., Note, 72
Harv.L.Rev. 920, 990 (1959); Comment, 24 U.Chi.L.Rev. 710, 713
(1957); Note, 74 Yale L.J. 553, 564 (1965).
In this case, Evans' confessions were offered in evidence
through the oral testimony of the postal inspector. It has been
said:
"Where the confession is offered in evidence by means of oral
testimony, redaction is patently impractical. To expect a witness
to relate X's confession without including any of its references to
Y is to ignore human frailty. Again, it is unlikely that an
intentional or accidental slip by the witness could be remedied by
instructions to disregard."
Note, 3 Col.J. of Law & Soc.Prob. 80, 88 (1967).
Some courts have promulgated rules governing the use of the
confessions. See n 4, supra. See also rules suggested by Judge Frank,
dissenting in Delli Paoli v. United States, 229 F.2d 319,
324.
[ Footnote 11 ] See Crawford v. United States, 212 U.
S. 183 , 212 U. S. 24 ; Caminetti v. United States, 242 U.
S. 470 , 242 U. S. 495 ; Stoneking v. United States, 232 F.2d 385.
[ Footnote 12 ]
It is suggested that, because the evidence is so unreliable the
need for cross-examination is obviated. This would certainly seem
contrary to the acceptance of the rule of evidence which would
require exclusion of the confession as to Bruton as
"inadmissible hearsay, a presumptively unreliable out-of-court
statement of a nonparty who was not a witness subject to
cross-examination." Post at 391 U. S.
138 .
"The theory of the Hearsay rule is that the many possible
deficiencies, suppressions, sources of error and untrustworthiness,
which lie underneath the bare untested assertion of a witness, may
he best brought to light and exposed by the test of
Cross-examination."
5 Wigmore, Evidence § 1362, at 3. The reason for excluding this
evidence as an evidentiary matter also requires its exclusion as a
constitutional matter. Surely the suggestion is not that Pointer v. Texas, for example, be repudiated and that all
hearsay evidence be admissible so long as the jury is properly
instructed to weigh it in light of "all the dangers of inaccuracy
which characterize hearsay generally." Post at 391 U. S.
141 . MR. JUSTICE STEWART, concurring. I join the opinion and judgment of the Court. Although I did not
agree with the decision in Jackson v. Denno, 378 U.
S. 368 ( see id. at 378 U. S.
427 ), I accept its holding and share the Court's
conclusion that it compels the overruling of Delli Paoli v.
United States, 352 U. S. 232 .
Quite apart from Jackson v. Denno, however, I think it
clear that the underlying rationale of the Sixth Amendment's
Confrontation Clause precludes reliance upon cautionary
instructions when the highly damaging out-of-court Page 391 U. S. 138 statement of a codefendant, who is not subject to
cross-examination, is deliberately placed before the jury at a
joint trial. A basic premise of the Confrontation Clause, it seems
to me, is that certain kinds of hearsay ( see, e.g., Pointer v.
Texas, 380 U. S. 400 ; Douglas v. Alabama, 380 U. S. 415 ) are
at once so damaging, so suspect, and yet so difficult to discount,
that jurors cannot be trusted to give such evidence the minimal
weight it logically deserves, whatever instructions the trial judge
might give. See the Court's opinion, ante at 391 U. S. 136 ,
n. 12. It is for this very reason that an out-of-court accusation
is universally conceded to be constitutionally inadmissible against
the accused, rather than admissible for the little it may be worth.
Even if I did not consider Jackson v. Denno controlling,
therefore, I would still agree that Delli Paoli must be
overruled.
MR. JUSTICE WHITE, dissenting.
Whether or not Evans' confession was inadmissible against him,
nothing in that confession which was relevant and material to
Bruton's case was admissible against Bruton. As to him, it was
inadmissible hearsay, a presumptively unreliable out-of-court
statement of a nonparty who was not a witness subject to
cross-examination. Admitting Evans' confession against Bruton would
require a new trial unless the error was harmless.
The trial judge in this case had no different view. He admitted
Evans' confession only against Evans, not against Bruton, and
carefully instructed the jury to disregard it in determining
Bruton's guilt or innocence. * Page 391 U. S. 139 Contrary to its ruling just a decade ago in Delli Paoli v.
United States, 352 U. S. 232 (1957), the Court now holds this instruction insufficient, and
reverses Bruton's conviction. It would apparently also reverse
every other case where a court admits a codefendant's confession
implicating a defendant, regardless of cautionary instructions and
regardless of the circumstances. I dissent from this excessively
rigid rule. There is nothing in this record to suggest that the
jury did not follow the trial judge's instructions. There has been
no new learning since Delli Paoli indicating that juries
are less reliable than they were considered in that case to be.
There is nothing in the prior decisions of this Court which
supports this new constitutional rule.
The Court concedes that there are many instances in which
reliance on limiting instructions is justified --
"Not every admission of inadmissible hearsay or other evidence
can be considered to be reversible error unavoidable through
limiting instructions; instances occur in almost every trial where
inadmissible evidence creeps in, usually inadvertently." Ante at 391 U. S. 135 .
The Court asserts, however, that the hazards to the defendant of
permitting the jury to hear a codefendant's confession implicating
him are so severe that we must assume the jury's inability to heed
a limiting instruction. This was the holding of the Court with
respect to a confession of the defendant himself in Jackson v.
Denno, 378 U. S. 368 (1964). There are good reasons, however, for distinguishing the
codefendant's confession from that of the defendant himself, and
for trusting in the jury's ability to disregard the former when
instructed to do so.
First, the defendant's own confession is probably the most
probative and damaging evidence that can be admitted against him.
Though itself an out-of-court statement, it is admitted as reliable
evidence because it is an admission of guilt by the defendant, and
constitutes Page 391 U. S. 140 direct evidence of the facts to which it relates. Even the
testimony of an eyewitness may be less reliable than the
defendant's own confession. An observer may not correctly perceive,
understand, or remember the acts of another, but the admissions of
a defendant come from the actor himself, the most knowledgeable and
unimpeachable source of information about his past conduct.
Certainly, confessions have profound impact on the jury, so much so
that we may justifiably doubt its ability to put them out of mind
even if told to do so. This was the conclusion of the Court in Jackson, and I continue to believe that case to be sound
law.
Second, it must be remembered that a coerced confession is not
excluded because it is thought to be unreliable. Regardless of how
true it may be, it is excluded because specific provisions of the
Constitution demand it, whatever the consequences for the criminal
trial. In Jackson itself, it was stated that
"[i]t is now axiomatic that a defendant in a criminal case is
deprived of due process of law if his conviction is founded, in
whole or in part, upon an involuntary confession, without regard
for the truth or falsity of the confession. . . ."
378 U.S. at 378 U. S. 376 . See id. at 378 U. S.
385 -386. In giving prospective effect only to its rules
in Miranda v. Arizona, 384 U. S. 436 (1966), the Court specifically reaffirmed the principle that
coerced confessions are inadmissible regardless of their truth or
falsity, Johnson v. New Jersey, 384 U.
S. 719 , 384 U. S. 729 ,
n. 9 (1966). The Court acknowledged that the rules of Miranda apply to situations "in which the danger [of
unreliable statements] is not necessarily as great as when the
accused is subjected to overt and obvious coercion." Id. at 384 U. S. 730 .
And, in Tehan v. United States ex rel. Shott, 382 U.
S. 406 , 382 U. S. 416 (1966), holding the rule of Griffin v. California, 380 U. S. 609 (1965), not retroactive, the Court quite explicitly stated that
"the Fifth Amendment's privilege against self-incrimination is
not Page 391 U. S. 141 an adjunct to the ascertainment of truth. That privilege, like
the guarantees of the Fourth Amendment, stands as a protection of
quite different constitutional values. . . ."
The exclusion of probative evidence in order to serve other ends
is sound jurisprudence but, as the Court concluded in Jackson
v. Denno, 378 U.S. at 378 U. S. 382 , juries would have great difficulty in
understanding that policy, in putting the confession aside, and in
finding the confession involuntary if the consequence was that it
could not be used in considering a defendant's guilt or
innocence.
The situation in this case is very different. Here we deal with
a codefendant's confession which is admitted only against the
codefendant and with a firm instruction to the jury to disregard it
in determining the defendant's guilt or innocence. That confession
cannot compare with the defendant's own confession in evidentiary
value. As to the defendant, the confession of the codefendant is
wholly inadmissible. It is hearsay, subject to all the dangers of
inaccuracy which characterize hearsay generally. Furthermore, the
codefendant is no more than an eyewitness, the accuracy of whose
testimony about the defendant's conduct is open to more doubt than
would be the defendant's own account of his actions. More than
this, however, the statements of a codefendant have traditionally
been viewed with special suspicion. Crawford v. United
States, 212 U. S. 183 , 212 U. S. 204 (1909); Holmgren v. United States, 217 U.
S. 509 , 217 U. S.
523 -524 (1910). See also Caminetti v. United
States, 242 U. S. 470 , 242 U. S. 495 (1917); Mathes, Jury Instruction and Forms for Federal Criminal
Cases, 27 F.R.D. 39, 68-69 (1961). Due to his strong motivation to
implicate the defendant and to exonerate himself, a codefendant's
statements about what the defendant said or did are less credible
than ordinary hearsay evidence. Whereas the defendant's own
confession possesses greater reliability and evidentiary Page 391 U. S. 142 value than ordinary hearsay, the codefendant's confession
implicating the defendant is intrinsically much less reliable.
The defendant's own confession may not be used against him if
coerced, not because it is untrue, but to protect other
constitutional values. The jury may have great difficulty
understanding such a rule and following an instruction to disregard
the confession. In contrast, the codefendant's admissions cannot
enter into the determination of the defendant's guilt or innocence
because they are unreliable. This the jury can be told and can
understand. Just as the Court believes that juries can reasonably
be expected to disregard ordinary hearsay or other inadmissible
evidence when instructed to do so, I believe juries will disregard
the portions of a codefendant's confession implicating the
defendant when so instructed. Indeed, if we must pick and choose
between hearsay as to which limiting instructions will be deemed
effective and hearsay the admission of which cannot be cured by
instructions, codefendants' admissions belong in the former
category, rather than the latter, for they are not only hearsay,
but hearsay which is doubly suspect. If the Court is right in
believing that a jury can be counted on to ignore a wide range of
hearsay statements which it is told to ignore, it seems very odd to
me to question its ability to put aside the codefendant's hearsay
statements about what the defendant did.
It is a common experience of all men to be informed of "facts"
relevant to an issue requiring their judgment, and yet to disregard
those "facts" because of sufficient grounds for discrediting their
veracity or the reliability of their source. Responsible judgment
would be impossible but for the ability of men to focus their
attention wholly on reliable and credible evidence, and jurymen are
no less capable of exercising this capacity than other Page 391 U. S. 143 men. Because I have no doubt that serious-minded and responsible
men are able to shut their minds to unreliable information when
exercising their judgment, I reject the assumption of the majority
that giving instructions to a jury to disregard a codefendant's
confession is an empty gesture.
The rule which the Court announces today will severely limit the
circumstances in which defendants may be tried together for a crime
which they are both charged with committing. Unquestionably, joint
trials are more economical and minimize the burden on witnesses,
prosecutors, and courts. They also avoid delays in bringing those
accused of crime to trial. This much the Court concedes. It is also
worth saying that separate trials are apt to have varying
consequences for legally indistinguishable defendants. The
unfairness of this is confirmed by the common prosecutorial
experience of seeing codefendants who are tried separately
strenuously jockeying for position with regard to who should be the
first to be tried.
In view of the practical difficulties of separate trials and
their potential unfairness, I am disappointed that the Court has
not spelled out how the federal courts might conduct their business
consistent with today's opinion. I would suppose that it will be
necessary to exclude all extrajudicial confessions unless all
portions of them which implicate defendants other than the
declarant are effectively deleted. Effective deletion will probably
require not only omission of all direct and indirect inculpations
of codefendants, but also of any statement that could be employed
against those defendants once their identity is otherwise
established. Of course, the deletion must not be such that it will
distort the statements to the substantial prejudice of either the
declarant or the Government. If deletion is not feasible, then the
Government will have to choose either not to Page 391 U. S. 144 use the confession at all or to try the defendants separately.
To save time, money, and effort, the Government might best seek a
ruling at the earliest possible stage of the trial proceedings as
to whether the confession is admissible once offending portions are
deleted. The failure of the Government to adopt and follow proper
procedures for insuring that the inadmissible portions of
confessions are excluded will be relevant to the question of
whether it was harmless error for them to have gotten before the
jury. Oral statements, such as that involved in the present case,
will present special problems, for there is a risk that the witness
in testifying will inadvertently exceed permissible limits. Except
for recommending that caution be used with regard to such oral
statements, it is difficult to anticipate the issues which will
arise in concrete factual situations.
I would hope, but am not sure, that, by using these procedures,
the federal courts would escape reversal under today's ruling. Even
so, I persist in believing that the reversal of Delli
Paoli unnecessarily burdens the already difficult task of
conducting criminal trials, and therefore I dissent in this
case.
MR. JUSTICE HARLAN joins this opinion without abandoning his
original disagreement with Jackson v. Denno, 378 U.
S. 368 , 378 U. S. 427 ,
expressed in his dissenting opinion in that case.
* As the Court observes, "[i]f . . . the jury disregarded the
reference to the codefendant, no question would arise under the
Confrontation Clause. . . ." Ante at 391 U. S. 126 .
Because, in my view, juries can reasonably be relied upon to
disregard the codefendant's references to the defendant, there is
no need to explore the special considerations involved in the
Confrontation Clause. | The Supreme Court ruled that admitting a codefendant's confession that implicates the defendant in a joint trial violates the defendant's right to cross-examination under the Sixth Amendment's Confrontation Clause, overruling a previous decision. Effective deletion of any statements implicating codefendants may be required to protect their rights, and separate trials may be necessary if deletion is not feasible. |
Criminal Trials & Prosecutions | Pointer v. Texas | https://supreme.justia.com/cases/federal/us/380/400/ | U.S. Supreme Court Pointer v. Texas, 380
U.S. 400 (1965) Pointer v. Texas No. 577 Argued March 15, 1965 Decided April 5, 1965 380
U.S. 400 CERTIORARI TO THE COURT OF CRIMINAL
APPEALS OF TEXAS Syllabus Petitioner was arrested and brought before a state judge for
preliminary hearing on a robbery charge. The complaining witness
testified but petitioner, who had no counsel, did not
cross-examine. Petitioner was later indicted and tried. The witness
had moved to another State, and the transcript of his testimony at
the hearing was introduced over petitioner's objections that he was
denied the right of confrontation. He was convicted and the highest
state court affirmed. Held: 1. The right granted to an accused by the Sixth Amendment to
confront the witnesses against him, which includes the right of
cross-examination, is a fundamental right essential to a fair trial
and is made obligatory on the States by the Fourteenth Amendment.
Pp. 380 U. S.
403 -406.
2. The introduction of the transcript in a federal criminal case
would have been a clear denial of the right of confrontation, since
the statement was made without an adequate opportunity for
cross-examination, and the right must be determined by the same
standards in a state proceeding. Pp. 380 U. S.
406 -408. 375
S.W.2d 293 , reversed and remanded.
MR. JUSTICE BLACK delivered the opinion of the Court.
The Sixth Amendment provides in part that:
"In all criminal prosecutions, the accused shall enjoy the right
. . . to be confronted with the witnesses Page 380 U. S. 401 against him . . . and to have the Assistance of Counsel for his
defence."
Two years ago, in Gideon v. Wainwright, 372 U.
S. 335 , we held that the Fourteenth Amendment makes the
Sixth Amendment's guarantee of right to counsel obligatory upon the
States. The question we find necessary to decide in this case is
whether the Amendment's guarantee of a defendant's right "to be
confronted with the witnesses against him," which has been held to
include the right to cross-examine those witnesses, is also made
applicable to the States by the Fourteenth Amendment.
The petitioner Pointer and one Dillard were arrested in Texas
and taken before a state judge for a preliminary hearing (in Texas,
called the "examining trial") on a charge of having robbed Kenneth
W. Phillips of $375 "by assault, or violence, or by putting in fear
of life or bodily injury," in violation of Texas Penal Code Art.
1408. At this hearing, an Assistant District Attorney conducted the
prosecution and examined witnesses, but neither of the defendants,
both of whom were laymen, had a lawyer. Phillips, as chief witness
for the State, gave his version of the alleged robbery in detail,
identifying petitioner as the man who had robbed him at gunpoint.
Apparently Dillard tried to cross-examine Phillips, but Pointer did
not, although Pointer was said to have tried to cross-examine some
other witnesses at the hearing. Petitioner was subsequently
indicted on a charge of having committed the robbery. Some time
before the trial was held, Phillips moved to California. After
putting in evidence to show that Phillips had moved and did not
intend to return to Texas, the State at the trial offered the
transcript of Phillips' testimony given at the preliminary hearing
as evidence against petitioner. Petitioner's counsel immediately
objected to introduction of the transcript, stating, "Your Honor,
we will object to that, as it is a denial of the confrontment of
the witnesses against the Defendant." Page 380 U. S. 402 Similar objections were repeatedly made by petitioner's counsel,
but were overruled by the trial judge, apparently in part because,
as the judge viewed it, petitioner had been present at the
preliminary hearing, and therefore had been "accorded the
opportunity of cross-examining the witnesses there against him."
The Texas Court of Criminal Appeals, the highest state court to
which the case could be taken, affirmed petitioner's conviction,
rejecting his contention that use of the transcript to convict him
denied him rights guaranteed by the Sixth and Fourteenth
Amendments. 375
S.W.2d 293 . We granted certiorari to consider the important
constitutional question the case involves. 379 U.S. 815.
In this Court, we do not find it necessary to decide one aspect
of the question petitioner raises, that is, whether failure to
appoint counsel to represent him at the preliminary hearing
unconstitutionally denied him the assistance of counsel within the
meaning of Gideon v. Wainwright, supra. In making that
argument, petitioner relies mainly on White v. Maryland, 373 U. S. 59 , in
which this Court reversed a conviction based in part upon evidence
that the defendant had pleaded guilty to the crime at a preliminary
hearing, where he was without counsel. Since the preliminary
hearing there, as in Hamilton v. Alabama, 368 U. S.
52 , was one in which pleas to the charge could be made,
we held in White, as in Hamilton, that a
preliminary proceeding of that nature was so critical a stage in
the prosecution that a defendant at that point was entitled to
counsel. But the State informs us that, at a Texas preliminary
hearing, such as is involved here, pleas of guilty or not guilty
are not accepted, and that the judge decides only whether the
accused should be bound over to the grand jury, and, if so, whether
he should be admitted to bail. Because of these significant
differences in the procedures of the respective States, we cannot
say that the White case is necessarily controlling Page 380 U. S. 403 as to the right to counsel. Whether there might be other
circumstances making this Texas preliminary hearing so critical to
the defendant as to call for appointment of counsel at that stage
we need not decide on this record, and that question we reserve. In
this case, the objections and arguments in the trial court, as well
as the arguments in the Court of Criminal Appeals and before us,
make it clear that petitioner's objection is based not so much on
the fact that he had no lawyer when Phillips made his statement at
the preliminary hearing as on the fact that use of the transcript
of that statement at the trial denied petitioner any opportunity to
have the benefit of counsel's cross-examination of the principal
witness against him. It is that latter question which we decide
here. I The Sixth Amendment is a part of what is called our Bill of
Rights. In Gideon v. Wainwright, supra, in which this
Court held that the Sixth Amendment's right to the assistance of
counsel is obligatory upon the States, we did so on the ground
that
"a provision of the Bill of Rights which is 'fundamental and
essential to a fair trial' is made obligatory upon the States by
the Fourteenth Amendment."
372 U.S. at 372 U. S. 342 .
And last Term, in Malloy v. Hogan, 378 U. S.
1 , in holding that the Fifth Amendment's guarantee
against self-incrimination was made applicable to the States by the
Fourteenth, we reiterated the holding of Gideon that the
Sixth Amendment's right to counsel guarantee is " a fundamental
right, essential to a fair trial,'" and "thus was made obligatory
on the States by the Fourteenth Amendment." 378 U.S. at 378 U. S. 6 . See also Murphy v. Waterfront Comm'n, 378 U. S.
52 . We hold today that the Sixth Amendment's right of an
accused to confront the witnesses against him is likewise a
fundamental right, and is made obligatory on the States by the
Fourteenth Amendment Page 380 U. S. 404 It cannot seriously be doubted at this late date that the right
of cross-examination is included in the right of an accused in a
criminal case to confront the witnesses against him. And probably
no one, certainly no one experienced in the trial of lawsuits,
would deny the value of cross-examination in exposing falsehood and
bringing out the truth in the trial of a criminal case. See,
e.g., 5 Wigmore, Evidence § 1367 (3d ed.1940). The fact that
this right appears in the Sixth Amendment of our Bill of Rights
reflects the belief of the Framers of those liberties and
safeguards that confrontation was a fundamental right essential to
a fair trial in a criminal prosecution. Moreover, the decisions of
this Court and other courts * throughout the
years have constantly emphasized the necessity for
cross-examination as a protection for defendants in criminal cases.
This Court, in Kirby v. United States, 174 U. S.
47 , 174 U. S. 55 , 174 U. S. 56 ,
referred to the right of confrontation as "[o]ne of the fundamental
guarantees of life and liberty," and
"a right long deemed so essential for the due protection of life
and liberty that it is guarded against legislative and judicial
action by provisions in the Constitution of the United States and
in the constitutions of most if not of all the States composing the
Union."
Mr. Justice Stone, writing for the Court in Alford v. United
States, 282 U. S. 687 , 282 U. S. 692 ,
declared that the right of cross-examination is "one of the
safeguards essential to a fair trial." And, in speaking of
confrontation and cross-examination, this Court said in Greene
v. McElroy, 360 U. S. 474 :
"They have ancient roots. They find expression in the Sixth
Amendment which provides that, in all Page 380 U. S. 405 criminal cases the accused shall enjoy the right 'to be
confronted with the witnesses against him.' This Court has been
zealous to protect these rights from erosion."
360 U.S. at 360 U. S.
496 -497 (footnote omitted). There are few subjects,
perhaps, upon which this Court and other courts have been more
nearly unanimous than in their expressions of belief that the right
of confrontation and cross-examination is an essential and
fundamental requirement for the kind of fair trial which is this
country's constitutional goal. Indeed, we have expressly declared
that to deprive an accused of the right to cross-examine the
witnesses against him is a denial of the Fourteenth Amendment's
guarantee of due process of law. In In re Oliver, 333 U. S. 257 ,
this Court said:
"A person's right to reasonable notice of a charge against him,
and an opportunity to be heard in his defense -- a right to his day
in court -- are basic in our system of jurisprudence, and these
rights include, as a minimum, a right to examine the witnesses
against him, to offer testimony, and to be represented by
counsel."
333 U.S. at 333 U. S. 273 (footnote omitted). And earlier this Term, in Turner v.
Louisiana, 379 U. S. 466 , 379 U. S.
472 -473, we held:
"In the constitutional sense, trial by jury in a criminal case
necessarily implies at the very least that the 'evidence developed'
against a defendant shall come from the witness stand in a public
courtroom where there is full judicial protection of the
defendant's right of confrontation, of cross-examination, and of
counsel." Compare Willner v. Committee on Character &
Fitness, 373 U. S. 96 , 373 U. S.
103 -104. Page 380 U. S. 406 We are aware that some cases, particularly West v.
Louisiana, 194 U. S. 258 , 194 U. S. 264 ,
have stated that the Sixth Amendment's right of confrontation does
not apply to trials in state courts, on the ground that the entire
Sixth Amendment does not so apply. See also Stein v. New
York, 346 U. S. 156 , 346 U. S.
195 -196. But, of course, since Gideon v. Wainwright,
supra, it no longer can broadly be said that the Sixth
Amendment does not apply to state courts. And, as this Court said
in Malloy v. Hogan, supra, "The Court has not hesitated to reexamine past decisions
according the Fourteenth Amendment a less central role in the
preservation of basic liberties than that which was contemplated by
its Framers when they added the Amendment to our constitutional
scheme."
378 U.S. at 378 U. S. 5 . In
the light of Gideon, Malloy, and other cases cited in
those opinions holding various provisions of the Bill of Rights
applicable to the States by virtue of the Fourteenth Amendment, the
statements made in West and similar cases generally
declaring that the Sixth Amendment does not apply to the States can
no longer be regarded as the law. We hold that petitioner was
entitled to be tried in accordance with the protection of the
confrontation guarantee of the Sixth Amendment, and that that
guarantee, like the right against compelled self-incrimination,
is
"to be enforced against the States under the Fourteenth
Amendment according to the same standards that protect those
personal rights against federal encroachment." Malloy v. Hogan, supra, 378 U.S. at 378 U. S. 10 . II Under this Court's prior decisions, the Sixth Amendment's
guarantee of confrontation and cross-examination was unquestionably
denied petitioner in this case. As has been pointed out, a major
reason underlying the Page 380 U. S. 407 constitutional confrontation rule is to give a defendant charged
with crime an opportunity to cross-examine the witnesses against
him. See, e.g., Dowdell v. United States, 221 U.
S. 325 , 221 U. S. 330 ; Motes v. United States, 178 U. S. 458 , 178 U. S. 474 ; Kirby v. United States, 174 U. S. 47 , 174 U. S. 55 -56; Mattox v. United States, 156 U. S. 237 , 156 U. S.
242 -243. Cf. Hopt v. Utah, 110 U.
S. 574 , 110 U. S. 581 ; Queen v.
Hepburn , 7 Cranch 290, 11 U. S. 295 .
This Court has recognized the admissibility against an accused of
dying declarations, Mattox v. United States, 146 U.
S. 140 , 146 U. S. 151 ,
and of testimony of a deceased witness who has testified at a
former trial, Mattox v. United States, 156 U.
S. 237 , 156 U. S.
240 -244. See also Dowdell v. United States,
supra, 221 U.S. at 221 U. S. 330 ; Kirby v. United States, supra, 174 U.S. at 174 U. S. 61 .
Nothing we hold here is to the contrary. The case before us would
be quite a different one had Phillips' statement been taken at a
full-fledged hearing at which petitioner had been represented by
counsel who had been given a complete and adequate opportunity to
cross-examine. Compare Motes v. United States, supra, 178
U.S. at 178 U. S. 474 .
There are other analogous situations which might not fall within
the scope of the constitutional rule requiring confrontation of
witnesses. The case before us, however, does not present any
situation like those mentioned above or others analogous to them.
Because the transcript of Phillips' statement offered against
petitioner at his trial had not been taken at a time and under
circumstances affording petitioner through counsel an adequate
opportunity to cross-examine Phillips, its introduction in a
federal court in a criminal case against Pointer would have
amounted to denial of the privilege of confrontation guaranteed by
the Sixth Amendment. Since we hold that the right of an accused to
be confronted with the witnesses against him must be determined by
the same standards whether the right is denied in a federal or
state proceeding, Page 380 U. S. 408 it follows that use of the transcript to convict petitioner
denied him a constitutional right, and that his conviction must be
reversed. Reversed and remanded. MR. JUSTICE HARLAN, concurring in the result.
I agree that, in the circumstances the admission of the
statement in question deprived the petitioner of a right of
"confrontation" assured by the Fourteenth Amendment. I cannot
subscribe, however, to the constitutional reasoning of the
Court.
The Court holds that the right of confrontation guaranteed by
the Sixth Amendment in federal criminal trials is carried into
state criminal cases by the Fourteenth Amendment. This is another
step in the onward march of the long-since discredited
"incorporation" doctrine ( see, e.g., Fairman, Does the
Fourteenth Amendment Incorporate the Bill of Rights? The Original
Understanding, 2 Stan.L.Rev. 5 (1949); Frankfurter, Memorandum on
"Incorporation" of the Bill of Rights Into the Due Process Clause
of the Fourteenth Amendment, 78 Harv.L.Rev. 746 (1965)), which for
some reason that I have not yet been able to fathom has come into
the sunlight in recent years. See, e.g., Mapp v. Ohio, 367 U. S. 643 ; Ker v. California, 374 U. S. 23 ; Malloy v. Hogan, 378 U. S. 1 .
For me, this state judgment must be reversed because a right of
confrontation is "implicit in the concept of ordered liberty," Palko v. Connecticut, 302 U. S. 319 , 302 U. S. 325 ,
reflected in the Due Process Clause of the Fourteenth Amendment
independently of the Sixth.
While either of these constitutional approaches brings one to
the same end result in this particular case, there is a basic
difference between the two in the kind of future constitutional
development they portend. The concept of Fourteenth Amendment due
process embodied in Palko Page 380 U. S. 409 and a host of other thoughtful past decisions now rapidly
falling into discard, recognizes that our Constitution tolerates,
indeed encourages, differences between the methods used to
effectuate legitimate federal and state concerns, subject to the
requirements of fundamental fairness "implicit in the concept of
ordered liberty." The philosophy of "incorporation," on the other
hand, subordinates all such state differences to the particular
requirements of the Federal Bill of Rights ( but see Ker v.
California, supra, at 374 U. S. 34 ) and increasingly subjects state legal
processes to enveloping federal judicial authority. "Selective"
incorporation or "absorption" amounts to little more than a diluted
form of the full incorporation theory. Whereas it rejects full
incorporation because of recognition that not all of the guarantees
of the Bill of Rights should be deemed "fundamental," it at the
same time ignores the possibility that not all phases of any given
guaranty described in the Bill of Rights are necessarily
fundamental.
It is too often forgotten in these times that the American
federal system is itself constitutionally ordained, that it
embodies values profoundly making for lasting liberties in this
country, and that its legitimate requirements demand continuing
solid recognition in all phases of the work of this Court. The
"incorporation" doctrines, whether full blown or selective, are
both historically and constitutionally unsound and incompatible
with the maintenance of our federal system on even course.
* See state and English cases collected in 5 Wigmore,
Evidence §§ 1367, 1395 (3d ed.1940). State constitutional and
statutory provisions similar to the Sixth Amendment are collected
in 5 Wigmore, supra, § 1397, n. 1.
MR. JUSTICE STEWART, concurring in the result.
I join in the judgment reversing this conviction, for the reason
that the petitioner was denied the opportunity to cross-examine,
through counsel, the chief witness for the prosecution. But I do
not join in the Court's pronouncement which makes "the Sixth
Amendment's right of an accused to confront the witnesses against
him . . . obligatory Page 380 U. S. 410 on the States." That questionable tour de force seems
to me entirely unnecessary to the decision of this case, which I
think is directly controlled by the Fourteenth Amendment's
guarantee that no State shall "deprive any person of life, liberty,
or property, without due process of law."
The right of defense counsel in a criminal case to cross-examine
the prosecutor's living witnesses is "[o]ne of the fundamental
guarantees of life and liberty," [ Footnote 1 ] and "one of the safeguards essential to a fair
trial." [ Footnote 2 ] It is, I
think, as indispensable an ingredient as the "right to be tried in
a courtroom presided over by a judge." [ Footnote 3 ] Indeed, this Court has said so this very Term. Turner v. Louisiana, 379 U. S. 466 , 379 U. S.
472 -473. [ Footnote
4 ]
Here, that right was completely denied. Therefore, as the Court
correctly points out, we need not consider the case which could be
presented if Phillips' statement had been taken at a hearing at
which the petitioner's counsel was given a full opportunity to
cross-examine. See West v. Louisiana, 194 U.
S. 258 .
[ Footnote 1 ] Kirby v. United States, 174 U. S.
47 , 174 U. S.
55 .
[ Footnote 2 ] Alford v. United States, 282 U.
S. 687 , 282 U. S.
692 .
[ Footnote 3 ] Rideau v. Louisiana, 373 U. S. 723 , 373 U. S.
727 .
[ Footnote 4 ] See also In re Murchison, 349 U.
S. 133 , where the Court said that
"due process requires as a minimum that an accused be given a
public trial after reasonable notice of the charges, have a right
to examine witnesses against him, call witnesses on his own behalf,
and be represented by counsel."
349 U.S. at 349 U. S.
134 .
MR. JUSTICE GOLDBERG, concurring.
I agree with the holding of the Court that
"the Sixth Amendment's right of an accused to confront the
witnesses against him is . . . a fundamental right and is made
obligatory on the States by the Fourteenth Amendment." Ante at 380 U. S. 403 .
I therefore join in the opinion and judgment of the Court. My
Brother HARLAN, while agreeing with the result reached by the
Court, deplores the Court's Page 380 U. S. 411 reasoning as "another step in the onward march of the long-since
discredited incorporation' doctrine," ante at 380 U. S. 408 .
Since I was not on the Court when the incorporation issue was
joined, see Adamson v. California, 332 U. S.
46 , I deem it appropriate to set forth briefly my view
on this subject. I need not recapitulate the arguments for or against
incorporation, whether "total" or "selective." They have been set
forth adequately elsewhere. [ Footnote
2/1 ] My Brother BLACK's view of incorporation has never
commanded a majority of the Court, though, in Adamson, it
was assented to by four Justices. The Court, in its decisions, has
followed a course whereby certain guarantees "have been taken over
from the earlier articles of the federal bill of rights and brought
within the Fourteenth Amendment," Palko v. Connecticut, 302 U. S. 319 , 302 U. S. 326 ,
by a process which might aptly be described as "a process of
absorption." Ibid. See Cohen v. Hurley, 366 U. S. 117 , 366 U. S. 154 (dissenting opinion of MR. JUSTICE BRENNAN); Brennan, The Bill of
Rights and the States, 36 N.Y.U.L.Rev. 761 (1961). Thus, the Court
has held that the Fourteenth Page 380 U. S. 412 Amendment guarantees against infringement by the States the
liberties of the First Amendment, [ Footnote 2/2 ] the Fourth Amendment, [ Footnote 2/3 ] the Just Compensation Clause of the
Fifth Amendment, [ Footnote 2/4 ] the
Fifth Amendment's privilege against self-incrimination, [ Footnote 2/5 ] the Eighth Amendment's
prohibition of cruel and unusual punishments, [ Footnote 2/6 ] and the Sixth Amendment's guarantee
of the assistance of counsel for an accused in a criminal
prosecution. [ Footnote 2/7 ]
With all deference to my Brother HARLAN, I cannot agree that
this process has "come into the sunlight in recent years." Ante at 380 U. S. 408 .
Rather, I believe that it has its origins at least as far back as Twining v. New Jersey, 211 U. S. 78 , 211 U. S. 99 ,
where the Court stated that
"it is possible that some of the personal rights safeguarded by
the first eight Amendments against National action may also be
safeguarded against state action, because a denial of them would be
a denial of due process of law. Chicago, Burlington &
Quincy Railroad v. Chicago, 166 U. S. 226 ."
This passage and the authority cited make clear that what is
protected by the Fourteenth Amendment are "rights," which apply in
every case, not solely in those cases where it seems "fair" to a
majority of the Court to afford the protection. Later cases
reaffirm that the process of "absorption" is one of extending
"rights." See Ker v. California, 374 U. S.
23 ; Malloy v. Hogan, 378 U. S.
1 , and cases cited by MR. JUSTICE BRENNAN in his
dissenting opinion in Cohen v. Hurley, supra, at 366 U. S. 156 .
I agree with these decisions, as is apparent from my votes in Page 380 U. S. 413 Gideon v. Wainwright, 372 U. S. 335 ; Malloy v. Hogan, supra, and Murphy v. Waterfront
Comm'n, 378 U. S. 52 , and
my concurring opinion in New York Times Co. v. Sullivan, 376 U. S. 254 , 376 U. S. 297 ,
and I subscribe to the process by which fundamental guarantees of
the Bill of Rights are absorbed by the Fourteenth Amendment, and
thereby applied to the States.
Furthermore, I do not agree with my Brother HARLAN that, once a
provision of the Bill of Rights has been held applicable to the
States by the Fourteenth Amendment, it does not apply to the States
in full strength. Such a view would have the Fourteenth Amendment
apply to the States "only a watered-down, subjective version of
the individual guarantees of the Bill of Rights.'" Malloy v.
Hogan, supra, at 378 U. S. 10 -11.
It would allow the States greater latitude than the Federal
Government to abridge concededly fundamental liberties protected by
the Constitution. While I quite agree with Mr. Justice Brandeis
that "[i]t is one of the happy incidents of the federal system that a
. . . State may . . . serve as a laboratory, and try novel social
and economic experiments," New State Ice Co. v. Liebmann, 285 U.
S. 262 , 285 U. S. 280 , 285 U. S. 311 (dissenting opinion), I do not believe that this includes the power
to experiment with the fundamental liberties of citizens
safeguarded by the Bill of Rights. My Brother HARLAN's view would
also require this Court to make the extremely subjective and
excessively discretionary determination as to whether a practice,
forbidden the Federal Government by a fundamental constitutional
guarantee, is, as viewed in the factual circumstances surrounding
each individual case, sufficiently repugnant to the notion of due
process as to be forbidden the States.
Finally, I do not see that my Brother HARLAN's view would
further any legitimate interests of federalism. It would require
this Court to intervene in the state judicial process with
considerable lack of predictability and with Page 380 U. S. 414 a consequent likelihood of considerable friction. This is well
illustrated by the difficulties which were faced and were
articulated by the state courts attempting to apply this Court's
now discarded rule of Betts v. Brady, 316 U.
S. 455 . See Green, The Bill of Rights, the
Fourteenth Amendment and the Supreme Court, 46 Mich.L.Rev. 869,
897-898. These difficulties led the Attorneys General of 22 States
to urge that this Court overrule Betts v. Brady and apply
fully the Sixth Amendment's guarantee of right to counsel to the
States through the Fourteenth Amendment. See Gideon v.
Wainwright, supra, at 372 U. S. 336 . And to deny to the States the power to
impair a fundamental constitutional right is not to increase
federal power, but, rather, to limit the power of both federal and
state governments in favor of safeguarding the fundamental rights
and liberties of the individual. In my view, this promotes, rather
than undermines, the basic policy of avoiding excess concentration
of power in government, federal or state, which underlies our
concepts of federalism.
I adhere to and support the process of absorption by means of
which the Court holds that certain fundamental guarantees of the
Bill of Rights are made obligatory on the States through the
Fourteenth Amendment. Although, as this case illustrates, there are
differences among members of the Court as to the theory by which
the Fourteenth Amendment protects the fundamental liberties of
individual citizens, it is noteworthy that there is a large area of
agreement, both here and in other cases, that certain basic rights
are fundamental -- not to be denied the individual by either the
state or federal governments under the Constitution. See, e.g.,
Cantwell v. Connecticut, 310 U. S. 296 ; NAACP v. Alabama ex rel. Patterson, 357 U.
S. 449 ; Gideon v. Wainwright, supra; New York Times
Co. v. Sullivan, supra; Turner v. Louisiana, 379 U.
S. 466 .
[ Footnote 2/1 ] See Adamson v. California, supra, at 332 U. S. 59 (concurring opinion of Mr. Justice Frankfurter); id. at 332 U. S. 68 (dissenting opinion of MR. JUSTICE BLACK); Malloy v.
Hogan, 378 U. S. 1 ; id. at 378 U. S. 14 (dissenting opinion of MR. JUSTICE HARLAN); Gideon v.
Wainwright, 372 U. S. 335 , 372 U. S. 345 (concurring opinion of MR. JUSTICE Douglas); id. at 372 U. S. 349 (concurring opinion of MR. JUSTICE HARLAN); Poe v. Ullman, 367 U. S. 497 , 367 U. S. 509 (dissenting opinion of MR. JUSTICE DOUGLAS); Frankfurter,
Memorandum on "Incorporation" of the Bill of Rights Into the Due
Process Clause of the Fourteenth Amendment, 78 Harv.L.Rev. 746;
Black, The Bill of Rights, 35 N.Y.U.L.Rev. 865 (1960); Brennan, The
Bill of Rights and the States, 36 N.Y.U.L.Rev. 761 (1961); Fairman,
Does the Fourteenth Amendment Incorporate the Bill of Rights? The
Original Understanding, 2 Stan.L.Rev. 5 (1949); Green, The Bill of
Rights, the Fourteenth Amendment and the Supreme Court, 46
Mich.L.Rev. 869 (1948); Henkin, "Selective Incorporation" in the
Fourteenth Amendment, 73 Yale L.J. 74 (1963).
[ Footnote 2/2 ] See, e.g., Gitlow v. New York, 268 U.
S. 652 , 268 U. S. 666 ; De Jones v. Oregon, 299 U. S. 353 , 299 U. S. 364 ; Cantwell v. Connecticut, 310 U. S. 296 , 310 U. S. 303 ; Louisiana ex rel. Gremillion v. NAACP, 366 U.
S. 293 , 366 U. S. 296 ; New York Times Co. v. Sullivan, 376 U.
S. 254 .
[ Footnote 2/3 ] See Wolf v. Colorado, 338 U. S. 25 ; Mapp v. Ohio, 367 U. S. 643 .
[ Footnote 2/4 ] Chicago, B. & Q. R. Co. v. Chicago, 166 U.
S. 226 .
[ Footnote 2/5 ] Malloy v. Hogan, 378 U. S. 1 .
[ Footnote 2/6 ] Robinson v. California, 370 U.
S. 660 .
[ Footnote 2/7 ] Gideon v. Wainwright, 372 U. S. 335 . | The Supreme Court held that the Sixth Amendment right of an accused to confront witnesses against them, including the right to cross-examination, is a fundamental right that is applicable to state criminal proceedings through the Fourteenth Amendment. The Court found that the introduction of a transcript from a preliminary hearing, where the petitioner did not have counsel and did not cross-examine the witness, violated the petitioner's right to confrontation and denied him a fair trial. The conviction was reversed and the case was remanded. |
Criminal Trials & Prosecutions | Massiah v. U.S. | https://supreme.justia.com/cases/federal/us/377/201/ | U.S. Supreme Court Massiah v. United States, 377
U.S. 201 (1964) Massiah v. United
States No. 199 Argued March 3, 1964 Decided May 18, 1964 377
U.S. 201 CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE SECOND
CIRCUIT Syllabus Government agents, while continuing to investigate narcotics
activities including those of petitioner, who had retained a lawyer
and was free on bail after indictment, without petitioner's
knowledge, secured an alleged confederate's consent to install a
radio transmitter in the latter's automobile. An agent was thereby
enabled to overhear petitioner's damaging statements which, despite
his objection, were used in the trial which resulted in his
conviction. Held: Incriminating statements thus deliberately
elicited by federal agents from the petitioner, in the absence of
his attorney, deprived the petitioner of his right to counsel under
the Sixth Amendment; therefore such statements could not
constitutionally be used as evidence against him in his trial. Pp.
201-207.
307 F.2d 62, reversed.
MR. JUSTICE STEWART delivered the opinion of the Court.
The petitioner was indicted for violating the federal narcotics
laws. He retained a lawyer, pleaded not guilty, and was released on
bail. While he was free on bail, a federal agent succeeded by
surreptitious means in listening to incriminating statements made
by him. Evidence of these statements was introduced against the
petitioner at his trial over his objection. He was convicted, and
the Court of Appeals affirmed.{1} We granted certiorari to Page 377 U. S. 202 consider whether, under the circumstances here presented, the
prosecution's use at the trial of evidence of the petitioner's own
incriminating statements deprived him of any right secured to him
under the Federal Constitution. 374 U.S. 805.
The petitioner, a merchant seaman, was in 1958 a member of the
crew of the S.S. Santa Maria. In April of that year,
federal customs officials in New York received information that he
was going to transport a quantity of narcotics aboard that ship
from South America to the United States. As a result of this and
other information, the agents searched the Santa Maria upon its arrival in New York and found in the afterpeak of the
vessel five packages containing about three and a half pounds of
cocaine. They also learned of circumstances, not here relevant,
tending to connect the petitioner with the cocaine. He was
arrested, promptly arraigned, and subsequently indicted for
possession of narcotics aboard a United States vessel.{2} In July,
a superseding indictment was returned, charging the petitioner and
a man named Colson with the same substantive offense, and in
separate counts charging the petitioner, Colson, and others with
having conspired to possess narcotics aboard a United States
vessel, and to import, conceal, and facilitate the sale of
narcotics.{3} The petitioner, who had retained a lawyer, pleaded
not guilty and was released on bail, along with Colson.
A few days later, and quite without the petitioner's knowledge,
Colson decided to cooperate with the government agents in their
continuing investigation of the narcotics activities in which the
petitioner, Colson, and others had allegedly been engaged. Colson
permitted an agent named Murphy to install a Schmidt radio
transmitter Page 377 U. S. 203 under the front seat of Colson's automobile, by means of which
Murphy, equipped with an appropriate receiving device, could
overhear from some distance away conversations carried on in
Colson's car.
On the evening of November 19, 1959, Colson and the petitioner
held a lengthy conversation while sitting in Colson's automobile,
parked on a New York street. By prearrangement with Colson, and
totally unbeknown to the petitioner, the agent Murphy sat in a car
parked out of sight down the street and listened over the radio to
the entire conversation. The petitioner made several incriminating
statements during the course of this conversation. At the
petitioner's trial, these incriminating statements were brought
before the jury through Murphy's testimony, despite the insistent
objection of defense counsel. The jury convicted the petitioner of
several related narcotics offenses, and the convictions were
affirmed by the Court of Appeals.{4}
The petitioner argues that it was an error of constitutional
dimensions to permit the agent Murphy at the trial to testify to
the petitioner's incriminating statements which Murphy had
overheard under the circumstances disclosed by this record. This
argument is based upon two distinct and independent grounds. First,
we are told that Murphy's use of the radio equipment violated the
petitioner's rights under the Fourth Amendment, and, consequently,
that all evidence which Murphy thereby obtained was, under the rule
of Weeks v. United States, 232 U.
S. 383 , inadmissible against the petitioner at the
trial. Secondly, it is said that the petitioner's Page 377 U. S. 204 Fifth and Sixth Amendment rights were violated by the use in
evidence against him of incriminating statements which government
agents had deliberately elicited from him after he had been
indicted and in the absence of his retained counsel. Because of the
way we dispose of the case, we do not reach the Fourth Amendment
issue.
In Spano v. New York, 360 U. S. 315 ,
this Court reversed a state criminal conviction because a
confession had been wrongly admitted into evidence against the
defendant at his trial. In that case, the defendant had already
been indicted for first-degree murder at the time he confessed. The
Court held that the defendant's conviction could not stand under
the Fourteenth Amendment. While the Court's opinion relied upon the
totality of the circumstances under which the confession had been
obtained, four concurring Justices pointed out that the
Constitution required reversal of the conviction upon the sole and
specific ground that the confession had been deliberately elicited
by the police after the defendant had been indicted, and therefore
at a time when he was clearly entitled to a lawyer's help. It was
pointed out that, under our system of justice, the most elemental
concepts of due process of law contemplate that an indictment be
followed by a trial, "in an orderly courtroom, presided over by a
judge, open to the public, and protected by all the procedural
safeguards of the law." 360 U.S. at 360 U. S. 327 (STEWART, J., concurring). It was said that a Constitution which
guarantees a defendant the aid of counsel at such a trial could
surely vouchsafe no less to an indicted defendant under
interrogation by the police in a completely extrajudicial
proceeding. Anything less, it was said, might deny a defendant
"effective representation by counsel at the only stage when legal
aid and advice would help him." 360 U.S. at 360 U. S. 326 (DOUGLAS, J., concurring).
Ever since this Court's decision in the Spano case, the
New York courts have unequivocally followed this constitutional Page 377 U. S. 205 rule.
"Any secret interrogation of the defendant, from and after the
finding of the indictment, without the protection afforded by the
presence of counsel, contravenes the basic dictates of fairness in
the conduct of criminal causes and the fundamental rights of
persons charged with crime." People v. Waterman, 9 N.Y.2d 561, 565, 216 N.Y.S.2d 70,
75, 175 N.E.2d 445, 448.{5}
This view no more than reflects a constitutional principle
established as long ago as Powell v. Alabama, 287 U. S.
45 , where the Court noted that,
". . . during perhaps the most critical period of the
proceedings . . . , that is to say, from the time of their
arraignment until the beginning of their trial, when consultation,
thoroughgoing investigation and preparation [are] vitally
important, the defendants . . . [are] as much entitled to such aid
[of counsel] during that period as at the trial itself." Id. at 287 U. S. 57 .
And, since the Spano decision, the same basic
constitutional principle has been broadly reaffirmed by this Court. Hamilton v. Alabama, 368 U. S. 52 ; White v. Maryland, 373 U. S. 59 . See Gideon v. Wainwright, 372 U.
S. 335 .
Here we deal not with a state court conviction, but with a
federal case, where the specific guarantee of the Sixth Amendment
directly applies.{6} Johnson v.
Zerbst , 304 Page 377 U. S. 206 U.S. 458. We hold that the petitioner was denied the basic
protections of that guarantee when there was used against him at
his trial evidence of his own incriminating words, which federal
agents had deliberately elicited from him after he had been
indicted and in the absence of his counsel. It is true that, in the Spano case, the defendant was interrogated in a police
station, while here the damaging testimony was elicited from the
defendant without his knowledge while he was free on bail. But, as
Judge Hays pointed out in his dissent in the Court of Appeals,
"if such a rule is to have any efficacy, it must apply to
indirect and surreptitious interrogations as well as those
conducted in the jailhouse. In this case, Massiah was more
seriously imposed upon . . . because he did not even know that he
was under interrogation by a government agent."
307 F.2d at 72-73.
The Solicitor General, in his brief and oral argument, has
strenuously contended that the federal law enforcement agents had
the right, if not indeed the duty, to continue their investigation
of the petitioner and his alleged criminal associates even though
the petitioner had been indicted. He points out that the Government
was continuing its investigation in order to uncover not only the
source of narcotics found on the S.S. Santa Maria, but
also their intended buyer. He says that the quantity of narcotics
involved was such as to suggest that the petitioner was part of a
large and well-organized ring, and indeed that the continuing
investigation confirmed this suspicion, since it resulted in
criminal charges against many defendants. Under these
circumstances, the Solicitor General concludes that the Government
agents were completely "justified in making use of Colson's
cooperation by having Colson continue his normal associations and
by surveilling them."
We may accept, and, at least for present purposes, completely
approve all that this argument implies, Fourth Page 377 U. S. 207 Amendment problems to one side. We do not question that, in this
case, as in many cases, it was entirely proper to continue an
investigation of the suspected criminal activities of the defendant
and his alleged confederates, even though the defendant had already
been indicted. All that we hold is that the defendant's own
incriminating statements, obtained by federal agents under the
circumstances here disclosed, could not constitutionally be used by
the prosecution as evidence against him at his trial. Reversed. 307 F.2d 62.
21 U.S.C. § 184a.
21 U.S.C. §§ 173, 174.
The petitioner's trial was upon a second superseding indictment
which had been returned on March 3, 1961, and which included
additional counts against him and other defendants. The Court of
Appeals reversed his conviction upon a conspiracy count, one judge
dissenting, but affirmed his convictions upon three substantive
counts, one judge dissenting. 307 F.2d 62. See also People v. Davis, 13 N.Y.2d 690, 241 N.Y.S.2d
172, 191 N.E.2d 674 (1963); People v. Rodriguez, 11 N.Y.2d
279, 229 N.Y.S.2d 353, 183 N.E.2d 651 (1962); People v.
Meyer, 11 N.Y.2d 162, 227 N.Y.S.2d 427, 182 N.E.2d 103 (1962); People v. Di Biasi, 7 N.Y.2d 544, 200 N.Y.S.2d 21, 166
N.E.2d 825 (1960); People v. Swanson, 18 A.D.2d 832, 237
N.Y.S.2d 400 (2d Dept. 1963); People v. Price, 18 A.D.2d
739, 235 N.Y.S.2d 390 (3d Dept. 1962); People v. Wallace, 17 A.D.2d 981, 234 N.Y.S.2d 579 (2d Dept. 1962); People v.
Karmel, 17 A.D.2d 659, 230 N.Y.S.2d 413 (2d Dept. 1962); People v. Robinson, 16 A.D.2d 184, 224 N.Y.S.2d 705 (4th
Dept. 1962).
"In all criminal prosecutions, the accused shall enjoy the right
. . . to have the Assistance of Counsel for his defence."
MR. JUSTICE WHITE, with whom MR. JUSTICE CLARK and MR. JUSTICE
HARLAN join, dissenting.
The current incidence of serious violations of the law
represents not only an appalling waste of the potentially happy and
useful lives of those who engage in such conduct, but also an
overhanging, dangerous threat to those unidentified and innocent
people who will be the victims of crime today and tomorrow. This is
a festering problem for which no adequate cures have yet been
devised. At the very least, there is much room for discontent with
remedial measures so far undertaken. And admittedly there remains
much to be settled concerning the disposition to be made of those
who violate the law.
But dissatisfaction with preventive programs aimed at
eliminating crime and profound dispute about whether we should
punish, deter, rehabilitate or cure cannot excuse concealing one of
our most menacing problems until the millennium has arrived. In my
view, a civilized society must maintain its capacity to discover
transgressions of the law and to identify those who flout it. This
much is necessary even to know the scope of the problem, much less
to formulate intelligent countermeasures. It will just not do to
sweep these disagreeable matters under the rug or to pretend they
are not there at all. Page 377 U. S. 208 It is therefore a rather portentous occasion when a
constitutional rule is established barring the use of evidence
which is relevant, reliable and highly probative of the issue which
the trial court has before it -- whether the accused committed the
act with which he is charged. Without the evidence, the quest for
truth may be seriously impeded, and, in many cases, the trial
court, although aware of proof showing defendant's guilt, must
nevertheless release him because the crucial evidence is deemed
inadmissible. This result is entirely justified in some
circumstances because exclusion serves other policies of overriding
importance, as where evidence seized in an illegal search is
excluded not because of the quality of the proof, but to secure
meaningful enforcement of the Fourth Amendment. Weeks v. United
States, 232 U. S. 383 ; Mapp v. Ohio, 367 U. S. 643 . But
this only emphasizes that the soundest of reasons is necessary to
warrant the exclusion of evidence otherwise admissible and the
creation of another area of privileged testimony. With all due
deference, I am not at all convinced that the additional barriers
to the pursuit of truth which the Court today erects rest on
anything like the solid foundations which decisions of this gravity
should require.
The importance of the matter should not be underestimated, for
today's rule promises to have wide application well beyond the
facts of this case. The reason given for the result here -- the
admissions were obtained in the absence of counsel -- would seem
equally pertinent to statements obtained at any time after the
right to counsel attaches, whether there has been an indictment or
not; to admissions made prior to arraignment, at least where the
defendant has counsel or asks for it; to the fruits of admissions
improperly obtained under the new rule; to criminal proceedings in
state courts; and to defendants long since convicted upon
evidence Page 377 U. S. 209 including such admissions. The new rule will immediately do
service in a great many cases.
Whatever the content or scope of the rule may prove to be, I am
unable to see how this case presents an unconstitutional
interference with Massiah's right to counsel. Massiah was not
prevented from consulting with counsel as often as he wished. No
meetings with counsel were disturbed or spied upon. Preparation for
trial was in no way obstructed. It is only a sterile syllogism --
an unsound one, besides -- to say that because Massiah had a right
to counsel's aid before and during the trial, his out-of-court
conversations and admissions must be excluded if obtained without
counsel's consent or presence. The right to counsel has never meant
as much before, Cicenia v. LaGay, 357 U.
S. 504 ; Crooker v. California, 357 U.
S. 433 , and its extension in this case requires some
further explanation, so far unarticulated by the Court.
Since the new rule would exclude all admissions made to the
police, no matter how voluntary and reliable, the requirement of
counsel's presence or approval would seem to rest upon the
probability that counsel would foreclose any admissions at all.
This is nothing more than a thinly disguised constitutional policy
of minimizing or entirely prohibiting the use in evidence of
voluntary out-of-court admissions and confessions made by the
accused. Carried as far as blind logic may compel some to go, the
notion that statements from the mouth of the defendant should not
be used in evidence would have a severe and unfortunate impact upon
the great bulk of criminal cases.
Viewed in this light, the Court's newly fashioned exclusionary
principle goes far beyond the constitutional privilege against
self-incrimination, which neither requires nor suggests the barring
of voluntary pretrial admissions. The Fifth Amendment states that
no person "shall be compelled in any criminal case to be a witness
against Page 377 U. S. 210 himself. . . ." The defendant may thus not be compelled to
testify at his trial, but he may if he wishes. Likewise, he may not
be compelled or coerced into saying anything before trial; but,
until today, he could if he wished to, and, if he did, it could be
used against him. Whether as a matter of self-incrimination or of
due process, the proscription is against compulsion -- coerced
incrimination. Under the prior law, announced in countless cases in
this Court, the defendant's pretrial statements were admissible
evidence if voluntarily made, inadmissible if not the product of
his free will. Hardly any constitutional area has been more
carefully patrolled by this Court, and, until now, the Court has
expressly rejected the argument that admissions are to be deemed
involuntary if made outside the presence of counsel. Cicenia v.
LaGay, supra; Crooker v. California, supra. * The Court presents no facts, no objective evidence, no reasons
to warrant scrapping the voluntary-involuntary test for
admissibility in this area. Without such evidence, I would retain
it in its present form.
This case cannot be analogized to the American Bar Association's
rule forbidding an attorney to talk to the opposing party litigant
outside the presence of his counsel. Aside from the fact that the
Association's canons are not of constitutional dimensions, the
specific canon argued is inapposite because it deals with the
conduct Page 377 U. S. 211 of lawyers and not with the conduct of investigators. Lawyers
are forbidden to interview the opposing party because of the
supposed imbalance of legal skill and acumen between the lawyer and
the party litigant; the reason for the rule does not apply to
nonlawyers, and certainly not to Colson, Massiah's codefendant.
Applying the new exclusionary rule is peculiarly inappropriate
in this case. At the time of the conversation in question,
petitioner was not in custody, but free on bail. He was not
questioned in what anyone could call an atmosphere of official
coercion. What he said was said to his partner in crime, who had
also been indicted. There was no suggestion, or any possibility, of
coercion. What petitioner did not know was that Colson had decided
to report the conversation to the police. Had there been no prior
arrangements between Colson and the police, had Colson simply gone
to the police after the conversation had occurred, his testimony
relating Massiah's statements would be readily admissible at the
trial, as would a recording which he might have made of the
conversation. In such event, it would simply be said that Massiah
risked talking to a friend who decided to disclose what he knew of
Massiah's criminal activities. But if, as occurred here, Colson had
been cooperating with the police prior to his meeting with Massiah,
both his evidence and the recorded conversation are somehow
transformed into inadmissible evidence despite the fact that the
hazard to Massiah remains precisely the same -- the defection of a
confederate in crime.
Reporting criminal behavior is expected, or even demanded, of
the ordinary citizen. Friends may be subpoenaed to testify about
friends, relatives about relatives and partners about partners. I
therefore question the soundness of insulating Massiah from the
apostasy of his partner in crime, and of furnishing constitutional
sanction for the strict secrecy and discipline of criminal
organizations. Page 377 U. S. 212 Neither the ordinary citizen nor the confessed criminal should
be discouraged from reporting what he knows to the authorities and
from lending his aid to secure evidence of crime. Certainly, after
this case, the Colsons will be few and far between, and the
Massiahs can breathe much more easily, secure in the knowledge that
the Constitution furnishes an important measure of protection
against faithless compatriots and guarantees sporting treatment for
sporting peddlers of narcotics.
Meanwhile, of course, the public will again be the loser, and
law enforcement will be presented with another serious dilemma. The
general issue lurking in the background of the Court's opinion is
the legitimacy of penetrating or obtaining confederates in criminal
organizations. For the law enforcement agency, the answer for the
time being can only be in the form of a prediction about the future
application of today's new constitutional doctrine. More narrowly,
and posed by the precise situation involved here, the question is
this: when the police have arrested and released on bail one member
of a criminal ring and another member, a confederate, is
cooperating with the police, can the confederate be allowed to
continue his association with the ring, or must he somehow be
withdrawn to avoid challenge to trial evidence on the ground that
it was acquired after, rather than before, the arrest, after,
rather than before, the indictment?
Defendants who are out on bail have been known to continue their
illicit operations. See Rogers v. United States, 325 F.2d
485 (C.A.10th Cir.). That an attorney is advising them should not
constitutionally immunize their statements made in furtherance of
these operations and relevant to the question of their guilt at the
pending prosecution. In this very case, there is evidence that,
after indictment, defendant Aiken tried to Page 377 U. S. 213 persuade Agent Murphy to go into the narcotics business with
him. Under today's decision, Murphy may neither testify as to the
content of this conversation nor seize for introduction in evidence
any narcotics whose location Aiken may have made known.
Undoubtedly, the evidence excluded in this case would not have
been available but for the conduct of Colson in cooperation with
Agent Murphy, but is it this kind of conduct which should be
forbidden to those charged with law enforcement? It is one thing to
establish safeguards against procedures fraught with the
potentiality of coercion and to outlaw "easy but self-defeating
ways in which brutality is substituted for brains as an instrument
of crime detection." McNabb v. United States, 318 U.
S. 332 , 318 U. S. 344 .
But here there was no substitution of brutality for brains, no
inherent danger of police coercion justifying the prophylatic
effect of another exclusionary rule. Massiah was not being
interrogated in a police station, was not surrounded by numerous
officers or questioned in relays, and was not forbidden access to
others. Law enforcement may have the elements of a contest about
it, but it is not a game. McGuire v. United States, 273 U. S. 95 , 273 U. S. 99 .
Massiah and those like him receive ample protection from the long
line of precedents in this Court holding that confessions may not
be introduced unless they are voluntary. In making these
determinations, the courts must consider the absence of counsel as
one of several factors by which voluntariness is to be judged. See House v. Mayo, 324 U. S. 42 , 324 U. S. 45 -46; Payne v. Arkansas, 356 U. S. 560 , 356 U. S. 567 ; Cicenia v. LaGay, supra, at 357 U. S. 509 .
This is a wiser rule than the automatic rule announced by the
Court, which requires courts and juries to disregard voluntary
admissions which they might well find to be the best possible
evidence in discharging their responsibility for ascertaining
truth.
* Today's rule picks up where the Fifth Amendment ends, and bars
wholly voluntary admissions. I would assume, although one cannot be
sure, that the new rule would not have a similar supplemental role
in connection with the Fourth Amendment. While the Fifth Amendment
bars only compelled incrimination, the Fourth Amendment bars only
unreasonable searches. It could be argued, fruitlessly I would
hope, that, if the police must stay away from the defendant, they
must also stay away from his house once the right to counsel has
attached, and that a court must exclude the products of a
reasonable search made pursuant to a properly issued warrant but
without the consent or presence of the accused's counsel. | Here is a summary of the case:
The Supreme Court ruled that the government violated Massiah's Sixth Amendment right to counsel by deliberately eliciting incriminating statements from him without his attorney present, and these statements could not be used as evidence against him at trial. Massiah was indicted for violating federal narcotics laws, and while he was free on bail, a federal agent secretly listened to his incriminating statements, which were later used as evidence against him at trial. The Court held that the use of these statements deprived Massiah of his constitutional right to counsel and reversed his conviction.
The case sets an important precedent regarding the protection of an individual's right to counsel during the investigation and trial stages, highlighting the importance of ensuring that any incriminating statements made by a defendant are voluntary and made with the presence and guidance of their attorney. |
Criminal Trials & Prosecutions | Kirby v. Illinois | https://supreme.justia.com/cases/federal/us/406/682/ | U.S. Supreme Court Kirby v. Illinois, 406
U.S. 682 (1972) Kirby v. Illinois No. 70-5061 Argued November 11,
1971 Reargued March 20-21,
1972 Decided June 7, 1972 406
U.S. 682 CERTIORARI TO THE APPELLATE COURT
OF ILLINOIS, FIRST DISTRICT Syllabus Petitioner and a companion were stopped for interrogation. When
each produced, in the course of demonstrating identification, items
bearing the name "Shard," they were arrested and taken to the
police station. There, the arresting officers learned of a robbery
of one "Shard" two days before. The officers sent for Shard, who
immediately identified petitioner and his companion as the robbers.
At the time of the confrontation, petitioner and his companion were
not advised of the right to counsel, nor did either ask for or
receive legal assistance. Six weeks later, petitioner and his
companion were indicted for the Shard robbery. At the trial, after
a pretrial motion to suppress his testimony had been overruled,
Shard testified as to his previous identification of petitioner and
his companion, and again identified them as the robbers. The
defendants were found guilty, and petitioner's conviction was
upheld on appeal, the appellate court holding that the per
se exclusionary rule of United States v. Wade, 388 U. S. 218 , and Gilbert v. California, 388 U. S. 263 , did
not apply to pre-indictment confrontations. Held: The judgment is affirmed. Pp. 406 U. S.
687 -691.
121 Ill.App.2d 323, 257 N.E.2d 589, affirmed.
MR. JUSTICE STEWART, joined by THE CHIEF JUSTICE, MR. JUSTICE
BLACKMUN, and MR. JUSTICE REHNQUIST, concluded that a showup after
arrest, but before the initiation of any adversary criminal
proceeding (whether by way of formal charge, preliminary hearing,
indictment, information, or arraignment), unlike the
post-indictment confrontations involved in Gilbert and Wade, is not a criminal prosecution at which the accused,
as a matter of absolute right, is entitled to counsel. Pp. 406 U. S.
687 -691.
MR. JUSTICE POWELL concurred in the result. P. 406 U. S.
691 .
STEWART, J., announced the Court's judgment and delivered an
opinion in which BURGER, C.J., and BLACKMUN and REHNQUIST, JJ.,
joined. BURGER, C.J., filed a concurring statement, post, p. 406 U. S. 691 .
POWELL, J., filed a statement concurring in the result, post, p. 406 U. S. 691 .
BRENNAN, J., filed a dissenting opinion, in which DOUGLAS and Page 406 U. S. 683 MARSHALL, JJ., joined, post, p. 406 U. S. 691 .
WHITE, J., filed a dissenting statement, post, p. 406 U. S.
705 .
MR. JUSTICE STEWART announced the judgment of the Court and an
opinion in which THE CHIEF JUSTICE, MR. JUSTICE BLACKMUN, and MR.
JUSTICE REHNQUIST join.
In United States v. Wade, 388 U.
S. 218 , and Gilbert v. California, 388 U.
S. 263 , this Court held
"that a post-indictment pretrial lineup at which the accused is
exhibited to identifying witnesses is a critical stage of the
criminal prosecution; that police conduct of such a lineup without
notice to and in the absence of his counsel denies the accused his
Sixth [and Fourteenth] Amendment right to counsel and calls in
question the admissibility at trial of the in-court identifications
of the accused by witnesses who attended the lineup." Gilbert v. California, supra, at 388 U. S. 272 .
Those cases further held that no "in-court identifications" are
admissible in evidence if their "source" is a lineup conducted in
violation of this constitutional standard. "Only a per se exclusionary rule as to such testimony can be an effective
sanction," the Court said, "to assure that law Page 406 U. S. 684 enforcement authorities will respect the accused's
constitutional right to the presence of his counsel at the critical
lineup." Id. at 388 U. S. 273 .
In the present case, we are asked to extend the Wade-Gilbert
per se exclusionary rule to identification testimony based
upon a police station showup that took place before the defendant
had been indicted or otherwise formally charged with any criminal
offense.
On February 21, 1968, a man named Willie Shard reported to the
Chicago police that the previous day two men had robbed him on a
Chicago street of a wallet containing, among other things,
traveler's checks and a Social Security card. On February 22, two
police officers stopped the petitioner and a companion, Ralph Bean,
on West Madison Street in Chicago. [ Footnote 1 ] When asked for identification, the petitioner
produced a wallet that contained three traveler's checks and a
Social Security card, all bearing the name of Willie Shard. Papers
with Shard's name on them were also found in Bean's possession.
When asked to explain his possession of Shard's property, the
petitioner first said that the traveler's checks were "play money,"
and then told the officers that he had won them in a crap game. The
officers then arrested the petitioner and Bean and took them to a
police station.
Only after arriving at the police station, and checking the
records there did the arresting officers learn of the Shard
robbery. A police car was then dispatched to Shard's place of
employment, where it picked up Shard and brought him to the police
station. Immediately upon entering the room in the police station
where the petitioner and Bean were seated at a table, Shard
positively identified them as the men who had Page 406 U. S. 685 robbed him two days earlier. No lawyer was present in the room,
and neither the petitioner nor Bean had asked for legal assistance,
or been advised of any right to the presence of counsel.
More than six weeks later, the petitioner and Bean were indicted
for the robbery of Willie Shard. Upon arraignment, counsel was
appointed to represent them, and they pleaded not guilty. A
pretrial motion to suppress Shard's identification testimony was
denied, and, at the trial, Shard testified as a witness for the
prosecution. In his testimony, he described his identification of
the two men at the police station on February 22, [ Footnote 2 ] and identified them again in the
courtroom as the men Page 406 U. S. 686 who had robbed him on February 20. [ Footnote 3 ] He was cross-examined at length regarding the
circumstances of his identification of the two defendants. Cf.
Pointer v. Texas, 380 U. S. 400 . The
jury found both defendants guilty, and the petitioner's conviction
was affirmed on appeal. People v. Kirby, 121 Ill.App.2d
323, 257 N.E.2d 589. [ Footnote
4 ] The Illinois appellate court held that the admission of
Shard's testimony was not error, relying upon an earlier decision
of the Illinois Supreme Court, People v.
Palmer, 41 Ill. 2d
571 , 244 N.E.2d
173 , holding that the Wade-Gilbert per se exclusionary
rule is not applicable to pre-indictment confrontations. Page 406 U. S. 687 We granted certiorari, limited to this question. 402 U.S. 995.
[ Footnote 5 ] I We note at the outset that the constitutional privilege against
compulsory self-incrimination is in no way implicated here. The
Court emphatically rejected the claimed applicability of that
constitutional guarantee in Wade itself:
"Neither the lineup itself nor anything shown by this record
that Wade was required to do in the lineup violated his privilege
against self-incrimination. We have only recently reaffirmed that
the privilege"
"protects an accused only from being compelled to testify
against himself, or otherwise provide the State with evidence of a
testimonial or communicative nature. . . ."
" Schmerber v. California, 384 U. S.
757 , 384 U. S. 761 . . . ."
388 U.S. at 388 U. S.
221 .
" * * * *" "We have no doubt that compelling the accused merely to exhibit
his person for observation by a prosecution witness prior to trial
involves no compulsion of the accused to give evidence having
testimonial significance. It is compulsion of the accused Page 406 U. S. 688 to exhibit his physical characteristics, not compulsion to
disclose any knowledge he might have. . . ." Id. at 388 U. S.
222 .
It follows that the doctrine of Miranda v. Arizona, 384 U. S. 436 , has
no applicability whatever to the issue before us; for the Miranda decision was based exclusively upon the Fifth and
Fourteenth Amendment privilege against compulsory
self-incrimination, upon the theory that custodial interrogation is
inherently coercive.
The Wade-Gilbert exclusionary rule, by contrast, stems
from a quite different constitutional guarantee -- the guarantee of
the right to counsel contained in the Sixth and Fourteenth
Amendments. Unless all semblance of principled constitutional
adjudication is to be abandoned, therefore, it is to the decisions
construing that guarantee that we must look in determining the
present controversy.
In a line of constitutional cases in this Court stemming back to
the Court's landmark opinion in Powell v. Alabama, 287 U. S. 45 , it
has been firmly established that a person's Sixth and Fourteenth
Amendment right to counsel attaches only at or after the time that
adversary judicial proceedings have been initiated against him. See Powell v. Alabama, supra; Johnson v. Zerbst, 304 U. S. 458 ; Hamilton v. Alabama, 368 U. S. 52 ; Gideon v. Wainwright, 372 U. S. 335 ; White v. Maryland, 373 U. S. 59 ; Massiah v. United States, 377 U.
S. 201 ; United States v. Wade, 388 U.
S. 218 ; Gilbert v. California, 388 U.
S. 263 ; Coleman v. Alabama, 399 U. S.
1 .
This is not to say that a defendant in a criminal case has a
constitutional right to counsel only at the trial itself. The Powell case makes clear that the right attaches at the
time of arraignment, [ Footnote
6 ] and the Court Page 406 U. S. 689 has recently held that it exists also at the time of a
preliminary hearing. Coleman v. Alabama, supra. But the
point is that, while members of the Court have differed as to
existence of the right to counsel in the contexts of some of the
above cases, all of those cases have involved points of time at or
after the initiation of adversary judicial criminal proceedings --
whether by way of formal charge, preliminary hearing, indictment,
information, or arraignment.
The only seeming deviation from this long line of constitutional
decisions was Escobedo v. Illinois, 378 U.
S. 478 . But Escobedo is not apposite here, for
two distinct reasons. First, the Court. in retrospect. perceived
that the "prime purpose" of Escobedo was not to vindicate
the constitutional right to counsel as such, but, like Miranda, "to guarantee full effectuation of the privilege
against self-incrimination. . . ." Johnson v. New Jersey, 384 U. S. 719 , 384 U. S. 729 .
Secondly, and perhaps even more important for purely practical
purposes, the Court has limited the holding of Escobedo to
its own facts, Johnson v. New Jersey, supra, at 384 U. S.
733 -734, and those facts are not remotely akin to the
facts of the case before us.
The initiation of judicial criminal proceedings is far from a
mere formalism. It is the starting point of our whole system of
adversary criminal justice. For it is only then that the government
has committed itself to prosecute, and only then that the adverse
positions of government and defendant have solidified. It is then
that a defendant finds himself faced with the prosecutorial forces
of organized society, and immersed in the intricacies of
substantive and procedural criminal law. Page 406 U. S. 690 It is this point, therefore, that marks the commencement of the
"criminal prosecutions" to which alone the explicit guarantees of
the Sixth Amendment are applicable. [ Footnote 7 ] See Powell v. Alabama, 287 U.S. at 287 U. S. 66 -71; Massiah v. United States, 377 U.
S. 201 ; Spano v. New York, 360 U.
S. 315 , 360 U. S. 324 (DOUGLAS, J., concurring).
In this case, we are asked to import into a routine police
investigation an absolute constitutional guarantee historically and
rationally applicable only after the onset of formal prosecutorial
proceedings. We decline to do so. Less than a year after Wade and Gilbert were decided, the Court
explained the rule of those decisions as follows:
"The rationale of those cases was that an accused is entitled to
counsel at any 'critical stage of the prosecution, ' and
that a post-indictment lineup is such a 'critical stage.'"
(Emphasis supplied.) Simmons v. United States, 390 U. S. 377 , 390 U. S.
382 -383. We decline to depart from that rationale today
by imposing a per se exclusionary rule upon testimony
concerning an identification that took place long before the
commencement of any prosecution whatever. II What has been said is not to suggest that there may not be
occasions during the course of a criminal investigation when the
police do abuse identification procedures. Such abuses are not
beyond the reach of the Constitution. As the Court pointed out in Wade itself, it is always necessary to "scrutinize any
pretrial confrontation. . . ." Page 406 U. S. 691 388 U.S. at 388 U. S. 227 .
The Due Process Clause of the Fifth and Fourteenth Amendments
forbids a lineup that is unnecessarily suggestive and conducive to
irreparable mistaken identification. Stovall v. Denno, 388 U. S. 293 ; Foster v. California, 394 U. S. 440 .
[ Footnote 8 ] When a person has
not been formally charged with a criminal offense, Stovall strikes the appropriate constitutional balance between the right of
a suspect to be protected from prejudicial procedures and the
interest of society in the prompt and purposeful investigation of
an unsolved crime.
The judgment is affirmed.
[ Footnote 1 ]
The officers stopped the petitioner and his companion because
they thought the petitioner was a man named Hampton, who was
"wanted" in connection with an unrelated criminal offense. The
legitimacy of this stop and the subsequent arrest is not before
us.
[ Footnote 2 ]
"Q. All right. Now, Willie, calling your attention to February
22, 1968, did you receive a call from the police asking you to come
down to the station?"
"A. Yes, I did."
"Q. When you went down there, what, if anything, happened,
Willie?"
"A. Well, I seen the two men was down there who robbed me."
"Q. Who took you to the police station?"
"A. The policeman picked me up."
"MR. POMARO: Q. When you went to the police station, did you see
the two defendants?"
"A. Yes, I did."
"Q. Do you see them in Court today?"
"A. Yes, sir."
"Q. Point them out, please?"
"A. Yes, that one there and the other one. (Indicating.)"
"MR. POMARO: Indicating for the record the defendants Bean and
Kirby."
"Q. And you positively identified them at the police station, is
that correct?"
"A. Yes."
"Q. Did any police officer make any suggestion to you
whatsoever?"
"THE WITNESS: No, they didn't."
[ Footnote 3 ]
"Q. Willie, when you looked back, when you were walking down the
street and first saw the defendants, when you looked back, did you
see them then?"
"A. Yes, I seen them."
"Q. Did you get a good look at them then?"
"A. Yes, I did."
"Q. All right. Now, when they grabbed you and took your money,
did you see them then?"
"A. Yes, I did."
"Q. Did you get a good look at them then?"
"A. Yes."
"Q. Both of them?"
"A. Correct."
"Q. When they walked away did you see them then?"
"A. Yes."
"Q. Did you look at them, Willie?"
"A. Yes."
"Q. Did you get a good look at them?"
"A. Yes."
"Q. Are those the same two fellows? Look at them, Willie."
"A. Correct."
"Q. Are those the same two that robbed you?"
"A. Yes."
"Q. You are sure, Willie?"
"A. Yes."
[ Footnote 4 ]
Bean's conviction was reversed. People v. Bean, 121
Ill.App.2d 332, 257 N.E.2d 562.
[ Footnote 5 ]
The issue of the applicability of Wade and Gilbert to pre-indictment confrontation has severely
divided the courts. Compare State v. Fields, 104 Ariz.
486, 455 P.2d 964 ; Perkins v. State, 228 So. 2d 382 (Fla.); Buchanan v. Commonwealth, 210 Va. 664, 173 S.E.2d
792; State v. Walters, 457 S.W.2d
817 (Mo.), with United States v. Greene, 139
U.S.App.D.C. 9, 429 F.2d 193; Rivers v. United States, 400
F.2d 935 (CA5); United States v. Phillips, 427 F.2d 1035
(CA9); Commonwealth v. Guillory, 356 Mass. 591, 254
N.E.2d 427 ; People v. Fowler, 1 Cal. 3d 335 ,
461 P.2d 643; Palmer v. State, 5 Md.App. 691, 249
A.2d 482 ; People v. Hutton, 21 Mich.App. 312, 175
N.W.2d 860; Commonwealth v. Whiting, 439 Pa. 205, 266 A.2d
738; In re Holley, 107 R.I. 615, 268
A.2d 723 ; Hayes v. State, 46 Wis.2d 93, 175
N.W.2d 625 .
[ Footnote 6 ]
"[D]uring perhaps the most critical period of the proceedings
against these defendants, that is to say, from the time of their
arraignment until the beginning of their trial, when consultation,
thoroughgoing investigation and preparation were vitally important,
the defendants did not have the aid of counsel in any real sense,
although they were as much entitled to such aid during that period
as at the trial itself." Powell v. Alabama, 287 U. S. 45 , 287 U. S.
57 .
[ Footnote 7 ]
"In all criminal prosecutions, the accused shall enjoy the right
to a speedy and public trial, by an impartial jury of the State and
district wherein the crime shall have been committed, which
district shall have been previously ascertained by law, and to be
informed of the nature and cause of the accusation; to be
confronted with the witnesses against him; to have compulsory
process for obtaining witnesses in his favor, and to have the
Assistance of Counsel for his defence."
U.S.Const., Amdt. VI.
[ Footnote 8 ]
In view of our limited grant of certiorari, we do not consider
whether there might have been a deprivation of due process in the
particularized circumstances of this case. That question remains
open for inquiry in a federal habeas corpus proceeding.
MR. CHIEF JUSTICE BURGER, concurring.
I agree that the right to counsel attaches as soon as criminal
charges are formally made against an accused and he becomes the
subject of a "criminal prosecution." Therefore, I join in the
plurality opinion and in the judgment. Cf. Coleman v.
Alabama, 399 U. S. 1 , 399 U. S. 21 (dissenting opinion).
MR. JUSTICE POWELL, concurring in the result.
As I would not extend the Wade-Gilbert per se exclusionary rule, I concur in the result reached by the Court.
MR. JUSTICE BRENNAN, with whom MR. JUSTICE DOUGLAS and MR.
JUSTICE MARSHALL join, dissenting.
After petitioner and Ralph Bean were arrested, police officers
brought Willie Shard, the robbery victim, to a room in a police
station where petitioner and Bean were seated at a table with two
other police officers. Shard testified at trial that the officers
who brought him to the Page 406 U. S. 692 room asked him if petitioner and Bean were the robbers, and that
he indicated they were. The prosecutor asked him, "And you
positively identified them at the police station, is that correct?"
Shard answered, "Yes." Consequently, the question in this case is
whether, under Gilbert v. California, 388 U.
S. 263 (1967), it was constitutional error to admit
Shard's testimony that he identified petitioner at the pretrial
station house showup when that showup was conducted by the police
without advising petitioner that he might have counsel present. Gilbert held, in the context of a post-indictment lineup,
that
"[o]nly a per se exclusionary rule as to such testimony
can be an effective sanction to assure that law enforcement
authorities will respect the accused's constitutional right to the
presence of his counsel at the critical lineup." Id. at 388 U. S. 273 .
I would apply Gilbert and the principles of its companion
case, United States v. Wade, 388 U.
S. 218 (1967), and reverse. [ Footnote 2/1 ]
In Wade, after concluding that the lineup conducted in
that case did not violate the accused's right against
self-incrimination, id. at 388 U. S.
221 -223, [ Footnote 2/2 ]
the Court addressed Page 406 U. S. 693 the argument
"that the assistance of counsel at the lineup was indispensable
to protect Wade's most basic right as a criminal defendant -- his
right to a fair trial at which the witnesses against him might be
meaningfully cross-examined," id. at 388 U. S.
223 -224. The Court began by emphasizing that the Sixth
Amendment guarantee "encompasses counsel's assistance whenever
necessary to assure a meaningful defence.'" Id. at 388 U. S. 225 .
After reviewing Powell v. Alabama, 287 U. S.
45 (1932); Hamilton v. Alabama, 368 U. S.
52 (1961); and Massiah v. United States, 377 U. S. 201 (1964), the Court, 388 U.S. at 388 U. S. 225 ,
focused upon two cases that involved the right against
self-incrimination: "In Escobedo v. Illinois, 378 U. S.
478 , we drew upon the rationale of Hamilton and Massiah in holding that the right to counsel was
guaranteed at the point where the accused, prior to arraignment,
was subjected to secret interrogation despite repeated requests to
see his lawyer. We again noted the necessity of counsel's presence
if the accused was to have a fair opportunity to present a defense
at the trial itself. . . ." United States v. Wade, 388 U.S. at 388 U. S.
225 -226. [ Footnote
2/3 ]
" * * * * Page 406 U. S.
694 " "[I]n Miranda v. Arizona, 384 U. S.
436 , the rules established for custodial interrogation
included the right to the presence of counsel. The result was
rested on our finding that this and the other rules were necessary
to safeguard the privilege against self-incrimination from being
jeopardized by such interrogation." Id. at 388 U. S. 226 .
The Court then pointed out that
"nothing decided or said in the opinions in [ Escobedo and Miranda ] links the right to counsel only to protection
of Fifth Amendment rights." Ibid. To the contrary, the Court said, those decisions
simply reflected the constitutional
"principle that in addition to counsel's presence at trial, the
accused is guaranteed that he need not stand alone against the
State at any stage of the prosecution, formal or informal, in court
or out, where counsel's absence might derogate from the accused's
right to a fair trial. The security of that right is as much the
aim of the right to counsel as it is of the other guarantees of the
Sixth Amendment. . . ." Id. at 388 U. S.
226 -227. This analysis led to the Court's formulation of
the controlling principle for pretrial confrontations:
"In sum, the principle of Powell v. Alabama and
succeeding cases requires that we scrutinize any pretrial
confrontation of the accused to determine whether the presence of
his counsel is necessary to preserve the defendant's basic right to
a fair trial as affected by his right meaningfully to cross-examine
the witnesses against him and to have effective assistance of
counsel at the trial itself. It calls upon us to analyze whether
potential substantial prejudice to defendant's rights inheres in
the particular confrontation and the ability of counsel to help
avoid that prejudice." Id. at 388 U. S. 227 (emphasis in original). Page 406 U. S. 695 It was that constitutional principle that the Court applied in Wade to pretrial confrontations for identification
purposes. The Court first met the government's contention that a
confrontation for identification is "a mere preparatory step in the
gathering of the prosecution's evidence," much like the scientific
examination of fingerprints and blood samples. The Court responded
that, in the latter instances,
"the accused has the opportunity for a meaningful confrontation
of the Government's case at trial through the ordinary processes of
cross-examination of the Government's expert witnesses and the
presentation of the evidence of his own experts."
The accused thus has no right to have counsel present at such
examinations:
"they are not critical stages, since there is minimal risk that
his counsel's absence at such stages might derogate from his right
to a fair trial." Id. at 388 U. S.
227 -228.
In contrast, the Court said,
"the confrontation compelled by the State between the accused
and the victim or witnesses to a crime to elicit identification
evidence is peculiarly riddled with innumerable dangers and
variable factors which might seriously, even crucially, derogate
from a fair trial." Id. at 388 U. S. 228 .
Most importantly,
"the accused's inability effectively to reconstruct at trial any
unfairness that occurred at the lineup may deprive him of his only
opportunity meaningfully to attack the credibility of the witness'
courtroom identification." Id. at 388 U. S.
231 -232. The Court's analysis of pretrial confrontations
for identification purposes produced the following conclusion:
"Insofar as the accused's conviction may rest on a courtroom
identification in fact, the fruit of a suspect pretrial
identification which the accused is helpless to subject to
effective scrutiny at trial, the accused is deprived of that right
of cross-examination Page 406 U. S. 696 which is an essential safeguard to his right to confront the
witnesses against him. Pointer v. Texas, 380 U. S.
400 . And even though cross-examination is a precious
safeguard to a fair trial, it cannot be viewed as an absolute
assurance of accuracy and reliability. Thus, in the present
context, where so many variables and pitfalls exist, the first line
of defense must be the prevention of unfairness and the lessening
of the hazards of eyewitness identification at the lineup itself.
The trial which might determine the accused's fate may well not be
that in the courtroom but that at the pretrial confrontation, with
the State aligned against the accused, the witness the sole jury,
and the accused unprotected against the overreaching, intentional
or unintentional, and with little or no effective appeal from the
judgment there rendered by the witness -- 'that's the man.'" Id. at 388 U. S.
235 -236. The Court then applied that conclusion to the
specific facts of the case.
"Since it appears that there is grave potential for prejudice,
intentional or not, in the pretrial lineup, which may not be
capable of reconstruction at trial, and since presence of counsel
itself can often avert prejudice and assure a meaningful
confrontation at trial, there can be little doubt that for Wade the post-indictment lineup was a critical stage of
the prosecution at which he was 'as much entitled to such aid [of
counsel] . . . as at the trial itself.'" Id. at 388 U. S.
236 -237.
While it should go without saying, it appears necessary, in view
of the plurality opinion today, to reemphasize that Wade did not require the presence of counsel at pretrial confrontations
for identification purposes simply on the basis of an abstract
consideration of the words "criminal prosecutions" in the Sixth
Amendment. Counsel is required at those confrontations because
"the Page 406 U. S. 697 dangers inherent in eyewitness identification and the
suggestibility inherent in the context of the pretrial
identification," id. at 388 U. S. 235 ,
[ Footnote 2/4 ] mean that protection
must be afforded to the
"most basic right [of] a criminal defendant -- his right to a
fair trial at which the witnesses against him might be meaningfully
cross-examined," id. at 388 U. S. 224 .
Indeed, the Court expressly stated that
"[l]egislative or other regulations, such as those of local
police departments, which eliminate the risks of abuse and
unintentional suggestion at lineup proceedings and the impediments
to meaningful confrontation at trial may also remove the basis for
regarding the stage as 'critical.'" Id. at 388 U. S. 239 ; see id. at 388 U. S. 239 n. 30; Gilbert v. California, 388 U.S. at 388 U. S. 273 .
Hence, "the initiation of adversary judicial criminal proceedings," ante at 406 U. S. 689 ,
is completely irrelevant to whether counsel is necessary at a
pretrial confrontation for identification in order to safeguard the
accused's constitutional rights to confrontation and the effective
assistance of counsel at his trial.
In view of Wade, it is plain, and the plurality today
does not attempt to dispute it, that there inhere in a
confrontation Page 406 U. S. 698 for identification conducted after arrest [ Footnote 2/5 ] the identical hazards to a fair trial that
inhere in such a confrontation conducted "after the onset of formal
prosecutorial proceedings." Id. at 406 U. S. 690 .
The plurality apparently considers an arrest, which for present
purposes we must assume to be based upon probable cause, to be
nothing more than part of "a routine police investigation," ibid., and thus not "the starting point of our whole
system of adversary criminal justice," id. at 406 U. S. 689 .
[ Footnote 2/6 ] An arrest, according
to the plurality, does not face the accused "with the prosecutorial
forces of organized society," nor immerse him "in the intricacies
of substantive and procedural criminal law." Those consequences
ensue, says the plurality, only with "[t]he initiation of judicial
criminal proceedings,"
"[f]or it is only then that the government has committed itself
to prosecute, and only then that the adverse positions of
government and defendant have solidified." Ibid. [ Footnote 2/7 ] If
these propositions do not amount to Page 406 U. S. 699 "mere formalism," ibid., it is difficult to know how to
characterize them. [ Footnote 2/8 ]
An arrest evidences the belief of the police that the perpetrator
of a crime has been caught. A post-arrest confrontation for
identification is not "a mere preparatory step in the gathering of
the prosecution's evidence." Wade, supra, at 388 U. S. 227 .
A primary, and frequently sole, purpose of the confrontation for
identification at that stage is to accumulate proof to buttress the
conclusion of the police that they have the offender in hand. The
plurality offers no reason, and I can think of none, for concluding
that a post-arrest confrontation for identification, unlike a
post-charge confrontation, is not among those
"critical confrontations of the accused by the prosecution at
pretrial proceedings where the results might well settle the
accused's fate and reduce the trial itself to a mere
formality." Id. at 388 U. S.
224 .
The highly suggestive form of confrontation employed in this
case underscores the point. This showup was particularly fraught
with the peril of mistaken Page 406 U. S. 700 identification. In the setting of a police station squad room,
where all present except petitioner and Bean were police officers,
the danger was quite real that Shard's understandable resentment
might lead him too readily to agree with the police that the pair
under arrest, and the only persons exhibited to him, were indeed
the robbers.
"It is hard to imagine a situation more clearly conveying the
suggestion to the witness that the one presented is believed guilty
by the police." Id. at 388 U. S. 234 .
The State had no case without Shard's identification testimony,
[ Footnote 2/9 ] and safeguards
against that consequence were therefore of critical importance.
Shard's testimony itself demonstrates the necessity for such
safeguards. On direct examination, Shard identified petitioner and
Bean not as the alleged robbers on trial in the courtroom, but as
the pair he saw at the police station. His testimony thus lends
strong support to the observation, quoted by the Court in Wade, 388 U.S. at 388 U. S. 229 , that
"[i]t is a matter of common experience that, once a witness has
picked out the accused at the line-up, he is not likely to go back
on his word later on, so that, in practice, the issue of identity
may (in the absence of other relevant evidence) for all practical
purposes be determined there and then, before the trial."
Williams & Hammelmann, Identification Parades, Part I,
[1963] Crim.L.Rev. 479, 482.
The plurality today "decline[s] to depart from [the] rationale"
of Wade and Gilbert. Ante at 406 U. S. 690 .
The plurality discovers that "rationale" not by consulting those
decisions themselves, which would seem to be the appropriate
course, but by reading one sentence in Simmons v. United
States, 390 U. S. 377 , 390 U. S.
382 -383 (1968), where no right to counsel claim was
either asserted or considered. The "rationale" the plurality
discovers is, apparently, Page 406 U. S. 701 that a post-indictment confrontation for identification is part
of the prosecution. The plurality might have discovered a different
"rationale" by reading one sentence in Foster v.
California, 394 U. S. 440 , 394 U. S. 442 (1969), a case decided after Simmons, where the Court
explained that, in Wade and Gilbert, "this Court held that, because of the possibility of unfairness
to the accused in the way a lineup is conducted, a lineup is a
'critical stage' in the prosecution, at which the accused must be
given the opportunity to be represented by counsel."
In Foster, moreover, although the Court mentioned that
the lineups took place after the accused's arrest, it did not say
whether they were also after the information was filed against him.
[ Footnote 2/10 ] Instead, the
Court simply pointed out that, under Stovall v. Denno, 388 U. S. 293 (1967), Wade and Gilbert were "applicable only to
lineups conducted after those cases were decided." 394 U.S. at 394 U. S. 442 .
Similarly, in Coleman v. Alabama, 399 U. S.
1 (1970), another case involving a pre- Wade lineup, no member of the Court saw any significance in whether the
accused had been formally charged with a crime before the lineup
was held. [ Footnote 2/11 ] Page 406 U. S. 702 The plurality might also have discovered a different "rationale"
for Wade and Gilbert had it examined Stovall
v. Denno, supra, decided the same day. In Stovall, the confrontation for identification took place one day after the
accused's arrest. Although the accused was first brought to an
arraignment, it "was postponed until [he] could retain counsel."
388 U.S. at 388 U. S. 295 .
Hence, in the plurality's terms today, the confrontation was held
"before the commencement of any prosecution." Ante at 406 U. S. 690 .
[ Footnote 2/12 ] Yet, in that
circumstance, the Court in Stovall Page 406 U. S. 703 stated that the accused raised "the same alleged constitutional
errors in the admission of allegedly tainted identification
evidence that were before us" in Wade and Gilbert. The Court therefore found that the case
"provide[d] a vehicle for deciding the extent to which the rules
announced in Wade and Gilbert -- requiring the
exclusion of identification evidence which is tainted by exhibiting
the accused to identifying witnesses before trial in the absence of
his counsel -- are to be applied retroactively."
388 U.S. at 388 U. S. 294 .
Indeed, the Court's explicit holding was
"that Wade and Gilbert affect only those cases
and all future cases which involve confrontations for
identification purposes conducted in the absence of counsel after
this date. The rulings of Wade and Gilbert are
therefore inapplicable in the present case." Id. at 388 U. S. 296 .
Hence, the accused in Stovall did not receive the benefit
of the new exclusionary rules, because they were not applied
retroactively; he was not denied their benefit because his
confrontation took place before he had "been formally charged with
a criminal offense." Ante at 406 U. S. 691 .
Moreover, in the course of its retroactivity discussion, 388 U.S.
at 388 U. S.
296 -301, the Court repeated the phrase "pretrial
confrontations for identification" or its equivalent no less than
10 times. Not once did the Court so much as hint that Wade and Gilbert applied only to confrontations after the
accused "had been indicted or otherwise formally charged with [a]
criminal offense." Ante at 406 U. S. 684 .
In fact, at one point, the Court summarized Wade as
holding "that the confrontation [for identification] is a critical stage,' and that counsel Page 406 U. S.
704 is required at all confrontations." 388 U.S. at 388 U. S. 298 (emphasis added). Wade and Gilbert, of course, happened to
involve post-indictment confrontations. Yet even a cursory perusal
of the opinions in those cases reveals that nothing at all turned
upon that particular circumstance. [ Footnote 2/13 ] In short, it is fair to conclude that,
rather than "declin[ing] to depart from [the] rationale" of Wade and Gilbert, ante at 406 U. S. 690 ,
the plurality today, albeit purporting to be engaged in "principled
constitutional adjudication," id. at 406 U. S. 688 ,
refuses even to recognize that "rationale." For my part, I do not
agree that we "extend" Wade and Gilbert, id. at 406 U. S. 684 ,
by holding that the principles of those cases apply to
confrontations for identification conducted after arrest. [ Footnote 2/14 ] Because Shard testified at
trial Page 406 U. S. 705 about his identification of petitioner at the police station
showup, the exclusionary rule of Gilbert, 388 U.S. at 388 U. S.
272 -274, requires reversal.
[ Footnote 2/1 ]
There is no room here for the application of the harmless error
doctrine. Because the admission of Shard's testimony about his
showup identification thus requires reversal, there is no need for
me to consider whether a remand would otherwise be necessary to
afford the State an opportunity to demonstrate that Shard's
in-court identification of petitioner, if that is what it was, see ante at 406 U. S. 686 n. 3, had an independent source. See United States v.
Wade, 388 U. S. 218 , 388 U. S.
239 -242 (1967); Gilbert v. California, 388 U. S. 263 , 388 U. S. 272 (1967).
[ Footnote 2/2 ]
The plurality asserts that, in view of that holding in Wade, "the doctrine of Miranda v. Arizona, 384 U. S. 436 , has
no applicability whatever to the issue before us." Ante at 406 U. S. 688 .
That assertion is necessary for the plurality because Miranda requires the presence of counsel before "the time
that. adversary judicial proceedings have been initiated against"
the accused. Ibid. The assertion is nonetheless erroneous,
for Wade specifically relied upon Miranda in
establishing the constitutional principle that controls the
applicability of the Sixth Amendment guarantee of the right to
counsel at pretrial confrontations. See 388 U.S. at 388 U. S.
226 -227.
[ Footnote 2/3 ]
The plurality asserts that " Escobedo is not apposite
here." Ante at 406 U. S. 689 .
It was, of course, "apposite" in Wade. Hence, to say that Johnson v. New Jersey, 384 U. S. 719 , 384 U. S.
733 -34 (1966), a case decided before Wade, "limited the holding of Escobedo to its own facts," ante at 406 U. S. 689 ,
even if true, is to say nothing at all that is relevant to the
present case. The plurality also utilizes Johnson for the
proposition
"that the 'prime purpose' of Escobedo was not to
vindicate the constitutional right to counsel as such, but, like Miranda, 'to guarantee full effectuation of the privilege
against self-incrimination. . . .'" Ibid. In view of Wade's specific reliance upon Escobedo and Miranda, that, obviously, is no
distinction either. Moreover, it implies that the purpose of Wade was "to vindicate the constitutional right to counsel
as such." That was not the purpose of Wade, as my extended
summary of the opinion demonstrates.
[ Footnote 2/4 ]
The plurality refers to "occasions during the course of a
criminal investigation when the police do abuse identification
procedures" and asserts that "[s]uch abuses are not beyond the
reach of the Constitution." Ante at 406 U. S. 690 .
The constitutional principles established in Wade, however, are not addressed solely to police "abuses," as Wade explicitly pointed out:
"The few cases that have surfaced therefore reveal the existence
of a process attended with hazards of serious unfairness to the
criminal accused and strongly suggest the plight of the more
numerous defendants who are unable to ferret out suggestive
influences in the secrecy of the confrontation. We do not assume
that these risks are the result of police procedures intentionally
designed to prejudice an accused. Rather, we assume they derive
from the dangers inherent in eyewitness identification and the
suggestibility inherent in the context of the pretrial
identification."
388 U.S. at 388 U. S.
234 -235.
[ Footnote 2/5 ]
This case does not require me to consider confrontations that
take place before custody, see, e.g., Bratten v.
Delaware, 307 F.
Supp. 643 (Del.1969); People v. Cesarz, 44 Ill. 2d
180 , 255 N.E.2d 1 (1969); State v. Moore, 111 N.J.Super. 528, 269 A.2d 534 (1970), nor accidental confrontations not arranged
by the police, see, e.g., United States v. Pollack, 427
F.2d 1168 (CA5 1970); State v. Bibbs, 461 S.W.2d
755 (Mo.1970), nor on-the-scene encounters shortly after the
crime, see, e.g., Russell v. United States, 133
U.S.App.D.C. 77, 408 F.2d 1280 (1969); United States v.
Davis, 399 F.2d 948 (CA2 1968).
[ Footnote 2/6 ] Cf. Miranda v. Arizona, 384 U.
S. 436 , 384 U. S. 477 (1966) (emphasis added):
"The principles announced today deal with the protection which
must be given to the privilege against self-incrimination when the
individual is first subjected to police interrogation while in
custody at the station or otherwise deprived of his freedom of
action in any significant way. It is at this point that our
adversary system of criminal proceedings commences, distinguishing itself at the outset from the inquisitorial system
recognized in some countries."
[ Footnote 2/7 ]
The plurality concludes that
"[i]t is this point, therefore, that marks the commencement of
the 'criminal prosecutions' to which alone the explicit guarantees
of the Sixth Amendment are applicable." Ante at 406 U. S. 690 .
This Court has taken the contrary position with respect to the
speedy trial guarantee of the Sixth Amendment:
"Invocation of the speedy trial provision thus need not await
indictment, information, or other formal charge. But we decline to
extend the reach of the amendment to the period prior to arrest. .
. . In the case before us, neither appellee was arrested, charged,
or otherwise subjected to formal restraint prior to indictment. It
was this event, therefore, which transformed the appellees into
'accused' defendants who are subject to the speedy trial
protections of the Sixth Amendment." United States v. Marion, 404 U.
S. 307 , 404 U. S. 321 , 404 U. S. 325 (1971).
[ Footnote 2/8 ]
As the California Supreme Court pointed out, with an eye toward
the real world,
"the establishment of the date of formal accusation as the time
wherein the right to counsel at lineup attaches could only lead to
a situation wherein substantially all lineup would be conducted
prior to indictment or information." People v. Fowler, 1 Cal. 3d 335 ,
344, 461 P.2d 643, 650 (1969).
[ Footnote 2/9 ]
Bean took the stand and testified that he and petitioner found
Shard's traveler's checks and Social Security card two hours before
their arrest strewn upon the ground in an alley.
[ Footnote 2/10 ]
In fact, the lineups in Foster took place before the
information was filed. The crime occurred on January 25, 1966.
After the accused was arrested, he was exhibited to the witness in
two lineups, both conducted within two weeks of January 25. The
information was not filed until March 17. Foster v.
California, No. 47, O.T. 1968, Brief for Respondent 3-8.
[ Footnote 2/11 ]
In fact, the lineup in Coleman took place before the
accused were formally charged. The crime occurred on July 24, 1966.
The accused were arrested on September 29, and the lineup was held
on October 1. The preliminary hearing was not until October 14, and
the indictments were not returned until November 11. Coleman v.
Alabama, No. 72, O.T. 1969, Brief for Petitioners 5-7; App.
84; see 399 U.S. at 399 U. S. 26 (STEWART, J., joined by BURGER, C.J., dissenting).
On those facts, the plurality opinion adverted to the timing of
the lineup only to the extent of pointing out that it was held
"about two months after the assault and seven months before
petitioners' trial." Id. at 399 U. S. 3 (BRENNAN, J., joined by DOUGLAS, WHITE, and MARSHALL, JJ.). The
plurality opinion then simply noted that
"[p]etitioners concede that, since the lineup occurred before
[ Wade and Gilbert ] were decided . . . , they
cannot invoke the holding of those cases requiring the exclusion of
in-court identification evidence which is tainted by exhibiting the
accused to identifying witnesses before trial in the absence of
counsel." Id. at 399 U. S. 3 -4.
Mr. Justice Black, in his concurring opinion, took no notice at
all of when the lineup was conducted. Instead, reiterating his view
that Wade "should be held fully retroactive," he insisted
"that petitioners in this pre- Wade case were entitled to
court-appointed counsel at the time of the lineup in which they
participated and that Alabama's failure to provide such counsel
violated petitioners' rights under the Sixth and Fourteenth
Amendments." Id. at 399 U. S. 13 . Nor
did Mr. Justice Harlan refer to the timing of the lineup in
expressing his
"dissent from the refusal to accord petitioners the benefit of
the Wade holding, neither petitioner having been afforded
counsel at the police 'lineup' identification."
Mr. Justice Harlan's summary of Wade, like that of the
prevailing opinion, did not limit its "rationale" to post-charge
confrontations:
"The Wade rule requires the exclusion of any in-court
identification preceded by a pretrial Lineup where the accused was
not represented by counsel, unless the in-court identification is
found to be derived from a source 'independent' of the tainted
pretrial viewing." Id. at 399 U. S. 21 .
[ Footnote 2/12 ]
The chain of events in Stovall was as follows: the
crime occurred on the night of August 23, 1961. The accused was
arrested on the afternoon of August 24, and appeared for
arraignment on the morning of August 25. The arraignment was
postponed until August 31 so that he could retain counsel. The
confrontation with the witness took place about noon on August 25.
At the arraignment on August 31, the committing magistrate
appointed counsel for the accused and set the felony examination
for September 1. That examination was never held, for, on August
31, the indictment was returned. Stovall v. Denno, No.
254, O.T. 1966, Brief for Respondent 34.
[ Footnote 2/13 ]
The Wade dissenters found no such limitation:
"The rule applies to any lineup, to any other techniques
employed to produce an identification and a fortiori to a
face-to-face encounter between the witness and the suspect alone,
regardless of when the identification occurs in time or place, and
whether before or after indictment or information." United States v. Wade, 388 U.S. at 388 U. S. 251 (WHITE, J., joined by Harlan and STEWART, JJ., dissenting in part
and concurring in part).
[ Footnote 2/14 ]
The plurality rather surprisingly asserts that "[t]he issue of
the applicability of Wade and Gilbert to
pre-indictment confrontation has severely divided the
courts." Ante at 406 U. S. 687 n. 5 (emphasis added). As the plurality's citations reveal, there
are decisions from five States, including Illinois, that have
refused to apply Wade and Gilbert to
pre-indictment confrontations for identification. Ranged against
those five, however, are decisions from at least 13 States. See
People v. Fowler, 1 Cal. 3d 335 ,
461 P.2d 643 (1969); State v. Singleton, 253 La. 18, 215 So. 2d
838 (1968); Commonwealth v. Guillory, 356 Mass. 591, 254
N.E.2d 427 (1970); Palmer v. State, 5 Md.App. 691, 249 A.2d 482 (1969); People v. Hutton, 21 Mich.App.
312, 175 N.W.2d 860 (1970); Thompson v. State, 85 Nev.
134, 451 P.2d 704 (1969); State v. Wright, 274 N.C. 84, 161 S.E.2d
581 (1968); State v. Isaacs, 24 Ohio App.2d 115, 265
N.E.2d 327 (1970); Commonwealth v. Whiting, 439 Pa. 205,
266 A.2d 738 (1970); In re Holley, 107 R.I. 615, 268
A.2d 723 (1970); Martinez v. State, 437
S.W.2d 842 (Tex.Ct.Crim.App. 1969); State v.
Hicks, 76 Wash. 2d
80 , 455 P.2d
943 (1969); Hayes v. State, 46 Wis.2d 93, 175
N.W.2d 625 (1970).
In addition, every United States Court of Appeals that has
confronted the question has applied Wade and Gilbert to pre-indictment confrontations. See United
States v. Greene, 139 U.S.App.D.C. 9, 429 F.2d 193 (1970); Cooper v. Picard, 428 F.2d 1351 (CA1 1970); United
States v. Ayers, 426 F.2d 524 (CA2 1970); Government of
Virgin Islands v. Callwood, 440 F.2d 1206 (CA3 1971); Rivers v. United States, 400 F.2d 935 (CA5 1968); United States v. Broadhead, 413 F.2d 1351 (CA7 1969); United States v. Phillips, 427 F.2d 1035 (CA9 1970); Wilson v. Gaffney, 454 F.2d 142 (CA10 1972). As Chief
Judge Lewis, speaking for the Court of Appeals for the Tenth
Circuit, put it in the last-cited case:
"In both Wade and Gilbert, the lineups were
conducted after indictments had been returned; in the case at bar,
the lineup occurred before petitioner had been formally charged.
But surely the assistance of counsel, now established as an
absolute post-indictment right, does not arise or attach because of
the return of an indictment. The confrontation of a lineup . . .
cannot have a constitutional distinction based upon the lodging of
a formal charge. Every reason set forth by the Supreme Court in Wade . . . for the assistance of counsel post-indictment
has equal or more impact when projected against a pre-indictment
atmosphere. We hold that petitioner had a right to counsel at the
lineup here considered." Id. at 144.
MR. JUSTICE WHITE, dissenting. United States v. Wade, 388 U.
S. 218 (1967), and Gilbert v. California, 388 U. S. 263 (1967), govern this case and compel reversal of the judgment
below. | The Supreme Court ruled that a person does not have an absolute right to counsel during a pre-indictment confrontation for identification purposes, affirming the lower court's decision. |
Criminal Trials & Prosecutions | U.S. v. Wade | https://supreme.justia.com/cases/federal/us/388/218/ | U.S. Supreme Court United States v. Wade, 388
U.S. 218 (1967) United States v. Wade No. 334 Argued February 16,
1967 Decided June 12, 1967 388
U.S. 218 CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE FIFTH
CIRCUIT Syllabus Several weeks after respondent's indictment for robbery of a
federally insured bank and for conspiracy, respondent, without
notice to his appointed counsel, was placed in a lineup in which
each person wore strips of tape on his face, as the robber
allegedly had done, and, on direction, repeated words like those
the robber allegedly had used. Two bank employees identified
respondent as the robber. At the trial, when asked if the robber
was in the courtroom, they identified respondent. The prior lineup
identifications were elicited on cross-examination. Urging that the
conduct of the lineup violated his Fifth Amendment privilege
against self-incrimination and his Sixth Amendment right to
counsel, respondent filed a motion for judgment of acquittal or,
alternatively, to strike the courtroom identifications. The trial
court denied the motions, and respondent was convicted. The Court
of Appeals reversed, holding that, though there was no Fifth
Amendment deprivation, the absence of counsel at the lineup denied
respondent his right to counsel under the Sixth Amendment and
required the grant of a new trial at which the in-court
identifications of those who had made lineup identifications would
be excluded. Held: 1. Neither the lineup itself nor anything required therein
violated respondent's Fifth Amendment privilege against
self-incrimination, since merely exhibiting his person for
observation by witnesses and using his voice as an identifying
physical characteristic involved no compulsion of the accused to
give evidence of a testimonial nature against himself which is
prohibited by that Amendment. Pp. 388 U. S.
221 -223.
2. The Sixth Amendment guarantees an accused the right to
counsel not only at his trial but at any critical confrontation by
the prosecution at pretrial proceedings where the results might
well determine his fate and where the absence of counsel might
derogate from his right to a fair trial. Pp. 388 U. S.
223 -227.
3. The post-indictment lineup (unlike such preparatory steps as
analyzing fingerprints and blood samples) was a critical
prosecutive stage at which respondent was entitled to the aid of
counsel. Pp. 388 U. S.
227 -239. Page 388 U. S. 219 (a) There is a great possibility of unfairness to the accused at
that point, (1) because of the manner in which confrontations for
identification are frequently conducted, (2) because of dangers
inherent in eyewitness identification and suggestibility' inherent
in the context of the confrontations, and (3) because of the
likelihood that the accused will often be precluded from
reconstructing what occurred, and thereby obtaining a full hearing
on the identification issue at trial. Pp. 388 U. S.
229 -235.
(b) This case illustrates the potential for improper influence
on witnesses through the lineup procedure, since the bank employees
were allowed to see respondent in the custody of FBI agents before
the lineup began. Pp. 388 U. S.
233 -234.
(c) The presence of counsel at the lineup will significantly
promote fairness at the confrontation and a full hearing at trial
on the issue of identification. Pp. 388 U. S.
236 -238.
4. In-court identification by a witness to whom the accused was
exhibited before trial in the absence of counsel must be excluded
unless it can be established that such evidence had an independent
origin or that error in its admission was harmless. Since it is not
clear that the Court of Appeals applied the prescribed rule of
exclusion, and since the nature of the in-court identifications
here was not an issue in the trial and cannot be determined on the
record, the case must be remanded to the District Court for
resolution of these issues. Pp. 388 U. S.
239 -243.
358 F.2d 557, vacated and remanded.
MR. JUSTICE BRENNAN delivered the opinion of the Court.
The question here is whether courtroom identifications of an
accused at trial are to be excluded from evidence because the
accused was exhibited to the witnesses before trial at a
post-indictment lineup conducted for Page 388 U. S. 220 identification purposes without notice to, and in the absence
of, the accused's appointed counsel.
The federally insured bank in Eustace, Texas, was robbed on
September 21, 1964. A man with a small strip of tape on each side
of his face entered the bank, pointed a pistol at the female
cashier and the vice-president, the only persons in the bank at the
time, and forced them to fill a pillowcase with the bank's money.
The man then drove away with an accomplice who had been waiting in
a stolen car outside the bank. On March 23, 1965, an indictment was
returned against respondent, Wade, and two others for conspiring to
rob the bank, and against Wade and the accomplice for the robbery
itself. Wade was arrested on April 2, and counsel was appointed to
represent him on April 26. Fifteen days later, an FBI agent,
without notice to Wade's lawyer, arranged to have the two bank
employees observe a lineup made up of Wade and five or six other
prisoners and conducted in a courtroom of the local county
courthouse. Each person in the line wore strips of tape such as
allegedly worn by the robber, and, upon direction, each said
something like "put the money in the bag," the words allegedly
uttered by the robber. Both bank employees identified Wade in the
lineup as the bank robber.
At trial, the two employees, when asked on direct examination if
the robber was in the courtroom, pointed to Wade. The prior lineup
identification was then elicited from both employees on
cross-examination. At the close of testimony, Wade's counsel moved
for a judgment of acquittal or, alternatively, to strike the bank
officials' courtroom identifications on the ground that conduct of
the lineup, without notice to and in the absence of his appointed
counsel, violated his Fifth Amendment privilege against
self-incrimination and his Sixth Amendment right to the assistance
of counsel. The motion was denied, and Wade was convicted. The Page 388 U. S. 221 Court of Appeals for the Fifth Circuit reversed the conviction
and ordered a new trial at which the in-court identification
evidence was to be excluded, holding that, though the lineup did
not violate Wade's Fifth Amendment rights, "the lineup, held as it
was, in the absence of counsel already chosen to represent
appellant, was a violation of his Sixth Amendment rights. . . ."
358 F.2d 557, 560. We granted certiorari, 385 U.S. 811, and set the
case for oral argument with No. 223, Gilbert v. California,
post, p. 388 U. S. 263 , and
No. 254, Stovall v. Denno, post, p. 388 U. S. 293 ,
which present similar questions. We reverse the judgment of the
Court of Appeals and remand to that court with direction to enter a
new judgment vacating the conviction and remanding the case to the
District Court for further proceedings consistent with this
opinion. I Neither the lineup itself nor anything shown by this record that
Wade was required to do in the lineup violated his privilege
against self-incrimination. We have only recently reaffirmed that
the privilege
"protects an accused only from being compelled to testify
against himself, or otherwise provide the State with evidence of a
testimonial or communicative nature. . . ." Schmerber v. California, 384 U.
S. 757 , 384 U. S. 761 .
We there held that compelling a suspect to submit to a withdrawal
of a sample of his blood for analysis for alcohol content and the
admission in evidence of the analysis report were not compulsion to
those ends. That holding was supported by the opinion in Holt
v. United States, 218 U. S. 245 , in
which case a question arose as to whether a blouse belonged to the
defendant. A witness testified at trial that the defendant put on
the blouse, and it had fit him. The defendant argued that the
admission of the testimony was error because compelling him to put
on the blouse was a violation of his privilege. The Court Page 388 U. S. 222 rejected the claim as "an extravagant extension of the Fifth
Amendment," Mr. Justice Holmes saying for the Court:
"[T]he prohibition of compelling a man in a criminal court to be
witness against himself is a prohibition of the use of physical or
moral compulsion to extort communications from him, not an
exclusion of his body as evidence when it may be material."
218 U.S. at 218 U. S.
252 -253. The Court in Holt, however, put aside
any constitutional questions which might be involved in compelling
an accused, as here, to exhibit himself before victims of or
witnesses to an alleged crime; the Court stated, "we need not
consider how far a court would go in compelling a man to exhibit
himself." Id. at 218 U. S. 253 .
[ Footnote 1 ]
We have no doubt that compelling the accused merely to exhibit
his person for observation by a prosecution witness prior to trial
involves no compulsion of the accused to give evidence having
testimonial significance. It is compulsion of the accused to
exhibit his physical characteristics, not compulsion to disclose
any knowledge he might have. It is no different from compelling
Schmerber to provide a blood sample or Holt to wear the blouse,
and, as in those instances, is not within the cover of the
privilege. Similarly, compelling Wade to speak within hearing
distance of the witnesses, even to utter words purportedly uttered
by the robber, was not compulsion to utter statements of a
"testimonial" nature; he was required to use his voice as an
identifying Page 388 U. S. 223 physical characteristic, not to speak his guilt. We held in Schmerber, supra, at 384 U. S. 761 ,
that the distinction to be drawn under the Fifth Amendment
privilege against self-incrimination is one between an accused's
"communications," in whatever form, vocal or physical, and
"compulsion which makes a suspect or accused the source of real
or physical evidence,'" Schmerber, supra, at 384 U. S. 764 .
We recognized that "both federal and state courts have usually held that . . . [the
privilege] offers no protection against compulsion to submit to
fingerprinting, photography, or measurements, to write or speak for
identification, to appear in court, to stand, to assume a stance,
to walk, or to make a particular gesture." Id. at 384 U. S. 764 .
None of these activities becomes testimonial within the scope of
the privilege because required of the accused in a pretrial
lineup.
Moreover, it deserves emphasis that this case presents no
question of the admissibility in evidence of anything Wade said or
did at the lineup which implicates his privilege. The Government
offered no such evidence as part of its case, and what came out
about the lineup proceedings on Wade's cross-examination of the
bank employees involved no violation of Wade's privilege. II The fact that the lineup involved no violation of Wade's
privilege against self-incrimination does not, however, dispose of
his contention that the courtroom identifications should have been
excluded because the lineup was conducted without notice to, and in
the absence of, his counsel. Our rejection of the right to counsel
claim in Schmerber rested on our conclusion in that case
that "[n]o issue of counsel's ability to assist petitioner in
respect of any rights he did possess is presented." 384 U.S. at 384 U. S. 766 .
In contrast, in this case, it is urged that the assistance of
counsel at the lineup was indispensable Page 388 U. S. 224 to protect Wade's most basic right as a criminal defendant --
his right to a fair trial at which the witnesses against him might
be meaningfully cross-examined.
The Framers of the Bill of Rights envisaged a broader role for
counsel than under the practice then prevailing in England of
merely advising his client in "matters of law," and eschewing any
responsibility for "matters of fact." [ Footnote 2 ] The constitutions in at least 11 of the 13
States expressly or impliedly abolished this distinction. Powell v. Alabama, 287 U. S. 45 , 287 U. S. 60 -65;
Note, 73 Yale L.J. 1000, 1030-1033 (1964).
"Though the colonial provisions about counsel were in accord on
few things, they agreed on the necessity of abolishing the
facts-law distinction; the colonists appreciated that, if a
defendant were forced to stand alone against the state, his case
was foredoomed."
73 Yale L.J., supra, at 1033-1034. This background is
reflected in the scope given by our decisions to the Sixth
Amendment's guarantee to an accused of the assistance of counsel
for his defense. When the Bill of Rights was adopted, there were no
organized police forces as we know them today. [ Footnote 3 ] The accused confronted the prosecutor
and the witnesses against him, and the evidence was marshalled,
largely at the trial itself. In contrast, today's law enforcement
machinery involves critical confrontations of the accused by the
prosecution at pretrial proceedings where the results might well
settle the accused's fate and reduce the trial itself to a mere
formality. In recognition of these realities of modern criminal
prosecution, our cases have construed the Sixth Amendment guarantee
to apply to "critical" stages of the proceedings. The guarantee
reads:
"In all criminal Page 388 U. S. 225 prosecutions, the accused shall enjoy the right . . . to have
the Assistance of Counsel for his defence. "
(Emphasis supplied.) The plain wording of this guarantee thus
encompasses counsel's assistance whenever necessary to assure a
meaningful "defence."
As early as Powell v. Alabama, supra, we recognized
that the period from arraignment to trial was "perhaps the most
critical period of the proceedings . . . ," id. at 287 U. S. 57 ,
during which the accused "requires the guiding hand of counsel . .
. ," id. at 287 U. S. 69 , if
the guarantee is not to prove an empty right. That principle has
since been applied to require the assistance of counsel at the type
of arraignment -- for example, that provided by Alabama -- where
certain rights might be sacrificed or lost: "What happens there may
affect the whole trial. Available defenses may be irretrievably
lost, if not then and there asserted. . . ." Hamilton v.
Alabama, 368 U. S. 52 , 368 U. S. 54 . See White v. Maryland, 373 U. S. 59 . The
principle was also applied in Massiah v. United States, 377 U. S. 201 ,
where we held that incriminating statements of the defendant should
have been excluded from evidence when it appeared that they were
overheard by federal agents who, without notice to the defendant's
lawyer, arranged a meeting between the defendant and an accomplice
turned informant. We said, quoting a concurring opinion in Spano v. New York, 360 U. S. 315 , 360 U. S. 326 ,
that
"[a]nything less . . . might deny a defendant 'effective
representation by counsel at the only stage when legal aid and
advice would help him.'"
377 U.S. at 377 U. S.
204 .
In Escobedo v. Illinois, 378 U.
S. 478 , we drew upon the rationale of Hamilton and Massiah in holding that the right to counsel was
guaranteed at the point where the accused, prior to arraignment,
was subjected to secret interrogation despite repeated requests to
see his lawyer. We again noted the necessity of counsel's
presence Page 388 U. S. 226 if the accused was to have a fair opportunity to present a
defense at the trial itself:
"The rule sought by the State here, however, would make the
trial no more than an appeal from the interrogation, and the "right
to use counsel at the formal trial [would be] a very hollow thing
[if], for all practical purposes, the conviction is already assured
by pretrial examination." . . . "One can imagine a cynical
prosecutor saying: Let them have the most illustrious counsel,
now. They can't escape the noose. There is nothing that counsel can
do for them at the trial.'"" 378 U.S. at 378 U. S.
487 -488. Finally, in Miranda v. Arizona, 384 U. S. 436 , the
rules established for custodial interrogation included the right to
the presence of counsel. The result was rested on our finding that
this and the other rules were necessary to safeguard the privilege
against self-incrimination from being jeopardized by such
interrogation.
Of course, nothing decided or said in the opinions in the cited
cases links the right to counsel only to protection of Fifth
Amendment rights. Rather, those decisions "no more than reflect a
constitutional principle established as long ago as Powell v.
Alabama. . . ." Massiah v. United States, supra, at 377 U. S. 205 .
It is central to that principle that, in addition to counsel's
presence at trial, [ Footnote 4 ]
the accused is guaranteed that he need not stand alone against the
State at any stage of the prosecution, formal or informal, in court
or out, where counsel's absence might derogate from the accused's
right to a fair trial. [ Footnote
5 ] The security of that right is as much the aim of the right
to counsel as it is of the other guarantees of the Page 388 U. S. 227 Sixth Amendment -- the right of the accused to a speedy and
public trial by an impartial jury, his right to be informed of the
nature and cause of the accusation, and his right to be confronted
with the witnesses against him and to have compulsory process for
obtaining witnesses in his favor. The presence of counsel at such
critical confrontations, as at the trial itself, operates to assure
that the accused's interests will be protected consistently with
our adversary theory of criminal prosecution. Cf. Pointer v.
Texas, 380 U. S. 400 .
In sum, the principle of Powell v. Alabama and
succeeding cases requires that we scrutinize any pretrial
confrontation of the accused to determine whether the presence of
his counsel is necessary to preserve the defendant's basic right to
a fair trial as affected by his right meaningfully to cross-examine
the witnesses against him and to have effective assistance of
counsel at the trial itself. It calls upon us to analyze whether
potential substantial prejudice to defendant's rights inheres in
the particular confrontation and the ability of counsel to help
avoid that prejudice. III The Government characterizes the lineup as a mere preparatory
step in the gathering of the prosecution's evidence, not different
-- for Sixth Amendment purposes -- from various other preparatory
steps, such as systematized or scientific analyzing of the
accused's fingerprints, blood sample, clothing, hair, and the like.
We think there are differences which preclude such stages' being
characterized as critical stages at which the accused has the right
to the presence of his counsel. Knowledge of the techniques of
science and technology is sufficiently available, and the variables
in techniques few enough, that the accused has the opportunity for
a meaningful confrontation of the Government's case at Page 388 U. S. 228 trial through the ordinary processes of cross-examination of the
Government's expert witnesses and the presentation of the evidence
of his own experts. The denial of a right to have his counsel
present at such analyses does not therefore violate the Sixth
Amendment; they are not critical stages, since there is minimal
risk that his counsel's absence at such stages might derogate from
his right to a fair trial. IV But the confrontation compelled by the State between the accused
and the victim or witnesses to a crime to elicit identification
evidence is peculiarly riddled with innumerable dangers and
variable factors which might seriously, even crucially, derogate
from a fair trial. The vagaries of eyewitness identification are
well known; the annals of criminal law are rife with instances of
mistaken identification. [ Footnote
6 ] Mr. Justice Frankfurter once said:
"What is the worth of identification testimony even when
uncontradicted? The identification of strangers is proverbially
untrustworthy. The hazards of such testimony are established by a
formidable number of instances in the records of English and
American trials. These instances are recent -- not due to the
brutalities of ancient criminal procedure."
The Case of Sacco and Vanzetti 30 (1927). A major factor
contributing to the high incidence of miscarriage of justice from
mistaken identification has been the degree of suggestion inherent
in the manner in which the prosecution presents the suspect to
witnesses for pretrial identification. A commentator Page 388 U. S. 229 has observed that
"[t]he influence of improper suggestion upon identifying
witnesses probably accounts for more miscarriages of justice than
any other single factor -- perhaps it is responsible for more such
errors than all other factors combined."
Wall, Eye-Witness Identification in Criminal Cases 26.
Suggestion can be created intentionally or unintentionally in many
subtle ways. [ Footnote 7 ] And
the dangers for the suspect are particularly grave when the
witness' opportunity for observation was insubstantial, and thus
his susceptibility to suggestion the greatest.
Moreover,
"[i]t is a matter of common experience that, once a witness has
picked out the accused at the line-up, he is not likely to go back
on his word later on, so that, in practice, the issue of identity
may (in the absence of other relevant evidence) for all practical
purposes be determined there and then, before the trial. [ Footnote 8 ]"
The pretrial confrontation for purpose of identification may
take the form of a lineup, also known as an "identification parade"
or "showup," as in the present case, or presentation of the suspect
alone to the witness, as in Stovall v. Denno, supra. It is
obvious that risks of suggestion attend either form of
confrontation, and increase the dangers inhering in eyewitness
identification. [ Footnote 9 ]
But, Page 388 U. S. 230 as is the case with secret interrogations, there is serious
difficulty in depicting what transpires at lineups and other forms
of identification confrontations. "Privacy results in secrecy, and
this, in turn, results in a gap in our knowledge as to what, in
fact, goes on. . . ." Miranda v. Arizona, supra, at 384 U. S. 448 .
For the same reasons, the defense can seldom reconstruct the manner
and mode of lineup identification for judge or jury at trial. Those
participating in a lineup with the accused may often be police
officers; [ Footnote 10 ] in
any event, the participants' names are rarely recorded or divulged
at trial. [ Footnote 11 ] The
impediments to an objective observation are increased when the
victim is the witness. Lineups are prevalent in rape and robbery
prosecutions, and present a particular hazard that a victim's
understandable outrage may excite vengeful or spiteful motives.
[ Footnote 12 ] In any event,
neither witnesses nor lineup participants are apt to be alert for
conditions prejudicial to the suspect. And if they were, it would
likely be of scant benefit to the suspect, since neither witnesses
nor lineup participants are likely to be schooled in the detection
of suggestive influences. [ Footnote 13 ] Improper influences Page 388 U. S. 231 may go undetected by a suspect, guilty or not, who experiences
the emotional tension which we might expect in one being confronted
with potential accusers. [ Footnote 14 ] Even when he does observe abuse, if he has a
criminal record, he may be reluctant to take the stand and open up
the admission of prior convictions. Moreover, any protestations by
the suspect of the fairness of the lineup made at trial are likely
to be in vain; [ Footnote 15 ]
the jury's choice is between the accused's unsupported version and
that of the police officers present. [ Footnote 16 ] In short, the accused's Page 388 U. S. 232 inability effectively to reconstruct at trial any unfairness
that occurred at the lineup may deprive him of his only opportunity
meaningfully to attack the credibility of the witness' courtroom
identification.
What facts have been disclosed in specific cases about the
conduct of pretrial confrontations for identification illustrate
both the potential for substantial prejudice to the accused at that
stage and the need for its revelation at trial. A commentator
provides some striking examples:
"In a Canadian case . . . the defendant had been picked out of a
line-up of six men, of which he was the only Oriental. In other
cases, a black-haired suspect was placed among a group of
light-haired persons, tall suspects have been made to stand with
short non-suspects, and, in a case where the perpetrator of the
crime was known to be a youth, a suspect under twenty was placed in
a line-up with five other persons, all of whom were forty or over.
[ Footnote 17 ]"
Similarly state reports, in the course of describing prior
identifications admitted as evidence of guilt, reveal Page 388 U. S. 233 numerous instances of suggestive procedures, for example, that
all in the lineup but the suspect were known to the identifying
witness, [ Footnote 18 ] that
the other participants in a lineup were grossly dissimilar in
appearance to the suspect, [ Footnote 19 ] that only the suspect was required to wear
distinctive clothing which the culprit allegedly wore, [ Footnote 20 ] that the witness is
told by the police that they have caught the culprit after which
the defendant is brought before the witness alone or is viewed in
jail, [ Footnote 21 ] that the
suspect is pointed out before or during a lineup, [ Footnote 22 ] and that the participants in
the lineup are asked to try on an article of clothing which fits
only the suspect. [ Footnote
23 ]
The potential for improper influence is illustrated by the
circumstances, insofar as they appear, surrounding the prior
identifications in the three cases we decide today. In the present
case, the testimony of the identifying Page 388 U. S. 234 witnesses elicited on cross-examination revealed that those
witnesses were taken to the courthouse and seated in the courtroom
to await assembly of the lineup. The courtroom faced on a hallway
observable to the witnesses through an open door. The cashier
testified that she saw Wade "standing in the hall" within sight of
an FBI agent. Five or six other prisoners later appeared in the
hall. The vice-president testified that he saw a person in the hall
in the custody of the agent who "resembled the person that we
identified as the one that had entered the bank." [ Footnote 24 ]
The lineup in Gilbert, supra, was conducted in an
auditorium in which some 100 witnesses to several alleged state and
federal robberies charged to Gilbert made wholesale identifications
of Gilbert as the robber in each other's presence, a procedure said
to be fraught with dangers of suggestion. [ Footnote 25 ] And the vice of suggestion created
by the identification in Stovall, supra, was the
presentation to the witness of the suspect alone handcuffed to
police officers. It is hard to imagine a situation more clearly
conveying the suggestion to the witness that the one presented is
believed guilty by the police. See Frankfurter, The Case
of Sacco and Vanzetti 31-32.
The few cases that have surfaced therefore reveal the existence
of a process attended with hazards of serious unfairness to the
criminal accused, and strongly suggest the plight of the more
numerous defendants who are unable to ferret out suggestive
influences in the Page 388 U. S. 235 secrecy of the confrontation. We do not assume that these risks
are the result of police procedures intentionally designed to
prejudice an accused. Rather, we assume they derive from the
dangers inherent in eyewitness identification and the
suggestibility inherent in the context of the pretrial
identification. Williams & Hammelmann, in one of the most
comprehensive studies of such forms of identification, said,
"[T]he fact that the police themselves have, in a given case,
little or no doubt that the man put up for identification has
committed the offense, and that their chief preoccupation is with
the problem of getting sufficient proof because he has not''come
clean,' involves a danger that this persuasion may communicate
itself even in a doubtful case to the witness in some way. . .
."
Identification Parades, Part I, [1963] Crim.L.Rev. 479, 483.
Insofar as the accused's conviction may rest on a courtroom
identification, in fact, the fruit of a suspect pretrial
identification which the accused is helpless to subject to
effective scrutiny at trial, the accused is deprived of that right
of cross-examination which is an essential safeguard to his right
to confront the witnesses against him. Pointer v. Texas, 380 U. S. 400 . And
even though cross-examination is a precious safeguard to a fair
trial, it cannot be viewed as an absolute assurance of accuracy and
reliability. Thus, in the present context, where so many variables
and pitfalls exist, the first line of defense must be the
prevention of unfairness and the lessening of the hazards of
eyewitness identification at the lineup itself. The trial which
might determine the accused's fate may well not be that in the
courtroom but that at the pretrial confrontation, with the State
aligned against the accused, the witness the sole jury, and the
accused unprotected against the overreaching, intentional or
unintentional, and with little or no Page 388 U. S. 236 effective appeal from the judgment there rendered by the witness
-- "that's the man."
Since it appears that there is grave potential for prejudice,
intentional or not, in the pretrial lineup, which may not be
capable of reconstruction at trial, and since presence of counsel
itself can often avert prejudice and assure a meaningful
confrontation at trial, [ Footnote 26 ] there can be Page 388 U. S. 237 little doubt that, for Wade, the post-indictment lineup was a
critical stage of the prosecution at which he was "as much entitled
to such aid [of counsel] . . . as at the trial itself." Powell
v. Alabama, 287 U. S. 45 , 287 U. S. 57 .
Thus, both Wade and his counsel should have been notified of the
impending lineup, and counsel's presence should have been a
requisite to conduct of the lineup, absent an "intelligent waiver." See Carnley v. Cochran, 369 U. S. 506 . No
substantial countervailing policy considerations have been advanced
against the requirement of the presence of counsel. Concern is
expressed that the requirement will forestall prompt
identifications and result in obstruction of the confrontations. As
for the first, we note that, in the two cases in which the right to
counsel is today held to apply, counsel had already been appointed,
and no argument is made in either case that notice to counsel would
have prejudicially delayed the confrontations. Moreover, we leave
open the question whether the presence of substitute counsel might
not suffice where notification and presence of the suspect's own
counsel would result in prejudicial delay. [ Footnote 27 ] And to refuse to recognize the
right to counsel for fear that counsel will obstruct the course of
justice is contrary to the Page 388 U. S. 238 basic assumptions upon which this Court has operated in Sixth
Amendment cases. We rejected similar logic in Miranda v.
Arizona concerning presence of counsel during custodial
interrogation, 384 U.S. at 384 U. S. 480 -481:
"[A]n attorney is merely exercising the good professional
judgment he has been taught. This is not cause for considering the
attorney a menace to law enforcement. He is merely carrying out
what he is sworn to do under his oath -- to protect to the extent
of his ability the rights of his client. In fulfilling this
responsibility, the attorney plays a vital role in the
administration of criminal justice under our Constitution."
In our view, counsel can hardly impede legitimate law
enforcement; on the contrary, for the reasons expressed, law
enforcement may be assisted by preventing the infiltration of taint
in the prosecution's identification evidence. [ Footnote 28 ] That result cannot help the guilty
avoid conviction, but can only help assure that the right man has
been brought to justice. [ Footnote 29 ] Page 388 U. S. 239 Legislative or other regulations, such as those of local police
departments, which eliminate the risks of abuse and unintentional
suggestion at lineup proceedings and the impediments to meaningful
confrontation at trial may also remove the basis for regarding the
stage as "critical." [ Footnote
30 ] But neither Congress nor the federal authorities have seen
fit to provide a solution. What we hold today "in no way creates a
constitutional straitjacket which will handicap sound efforts at
reform, nor is it intended to have this effect." Miranda v.
Arizona, supra, at 384 U. S.
467 . V We come now to the question whether the denial of Wade's motion
to strike the courtroom identification by the bank witnesses at
trial because of the absence of his counsel at the lineup required,
as the Court of Appeals held, the grant of a new trial at which
such evidence is Page 388 U. S. 240 to be excluded. We do not think this disposition can be
justified without first giving the Government the opportunity to
establish by clear and convincing evidence that the in-court
identifications were based upon observations of the suspect other
than the lineup identification. See Murphy v. Waterfront
Commission, 378 U. S. 52 , 378 U. S. 79 , n.
18. [ Footnote 31 ] Where, as
here, the admissibility of evidence of the lineup identification
itself is not involved, a per se rule of exclusion of
courtroom identification would be unjustified. [ Footnote 32 ] See Nardone v. United
States, 308 U. S. 338 , 308 U. S. 341 .
A rule limited solely to the exclusion of testimony concerning
identification at the lineup itself, without regard to
admissibility of the courtroom identification, would render the
right to counsel an empty one. The lineup is most often used, as in
the present case, to crystallize the witnesses' identification of
the defendant for future reference. We have already noted that the
lineup identification will have that effect. The State may then
rest upon the witnesses' unequivocal courtroom identification, and
not mention the pretrial identification as part of the State's case
at trial. Counsel is then in the predicament in which Wade's
counsel found himself -- realizing that possible unfairness at the
lineup may be the sole means of attack upon the unequivocal
courtroom identification, and having to probe in the dark Page 388 U. S. 241 in an attempt to discover and reveal unfairness, while
bolstering the government witness' courtroom identification by
bringing out and dwelling upon his prior identification. Since
counsel's presence at the lineup would equip him to attack not only
the lineup identification, but the courtroom identification as
well, limiting the impact of violation of the right to counsel to
exclusion of evidence only of identification at the lineup itself
disregards a critical element of that right.
We think it follows that the proper test to be applied in these
situations is that quoted in Wong Sun v. United States, 371 U. S. 471 , 371 U. S.
488 ,
"'[W]hether, granting establishment of the primary illegality,
the evidence to which instant objection is made has been come at by
exploitation of that illegality or instead by means sufficiently
distinguishable to be purged of the primary taint.' Maguire,
Evidence of Guilt 221 (1959)." See also Hoffa v. United States, 385 U.
S. 293 , 385 U. S. 309 .
Application of this test in the present context requires
consideration of various factors; for example, the prior
opportunity to observe the alleged criminal act, the existence of
any discrepancy between any pre-lineup description and the
defendant's actual description, any identification prior to lineup
of another person, the identification by picture of the defendant
prior to the lineup, failure to identify the defendant on a prior
occasion, and the lapse of time between the alleged act and the
lineup identification. It is also relevant to consider those facts
which, despite the absence of counsel, are disclosed concerning the
conduct of the lineup. [ Footnote
33 ] Page 388 U. S. 242 We doubt that the Court of Appeals applied the proper test for
exclusion of the in-court identification of the two witnesses. The
court stated that
"it cannot be said with any certainty that they would have
recognized appellant at the time of trial if this intervening
lineup had not occurred,"
and that the testimony of the two witnesses "may well have been
colored by the illegal procedure, [and] was prejudicial." 358 F.2d
at 560. Moreover, the court was persuaded, in part, by the
"compulsory verbal responses made by Wade at the instance of the
Special Agent." Ibid. This implies the erroneous holding
that Wade's privilege against self-incrimination was violated, so
that the denial of counsel required exclusion.
On the record now before us, we cannot make the determination
whether the in-court identifications had an independent origin.
This was not an issue at trial, although there is some evidence
relevant to a determination. That inquiry is most properly made in
the District Court. We therefore think the appropriate procedure to
be followed is to vacate the conviction pending a hearing to
determine whether the in-court identifications had an independent
source or whether, in any event, the introduction of the evidence
was harmless error, Chapman v. California, 386 U. S.
18 , and for the District Court to reinstate the
conviction or order a new trial, as may be proper. See United
States v. Shotwell Mfg. Co., 355 U. S. 233 , 355 U. S.
245 -246. Page 388 U. S. 243 The judgment of the Court of Appeals is vacated, and the case is
remanded to that court with direction to enter a new judgment
vacating the conviction and remanding the case to the District
Court for further proceedings consistent with this opinion. It is so ordered. THE CHIEF JUSTICE joins the opinion of the Court except for 388 U. S. from
which he dissents for the reasons expressed in the opinion of MR.
JUSTICE FORTAS.
MR. JUSTICE DOUGLAS joins the opinion of the Court except for 388 U. S. On
that phase of the case, he adheres to the dissenting views in Schmerber v. California, 384 U. S. 757 , 384 U. S.
772 -779, since he believes that compulsory lineup
violates the privilege against self-incrimination contained in the
Fifth Amendment.
[ Footnote 1 ] Holt was decided before Weeks v. United
States, 232 U. S. 383 ,
fashioned the rule excluding illegally obtained evidence in a
federal prosecution. The Court therefore followed Adams v. New
York, 192 U. S. 585 , in
holding that, in any event, "when he is exhibited, whether
voluntarily or by order, and even if the order goes too far, the
evidence, if material, is competent." 218 U.S. at 218 U. S.
253 .
[ Footnote 2 ] See Powell v. Alabama, 287 U. S.
45 , 287 U. S. 60 -65;
Beaney, Right to Counsel in American Courts 8-26.
[ Footnote 3 ] See Note, 73 Yale L.J. 1000, 1040-1042 (1964); Comment,
53 Calif.L.Rev. 337, 347-348 (1965).
[ Footnote 4 ] See, e.g., Powell v. Alabama, 287 U. S.
45 ; Hamilton v. Alabama, 368 U. S.
52 ; White v. Maryland, 373 U. S.
59 ; Escobedo v. Illinois, 378 U.
S. 478 ; Massiah v. United States, 377 U.
S. 201 .
[ Footnote 5 ] See cases cited n 4, supra; Avery v. Alabama, 308 U.
S. 444 , 308 U. S.
446 .
[ Footnote 6 ]
Borchard, Convicting the Innocent; Frank & Frank, Not
Guilty; Wall, Eye-Witness Identification in Criminal Cases; 3
Wigmore, Evidence § 786a (3d ed.1940); Rolph, Personal Identity;
Gross, Criminal Investigation 47-54 (Jackson ed.1962); Williams,
Proof of Guilt 83-98 (1955); Williams, Circumstantial Evidence
192-205 (7th ed. 1937); Wigmore, The Science of Judicial Proof §§
250-253 (3d ed 1937).
[ Footnote 7 ] See Wall, supra, n 6, at 26-65; Murray, The Criminal Lineup at Home and
Abroad, 1966 Utah L.Rev. 610; Napley, Problems of Effecting the
Presentation of the Case for a Defendant, 66 Col.L.Rev. 94, 98-99
(1966); Williams, Identification Parades, [1955] Crim.L.Rev. (Eng.)
525; Paul, Identification of Accused Persons, 12 Austl.L.J. 42
(1938); Houts, From Evidence to Proof 25; Williams Hammelmann,
Identification Parades, Parts I & II, [1963] Crim.L.Rev.
479-490, 545-555; Corphe, Showing Prisoners to Witnesses for
Identification, 1 Am.J.Police Sci. 79 (1930); Wigmore, The Science
of Judicial Proof, supra, n 6, at § 253; Devlin, The Criminal Prosecution in England
70; Williams, Proof of Guilt 95-97.
[ Footnote 8 ]
Williams Hammelmann, Identification Parades, Part I, [1963]
Crim.L.Rev. 479, 482.
[ Footnote 9 ]
Williams Hammelmann, Identification Parades, Part I, supra, n 7.
[ Footnote 10 ] See Wall, supra, n 6, at 57-59; see, e.g., People v.
Boney, 28 Ill. 2d
505 , 192 N.E.2d
920 (1963); People v. James, 218 Cal. App.
2d 166 , 32 Cal. Rptr. 283 (1963).
[ Footnote 11 ] See Rolph, Personal Identity 50:
"The bright burden of identity, at these parades, is lifted from
the innocent participants to hover about the suspect, leaving the
rest featureless and unknown and without interest."
[ Footnote 12 ] See Williams & Hammelmann, Identification Parades,
Part II, [1963] Crim.L.Rev. 545, 546; Borchard, Convicting the
Innocent 367.
[ Footnote 13 ]
An additional impediment to the detection of such influences by
participants, including the suspect, is the physical conditions
often surrounding the conduct of the lineup. In many, lights shine
on the stage in such a way that the suspect cannot see the witness. See Gilbert v. United States, 366 F.2d 923 (C.A. 9th
Cir.1966). In some, a one-way mirror is used and what is said on
the witness' side cannot be heard. See Rigney v. Hendrick, 355 F.2d 710, 711, n. 2 (C.A.3d Cir.1965); Aaron v. State, 273 Ala. 337, 139 So. 2d
309 (1961).
[ Footnote 14 ]
Williams & Hammelmann, Part I, supra, n 7, at 489; Napley, supra, n 7, at 99.
[ Footnote 15 ] See In re Groban, 352 U. S. 330 , 352 U. S. 340 (BLACK, J., dissenting). The difficult position of defendants in
attempting to protest the manner of pretrial identification is
illustrated by the many state court cases in which contentions of
blatant abuse rested on their unsupportable allegations, usually
controverted by the police officers present. See, e.g., People
v. Shields, 70 Cal. App. 2d
628 , 634-635, 161 P.2d 475, 478-479 (1945); People v.
Hicks, 22 Ill. 2d
364 , 176 N.E.2d
810 (1961); State v. Hill, 193 Kan. 512, 394 P.2d 106 (1964); Redmon v. Commonwealth, 321
S.W.2d 397 (Ky.Ct.App. 1959); Lubinski v. State, 180
Md. 1, 8, 22 A.2d 455, 459 (1941). For a striking case in which
hardly anyone agreed upon what occurred at the lineup, including
who identified whom, see Johnson v. State, 237 Md. 283,
206 A.2d 138 (1965).
[ Footnote 16 ]
An instructive example of the defendant's predicament may be
found in Proctor v. State, 223 Md. 394, 164 A.2d 708
(1960). A prior identification is admissible in Maryland only under
the salutary rule that it cannot have been made "under conditions
of unfairness or unreliability." Id. at 401, 164 A.2d at
712. Against the defendant's contention that these conditions had
not been met, the Court stated:
"In the instant case, there are no such facts as, in our
judgment, would call for a finding that the identification . . .
was made under conditions of unfairness or unreliability. The
relatively large number of persons put into the room together for
[the victim] to look at is one circumstance indicating fairness,
and the fact that the police officer was unable to remember the
appearances of the others and could not recall if they had physical
characteristics similar to [the defendant's] or not is at least
suggestive that they were not of any one type or that they all
differed markedly in looks from the defendant. There is no evidence
that the Police Sergeant gave the complaining witness any
indication as to which of the thirteen men was the defendant; the
Sergeant's testimony is simply that he asked [the victim] if he
could identify [the defendant] after having put the thirteen men in
the courtroom."
[ Footnote 17 ]
Wall, Eye-Witness Identification in Criminal Cases 53. For other
such examples see Houts, From Evidence to Proof 25;
Frankfurter, The Case of Sacco and Vanzetti 12-14, 30-32; 3
Wigmore, Evidence § 786a, at 164, n. 2 (3d ed.1940); Paul,
Identification of Accused Persons, 12 Austl.L.J. 42, 44 (1938);
Rolph, Personal Identity 34-43.
[ Footnote 18 ] See People v. James, 218 Cal. App.
2d 166 , 170-171, 32 Cal. Rptr. 283, 286 (1963); People v.
Boney, 28 Ill. 2d
505 , 192 N.E.2d
920 (1963).
[ Footnote 19 ] See Fredericksen v. United States, 105 U.S.App.D.C.
262, 266 F.2d 463 (1959); People v. Adell, 75 Ill.App.2d
385, 221 N.E.2d 72 (1966); State v. Hill, 193 Kan. 512, 394 P.2d 106 (1964), People v. Seppi, 221 N.Y. 62, 116 N.E. 793 (1917); State v. Dan, 215 Ore. 151, 162, 333 P.2d
907 , 912 (1958).
[ Footnote 20 ] See People v. Crenshaw, 15 Ill. 2d
458 , 460, 155 N.E.2d
599 , 602 (1959); Presley v. State, 224 Md. 550, 168
A.2d 510 (1961); State v. Ramirez, 76 N.M. 72, 412 P.2d 246 (1966); State v. Bazemore, 193 N.C. 336, 137 S.E. 172
(1927); Barrett v. State, 190 Tenn. 366, 229
S.W.2d 516 (1950).
[ Footnote 21 ] See Aaron v. State, 273 Ala. 337, 139 So. 2d
309 (1961); Bishop v. State, 236 Ark. 12, 364 S.W.2d 676 (1963); People v. Thompson, 406 Ill.
555 , 94 N.E.2d 349 (1950); People v. Berne, 384 Ill. 334, 51 N.E.2d 578
(1943); People v. Martin, 304 Ill. 494, 136 N.E. 711
(1922); Barrett v. State, 190 Tenn. 366, 229
S.W.2d 516 (1950).
[ Footnote 22 ] See People v. Clark, 28 Ill. 2d
423 , 192 N.E.2d
851 (1963); Gillespie v. State, 355
P.2d 451 , 454 (Okla.Cr.1960).
[ Footnote 23 ] See People v. Parham, 60 Cal. 2d
378 , 384 P.2d 1001 (1963).
[ Footnote 24 ] See Wall, supra, n 6, at 48; Napley, supra, n 7, at 99:
"[W]hile many identification parades are conducted by the police
with scrupulous regard for fairness, it is not unknown for the
identifying witness to be placed in a position where he can see the
suspect before the parade forms. . . ."
[ Footnote 25 ]
Williams & Hammelmann, Part I, supra, n 7, at 486; Burtt, Applied Psychology
254-255.
[ Footnote 26 ]
One commentator proposes a model statute providing not only for
counsel, but other safeguards as well:
"Most, if not all, of the attacks on the lineup process could be
averted by a uniform statute modeled upon the best features of the
civilian codes. Any proposed statute should provide for the right
to counsel during any lineup or during any confrontation. Provision
should be made that any person, whether a victim or a witness, must
give a description of the suspect before he views any arrested
person. A written record of this description should be required,
and the witness should be made to sign it. This written record
would be available for inspection by defense counsel for copying
before the trial and for use at the trial in testing the accuracy
of the identification made during the lineup and during the
trial."
"This ideal statute would require at least six persons in
addition to the accused in a lineup, and these persons would have
to be of approximately the same height, weight, coloration of hair
and skin, and bodily types as the suspect. In addition, all of
these men should, as nearly as possible, be dressed alike. If
distinctive garb was used during the crime, the suspect should not
be forced to wear similar clothing in the lineup unless all of the
other persons are similarly garbed. A complete written report of
the names, addresses, descriptive details of the other persons in
the lineup, and of everything which transpired during the
identification, would be mandatory. This report would include
everything stated by the identifying witness during this step,
including any reasons given by him as to what features, etc., have
sparked his recognition."
"This statute should permit voice identification tests by having
each person in the lineup repeat identical innocuous phrases, and
it would be impermissible to force the use of words allegedly used
during a criminal act."
"The statute would enjoin the police from suggesting to any
viewer that one or more persons in the lineup had been arrested as
a suspect. If more than one witness is to make an identification,
each witness should be required to do so separately and should be
forbidden to speak to another witness until all of them have
completed the process."
"The statute could require the use of movie cameras and tape
recorders to record the lineup process in those states which are
financially able to afford these devices. Finally, the statute
should provide that any evidence obtained as the result of a
violation of this statute would be inadmissible."
Murray, The Criminal Lineup at Home and Abroad, 1966 Utah L.Rev.
610, 627-628.
[ Footnote 27 ]
Although the right to counsel usually means a right to the
suspect's own counsel, provision for substitute counsel may be
justified on the ground that the substitute counsel's presence may
eliminate the hazards which render the lineup a critical stage for
the presence of the suspect's own counsel.
[ Footnote 28 ]
Concern is also expressed that the presence of counsel will
force divulgence of the identity of government witnesses whose
identity the Government may want to conceal. To the extent that
this is a valid or significant state interest, there are police
practices commonly used to effect concealment, for example, masking
the face.
[ Footnote 29 ]
Many other nations surround the lineup with safeguards against
prejudice to the suspect. In England, the suspect must be allowed
the presence of his solicitor or a friend, Napley, supra, n 7, at 999; Germany requires
the presence of retained counsel; France forbids the confrontation
of the suspect in the absence of his counsel; Spain, Mexico, and
Italy provide detailed procedures prescribing the conditions under
which confrontation must occur under the supervision of a judicial
officer who sees to it that the proceedings are officially recorded
to assure adequate scrutiny at trial. Murray, The Criminal Lineup
at Home and Abroad, 1966 Utah L.Rev. 610, 621-627.
[ Footnote 30 ]
Thirty years ago, Wigmore suggested a "scientific method" of
pretrial identification "to reduce the risk of error hitherto
inherent in such proceedings." Wigmore, The Science of Judicial
Proof 541 (3d ed.1937). Under this approach, at least 100 talking
films would be prepared of men from various occupations, races,
etc. Each would be photographed in a number of stock movements,
with and without hat and coat, and would read aloud a standard
passage. The suspect would be filmed in the same manner. Some 25 of
the films would be shown in succession in a special projection room
in which each witness would be provided an electric button which
would activate a board backstage when pressed to indicate that the
witness had identified a given person. Provision would be made for
the degree of hesitancy in the identification to be indicated by
the number of presses. Id. at 540-541. Of course, the more
systematic and scientific a process or proceeding, including one
for purposes of identification, the less the impediment to
reconstruction of the conditions bearing upon the reliability of
that process or proceeding at trial. See discussion of
fingerprint and like tests, 388 U. S. supra, and of handwriting exemplars in Gilbert v.
California, supra. [ Footnote 31 ] See Goldstein v. United States, 316 U.
S. 114 , 316 U. S. 124 ,
n. 1 (Murphy, J., dissenting).
"[A]fter an accused sustains the initial burden, imposed by Nardone v. United States, 308 U. S.
338 , of proving to the satisfaction of the trial judge
in the preliminary hearing that wiretapping was unlawfully
employed, as petitioners did here, it is only fair that the burden
should then shift to the Government to convince the trial judge
that its proof had an independent origin."
[ Footnote 32 ]
We reach a contrary conclusion in Gilbert v. California,
supra, as to the admissibility of the witness' testimony that
he also identified the accused at the lineup.
[ Footnote 33 ]
Thus, it is not the case that
"[i]t matters not how well the witness knows the suspect,
whether the witness is the suspect's mother, brother, or long-time
associate, and no matter how long or well the witness observed the
perpetrator at the scene of the crime."
Such factors will have an important bearing upon the true basis
of the witness' in-court identification. Moreover, the State's
inability to bolster the witness' courtroom identification by
introduction of the lineup identification itself, see Gilbert
v. California, supra, will become less significant the more
the evidence of other opportunities of the witness to observe the
defendant. Thus, where the witness is a "kidnap victim who has
lived for days with his abductor," the value to the State of
admission of the lineup identification is indeed marginal, and such
identification would be a mere formality.
MR. JUSTICE CLARK, concurring.
With reference to the lineup point involved in this case, I
cannot, for the life of me, see why a lineup is not a critical
stage of the prosecution. Identification of the suspect -- a
prerequisite to establishment of guilt -- occurs at this stage, and
with Miranda v. Arizona, 384 U. S. 436 (1966), on the books, the requirement of the presence of counsel
arises, unless waived by the suspect. I dissented in Miranda, but I am bound by it now, as we all are. Schmerber v. California, 384 U. S. 757 (1966), precludes petitioner's claim of self-incrimination. I
therefore join the opinion of the Court.
MR. JUSTICE BLACK, dissenting in part and concurring in
part.
On March 23, 1965, respondent Wade was indicted for robbing a
bank; on April 2, he was arrested, and on April 26, the court
appointed a lawyer to represent him. Page 388 U. S. 244 Fifteen days later, while Wade was still in custody, an FBI
agent took him and several other prisoners into a room at the
courthouse, directed each to participate in a lineup wearing strips
of tape on his face and to speak the words used by the robber at
the bank. This was all done in order to let the bank employee
witnesses look at Wade for identification purposes. Wade's lawyer
was not notified of or present at the lineup to protect his
client's interests. At Wade's trial, two bank employees identified
him in the courtroom. Wade objected to this testimony when, on
cross-examination, his counsel elicited from these witnesses the
fact that they had seen Wade in the lineup. He contended that, by
forcing him to participate in the lineup, wear strips of tape on
his face, and repeat the words used by the robber, all without
counsel, the Government had (1) compelled him to be a witness
against himself in violation of the Fifth Amendment, and (2)
deprived him of the assistance of counsel for his defense in
violation of the Sixth Amendment.
The Court in Part I of its opinion rejects Wade's Fifth
Amendment contention. From that, I dissent. In Parts II-IV of its
opinion, the Court sustains Wade's claim of denial of right to
counsel in the out-of-court lineup, and in that I concur. In Part
V, the Court remands the case to the District Court to consider
whether the courtroom identification of Wade was the fruit of the
illegal lineup, and, if it was, to grant him a new trial unless the
court concludes that the courtroom identification was harmless
error. I would reverse the Court of Appeals' reversal of Wade's
conviction, but I would not remand for further proceedings. Since
the prosecution did not use the out-of-court lineup identification
against Wade at his trial, I believe the conviction should be
affirmed. Page 388 U. S. 245 I In rejecting Wade's claim that his privilege against
self-incrimination was violated by compelling him to appear in the
lineup wearing the tape and uttering the words given him by the
police, the Court relies on the recent holding in Schmerber v.
California, 384 U. S. 757 . In
that case, the Court held that taking blood from a man's body
against his will in order to convict him of a crime did not compel
him to be a witness against himself. I dissented from that holding,
384 U.S. at 384 U. S. 773 ,
and still dissent. The Court's reason for its holding was that the
sample of Schmerber's blood taken in order to convict him of crime
was neither "testimonial" nor "communicative" evidence. I think it
was both. It seems quite plain to me that the Fifth Amendment's
Self-incrimination Clause was designed to bar the Government from
forcing any person to supply proof of his own crime, precisely what
Schmerber was forced to do when he was forced to supply his blood.
The Government simply took his blood against his will and over his
counsel's protest for the purpose of convicting him of crime. So
here, having Wade in its custody awaiting trial to see if he could
or would be convicted of crime, the Government forced him to stand
in a lineup, wear strips on his face, and speak certain words, in
order to make it possible for government witnesses to identify him
as a criminal. Had Wade been compelled to utter these or any other
words in open court, it is plain that he would have been entitled
to a new trial because of having been compelled to be a witness
against himself. Being forced by the Government to help convict
himself and to supply evidence against himself by talking outside
the courtroom is equally violative of his constitutional right not
to be compelled to be a witness against himself. Consequently,
because of this violation of the Fifth Amendment, Page 388 U. S. 246 and not because of my own personal view that the Government's
conduct was "unfair," "prejudicial," or "improper," I would
prohibit the prosecution's use of lineup identification at
trial. II I agree with the Court, in large part because of the reasons it
gives, that failure to notify Wade's counsel that Wade was to be
put in a lineup by government officers and to be forced to talk and
wear tape on his face denied Wade the right to counsel in violation
of the Sixth Amendment. Once again, my reason for this conclusion
is solely the Sixth Amendment's guarantee that "the accused shall
enjoy the right . . . to have the Assistance of Counsel for his
defence." As this Court's opinion points out, "[t]he plain wording
of this guarantee thus encompasses counsel's assistance whenever
necessary to assure a meaningful defence.'" And I agree with
the Court that a lineup is a "critical stage" of the criminal
proceedings against an accused, because it is a stage at which the
Government makes use of his custody to obtain crucial evidence
against him. Besides counsel's presence at the lineup being
necessary to protect the defendant's specific constitutional rights
to confrontation and the assistance of counsel at the trial itself,
the assistance of counsel at the lineup is also necessary to
protect the defendant's in-custody assertion of his privilege
against self-incrimination, Miranda v. Arizona, 384 U. S. 436 ,
for, contrary to the Court, I believe that counsel may advise the
defendant not to participate in the lineup or to participate only
under certain conditions. I agree with the Court that counsel's presence at the lineup is
necessary to protect the accused's right to a "fair trial," only if
by "fair trial" the Court means a trial in accordance with the "Law
of the Land" as specifically set out in the Constitution. But there
are Page 388 U. S. 247 implications in the Court's opinion that, by a "fair trial," the
Court means a trial which a majority of this Court deems to be
"fair," and that a lineup is a "critical stage" only because the
Court, now assessing the "innumerable dangers" which inhere in it,
thinks it is such. That these implications are justified is
evidenced by the Court's suggestion that
"[l]egislative or other regulations . . . which eliminate the
risks of abuse . . . at lineup proceedings . . . may also remove
the basis for regarding the stage as 'critical.'"
And it is clear from the Court's opinion in Gilbert v.
California, post, p. 388 U. S. 263 ,
that it is willing to make the Sixth Amendment's guarantee of right
to counsel dependent on the Court's own view of whether a
particular stage of the proceedings -- though "critical" in the
sense of the prosecution's gathering of evidence -- is "critical"
to the Court's own view of a "fair trial." I am wholly unwilling to
make the specific constitutional right of counsel dependent on
judges' vague and transitory notions of fairness and their equally
transitory, though thought to be empirical, assessment of the "risk
that . . . counsel's absence . . . might derogate from . . . [a
defendant's] right to a fair trial." Ante at 388 U. S. 228 . See Pointer v. Texas, 380 U. S. 400 , 380 U. S. 412 (concurring opinion of Goldberg, J.). III I would reverse Wade's conviction without further ado had the
prosecution at trial made use of his lineup identification either
in place of courtroom identification or to bolster in a harmful
manner crucial courtroom identification. But the prosecution here
did neither of these things. After prosecution witnesses under oath
identified Wade in the courtroom, it was the defense, and not the
prosecution, which brought out the prior lineup identification.
While stating that "a per se rule of exclusion of
courtroom identification would be unjustified," the Court,
nevertheless, remands this case for "a Page 388 U. S. 248 hearing to determine whether the in-court identifications had an
independent source," or were the tainted fruits of the invalidly
conducted lineup. From this holding I dissent.
In the first place, even if this Court has power to establish
such a rule of evidence, I think the rule fashioned by the Court is
unsound. The "tainted fruit" determination required by the Court
involves more than considerable difficulty. I think it is
practically impossible. How is a witness capable of probing the
recesses of his mind to draw a sharp line between a courtroom
identification due exclusively to an earlier lineup and a courtroom
identification due to memory not based on the lineup? What kind of
"clear and convincing evidence" can the prosecution offer to prove
upon what particular events memories resulting in an in-court
identification rest? How long will trials be delayed while judges
turn psychologists to probe the subconscious minds of witnesses?
All these questions are posed but not answered by the Court's
opinion. In my view, the Fifth and Sixth Amendments are satisfied
if the prosecution is precluded from using lineup identification as
either an alternative to or corroboration of courtroom
identification. If the prosecution does neither, and its witnesses
under oath identify the defendant in the courtroom, then I can find
no justification for stopping the trial in midstream to hold a
lengthy "tainted fruit" hearing. The fact of and circumstances
surrounding a prior lineup identification might be used by the
defense to impeach the credibility of the in-court identifications,
but not to exclude them completely.
But, more important, there is no constitutional provision upon
which I can rely that directly or by implication gives this Court
power to establish what amounts to a constitutional rule of
evidence to govern not only the Federal Government, but the States
in their trial of state Page 388 U. S. 249 crimes under state laws in state courts. See Gilbert v.
California, supra. The Constitution deliberately reposed in
the States very broad power to create and to try crimes according
to their own rules and policies. Spencer v. Texas, 385 U. S. 554 .
Before being deprived of this power, the least that they can ask is
that we should be able to point to a federal constitutional
provision that, either by express language or by necessary
implication, grants us the power to fashion this novel rule of
evidence to govern their criminal trials. Cf. Berger v. New
York, ante, p. 388 U. S. 70 (BLACK, J., dissenting). Neither Nardone v. United States, 308 U. S. 338 , nor Wong Sun v. United States, 371 U.
S. 471 , both federal cases and both decided "in other
contexts," supports what the Court demands of the States today.
Perhaps the Court presumes to write this constitutional rule of
evidence on the basis of the Fourteenth Amendment's Due Process
Clause. This is not the time or place to consider that claim.
Suffice it for me to say briefly that I find no such authority in
the Due Process Clause. It undoubtedly provides that a person must
be tried in accordance with the "Law of the Land." Consequently, it
violates due process to try a person in a way prohibited by the
Fourth, Fifth, or Sixth Amendments of our written Constitution. But
I have never been able to subscribe to the dogma that the Due
Process Clause empowers this Court to declare any law, including a
rule of evidence, unconstitutional which it believes is contrary to
tradition, decency, fundamental justice, or any of the other
wide-meaning words used by judges to claim power under the Due
Process Clause. See, e.g., Rochin v. California, 342 U. S. 165 . I
have an abiding idea that, if the Framers had wanted to let judges
write the Constitution on any such day-to-day beliefs of theirs,
they would have said so instead of so carefully defining their
grants and prohibitions in a written constitution. Page 388 U. S. 250 With no more authority than the Due Process Clause, I am wholly
unwilling to tell the state or federal courts that the United
States Constitution forbids them to allow courtroom identification
without the prosecution's first proving that the identification
does not rest in whole or in part on an illegal lineup. Should I do
so, I would feel that we are deciding what the Constitution is not
from what it says, but from what we think it would have been wise
for the Framers to put in it. That to me would be "judicial
activism" at its worst. I would leave the States and Federal
Government free to decide their own rules of evidence. That, I
believe, is their constitutional prerogative.
I would affirm Wade's conviction.
MR JUSTICE WHITE, whom MR. JUSTICE HARLAN and MR. JUSTICE
STEWART join, dissenting in part and concurring in part.
The Court has again propounded a broad constitutional rule
barring use of a wide spectrum of relevant and probative evidence,
solely because a step in its ascertainment or discovery occurs
outside the presence of defense counsel. This was the approach of
the Court in Miranda v. Arizona, 384 U.
S. 436 . I objected then to what I thought was an
uncritical and doctrinaire approach without satisfactory factual
foundation. I have much the same view of the present ruling, and
therefore dissent from the judgment and from Parts 388 U.
S. 388 U. S. and 388 U. S. The Court's opinion is far-reaching. It proceeds first by
creating a new per se rule of constitutional law: a
criminal suspect cannot be subjected to a pretrial identification
process in the absence of his counsel without violating the Sixth
Amendment. If he is, the State may not buttress a later courtroom
identification of the witness by any reference to the previous
identification. Furthermore, the courtroom identification is not
admissible Page 388 U. S. 251 at all unless the State can establish by clear and convincing
proof that the testimony is not the fruit of the earlier
identification made in the absence' of defendant's counsel --
admittedly a heavy burden for the State, and probably an impossible
one. To all intents and purposes, courtroom identifications are
barred if pretrial identifications have occurred without counsel's
being present.
The rule applies to any lineup, to any other techniques employed
to produce an identification, and a fortiori to a
face-to-face encounter between the witness and the suspect alone,
regardless of when the identification occurs in time or place and
whether before or after indictment or information. It matters not
how well the witness knows the suspect, whether the witness is the
suspect's mother, brother, or long-time associate, and no matter
how long or well the witness observed the perpetrator at the scene
of the crime. The kidnap victim who has lived for days with his
abductor is in the same category as the witness who has had only a
fleeting glimpse of the criminal. Neither may identify the suspect
without defendant's counsel's being present. The same strictures
apply regardless of the number of other witnesses who positively
identify the defendant, and regardless of the corroborative
evidence showing that it was the defendant who had committed the
crime.
The premise for the Court's rule is not the general
unreliability of eyewitness identifications, nor the difficulties
inherent in observation, recall, and recognition. The Court assumes
a narrower evil as the basis for its rule -- improper police
suggestion which contributes to erroneous identifications. The
Court apparently believes that improper police procedures are so
widespread that a broad prophylactic rule must be laid down,
requiring the presence of counsel at all pretrial identifications,
in Page 388 U. S. 252 order to detect recurring instances of police misconduct.
[ Footnote 2/1 ] I do not share this
pervasive distrust of all official investigations. One of the
materials the Court relies upon supports it. [ Footnote 2/2 ] Certainly, I would bow to solid fact, but
the Court quite obviously does not have before it any reliable,
comprehensive survey of current police practices on which to base
its new rule. Until it does, the Court should avoid excluding
relevant evidence from state criminal trials. Cf. Washington v.
Texas, ante, p. 388 U. S. 14 .
The Court goes beyond assuming that a great majority of the
country's police departments are following improper practices at
pretrial identifications. To find the lineup a "critical" stage of
the proceeding and to exclude identifications made in the absence
of counsel, the Court must also assume that police "suggestion," if
it occurs at all, leads to erroneous, rather than accurate,
identifications, and that reprehensible police conduct will have an
unavoidable and largely undiscoverable impact on the trial. This,
in turn, assumes that there is now no adequate source from which
defense counsel can learn about the circumstances of the pretrial
identification in order to place before the jury all of the
considerations which should enter into an appraisal of courtroom
identification Page 388 U. S. 253 evidence. But these are treacherous and unsupported assumptions,
[ Footnote 2/3 ] resting as they do
on the notion that the defendant will not be aware, that the police
and the witnesses will forget or prevaricate, that defense counsel
will be unable to bring out the truth, and that neither jury,
judge, nor appellate court is a sufficient safeguard against
unacceptable police conduct occurring at a pretrial identification
procedure. I am unable to share the Court's view of the willingness
of the police and the ordinary citizen-witness to dissemble, either
with respect to the identification of the defendant or with respect
to the circumstances surrounding a pretrial identification.
There are several striking aspects to the Court's holding.
First, the rule does not bar courtroom identifications where there
have been no previous identifications in the presence of the
police, although, when identified in the courtroom, the defendant
is known to be in custody and charged with the commission of a
crime. Second, the Court seems to say that, if suitable legislative
standards were adopted for the conduct of pretrial identifications,
thereby lessening the hazards in such confrontations, Page 388 U. S. 254 it would not insist on the presence of counsel. But if this is
true, why does not the Court simply fashion what it deems to be
constitutionally acceptable procedures for the authorities to
follow? Certainly the Court is correct in suggesting that the new
rule will be wholly inapplicable where police departments
themselves have established suitable safeguards.
Third, courtroom identification may be barred, absent counsel at
a prior identification, regardless of the extent of counsel's
information concerning the circumstances of the previous
confrontation between witness and defendant -- apparently even if
there were recordings or sound movies of the events as they
occurred. But if the rule is premised on the defendant's right to
have his counsel know, there seems little basis for not accepting
other means to inform. A disinterested observer, recordings,
photographs -- any one of them would seem adequate to furnish the
basis for a meaningful cross-examination of the eyewitness who
identifies the defendant in the courtroom.
I share the Court's view that the criminal trial, at the very
least, should aim at truthful factfinding, including accurate
eyewitness identifications. I doubt, however, on the basis of our
present information, that the tragic mistakes which have occurred
in criminal trials are as much the product of improper police
conduct as they are the consequence of the difficulties inherent in
eyewitness testimony and in resolving evidentiary conflicts by
court or jury. I doubt that the Court's new rule will obviate these
difficulties, or that the situation will be measurably improved by
inserting defense counsel into the investigative processes of
police departments everywhere.
But, it may be asked, what possible state interest militates
against requiring the presence of defense counsel at lineups? After
all, the argument goes, he may do some good, he may upgrade the
quality of identification evidence in state courts, and he can
scarcely do any Page 388 U. S. 255 harm. Even if true, this is a feeble foundation for fastening an
iron-clad constitutional rule upon state criminal procedures.
Absent some reliably established constitutional violation, the
processes by which the States enforce their criminal laws are their
own prerogative. The States do have an interest in
conducting their own affairs, an interest which cannot be displaced
simply by saying that there are no valid arguments with respect to
the merits of a federal rule emanating from this Court.
Beyond this, however, requiring counsel at pretrial
identifications as an invariable rule trenches on other valid state
interests. One of them is its concern with the prompt and efficient
enforcement of its criminal laws. Identifications frequently take
place after arrest, but before an indictment is returned or an
information is filed. The police may have arrested a suspect on
probable cause, but may still have the wrong man. Both the suspect
and the State have every interest in a prompt identification at
that stage, the suspect in order to secure his immediate release
and the State because prompt and early identification enhances
accurate identification, and because it must know whether it is on
the right investigative track. Unavoidably, however, the absolute
rule requiring the presence of counsel will cause significant
delay, and it may very well result in no pretrial identification at
all. Counsel must be appointed, and a time arranged convenient for
him and the witnesses. Meanwhile, it may be necessary to file
charges against the suspect, who may then be released on bail, in
the federal system very often on his own recognizance, with neither
the State nor the defendant having the benefit of a properly
conducted identification procedure.
Nor do I think the witnesses themselves can be ignored. They
will now be required to be present at the convenience of counsel,
rather than their own. Many may be much less willing to participate
if the identification Page 388 U. S. 256 stage is transformed into an adversary proceeding not under the
control of a judge. Others may fear for their own safety if their
identity is known at an early date, especially when there is no way
of knowing until the lineup occurs whether or not the police really
have the right man. [ Footnote
2/4 ]
Finally, I think the Court's new rule is vulnerable in terms of
its own unimpeachable purpose of increasing the reliability of
identification testimony.
Law enforcement officers have the obligation to convict the
guilty and to make sure they do not convict the innocent. They must
be dedicated to making the criminal trial a procedure for the
ascertainment of the true facts surrounding the commission of the
crime. [ Footnote 2/5 ] To this
extent, our so-called adversary system is not adversary at all; nor
should it be. But defense counsel has no comparable obligation to
ascertain or present the truth. Our system assigns him a different
mission. He must Page 388 U. S. 257 be and is interested in preventing the conviction of the
innocent, but, absent a voluntary plea of guilty, we also insist
that he defend his client whether he is innocent or guilty. The
State has the obligation to present the evidence. Defense counsel
need present nothing, even if he knows what the truth is. He need
not furnish any witnesses to the police, or reveal any confidences
of his client, or furnish any other information to help the
prosecution's case. If he can confuse a witness, even a truthful
one, or make him appear at a disadvantage, unsure or indecisive,
that will be his normal course. [ Footnote 2/6 ] Our interest in not convicting Page 388 U. S. 258 the innocent permits counsel to put the State to its proof, to
put the State's case in the worst possible light, regardless of
what he thinks or knows to be the truth. Undoubtedly there are some
limits which defense counsel must observe, [ Footnote 2/7 ] but, more often than not, defense counsel
will cross-examine a prosecution witness, and impeach him if he
can, even if he thinks the witness is telling the truth, just as he
will attempt to destroy a witness who he thinks is lying. In this
respect, as part of our modified adversary system and as part of
the duty imposed on the most honorable defense counsel, we
countenance or require conduct which, in many instances, has
little, if any, relation to the search for truth.
I would not extend this system, at least as it presently
operates, to police investigations, and would not require counsel's
presence at pretrial identification procedures. Counsel's interest
is in not having his client placed at the scene of the crime,
regardless of his whereabouts. Some counsel may advise their
clients to refuse to make any Page 388 U. S. 259 movements or to speak any words in a lineup, or even to appear
in one. To that extent, the impact on truthful factfinding is quite
obvious. Others will.not only observe what occurs and develop
possibilities for later cross-examination, but will hover over
witnesses and begin their cross-examination then, menacing truthful
factfinding as thoroughly as the Court fears the police now do.
Certainly there is an implicit invitation to counsel to suggest
rules for the lineup and to manage and produce it as best he can. I
therefore doubt that the Court's new rule, at least absent some
clearly defined limits on counsel's role, will measurably
contribute to more reliable pretrial identifications. My fears are
that it will have precisely the opposite result. It may well
produce fewer convictions, but that is hardly a proper measure of
its long-run acceptability. In my view, the State is entitled to
investigate and develop its case outside the presence of defense
counsel. This includes the right to have private conversations with
identification witnesses, just as defense counsel may have his own
consultations with these and other witnesses without having the
prosecutor present.
Whether today's judgment would be an acceptable exercise of
supervisory power over federal courts is another question. But, as
a constitutional matter, the judgment in this case is erroneous,
and, although I concur in Parts I and III of the Court's opinion, I
respectfully register this dissent.
[ Footnote 2/1 ]
Yet, in Stovall v. Denno, post, p. 388 U. S. 293 , the
Court recognizes that improper police conduct in the identification
process has not been so widespread as to justify full retroactivity
for its new rule.
[ Footnote 2/2 ]
In Miranda v. Arizona, 384 U.
S. 436 , 384 U. S. 449 ,
the Court noted that O'Hara, Fundamentals of Criminal Investigation
(1956), is a text that has enjoyed extensive use among law
enforcement agencies and among students of police science. The
quality of the work was said to rest on the author's long service
as observer, lecturer in police science, and work as a federal
crime investigator. O'Hara does not suggest that the police should
or do use identification machinery improperly; instead, he argues
for techniques that would increase the reliability of eyewitness
identifications, and there is no reason to suggest that O'Hara's
views are not shared and practiced by the majority of police
departments throughout the land.
[ Footnote 2/3 ]
The instant case and its companions, Gilbert v. California,
post, p. 388 U. S. 263 , and Stovall v. Denno, post, p. 388 U. S. 293 ,
certainly lend no support to the Court's assumptions. The police
conduct deemed improper by the Court in the three cases seems to
have come to light at trial in the ordinary course of events. One
can ask what more counsel would have learned at the pretrial
identifications that would have been relevant for truth
determination at trial. When the Court premises its constitutional
rule on police conduct so subtle as to defy description and
subsequent disclosure, it deals in pure speculation. If police
conduct is intentionally veiled, the police will know about it, and
I am unwilling to speculate that defense counsel at trial will be
unable to reconstruct the known circumstances of the pretrial
identification. And if the "unknown" influence on identifications
is "innocent," the Court's general premise evaporates, and the
problem is simply that of the inherent shortcomings of eyewitness
testimony.
[ Footnote 2/4 ]
I would not have thought that the State's interest regarding its
sources of identification is any less than its interest in
protecting informants, especially those who may aid in
identification but who will not be used as witnesses. See
McCray v. Illinois, 386 U. S. 300 .
[ Footnote 2/5 ]
"The United States Attorney is the representative not of an
ordinary party to a controversy, but of a sovereignty whose
obligation to govern impartially is as compelling as its obligation
to govern at all, and whose interest, therefore, in a criminal
prosecution is not that it shall win a case, but that justice shall
be done. As such, he is, in a peculiar and very definite sense, the
servant of the law, the two-fold aim of which is that guilt shall
not escape, or innocence suffer. He may prosecute with earnestness
and vigor -- indeed, he should do so. But, while he may strike hard
blows, he is not at liberty to strike foul ones. It is as much his
duty to refrain from improper methods calculated to produce a
wrongful conviction as it is to use every legitimate means to bring
about a just one." Berger v. United States, 295 U. S.
78 , 295 U. S. 88 . See also Mooney v. Holohan, 294 U.
S. 103 ; Pyle v. Kansas, 317 U.
S. 213 ; Alcorta v. Texas, 355 U. S.
28 ; Napue v. Illinois, 360 U.
S. 264 ; Brady v. Maryland, 373 U. S.
83 ; Giles v. Maryland, 386 U. S.
66 ; Miller v. Pate, 386 U. S.
1 .
[ Footnote 2/6 ]
One point of view about the role of the courtroom lawyer appears
in Frank, Courts on Trial 82-83.
"What is the role of the lawyers in bringing the evidence before
the trial court? As you may learn by reading any one of a dozen or
more handbooks on how to try a law-suit, an experienced lawyer uses
all sorts of stratagems to minimize the effect on the judge or jury
of testimony disadvantageous to his client, even when the lawyer
has no doubt of the accuracy and honesty of that testimony. . . .
If such a witness happens to be timid, frightened by the
unfamiliarity of courtroom ways, the lawyer, in his
cross-examination, plays on that weakness, in order to confuse the
witness and make it appear that he is concealing significant facts.
Longenecker, in his book Hints On The Trial of a Law Suit (a book
endorsed by the great Wigmore), in writing of the 'truthful,
honest, over-cautious' witness, tells how 'a skillful advocate, by
a rapid cross-examination, may ruin the testimony of such a
witness.' The author does not even hint any disapproval of that
accomplishment. Longenecker's and other similar books recommend
that a lawyer try to prod an irritable but honest 'adverse' witness
into displaying his undesirable characteristics in their most
unpleasant form in order to discredit him with the judge or jury.
'You may,' writes Harris,"
"sometimes destroy the effect of an adverse witness by making
him appear more hostile than he really is. You may make him
exaggerate or unsay something and say it again."
"Taft says that a clever cross-examiner, dealing with an honest
but egotistic witness, will "deftly tempt the witness to indulge in
his propensity for exaggeration, so as to make him hang
himself.'" "And thus," adds Taft," "it may happen that not only is the value of his testimony lost,
but the side which produces him suffers for seeking aid from such a
source"
"-- although, I would add, that may be the only source of
evidence of a fact on which the decision will turn. 'An
intimidating manner in putting questions,' writes Wigmore,"
"may so coerce or disconcert the witness that his answers do not
represent his actual knowledge on the subject. So also, questions
which in form or subject cause embarrassment, shame or anger in the
witness may unfairly lead him to such demeanor or utterances that
the impression produced by his statements does not do justice to
its real testimonial value."
[ Footnote 2/7 ] See the materials collected in c. 3 of Countryman &
Finman, The Lawyer in Modern Society; Joint Committee on Continuing
Legal Education of American Law Institute and the American Bar
Association, The Problem of a Criminal Defense 1-46 (1961);
Stovall, Aspects of the Advocate's Dual Responsibility, 22 The
Alabama Lawyer 66; Gold, Split Loyalty: An Ethical Problem for the
Criminal Defense Lawyer, 14 Clev.-Mar.L.Rev. 65; Symposium on
Professional Ethics, 64 Mich.L.Rev. 1469-1498.
MR. JUSTICE FORTAS, with whom THE CHIEF JUSTICE and MR. JUSTICE
DOUGLAS join, concurring in part and dissenting in part.
1. I agree with the Court that the exhibition of the person of
the accused at a lineup is not itself a violation of the privilege
against self-incrimination. In itself, it is no more subject to
constitutional objection Page 388 U. S. 260 than the exhibition of the person of the accused in the
courtroom for identification purposes. It is an incident of the
State's power to arrest, and a reasonable and justifiable aspect of
the State's custody resulting from arrest. It does not require that
the accused take affirmative, volitional action, but only that,
having been duly arrested he may be seen for identification
purposes. It is, however, a "critical stage" in the prosecution,
and I agree with the Court that the opportunity to have counsel
present must be made available.
2. In my view, however, the accused may not be compelled in a
lineup to speak the words uttered by the person who committed the
crime. I am confident that it could not be compelled in court. It
cannot be compelled in a lineup. It is more than passive, mute
assistance to the eyes of the victim or of witnesses. It is the
kind of volitional act -- the kind of forced cooperation by the
accused -- which is within the historical perimeter of the
privilege against compelled self-incrimination.
Our history and tradition teach and command that an accused may
stand mute. The privilege means just that; not less than that.
According to the Court, an accused may be jailed -- indefinitely --
until he is willing to say, for an identifying audience, whatever
was said in the course of the commission of the crime. Presumably,
this would include, "Your money or your life" -- or perhaps, words
of assault in a rape case. This is intolerable under our
constitutional system.
I completely agree that the accused must be advised of and given
the right to counsel before a lineup -- and I join in that part of
the Court's opinion; but this is an empty right unless we mean to
insist upon the accused's fundamental constitutional immunities.
One of these is that the accused may not be compelled to speak. To
compel him to speak would violate the privilege Page 388 U. S. 261 against self-incrimination, which is incorporated in the Fifth
Amendment.
This great privilege is not merely a shield for the accused. It
is also a prescription of technique designed to guide the State's
investigation. History teaches us that self-accusation is an
unreliable instrument of detection, apt to inculpate the
innocent-but-weak and to enable the guilty to escape. But this is
not the end of the story. The privilege historically goes to the
roots of democratic and religious principle. It prevents the
debasement of the citizen which would result from compelling him to
"accuse" himself before the power of the state. The roots of the
privilege are deeper than the rack and the screw used to extort
confessions. They go to the nature of a free man and to his
relationship to the state.
An accused cannot be compelled to utter the words spoken by the
criminal in the course of the crime. I thoroughly disagree with the
Court's statement that such compulsion does not violate the Fifth
Amendment. The Court relies upon Schmerber v. California, 384 U. S. 757 (1966), to support this. I dissented in Schmerber, but, if
it were controlling here, I should, of course, acknowledge its
binding effect unless we were prepared to overrule it. But Schmerber, which authorized the forced extraction of blood
from the veins of an unwilling human being, did not compel the
person actively to cooperate -- to accuse himself by a volitional
act which differs only in degree from compelling him to act out the
crime, which, I assume, would be rebuffed by the Court. It is the
latter feature which places the compelled utterance by the accused
squarely within the history and noble purpose of the Fifth
Amendment's commandment.
To permit Schmerber to apply in any respect beyond its
holding is, in my opinion, indefensible. To permit Page 388 U. S. 262 its insidious doctrine to extend beyond the invasion of the
body, which it permits, to compulsion of the will of a man, is to
deny and defy a precious part of our historical faith, and to
discard one of the most profoundly cherished instruments by which
we have established the freedom and dignity of the individual. We
should not so alter the balance between the rights of the
individual and of the state, achieved over centuries of
conflict.
3. While the Court holds that the accused must be advised of and
given the right to counsel at the lineup, it makes the privilege
meaningless in this important respect. Unless counsel has been
waived, or, being present, has not objected to the accused's
utterance of words used in the course of committing the crime, to
compel such an utterance is constitutional error. * Accordingly, while I join the Court in requiring vacating of the
judgment below for a determination as to whether the identification
of respondent was based upon factors independent of the lineup, I
would do so not only because of the failure to offer counsel before
the lineup, but also because of the violation of respondent's Fifth
Amendment rights.
* While it is conceivable that legislation might provide a
meticulous lineup procedure which would satisfy constitutional
requirements, I do not agree with the Court that this would "remove
the basis for regarding the [lineup] stage as critical."' | In United States v. Wade, the Supreme Court held that a post-indictment lineup is a critical stage of prosecution, and the absence of counsel for the accused violates their Sixth Amendment right to a fair trial. While exhibiting one's person or voice for identification does not violate the Fifth Amendment privilege against self-incrimination, the Court recognized the potential for unfairness and suggestibility in eyewitness identifications. Justice Brennan, in his concurrence and partial dissent, emphasized the importance of the Fifth Amendment privilege, arguing that compelling an accused to utter words used in a crime violates their constitutional rights. |
Criminal Trials & Prosecutions | Escobedo v. Illinois | https://supreme.justia.com/cases/federal/us/378/478/ | U.S. Supreme Court Escobedo v. Illinois, 378
U.S. 478 (1964) Escobedo v. Illinois No. 615 Argued April 29, 1964 Decided June 22, 1964 378
U.S. 478 CERTIORARI TO THE SUPREME COURT OF
ILLINOIS Syllabus Petitioner, a 22-year-old of Mexican extraction, was arrested
with his sister and taken to police headquarters for interrogation
in connection with the fatal shooting, about 11 days before, of his
brother-in-law. He had been arrested shortly after the shooting,
but had made no statement, and was released after his lawyer
obtained a writ of habeas corpus from a state court. Petitioner
made several requests to see his lawyer, who, though present in the
building, and despite persistent efforts, was refused access to his
client. Petitioner was not advised by the police of his right to
remain silent and, after persistent questioning by the police, made
a damaging statement to an Assistant State's Attorney which was
admitted at the trial. Convicted of murder, he appealed to the
State Supreme Court, which affirmed the conviction. Held: Under the circumstances of this case, where a
police investigation is no longer a general inquiry into an
unsolved crime but has begun to focus on a particular suspect in
police custody who has been refused an opportunity to consult with
his counsel and who has not been warned of his constitutional right
to keep silent, the accused has been denied the assistance of
counsel in violation of the Sixth and Fourteenth Amendments, and no
statement extracted by the police during the interrogation may be
used against him at a trial. Crooker v. California, 357 U. S. 433 , and Cicenia v. Lagay, 357 U. S. 504 ,
distinguished, and, to the extent that they may be inconsistent
with the instant case, they are not controlling. Pp. 378 U. S.
479 -492. 28 Ill. 2d
41 , 190 N.E.2d
825 , reversed and remanded. Page 378 U. S. 479 MR. JUSTICE GOLDBERG delivered the opinion of the Court.
The critical question in this case is whether, under the
circumstances, the refusal by the police to honor petitioner's
request to consult with his lawyer during the course of an
interrogation constitutes a denial of "the Assistance of Counsel"
in violation of the Sixth Amendment to the Constitution as "made
obligatory upon the States by the Fourteenth Amendment," Gideon
v. Wainwright, 372 U. S. 335 , 372 U. S. 342 ,
and thereby renders inadmissible in a state criminal trial any
incriminating statement elicited by the police during the
interrogation.
On the night of January 19, 1960, petitioner's brother-in-law
was fatally shot. In the early hours of the next morning, at 2:30
a.m., petitioner was arrested without a warrant and interrogated.
Petitioner made no statement to the police, and was released at 5
that afternoon pursuant to a state court writ of habeas corpus
obtained by Mr. Warren Wolfson, a lawyer who had been retained by
petitioner.
On January 30, Benedict DiGerlando, who was then in police
custody and who was later indicted for the murder along with
petitioner, told the police that petitioner had fired the fatal
shots. Between 8 and 9 that evening, petitioner and his sister, the
widow of the deceased, were arrested and taken to police
headquarters. En route to the police station, the police "had
handcuffed the defendant behind his back," and "one of the
arresting officers told defendant that DiGerlando had named him as
the one who shot" the deceased. Petitioner testified, without
contradiction, that the "detectives said they had us pretty well,
up pretty tight, and we might as well admit to this crime," and
that he replied, "I am sorry, but I would like to have advice from
my lawyer." A police officer testified that, although petitioner
was not formally charged, "he was in custody" and "couldn't walk
out the door." Page 378 U. S. 480 Shortly after petitioner reached police headquarters, his
retained lawyer arrived. The lawyer described the ensuing events in
the following terms:
"On that day, I received a phone call [from 'the mother of
another defendant'] and, pursuant to that phone call, I went to the
Detective Bureau at 11th and State. The first person I talked to
was the Sergeant on duty at the Bureau Desk, Sergeant Pidgeon. I
asked Sergeant Pidgeon for permission to speak to my client, Danny
Escobedo. . . . Sergeant Pidgeon made a call to the Bureau lockup
and informed me that the boy had been taken from the lockup to the
Homicide Bureau. This was between 9:30 and 10:00 in the evening.
Before I went anywhere, he called the Homicide Bureau and told them
there was an attorney waiting to see Escobedo. He told me I could
not see him. Then I went upstairs to the Homicide Bureau. There
were several Homicide Detectives around, and I talked to them. I
identified myself as Escobedo's attorney and asked permission to
see him. They said I could not. . . . The police officer told me to
see Chief Flynn, who was on duty. I identified myself to Chief
Flynn and asked permission to see my client. He said I could not. .
. . I think it was approximately 11:00 o'clock. He said I couldn't
see him because they hadn't completed questioning. . . . [F]or a
second or two, I spotted him in an office in the Homicide Bureau.
The door was open, and I could see through the office. . . . I
waved to him and he waved back, and then the door was closed by one
of the officers at Homicide. [ Footnote 1 ] There were four or five officers milling Page 378 U. S. 481 around the Homicide Detail that night. As to whether I talked to
Captain Flynn any later that day, I waited around for another hour
or two and went back again and renewed by [ sic ] request to
see my client. He again told me I could not. . . . I filed an
official complaint with Commissioner Phelan of the Chicago Police
Department. I had a conversation with every police officer I could
find. I was told at Homicide that I couldn't see him and I would
have to get a writ of habeas corpus. I left the Homicide Bureau and
from the Detective Bureau at 11th and State at approximately 1:00
A.M. [Sunday morning]. I had no opportunity to talk to my client
that night. I quoted to Captain Flynn the Section of the Criminal
Code which allows an attorney the right to see his client.
[ Footnote 2 ]"
Petitioner testified that, during the course of the
interrogation, he repeatedly asked to speak to his lawyer, and that
the police said that his lawyer "didn't want to see" him. The
testimony of the police officers confirmed these accounts in
substantial detail.
Notwithstanding repeated requests by each, petitioner and his
retained lawyer were afforded no opportunity to consult during the
course of the entire interrogation. At one point, as previously
noted, petitioner and his attorney came into each other's view for
a few moments, but the attorney was quickly ushered away.
Petitioner testified "that he heard a detective telling the
attorney the latter would not be allowed to talk to [him] until
they Page 378 U. S.
482 were done,'" and that he heard the attorney being refused
permission to remain in the adjoining room. A police officer
testified that he had told the lawyer that he could not see
petitioner until "we were through interrogating" him. There is testimony by the police that, during the interrogation,
petitioner, a 22-year-old of Mexican extraction with no record of
previous experience with the police, "was handcuffed" [ Footnote 3 ] in a standing position and
that he "was nervous, he had circles under his eyes, and he was
upset" and was "agitated" because "he had not slept well in over a
week."
It is undisputed that, during the course of the interrogation,
Officer Montejano, who "grew up" in petitioner's neighborhood, who
knew his family, and who uses "Spanish language in [his] police
work," conferred alone with petitioner "for about a quarter of an
hour. . . ." Petitioner testified that the officer said to him "in
Spanish that my sister and I could go home if I pinned it on
Benedict DiGerlando," that
"he would see to it that we would go home and be held only as
witnesses, if anything, if we had made a statement against
DiGerlando . . . that we would be able to go home that night."
Petitioner testified that he made the statement in issue because
of this assurance. Officer Montejano denied offering any such
assurance.
A police officer testified that, during the interrogation, the
following occurred:
"I informed him of what DiGerlando told me, and, when I did, he
told me that DiGerlando was [lying], and I said, 'Would you care to
tell DiGerlando that?' and he said, 'Yes, I will.' So I Page 378 U. S. 483 brought . . . Escobedo in and he confronted DiGerlando and he
told him that he was lying and said, 'I didn't shoot Manuel, you
did it.'"
In this way, petitioner for the first time admitted to some
knowledge of the crime. After that, he made additional statements
further implicating himself in the murder plot. At this point, an
Assistant State's Attorney, Theodore J. Cooper, was summoned "to
take" a statement. Mr. Cooper, an experienced lawyer who was
assigned to the Homicide Division to take "statements from some
defendants and some prisoners that they had in custody," "took"
petitioner's statement by asking carefully framed questions
apparently designed to assure the admissibility into evidence of
the resulting answers. Mr. Cooper testified that he did not advise
petitioner of his constitutional rights, and it is undisputed that
no one during the course of the interrogation so advised him.
Petitioner moved both before and during trial to suppress the
incriminating statement, but the motions were denied. Petitioner
was convicted of murder, and he appealed the conviction.
The Supreme Court of Illinois, in its original opinion of
February 1, 1963, held the statement inadmissible and reversed the
conviction. The court said:
"[I]t seems manifest to us, from the undisputed evidence and the
circumstances surrounding defendant at the time of his statement
and shortly prior thereto, that the defendant understood he would
be permitted to go home if he gave the statement, and would be
granted an immunity from prosecution." Compare Lynumn v. Illinois, 372 U.
S. 528 . The State petitioned for, and the court granted,
rehearing. The court then affirmed the conviction. It said:
"[T]he Page 378 U. S. 484 officer denied making the promise and the trier of fact believed
him. We find no reason for disturbing the trial court's finding
that the confession was voluntary. [ Footnote 4 ]" 28 Ill. 2d
41 , 45-46, 190 N.E.2d
825 , 827. The court also held, on the authority of this Court's
decisions in Crooker v. California, 357 U.
S. 433 , and Cicenia v. Lagay, 357 U.
S. 504 , that the confession was admissible even though
"it was obtained after he had requested the assistance of counsel,
which request was denied." 28 Ill. 2d at 46, 190 N.E.2d at 827. We
granted a writ of certiorari to consider whether the petitioner's
statement was constitutionally admissible at his trial. 375 U.S.
902. We conclude, for the reasons stated below, that it was not
and, accordingly, we reverse the judgment of conviction. In Massiah v. United States, 377 U.
S. 201 , this Court observed that
"a Constitution which guarantees a defendant the aid of counsel
at . . . trial could surely vouchsafe no less to an indicted
defendant under interrogation by the police in a completely
extrajudicial proceeding. Anything less . . . might deny a
defendant 'effective representation by counsel at the only stage
when Page 378 U. S. 485 legal aid and advice would help him.'" Id. at 377 U. S. 204 ,
quoting DOUGLAS, J., concurring in Spano v. New York, 360 U. S. 315 , 360 U. S.
326 .
The interrogation here was conducted before petitioner was
formally indicted. But in the context of this case, that fact
should make no difference. When petitioner requested, and was
denied, an opportunity to consult with his lawyer, the
investigation had ceased to be a general investigation of "an
unsolved crime." Spano v New York, 360 U.
S. 315 , 360 U. S. 327 (STEWART, J., concurring). Petitioner had become the accused, and
the purpose of the interrogation was to "get him" to confess his
guilt despite his constitutional right not to do so. At the time of
his arrest and throughout the course of the interrogation, the
police told petitioner that they had convincing evidence that he
had fired the fatal shots. Without informing him of his absolute
right to remain silent in the face of this accusation, the police
urged him to make a statement. [ Footnote 5 ] As this Court observed many years ago:
"It cannot be doubted that, placed in the position in which the
accused was when the statement was made to him that the other
suspected person had charged him with crime, the result was to
produce upon his mind the fear that, if he remained silent, it
would be considered an admission of guilt, and therefore render
certain his being committed for trial as the guilty person, and it
cannot be conceived that the converse impression would not also
have naturally Page 378 U. S. 486 arisen, that, by denying there was hope of removing the
suspicion from himself." Bram v. United States, 168 U.
S. 532 , 168 U. S. 562 .
Petitioner, a layman, was undoubtedly unaware that, under Illinois
law, an admission of "mere" complicity in the murder plot was
legally as damaging as an admission of firing of the fatal shots. Illinois v. Escobedo, 28 Ill. 2d
41 , 190 N.E.2d
825 . The "guiding hand of counsel" was essential to advise
petitioner of his rights in this delicate situation. Powell v.
Alabama, 287 U. S. 45 , 287 U. S. 69 .
This was the "stage when legal aid and advice" were most critical
to petitioner. Massiah v. United States, supra, at 377 U. S. 204 .
It was a stage surely as critical as was the arraignment in Hamilton v. Alabama, 368 U. S. 52 , and
the preliminary hearing in White v. Maryland, 373 U. S.
59 . What happened at this interrogation could certainly
"affect the whole trial," Hamilton v. Alabama, supra, at 368 U. S. 54 ,
since rights "may be as irretrievably lost, if not then and there
asserted, as they are when an accused represented by counsel waives
a right for strategic purposes." Ibid. It would exalt form
over substance to make the right to counsel, under these
circumstances, depend on whether, at the time of the interrogation,
the authorities had secured a formal indictment. Petitioner had,
for all practical purposes, already been charged with murder.
The New York Court of Appeals, whose decisions this Court cited
with approval in Massiah, 377 U.
S. 201 , at 377 U. S. 205 ,
has recently recognized that, under circumstances such as those
here, no meaningful distinction can be drawn between interrogation
of an accused before and after formal indictment. In People v.
Donovan, 13 N.Y.2d 148, 193 N.E.2d 628, that court, in an
opinion by Judge Fuld, held that a
"confession taken from a defendant, during a period of detention
[prior to indictment], after his attorney had requested and been
denied access Page 378 U. S. 487 to him"
could not be used against him in a criminal trial. [ Footnote 6 ] Id. at 151, 193
N.E.2d at 629. The court observed that it
"would be highly incongruous if our system of justice permitted
the district attorney, the lawyer representing the State, to
extract a confession from the accused while his own lawyer, seeking
to speak with him, was kept from him by the police." Id. at 152, 193 N.E.2d at 629. [ Footnote 7 ]
In Gideon v. Wainwright, 372 U.
S. 335 , we held that every person accused of a crime,
whether state or federal, is entitled to a lawyer at trial.
[ Footnote 8 ] The rule sought by
the State here, however, would make the trial no more than an
appeal from the interrogation, and the
"right to use counsel at the formal trial [would be] a very
hollow thing [if], for all practical purposes, the conviction is
already assured by pretrial examination." In re Groban , 352 U.S. Page 378 U. S. 488 330, 352 U. S. 344 (BLACK, J., dissenting). [ Footnote
9 ]
"One can imagine a cynical prosecutor saying: 'Let them have the
most illustrious counsel now. They can't escape the noose. There is
nothing that counsel can do for them at the trial.'" Ex parte Sullivan, 107 F.
Supp. 514 , 517-518.
It is argued that, if the right to counsel is afforded prior to
indictment, the number of confessions obtained by the police will
diminish significantly, because most confessions are obtained
during the period between arrest and indictment, [ Footnote 10 ] and "any lawyer worth his salt
will tell the suspect in no uncertain terms to make no statement to
police under any circumstances." Watts v. Indiana, 338 U. S. 49 , 338 U. S. 59 (Jackson, J., concurring in part and dissenting in part). This
argument, of course, cuts two ways. The fact that many confessions
are obtained during this period points up its critical nature as a
"stage when legal aid and advice" are surely needed. Massiah v.
United States, supra, at 377 U. S. 204 ; Hamilton v. Alabama, supra; White v. Maryland, supra. The
right to counsel would indeed be hollow if it began at a period
when few confessions were obtained. There is necessarily a direct
relationship between the importance of a stage to the police in
their quest for a confession and the criticalness of that stage to
the accused in his need for legal advice. Our Constitution, unlike
some others, strikes the balance in favor of the right of the
accused to be advised by his lawyer of his privilege against
self-incrimination. See Note, 73 Yale L.J. 1000, 1048-1051
(1964).
We have learned the lesson of history, ancient and modern, that
a system of criminal law enforcement Page 378 U. S. 489 which comes to depend on the "confession" will, in the long run,
be less reliable [ Footnote
11 ] and more subject to abuses [ Footnote 12 ] than a system which depends on extrinsic
evidence independently secured through skillful investigation. As
Dean Wigmore so wisely said:
" [A]ny system of administration which permits the
prosecution to trust habitually to compulsory self-disclosure as a
source of proof must itself suffer morally thereby. The
inclination develops to rely mainly upon such evidence, and to be
satisfied with an incomplete investigation of the other sources.
The exercise of the power to extract answers begets a forgetfulness
of the just limitations of that power. The simple and peaceful
process of questioning breeds a readiness to resort to bullying and
to physical force and torture. If there is a right to an answer,
there soon seems to be a right to the expected answer -- that is,
to a confession of guilt. Thus, the legitimate use grows into the
unjust abuse; ultimately, the innocent are jeopardized by the
encroachments of a bad system. Such seems to have been the course
of experience in those legal systems where the privilege was not
recognized."
8 Wigmore, Evidence (3d ed.1940), 309. (Emphasis in
original.) Page 378 U. S. 490 This Court also has recognized that
"history amply shows that confessions have often been extorted
to save law enforcement officials the trouble and effort of
obtaining valid and independent evidence. . . ." Haynes v. Washington, 373 U. S. 503 , 373 U. S.
519 .
We have also learned the companion lesson of history that no
system of criminal justice can, or should, survive if it comes to
depend for its continued effectiveness on the citizens' abdication
through unawareness of their constitutional rights. No system worth
preserving should have to fear that, if an accused is permitted to
consult with a lawyer, he will become aware of, and exercise, these
rights. [ Footnote 13 ] If the
exercise of constitutional rights will thwart the effectiveness of
a system of law enforcement, then there is something very wrong
with that system. [ Footnote
14 ]
We hold, therefore, that where, as here, the investigation is no
longer a general inquiry into an unsolved crime, but has begun to
focus on a particular suspect, the suspect Page 378 U. S. 491 has been taken into police custody, the police carry out a
process of interrogations that lends itself to eliciting
incriminating statements, the suspect has requested and been denied
an opportunity to consult with his lawyer, and the police have not
effectively warned him of his absolute constitutional right to
remain silent, the accused has been denied "the Assistance of
Counsel" in violation of the Sixth Amendment to the Constitution as
"made obligatory upon the States by the Fourteenth Amendment," Gideon v. Wainwright, 372 U.S. at 372 U. S. 342 ,
and that no statement elicited by the police during the
interrogation may be used against him at a criminal trial. Crooker v. California, 357 U.
S. 433 , does not compel a contrary result. In that case,
the Court merely rejected the absolute rule sought by petitioner,
that
"every state denial of a request to contact counsel [is] an
infringement of the constitutional right without regard to the
circumstances of the case. " Id. at 357 U. S. 440 .
(Emphasis in original.) In its place, the following rule was
announced:
"[S]tate refusal of a request to engage counsel violates due
process not only if the accused is deprived of counsel at trial on
the merits, . . . but also if he is deprived of counsel for any
part of the pretrial proceedings, provided that he is so
prejudiced thereby as to infect his subsequent trial with an
absence of 'that fundamental fairness essential to the very concept
of justice. . . .' The latter determination necessarily depends
upon all the circumstances of the case."
357 U.S. at 357 U. S.
439 -440. (Emphasis added.) The Court, applying "these
principles" to "the sum total of the circumstances [there] during
the time petitioner was without counsel," id. at 357 U. S. 440 ,
concluded that he had not been fundamentally prejudiced by the
denial of his request for counsel. Among the critical circumstances
which distinguish that case from this one are that the petitioner
there, but not here, was explicitly advised by the police of his
constitutional right to remain silent and Page 378 U. S. 492 not to "say anything" in response to the questions, id. at 357 U. S. 437 ,
and that petitioner there, but not here, was a well educated man
who had studied criminal law while attending law school for a year.
The Court's opinion in Cicenia v. Lagay, 357 U.
S. 504 , decided the same day, merely said that the
"contention that petitioner had a constitutional right to confer
with counsel is disposed of by Crooker v. California. . .
." That case adds nothing, therefore, to Crooker. In any
event, to the extent that Cicenia or Crooker may
be inconsistent with the principles announced today, they are not
to be regarded as controlling. [ Footnote 15 ]
Nothing we have said today affects the powers of the police to
investigate "an unsolved crime," Spano v. New York, 360 U. S. 315 , 360 U. S. 327 (STEWART, J., concurring), by gathering information from witnesses
and by other "proper investigative efforts." Haynes v.
Washington, 373 U. S. 503 , 373 U. S. 519 .
We hold only that, when the process shifts from investigatory to
accusatory -- when its focus is on the accused and its purpose is
to elicit a confession -- our adversary system begins to operate,
and, under the circumstances here, the accused must be permitted to
consult with his lawyer.
The judgment of the Illinois Supreme Court is reversed, and the
case remanded for proceedings not inconsistent with this
opinion. Reversed and remanded. [ Footnote 1 ]
Petitioner testified that this ambiguous gesture "could have
meant most anything," but that he "took it upon [his] own to think
that [the lawyer was telling him] not to say anything," and that
the lawyer "wanted to talk" to him.
[ Footnote 2 ]
The statute then in effect provided in pertinent part that:
"All public officers . . . having the custody of any person . .
. restrained of his liberty for any alleged cause whatever, shall,
except in cases of imminent danger of escape, admit any practicing
attorney . . . whom such person . . . may desire to see or consult.
. . ."
Ill.Rev.Stat. (1959), c. 38, § 477. Repealed as of Jan. 1, 1964,
by Act approved Aug. 14, 1963, H.B. No. 851.
[ Footnote 3 ]
The trial judge justified the handcuffing on the ground that it
"is ordinary police procedure."
[ Footnote 4 ] Compare Haynes v. Washington, 373 U.
S. 503 , 373 U. S. 515 (decided on the same day as the decision of the Illinois Supreme
Court here), where we said:
"Our conclusion is in no way foreclosed, as the State contends,
by the fact that the state trial judge or the jury may have reached
a different result on this issue."
"It is well settled that the duty of constitutional adjudication
resting upon this Court requires that the question whether the Due
Process Clause of the Fourteenth Amendment has been violated by
admission into evidence of a coerced confession be the subject of
an independent determination here, see, e.g., Ashcraft
v. Tennessee, 322 U. S. 143 , 322 U. S.
147 -148; 'we cannot escape the responsibility of making
our own examination of the record,' Spano v. New York, 360 U. S.
315 , 360 U. S. 316 ."
(Emphasis in original.)
[ Footnote 5 ]
Although there is testimony in the record that petitioner and
his lawyer had previously discussed what petitioner should do in
the event of interrogation, there is no evidence that they
discussed what petitioner should, or could, do in the face of a
false accusation that he had fired the fatal bullets.
[ Footnote 6 ]
The English Judges' Rules also recognize that a functional,
rather than a formal, test must be applied, and that, under
circumstances such as those here, no special significance should be
attached to formal indictment. The applicable Rule does not permit
the police to question an accused, except in certain extremely
limited situations not relevant here, at any time after the
defendant "has been charged or informed that he my be
prosecuted. " [1964] Crim.L.Rev. 166-170 (emphasis supplied).
Although voluntary statements obtained in violation of these rules
are not automatically excluded from evidence, the judge may, in the
exercise of his discretion, exclude them.
"Recent cases suggest that perhaps the judges have been
tightening up, [and, almost] inevitably, the effect of the new
Rules will be to stimulate this tendency." Id. at 182.
[ Footnote 7 ]
Canon 9 of the American Bar Association's Canon of Professional
Ethics provides that:
"A lawyer should not in any way communicate upon the subject of
controversy with a party represented by counsel; much less should
he undertake to negotiate or compromise the matter with him, but
should deal only with his counsel. It is incumbent upon the lawyer
most particularly to avoid everything that may tend to mislead a
party not represented by counsel, and he should not undertake to
advise him as to the law." See Broeder, Wong Sun v. United States: A
Study in Faith and Hope, 42 Neb.L.Rev. 483, 599-604.
[ Footnote 8 ]
Twenty-two States, including Illinois, urged us so to hold.
[ Footnote 9 ]
The Soviet criminal code does not permit a lawyer to be present
during the investigation. The Soviet trial has thus been aptly
described as "an appeal from the pretrial investigation." Feifer,
Justice in Moscow (1964), 86.
[ Footnote 10 ] See Barrett, Police Practices and the Law -- From
Arrest to Release or Charge, 50 Cal.L.Rev. 11, 43 (1962).
[ Footnote 11 ] See Committee Print, Subcommittee to Investigate
Administration of the Internal Security Act, Senate Committee on
the Judiciary, 85th Cong., 1st Sess., reporting and analyzing the
proceedings at the XXth Congress of the Communist Party of the
Soviet Union, February 25, 1956, exposing the false confessions
obtained during the Stalin purges of the 1930's. See also
Miller v. United States, 320 F.2d 767, 772-773 (opinion of
Chief Judge Bazelon); Lifton, Thought Reform and the Psychology of
Totalism (1961); Rogge, Why Men Confess (1959); Schein, Coercive
Persuasion (1961).
[ Footnote 12 ] See Stephen, History of the Criminal Law, quoted in 8
Wigmore, Evidence (3d ed.1940), 312; Report and Recommendations of
the Commissioners' Committee on Police Arrests for Investigation,
District of Columbia (1962).
[ Footnote 13 ] Cf. Report of Attorney General's Committee on Poverty
and the Administration of Federal Criminal Justice (1963),
10-11:
"The survival of our system of criminal justice and the values
which it advances depends upon a constant, searching, and creative
questioning of official decisions and assertions of authority at
all stages of the process. . . . Persons [denied access to counsel]
are incapable of providing the challenges that are indispensable to
satisfactory operation of the system. The loss to the interests of
accused individuals, occasioned by these failures, are great and
apparent. It is also clear that a situation in which persons are
required to contest a serious accusation but are denied access to
the tools of contest is offensive to fairness and equity. Beyond
these considerations, however, is the fact that [this situation is]
detrimental to the proper functioning of the system of justice, and
that the loss in vitality of the adversary system thereby
occasioned significantly endangers the basic interests of a free
community."
[ Footnote 14 ]
The accused may, of course, intelligently and knowingly waive
his privilege against self-incrimination and his right to counsel
either at a pretrial stage or at the trial. See Johnson v.
Zerbst, 304 U. S. 458 . But
no knowing and intelligent waiver of any constitutional right can
be said to have occurred under the circumstances of this case.
[ Footnote 15 ]
The authority of Cicenia v. Lagay, 357 U.
S. 504 , and Crooker v. California, 357 U.
S. 433 , was weakened by the subsequent decisions of this
Court in Hamilton v. Alabama, 368 U. S.
52 , White v. Maryland, 373 U. S.
59 , and Massiah v. United States, 377 U.
S. 201 (as the dissenting opinion in the last-cited case
recognized).
MR. JUSTICE HARLAN, dissenting.
I would affirm the judgment of the Supreme Court of Illinois on
the basis of Cicenia v. Lagay, 357 U.
S. 504 , Page 378 U. S. 493 decided by this Court only six years ago. Like my Brother WHITE, post, p. 378 U. S. 495 ,
I think the rule announced today is most ill-conceived, and that it
seriously and unjustifiably fetters perfectly legitimate methods of
criminal law enforcement.
MR. JUSTICE STEWART, dissenting.
I think this case is directly controlled by Cicenia v.
Lagay, 357 U. S. 504 , and
I would therefore affirm the judgment. Massiah v. United States, 377 U.
S. 201 , is not in point here. In that case, a federal
grand jury had indicted Massiah. He had retained a lawyer and
entered a formal plea of not guilty. Under our system of federal
justice, an indictment and arraignment are followed by a trial, at
which the Sixth Amendment guarantees the defendant the assistance
of counsel. * But Massiah was
released on bail, and thereafter agents of the Federal Government
deliberately elicited incriminating statements from him in the
absence of his lawyer. We held that the use of these statements
against him at his trial denied him the basic protections of the
Sixth Amendment guarantee. Putting to one side the fact that the
case now before us is not a federal case, the vital fact remains
that this case does not involve the deliberate interrogation of a
defendant after the initiation of judicial proceedings against him.
The Court disregards this basic difference between the present case
and Massiah's, with the bland assertion that "that fact should make
no difference." Ante, p. 378 U. S.
485 .
It is "that fact," I submit, which makes all the difference.
Under our system of criminal justice, the institution of formal,
meaningful judicial proceedings, by way of indictment, information,
or arraignment, marks the Page 378 U. S. 494 point at which a criminal investigation has ended and adversary
proceedings have commenced. It is at this point that the
constitutional guarantees attach which pertain to a criminal trial.
Among those guarantees are the right to a speedy trial, the right
of confrontation, and the right to trial by jury. Another is the
guarantee of the assistance of counsel. Gideon v.
Wainwright, 372 U. S. 335 ; Hamilton v. Alabama, 368 U. S. 52 ; White v. Maryland, 373 U. S. 59 .
The confession which the Court today holds inadmissible was a
voluntary one. It was given during the course of a perfectly
legitimate police investigation of an unsolved murder. The Court
says that what happened during this investigation "affected" the
trial. I had always supposed that the whole purpose of a police
investigation of a murder was to "affect" the trial of the
murderer, and that it would be only an incompetent, unsuccessful,
or corrupt investigation which would not do so. The Court further
says that the Illinois police officers did not advise the
petitioner of his "constitutional rights" before he confessed to
the murder. This Court has never held that the Constitution
requires the police to give any "advice" under circumstances such
as these.
Supported by no stronger authority than its own rhetoric, the
Court today converts a routine police investigation of an unsolved
murder into a distorted analogue of a judicial trial. It imports
into this investigation constitutional concepts historically
applicable only after the onset of formal prosecutorial
proceedings. By doing so, I think the Court perverts those precious
constitutional guarantees, and frustrates the vital interests of
society in preserving the legitimate and proper function of honest
and purposeful police investigation.
Like my Brother CLARK, I cannot escape the logic of my Brother
WHITE's conclusions as to the extraordinary implications which
emanate from the Court's opinion in Page 378 U. S. 495 this case, and I share their views as to the untold and highly
unfortunate impact today's decision may have upon the fair
administration of criminal justice. I can only hope we have
completely misunderstood what the Court has said.
* "In all criminal prosecutions, the accused shall enjoy the
right . . . to have the Assistance of Counsel for his defence."
MR. JUSTICE WHITE, with whom MR. JUSTICE CLARK and MR. JUSTICE
STEWART join, dissenting.
In Massiah v. United States, 377 U.
S. 201 , the Court held that, as of the date of the
indictment, the prosecution is dissentitled to secure admissions
from the accused. The Court now moves that date back to the time
when the prosecution begins to "focus" on the accused. Although the
opinion purports to be limited to the facts of this case, it would
be naive to think that the new constitutional right announced will
depend upon whether the accused has retained his own counsel, cf. Gideon v. Wainwright, 372 U.
S. 335 ; Griffin v. Illinois, 351 U. S.
12 ; Douglas v. California, 372 U.
S. 353 , or has asked to consult with counsel in the
course of interrogation. Cf. Carnley v. Cochran, 369 U. S. 506 . At
the very least, the Court holds that, once the accused becomes a
suspect and, presumably, is arrested, any admission made to the
police thereafter is inadmissible in evidence unless the accused
has waived his right to counsel. The decision is thus another major
step in the direction of the goal which the Court seemingly has in
mind -- to bar from evidence all admissions obtained from an
individual suspected of crime, whether involuntarily made or not.
It does, of course, put us one step "ahead" of the English judges
who have had the good sense to leave the matter a discretionary one
with the trial court.* I reject this step and Page 378 U. S. 496 the invitation to go farther which the Court has now issued.
By abandoning the voluntary-involuntary test for admissibility
of confessions, the Court seems driven by the notion that it is
uncivilized law enforcement to use an accused's own admissions
against him at his trial. It attempts to find a home for this new
and nebulous rule of due process by attaching it to the right to
counsel guaranteed in the federal system by the Sixth Amendment and
binding upon the States by virtue of the due process guarantee of
the Fourteenth Amendment. Gideon v. Wainwright, supra. The
right to counsel now not only entitles the accused to counsel's
advice and aid in preparing for trial, but stands as an
impenetrable barrier to any interrogation once the accused has
become a suspect. From that very moment, apparently his right to
counsel attaches, a rule wholly unworkable and impossible to
administer unless police cars are equipped with public defenders
and undercover agents and police informants have defense counsel at
their side. I would not abandon the Court's prior cases defining
with some care and analysis the circumstances requiring the
presence or aid of counsel and substitute the amorphous and wholly
unworkable principle that counsel is constitutionally required
whenever he would or could be helpful. Hamilton v.
Alabama, 368 U. S. 52 ; White v. Maryland, 373 U. S. 59 ; Gideon v. Page 378 U. S. 497 Wainwright, supra. These cases dealt with the
requirement of counsel at proceedings in which definable rights
could be won or lost, not with stages where probative evidence
might be obtained. Under this new approach, one might just as well
argue that a potential defendant is constitutionally entitled to a
lawyer before, not after, he commits a crime, since it is then that
crucial incriminating evidence is put within the reach of the
Government by the would-be accused. Until now, there simply has
been no right guaranteed by the Federal Constitution to be free
from the use at trial of a voluntary admission made prior to
indictment.
It is incongruous to assume that the provision for counsel in
the Sixth Amendment was meant to amend or supersede the
self-incrimination provision of the Fifth Amendment, which is now
applicable to the States. Malloy v. Hogan, 378 U. S.
1 . That amendment addresses itself to the very issue of
incriminating admissions of an accused and resolves it by
proscribing only compelled statements. Neither the Framers, the
constitutional language, a century of decisions of this Court, nor
Professor Wigmore provides an iota of support for the idea that an
accused has an absolute constitutional right not to answer even in
the absence of compulsion -- the constitutional right not to
incriminate himself by making voluntary disclosures.
Today's decision cannot be squared with other provisions of the
Constitution which, in my view, define the system of criminal
justice this Court is empowered to administer. The Fourth Amendment
permits upon probable cause even compulsory searches of the suspect
and his possessions and the use of the fruits of the search at
trial, all in the absence of counsel. The Fifth Amendment and state
constitutional provisions authorize, indeed require, inquisitorial
grand jury proceedings at which a potential defendant, in the
absence of counsel, Page 378 U. S. 498 is shielded against no more than compulsory incrimination. Mulloney v. United States, 79 F.2d 566, 578 (C.A. 1st
Cir.); United States v. Benjamin, 120 F.2d 521, 522
(C.A.2d Cir.); United States v. Scully, 225 F.2d 113, 115
(C.A.2d Cir.); United States v. Gilboy, 160 F.
Supp. 442 (D.C.M.D.Pa.). A grand jury witness, who may be a
suspect, is interrogated and his answers, at least until today, are
admissible in evidence at trial. And these provisions have been
thought of as constitutional safeguards to persons suspected of an
offense. Furthermore, until now, the Constitution has permitted the
accused to be fingerprinted and to be identified in a lineup or in
the courtroom itself.
The Court chooses to ignore these matters, and to rely on the
virtues and morality of a system of criminal law enforcement which
does not depend on the "confession." No such judgment is to be
found in the Constitution. It might be appropriate for a
legislature to provide that a suspect should not be consulted
during a criminal investigation; that an accused should never be
called before a grand jury to answer, even if he wants to, what may
well be incriminating questions, and that no person, whether he be
a suspect, guilty criminal or innocent bystander, should be put to
the ordeal of responding to orderly noncompulsory inquiry by the
State. But this is not the system our Constitution requires. The
only "inquisitions" the Constitution forbids are those which compel
incrimination. Escobedo's statements were not compelled, and the
Court does not hold that they were.
This new American judges' rule, which is to be applied in both
federal and state courts, is perhaps thought to be a necessary
safeguard against the possibility of extorted confessions. To this
extent, it reflects a deep-seated distrust of law enforcement
officers everywhere, unsupported by relevant data or current
material based upon our own Page 378 U. S. 499 experience. Obviously law enforcement officers can make mistakes
and exceed their authority, as today's decision shows that even
judges can do, but I have somewhat more faith than the Court
evidently has in the ability and desire of prosecutors and of the
power of the appellate courts to discern and correct such
violations of the law.
The Court may be concerned with a narrower matter: the unknowing
defendant who responds to police questioning because he mistakenly
believes that he must and that his admissions will not be used
against him. But this worry hardly calls for the broadside the
Court has now fired. The failure to inform an accused that he need
not answer and that his answers may be used against him is very
relevant indeed to whether the disclosures are compelled. Cases in
this Court, to say the least, have never placed a premium on
ignorance of constitutional rights. If an accused is told he must
answer and does not know better, it would be very doubtful that the
resulting admissions could be used against him. When the accused
has not been informed of his rights at all, the Court
characteristically and properly looks very closely at the
surrounding circumstances. See Ward v. Texas, 316 U.
S. 547 ; Haley v. Ohio, 332 U.
S. 596 ; Payne v. Arkansas, 356 U.
S. 560 . I would continue to do so. But, in this case,
Danny Escobedo knew full well that he did not have to answer, and
knew full well that his lawyer had advised him not to answer.
I do not suggest for a moment that law enforcement will be
destroyed by the rule announced today. The need for peace and order
is too insistent for that. But it will be crippled, and its task
made a great deal more difficult, all, in my opinion, for unsound,
unstated reasons which can find no home in any of the provisions of
the Constitution.
*
"[I]t seems from reported cases that the judges have given up
enforcing their own rules, for it is no longer the practice to
exclude evidence obtained by questioning in custody. . . . A
traditional principle of 'fairness' to criminals, which has quite
possibly lost some of the reason for its existence, is maintained
in words while it is disregarded in fact. . . ."
"The reader may be expecting at this point a vigorous
denunciation of the police and of the judges, and a plea for a
return to the Judges' Rules as interpreted in 1930. What has to be
considered, however, is whether these Rules are a workable part of
the machinery of justice. Perhaps the truth is that the Rules have
been abandoned, by tacit consent, just because they are an
unreasonable restriction upon the activities of the police in
bringing criminals to book."
Williams, Questioning by the Police: Some Practical
Considerations, [1960] Crim.L.Rev. 325, 331-332. See also [1964] Crim.L.Rev. 161-182. | The Supreme Court held that the police's refusal to allow a suspect in custody to consult with their lawyer during interrogation, and the failure to inform the suspect of their right to remain silent, violated the Sixth and Fourteenth Amendments. Any statements made by the suspect during such interrogation are inadmissible in court. |
Criminal Trials & Prosecutions | Davis v. Alaska | https://supreme.justia.com/cases/federal/us/415/308/ | U.S. Supreme Court Davis v. Alaska, 415
U.S. 308 (1974) Davis v. Alaska No. 72-5794 Argued December 12,
1973 Decided February 27,
1974 415
U.S. 308 CERTIORARI TO THE SUPREME COURT OF
ALASKA Syllabus Petitioner was convicted of grand larceny and burglary following
a trial in which the trial court, on motion of the prosecution,
issued a protective order prohibiting questioning Green, a key
prosecution witness, concerning Green's adjudication as a juvenile
delinquent relating to a burglary and his probation status at the
time of the events as to which he was to testify. The trial court's
order was based on state provisions protecting the anonymity of
juvenile offenders. The Alaska Supreme Court affirmed. Held: Petitioner was denied his right of confrontation
of witnesses under the Sixth and Fourteenth Amendments. Pp. 415 U. S.
315 -321.
(a) The defense was entitled to attempt to show that Green was
biased because of his vulnerable status as a probationer and his
concern that he might be a suspect in the burglary charged against
petitioner, and limiting the cross-examination of Green precluded
the defense from showing his possible bias. Pp. 415 U. S.
315 -318.
(b) Petitioner's right of confrontation is paramount to the
State's policy of protecting juvenile offenders, and any temporary
embarrassment to Green by disclosure of his juvenile court record
and probation status is outweighed by petitioner's right
effectively to cross-examine a witness. Pp. 415 U. S.
319 -320. 499 P.2d 1025 ,
reversed and remanded.
BURGER, C.J., delivered the opinion of the Court, in which
DOUGLAS, BRENNAN, STEWART, MARSHALL, BLACKMUN, and POWELL, JJ.,
joined. STEWART, J., filed a concurring statement, post, p. 415 U. S. 321 .
WHITE, J., filed a dissenting opinion, in which REHNQUIST, J.,
joined, post, p. 415 U. S.
321 . Page 415 U. S. 309 MR. CHIEF JUSTICE BURGER delivered the opinion of the Court.
We granted certiorari in this case to consider whether the
Confrontation Clause requires that a defendant in a criminal case
be allowed to impeach the credibility of a prosecution witness by
cross-examination directed at possible bias deriving from the
witness' probationary status as a juvenile delinquent when such an
impeachment would conflict with a State's asserted interest in
preserving the confidentiality of juvenile adjudications of
delinquency. (1) When the Polar Bar in Anchorage closed in the early morning
hours of February 16, 1970, well over a thousand dollars in cash
and checks was in the bar's Mosler safe. About midday, February 16,
it was discovered that the bar had been broken into and the safe,
about two feet square and weighing several hundred pounds, had been
removed from the premises.
Later that, afternoon, the Alaska State Troopers received word
that a safe had been discovered about 26 miles outside Anchorage
near the home of Jess Straight and his family. The safe, which was
subsequently determined to be the one stolen from the Polar Bar,
had been pried open and the contents removed. Richard Green, Jess
Straight's stepson, told investigating troopers on the scene that,
at about noon on February 16, he had seen and spoken with two Negro
men standing alongside a late-model metallic blue Chevrolet sedan
near where the safe was later discovered. The next day,
Anchorage Page 415 U. S. 310 police investigators brought him to the police station, where
Green was given six photographs of adult Negro males. After
examining the photographs for 30 seconds to a minute, Green
identified the photograph of petitioner as that of one of the men
he had encountered the day before and described to the police.
Petitioner was arrested the next day, February 18. On February 19,
Green picked petitioner out of a lineup of seven Negro males.
At trial, evidence was introduced to the effect that paint chips
found in the trunk of petitioner's rented blue Chevrolet could have
originated from the surface of the stolen safe. Further, the trunk
of the car contained particles which were identified as safe
insulation characteristic of that found in Mosler safes. The
insulation found in the trunk matched that of the stolen safe.
Richard Green was a crucial witness for the prosecution. He
testified at trial that, while on an errand for his mother, he
confronted two men standing beside a late-model metallic blue
Chevrolet, parked on a road near his family's house. The man
standing at the rear of the car spoke to Green asking if Green
lived nearby and if his father was home. Green offered the men
help, but his offer was rejected. On his return from the errand,
Green again passed the two men, and he saw the man with whom he had
had the conversation standing at the rear of the car with
"something like a crowbar" in his hands. Green identified
petitioner at the trial as the man with the "crowbar." The safe was
discovered later that afternoon at the point, according to Green,
where the Chevrolet had been parked.
Before testimony was taken at the trial of petitioner, the
prosecutor moved for a protective order to prevent any reference to
Green's juvenile record by the defense in the course of
cross-examination. At the time of the Page 415 U. S. 311 trial and at the time of the events Green testified to, Green
was on probation by order of a juvenile court after having been
adjudicated a delinquent for burglarizing two cabins. Green was 16
years of age at the time of the Polar Bar burglary, but had turned
17 prior to trial.
In opposing the protective order, petitioner's counsel made it
clear that he would not introduce Green's juvenile adjudication as
a general impeachment of Green's character as a truthful person
but, rather, to show specifically that, at the same time Green was
assisting the police in identifying petitioner he was on probation
for burglary. From this petitioner would seek to show -- or at
least argue -- that Green acted out of fear or concern of possible
jeopardy to his probation. Not only might Green have made a hasty
and faulty identification of petitioner to shift suspicion away
from himself as one who robbed the Polar Bar, but Green might have
been subject to undue pressure from the police, and made his
identifications under fear of possible probation revocation.
Green's record would be revealed only as necessary to probe Green
for bias and prejudice, and not generally to call Green's good
character into question.
The trial court granted the motion for a protective order,
relying on Alaska Rule of Children's Procedure 23 [ Footnote 1 ] and Alaska Stat. 47.10.080(g)
(1971). [ Footnote 2 ] Page 415 U. S. 312 Although prevented from revealing that Green had been on
probation for the juvenile delinquency adjudication for burglary at
the same time that he originally identified petitioner, counsel for
petitioner did his best to expose Green's state of mind at the time
Green discovered that a stolen safe had been discovered near his
home. Green denied that he was upset or uncomfortable about the
discovery of the safe. He claimed not to have been worried about
any suspicions the police might have been expected to harbor
against him, though Green did admit that it crossed his mind that
the police might have thought he had something to do with the
crime.
Defense counsel cross-examined Green in part as follows:
"Q. Were you upset at all by the fact that this safe was found
on your property?"
"A. No, sir."
"Q. Did you feel that they might in some way suspect you of
this?"
"A. No."
"Q. Did you feel uncomfortable about this though?"
"A. No, not really."
"Q. The fact that a safe was found on your property?"
"A. No."
"Q. Did you suspect for a moment that the police might somehow
think that you were involved in this?"
"A. I thought they might ask a few questions is all."
"Q. Did that thought ever enter your mind that you -- that the
police might think that you were somehow connected with this?"
" * * * Page 415 U. S.
313 " "A. No, it didn't really bother me, no."
"Q. Well, but. . . . "
"A. I mean, you know, it didn't -- it didn't come into my mind
as worrying me, you know."
"Q. That really wasn't -- wasn't my question, Mr. Green. Did you
think that -- not whether it worried you so much or not, but did
you feel that there was a possibility that the police might somehow
think that you had something to do with this, that they might have
that, in their mind, not that you. . . . "
"A. That came across my mind, yes, sir."
"Q. That did cross your mind?"
"A. Yes."
"Q. So, as I understand it, you went down to the-- you drove in
with the police in -- in their car from mile 25, Glenn Highway down
to the city police station?"
"A. Yes, sir."
"Q. And then went into the investigators' room with Investigator
Gray and Investigator Weaver?"
"A. Yeah."
"Q. And they started asking you questions about -- about the
incident, is that correct?"
"A. Yeah."
"Q. Had you ever been questioned like that, before by any law
enforcement officers?"
"A. No."
"MR. RIPLEY: I'm going to object to this, Your Honor, it's a
carry-on with rehash of the same thing. He's attempting to raise in
the jury's mind. . . . "
"THE COURT: I'll sustain the objection."
Since defense counsel was prohibited from making inquiry as to
the witness' being on probation under a juvenile court
adjudication, Green's protestations of unconcern over possible
police suspicion that he might Page 415 U. S. 314 have had a part in the Polar Bar burglary and his categorical
denial of ever having been the subject of any similar law
enforcement interrogation went unchallenged. The tension between
the right of confrontation and the State's policy of protecting the
witness with a juvenile record is particularly evident in the final
answer given by the witness. Since it is probable that Green
underwent some questioning by police when he was arrested for the
burglaries on which his juvenile adjudication of delinquency
rested, the answer can be regarded as highly suspect at the very
least. The witness was, in effect, asserting, under protection of
the trial court's ruling, a right to give a questionably truthful
answer to a cross-examiner pursuing a relevant line of inquiry; it
is doubtful whether the bold "No" answer would have been given by
Green absent a belief that he was shielded from traditional
cross-examination. It would be difficult to conceive of a situation
more clearly illustrating the need for cross-examination. The
remainder of the cross-examination was devoted to an attempt to
prove that Green was making his identification at trial on the
basis of what he remembered from his earlier identifications at the
photographic display and lineup, and not on the basis of his
February 16 confrontation with the two men on the road.
The Alaska Supreme Court affirmed petitioner's conviction,
[ Footnote 3 ] concluding that it
did not have to resolve the potential conflict in this case between
a defendant's right to a meaningful confrontation with adverse
witnesses and the State's interest in protecting the anonymity of a
juvenile offender, since
"our reading of the trial Page 415 U. S. 315 transcript convinces us that counsel for the defendant was able
adequately to question the youth in considerable detail concerning
the possibility of bias or motive." 499 P.2d 1025 ,
1036 (1972). Although the court admitted that Green's denials of
any sense of anxiety or apprehension upon the safe's being found
close to his home were possibly self-serving,
"the suggestion was nonetheless brought to the attention of the
jury, and that body was afforded the opportunity to observe the
demeanor of the youth and pass on his credibility." Ibid. The court concluded that, in light of the
indirect references permitted, there was no error.
Since we granted certiorari limited to the question of whether
petitioner was denied his right under the Confrontation Clause to
adequately cross-examine Green, 410 U.S. 925 (1973), the essential
question turns on the correctness of the Alaska court's evaluation
of the "adequacy" of the scope of cross-examination permitted. We
disagree with that court's interpretation of the Confrontation
Clause, and we reverse. (2) The Sixth Amendment to the Constitution guarantees the right of
an accused in a criminal prosecution "to be confronted with the
witnesses against him." This right is secured for defendants in
state as well as federal criminal proceedings under Pointer v.
Texas, 380 U. S. 400 (1965). Confrontation means more than being allowed to confront the
witness physically. "Our cases construing the [confrontation]
clause hold that a primary interest secured by it is the right of
cross-examination." Douglas v. Alabama, 380 U.
S. 415 , 380 U. S. 418 (1965). Professor Wigmore stated:
"The main and essential purpose of confrontation is to
secure for the opponent the opportunity of Page 415 U. S. 316 cross-examination. The opponent demands confrontation
not for the idle purpose of gazing upon the witness, or of being
gazed upon by him, but for the purpose of cross-examination, which
cannot be had except by the direct and personal putting of
questions and obtaining immediate answers."
5 J. Wigmore, Evidence § 1395, p. 123 (3d ed.1940). (Emphasis in
original.)
Cross-examination is the principal means by which the
believability of a witness and the truth of his testimony are
tested. Subject always to the broad discretion of a trial judge to
preclude repetitive and unduly harassing interrogation, the
cross-examiner is not only permitted to delve into the witness'
story to test the witness' perceptions and memory, but the
cross-examiner has traditionally been allowed to impeach, i.e., discredit, the witness. One way of discrediting the
witness is to introduce evidence of a prior criminal conviction of
that witness. By so doing, the cross-examiner intends to afford the
jury a basis to infer that the witness' character is such that he
would be less likely than the average trustworthy citizen to be
truthful in his testimony. The introduction of evidence of a prior
crime is thus a general attack on the credibility of the witness. A
more particular attack on the witness' credibility is effected by
means of cross-examination directed toward revealing possible
biases, prejudices, or ulterior motives of the witness as they may
relate directly to issues or personalities in the case at hand. The
partiality of a witness is subject to exploration at trial, and is
"always relevant as discrediting the witness and affecting the
weight of his testimony." 3A J. Wigmore, Evidence § 940, p. 775
(Chadbourn rev.1970). We have recognized that the exposure of a
witness' motivation in testifying is a proper and important
function of the constitutionally protected right of
cross-examination. Page 415 U. S. 317 Greene v. McElroy, 360 U. S. 474 , 360 U. S. 496 (1959). [ Footnote 4 ]
In the instant case, defense counsel sought to show the
existence of possible bias and prejudice of Green, causing him to
make a faulty initial identification of petitioner, which, in turn,
could have affected his later in-court identification of
petitioner. [ Footnote 5 ]
We cannot speculate as to whether the jury, as sole judge of the
credibility of a witness, would have accepted this line of
reasoning had counsel been permitted to fully present it. But we do
conclude that the jurors were entitled to have the benefit of the
defense theory before them so that they could make an informed
judgment as to the weight to place on Green's testimony which
provided "a crucial link in the proof . . . of petitioner's act." Douglas v. Alabama, 380 U.S. at 380 U. S. 419 .
The accuracy and truthfulness of Green's testimony were key
elements in the State's case against petitioner. The claim of bias
which the defense sought to develop was Page 415 U. S. 318 admissible to afford a basis for an inference of undue pressure
because of Green's vulnerable status as a probationer, cf.
Alford v. United States, 282 U. S. 687 (1931), [ Footnote 6 ] as well as
of Green's possible concern that he might be a suspect in the
investigation.
We cannot accept the Alaska Supreme Court's conclusion that the
cross-examination that was permitted defense counsel was adequate
to develop the issue of bias properly to the jury. While counsel
was permitted to ask Green whether he was biased, counsel
was unable to make a record from which to argue why Green
might have been biased or otherwise lacked that degree of
impartiality expected of a witness at trial. On the basis of the
limited cross-examination that was permitted, the jury might well
have thought that defense counsel was engaged in a speculative and
baseless line of attack on the credibility of an apparently
blameless witness, or, as the prosecutor's objection put it, a
"rehash" of prior cross-examination. On these facts, it seems clear
to us that, to make any such inquiry effective, defense counsel
should have been permitted to expose to the jury the facts from
which jurors, as the sole triers of fact and credibility, could
appropriately draw inferences relating to the reliability of the
witness. Petitioner was thus denied the right of effective
cross-examination which
"'would be constitutional error of the first magnitude and no
amount of showing of want of prejudice would cure it.' Brookhart v. Janis, 384 U. S. 1 , 384 U. S.
3 ." Smith v. Illinois, 390 U. S. 129 , 390 U. S. 131 (1968). Page 415 U. S. 319 (3) The claim is made that the State has an important interest in
protecting the anonymity of juvenile offenders, and that this
interest outweighs any competing interest this petitioner might
have in cross-examining Green about his being on probation. The
State argues that exposure of a juvenile's record of delinquency
would likely cause impairment of rehabilitative goals of the
juvenile correctional procedures. This exposure, it is argued,
might encourage the juvenile offender to commit further acts of
delinquency, or cause the juvenile offender to lose employment
opportunities or otherwise suffer unnecessarily for his youthful
transgression.
We do not and need not challenge the State's interest as a
matter of its own policy in the administration of criminal justice
to seek to preserve the anonymity of a juvenile offender. Cf.
In re Gault, 387 U. S. 1 , 387 U. S. 25 (1967). Here, however, petitioner sought to introduce evidence of
Green's probation for the purpose of suggesting that Green was
biased and, therefore, that his testimony was either not to be
believed in his identification of petitioner or at least very
carefully considered in that light. Serious damage to the strength
of the State's case would have been a real possibility had
petitioner been allowed to pursue this line of inquiry. In this
setting, we conclude that the right of confrontation is paramount
to the State's policy of protecting a juvenile offender. Whatever
temporary embarrassment might result to Green or his family by
disclosure of his juvenile record -- if the prosecution insisted on
using him to make its case -- is outweighed by petitioner's right
to probe into the influence of possible bias in the testimony of a
crucial identification witness.
In Alford v. United States, supra, we upheld the
right Page 415 U. S. 320 of defense counsel to impeach a witness by showing that, because
of the witness' incarceration in federal prison at the time of
trial, the witness' testimony was biased as "given under promise or
expectation of immunity, or under the coercive effect of his
detention by officers of the United States." 282 U.S. at 282 U. S. 693 .
In response to the argument that the witness had a right to be
protected from exposure of his criminal record, the Court
stated:
"[N]o obligation is imposed on the court, such as that suggested
below, to protect a witness from being discredited on
cross-examination short of an attempted invasion of his
constitutional protection from self incrimination, properly
invoked. There is a duty to protect him from questions which go
beyond the bounds of proper cross-examination merely to harass,
annoy or humiliate him." Id. at 282 U. S. 694 .
As in Alford, we conclude that the State's desire that
Green fulfill his public duty to testify free from embarrassment
and with his reputation unblemished must fall before the right of
petitioner to seek out the truth in the process of defending
himself.
The State's policy interest in protecting the confidentiality of
a juvenile offender's record cannot require yielding of so vital a
constitutional right as the effective cross-examination for bias of
an adverse witness. The State could have protected Green from
exposure of his juvenile adjudication in these circumstances by
refraining from using him to make out its case; the State cannot,
consistent with the right of confrontation, require the petitioner
to bear the full burden of vindicating the State's interest in the
secrecy of juvenile criminal records. The judgment affirming
petitioner's convictions of burglary and grand larceny is reversed,
and the case is Page 415 U. S. 321 remanded for further proceedings not inconsistent with this
opinion. It is so ordered. [ Footnote 1 ]
Rule 23 provides:
"No adjudication, order, or disposition of a juvenile case shall
be admissible in a court not acting in the exercise of juvenile
jurisdiction except for use in a presentencing procedure in a
criminal case where the superior court, in its discretion,
determines that such use is appropriate."
[ Footnote 2 ]
Section 47.10.080(g) provides in pertinent part:
"The commitment and placement of a child and evidence given in
the court are not admissible as evidence against the minor in a
subsequent case or proceedings in any other court. . . ."
[ Footnote 3 ]
In the same opinion. the Alaska Supreme Court also affirmed
petitioner's conviction, following a separate trial, for being a
felon in possession of a concealable firearm. That conviction is
not in issue before this Court.
[ Footnote 4 ]
In Greene, we stated:
"Certain principles have remained relatively immutable in our
jurisprudence. One of these is that, where governmental action
seriously injures an individual, and the reasonableness of the
action depends on fact findings, the evidence used to prove the
Government's case must be disclosed to the individual so that he
has an opportunity to show that it is untrue. While this is
important in the case of documentary evidence, it is even more
important where the evidence consists of the testimony of
individuals whose memory might be faulty or who, in fact, might be
perjurers or persons motivated by malice, vindictiveness,
intolerance, prejudice, or jealousy. We have formalized these
protections in the requirements of confrontation and
cross-examination. . . ."
360 U.S. at 360 U. S.
496 .
[ Footnote 5 ]
"[A] partiality of mind at some former time may be used as the basis of an argument to the same state at the
time of testifying, though the ultimate object is to establish
partiality at the time of testifying."
3A J. Wigmore, Evidence § 940, p. 776 (Chadbourn rev.1970).
(Emphasis in original; footnotes omitted.)
[ Footnote 6 ]
Although Alford involved a federal criminal trial and
we reversed because of abuse of discretion and prejudicial error,
the constitutional dimension of our holding in Alford is
not in doubt. In Smith v. Illinois, 390 U.
S. 19 , 390 U. S. 13 -133
(1968), we relied, in part, on Alford to reverse a state
criminal conviction on confrontation grounds.
MR. JUSTICE STEWART, concurring.
The Court holds that, in the circumstances of this case, the
Sixth and Fourteenth Amendments conferred the right to
cross-examine a particular prosecution witness about his
delinquency adjudication for burglary and his status as a
probationer. Such cross-examination was necessary in this case in
order "to show the existence of possible bias and prejudice . . .
," ante at 415 U. S. 317 .
In joining the Court's opinion, I would emphasize that the Court
neither holds nor suggests that the Constitution confers a right in
every case to impeach the general credibility of a witness through
cross-examination about his past delinquency adjudications or
criminal convictions.
MR. JUSTICE WHITE, with whom MR. JUSTICE REHNQUIST joins,
dissenting.
As I see it, there is no constitutional principle at stake here.
This is nothing more than a typical instance of a trial court
exercising its discretion to control or limit cross-examination,
followed by a typical decision of a state appellate court refusing
to disturb the judgment of the trial court and itself concluding
that limiting cross-examination had done no substantial harm to the
defense. Yet the Court insists on second-guessing the state courts
and, in effect, inviting federal review of every ruling of a state
trial judge who believes cross-examination has gone far enough. I
would not undertake this task, if for no other reason than that I
have little faith in our ability, in fact-bound cases and on a cold
record, to improve on the judgment of trial judges and of the state
appellate courts who agree with them. I would affirm the
judgment. | In the case of Davis v. Alaska (1974), the U.S. Supreme Court ruled that a defendant's right to confront witnesses against them under the Sixth and Fourteenth Amendments takes precedence over a state's interest in protecting the identity of juvenile offenders. The Court held that the defense has the right to attempt to show a witness's potential bias due to their vulnerable status, and that limiting cross-examination of the witness can impede the defense from doing so. The Court reversed the lower court's decision, prioritizing the defendant's right to effective cross-examination over the witness's privacy. |
Criminal Trials & Prosecutions | Taylor v. Louisiana | https://supreme.justia.com/cases/federal/us/419/522/ | U.S. Supreme Court Taylor v. Louisiana, 419
U.S. 522 (1975) Taylor v. Louisiana No. 73-5744 Argued October 16,
1974 Decided January 21,
1975 419
U.S. 522 APPEAL FROM THE SUPREME COURT OF
LOUISIANA Syllabus Appellant, a male, was convicted of a crime by a petit jury
selected from a venire on which there were no women and which was
selected pursuant to a system resulting from Louisiana
constitutional and statutory requirements that a woman should not
be selected for jury service unless she had previously filed a
written declaration of her desire to be subject to jury service.
The State Supreme Court affirmed, having rejected appellant's
challenge to the constitutionality of the state jury selection
scheme. Held: 1. Appellant had standing to make his constitutional claim,
there being no rule that such a claim may be asserted only by
defendants who are members of the group excluded from jury service. Peters v. Kiff, 407 U. S. 493 . P. 419 U. S.
526 .
2. The requirement that a petit jury be selected from a
representative cross-section of the community, which is fundamental
to the jury trial guaranteed by the Sixth Amendment, is violated by
the systematic exclusion of women from jury panels, which in the
judicial district here involved amounted to 53% of the citizens
eligible for jury service. Pp. 419 U. S.
526 -533.
3. No adequate justification was shown here for the challenged
jury selection provisions and the right to a jury selected from a
fair cross-section of the community cannot be overcome on merely
rational grounds. Pp. 419 U. S.
533 -535.
4. It can no longer be held that women as a class may be
excluded from jury service or given automatic exemptions based
solely on sex if the consequence is that criminal jury venires are
almost all male, and contrary implications of prior cases, e.g., Hoyt v. Florida, 368 U. S. 57 ,
cannot be followed. Pp. 419 U. S.
535 -537. 282 So.
2d 491 , reversed and remanded.
WHITE, J., delivered the opinion of the Court, in which DOUGLAS,
BRENNAN, STEWART, MARSHALL, BLACKMUN, and POWELL, JJ., joined.
BURGER, C.J., concurred in the result. REHNQUIST, J., filed a
dissenting opinion, post, p. 419 U. S.
538 . Page 419 U. S. 523 MR. JUSTICE WHITE delivered the opinion of the Court.
When this case was tried, Art. VII, § 41, [ Footnote 1 ] of the Louisiana Constitution, and
Art. 402 of the Louisiana Code of Criminal Procedure [ Footnote 2 ] provided that a woman should not
be selected for jury service unless she had previously filed a
written declaration of her desire to be subject to jury service.
The constitutionality of these provisions is the issue in this
case. Page 419 U. S. 524 I Appellant, Billy J. Taylor, was indicted by the grand jury of
St. Tammany Parish, in the Twenty-second Judicial District of
Louisiana, for aggravated kidnaping. On April 12, 1972, appellant
moved the trial court to quash the petit jury venire drawn for the
special criminal term beginning with his trial the following day.
Appellant alleged that women were systematically excluded from the
venire and that he would therefore be deprived of what he claimed
to be his federal constitutional right to "a fair trial by jury of
a representative segment of the community. . . ."
The Twenty-second Judicial District comprises the parishes of
St. Tammany and Washington. The appellee has stipulated that 53% of
the persons eligible for jury service in these parishes were
female, and that no more than 10% of the persons on the jury wheel
in St. Tammany Parish were women. [ Footnote 3 ] During the period from December 8, 1971, to
November 3, 19,72, 12 females were among the 1,800 persons drawn to
fill petit jury venires in St. Tammany Parish. It was also
stipulated that the discrepancy between females eligible for jury
service and those actually included in the venire was the result of
the operation of La.Const., Art. VII, § 41, and La.Code Crim.Proc.,
Art. 402. [ Footnote 4 ] In the
present case, a venire totaling 175 persons was drawn for jury
service beginning April 13, 1972. There were no females on the
venire.
Appellant's motion to quash the venire was denied that same day.
After being tried, convicted, and sentenced to death, appellant
sought review in the Supreme Court of Louisiana, where he renewed
his claim that the Page 419 U. S. 525 petit jury venire should have been quashed. The Supreme Court of
Louisiana, recognizing that this claim drew into question the
constitutionality of the provisions of the Louisiana Constitution
and Code of Criminal Procedure dealing with the service of women on
juries, squarely held, one justice dissenting, that these
provisions were valid and not unconstitutional under federal law. 282 So.
2d 491 , 497 (1973). [ Footnote
5 ]
Appellant appealed from that decision to this Court. We noted
probable jurisdiction, 415 U.S. 911 (1974), to consider whether the
Louisiana jury selection system deprived appellant of his Sixth and
Fourteenth Amendment right to an impartial jury trial. We hold that
it did, and that these Amendments were violated in this case by the
operation of La.Const., Art. VII, § 41, and La.Code Crim.Proc.,
Art. 402. In consequence, appellant's conviction must be
reversed. II The Louisiana jury selection system does not disqualify women
from jury service, but, in operation, its conceded systematic
impact is that only a very few women, grossly disproportionate to
the number of eligible women in the community, are called for jury
service. In this case, no women were on the venire from which the
petit jury was drawn. The issue we have, therefore, is whether a
jury selection system which operates to exclude from jury service
an identifiable class of citizens constituting 53% Page 419 U. S. 526 of eligible jurors in the community comports with the Sixth and
Fourteenth Amendments.
The State first insists that Taylor, a male, has no standing to
object to the exclusion of women from his jury. But Taylor's claim
is that he was constitutionally entitled to a jury drawn from a
venire constituting a fair cross-section of the community, and that
the jury that tried him was not such a jury by reason of the
exclusion of women. Taylor was not a member of the excluded class,
but there is no rule that claims such as Taylor presents may be
made only by those defendants who are members of the group excluded
from jury service. In Peters v. Kiff, 407 U.
S. 493 (1972), the defendant, a white man, challenged
his conviction on the ground that Negroes had been systematically
excluded from jury service. Six Members of the Court agreed that
petitioner was entitled to present the issue, and concluded that he
had been deprived of his federal rights. Taylor, in the case before
us, was similarly entitled to tender and have adjudicated the claim
that the exclusion of women from jury service deprived him of the
kind of factfinder to which he was constitutionally entitled. III The background against which this case must be decided includes
our holding in Duncan v. Louisiana, 391 U.
S. 145 (1968), that the Sixth Amendment's provision for
jury trial is made binding on the States by virtue of the
Fourteenth Amendment. Our inquiry is whether the presence of a fair
cross-section of the community on venires, panels, or lists from
which petit juries are drawn is essential to the fulfillment of the
Sixth Amendment's guarantee of an impartial jury trial in criminal
prosecutions.
The Court's prior cases are instructive. Both in the Page 419 U. S. 527 course of exercising its supervisory powers over trials in
federal courts and in the constitutional context, the Court has
unambiguously declared that the American concept of the jury trial
contemplates a jury drawn from a fair cross-section of the
community. A unanimous Court stated in Smith v. Texas, 311 U. S. 128 , 311 U. S. 130 (1940), that
"[i]t is part of the established tradition in the use of juries
as instruments of public justice that the jury be a body truly
representative of the community."
To exclude racial groups from jury service was said to be "at
war with our basic concepts of a democratic society and a
representative government." A state jury system that resulted in
systematic exclusion of Negroes as jurors was therefore held to
violate the Equal Protection Clause of the Fourteenth Amendment. Glasser v. United States, 315 U. S.
60 , 315 U. S. 85 -86
(1942), in the context of a federal criminal case and the Sixth
Amendment's jury trial requirement, stated that
"[o]ur notions of what a proper jury is have developed in
harmony with our basic concepts of a democratic society and a
representative government,"
and repeated the Court's understanding that the jury " be a
body truly representative of the community' . . . , and not the
organ of any special group or class." A federal conviction by a jury from which women had been
excluded, although eligible for service under state law, was
reviewed in Ballard v. United States, 329 U.
S. 187 (1946). Noting the federal statutory "design to
make the jury a cross-section of the community'" and the fact
that women had been excluded, the Court exercised its supervisory
powers over the federal courts and reversed the conviction. In Brown v. Allen, 344 U. S. 443 , 344 U. S. 474 (1953), the Court declared that "[o]ur duty to protect he federal constitutional rights of all
does not mean we must or should impose on states our conception of
the proper source of jury lists, so long as the source Page 419 U. S. 528 reasonably reflects a cross-section of the population suitable
in character and intelligence for that civic duty."
Some years later, in Carter v. Jury Comm'n, 396 U. S. 320 , 396 U. S. 330 (1970), the Court observed that the exclusion of Negroes from jury
service because of their race "contravenes the very idea of a jury
-- a body truly representative of the community.' . . ."
(Quoting from Smith v. Texas, supra. ) At about the same
time, it was contended that the use of six-man juries in noncapital
criminal cases violated the Sixth Amendment for failure to provide
juries drawn from a cross-section of the community, Williams v.
Florida, 399 U. S. 78 (1970). In the course of rejecting that challenge, we said that the
number of persons on the jury should "be large enough to promote group deliberation, free from
outside attempts at intimidation, and to provide a fair possibility
for obtaining a representative cross-section of the community." Id. at 399 U. S. 100 .
In like vein, in Apodaca v. Oregon, 406 U.
S. 404 , 406 U. S.
410 -411 (1972) (plurality opinion), it was said that
"a jury will come to such a [common sense] judgment as long as
it consists of a group of laymen representative of a cross-section
of the community who have the duty and the opportunity to
deliberate . . . on the question of a defendant's guilt."
Similarly, three Justices in Peters v. Kiff, 407 U.S.
at 407 U. S. 500 ,
observed that the Sixth Amendment comprehended a fair possibility
for obtaining a jury constituting a representative cross-section of
the community.
The unmistakable import of this Court's opinions, at least since
1940, Smith v. Texas, supra, and not repudiated by
intervening decisions, is that the selection of a petit jury from a
representative cross-section of the community is an essential
component of the Sixth Amendment right to a jury trial. Recent
federal legislation governing jury selection within the federal
court system has a similar thrust. Shortly prior to this Court's
decision Page 419 U. S. 529 in Duncan v. Louisiana, supra, the Federal Jury
Selection and Service Act of 1968 [ Footnote 6 ] was enacted. In that Act, Congress stated
"the policy of the United States that all litigants in Federal
courts entitled to trial by jury shall have the right to grand and
petit juries selected at random from a fair cross-section of the
community in the district or division wherein the court
convenes."
28 U.S.C. § 1861. In that Act, Congress also established the
machinery by which the stated policy was to be implemented. 28
U.S.C. §§ 1862-1866. In passing this legislation, the Committee
Reports of both the House [ Footnote
7 ] and the Senate [ Footnote
8 ] recognized that the jury plays a political function in the
administration of the law, and Page 419 U. S. 530 that the requirement of a jury's being chosen from a fair
cross-section of the community is fundamental to the American
system of justice. Debate on the floors of the House and Senate on
the Act invoked the Sixth Amendment, [ Footnote 9 ] the Constitution generally, [ Footnote 10 ] and prior decisions of this
Court [ Footnote 11 ] in
support of the Act.
We accept the fair cross-section requirement as fundamental to
the jury trial guaranteed by the Sixth Amendment, and are convinced
that the requirement has solid foundation. The purpose of a jury is
to guard against the exercise of arbitrary power -- to make
available the common sense judgment of the community as a hedge
against the overzealous or mistaken prosecutor and in preference to
the professional, or perhaps overconditioned or biased response of
a judge. Duncan v. Louisiana, 391 U.S. at 391 U. S.
155 -156. This prophylactic vehicle is not provided if
the jury pool is made up of only special segments of the populace
or if large, distinctive groups are excluded from the pool.
Community participation in the administration of the criminal law,
moreover, is not only consistent with our democratic heritage, but
is also critical to public confidence in the fairness of the
criminal justice system. Restricting jury service to only special
groups or excluding identifiable segments playing major roles in
the community cannot be squared with the constitutional concept of
jury trial.
"Trial by jury presupposes a jury drawn from a pool broadly
representative of the community as well as impartial in a specific
case. . . . [T]he broad representative character of the jury should
be maintained, partly as assurance of a diffused impartiality and
partly Page 419 U. S. 531 because sharing in the administration of justice is a phase of
civic responsibility." Thiel v. Southern Pacific Co., 328 U.
S. 217 , 328 U. S. 227 (1946) (Frankfurter, J., dissenting). IV We are also persuaded that the fair cross-section requirement is
violated by the systematic exclusion of women, who, in the judicial
district involved here, amounted to 53% of the citizens eligible
for jury service. This conclusion necessarily entails the judgment
that women are sufficiently numerous and distinct from men, and
that, if they are systematically eliminated from jury panels, the
Sixth Amendment's fair cross-section requirement cannot be
satisfied. This very matter was debated in Ballard v. United
States, supra. Positing the fair cross-section rule -- there
said to be a statutory one -- the Court concluded that the
systematic exclusion of women was unacceptable. The dissenting view
that an all-male panel drawn from various groups in the community
would be as truly representative as if women were included, was
firmly rejected:
"The thought is that the factors which tend to influence the
action of women are the same as those which influence the action of
men -- personality, background, economic status -- and not sex. Yet
it is not enough to say that women when sitting as jurors neither
act nor tend to act as a class. Men likewise do not act as a class.
But, if the shoe were on the other foot, who would claim that a
jury was truly representative of the community if all men were
intentionally and systematically excluded from the panel? The truth
is that the two sexes are not fungible; a community made up
exclusively of one is different from a community composed of both;
the subtle interplay of influence one on the other is Page 419 U. S. 532 among the imponderables. To insulate the courtroom from either
may not, in a given case, make an iota of difference. Yet a flavor,
a distinct quality, is lost if either sex is excluded. The
exclusion of one may indeed make the jury less representative of
the community than would be true if an economic or racial group
were excluded."
329 U.S. at 329 U. S.
193 -194. [ Footnote
12 ] Page 419 U. S. 533 In this respect, we agree with the Court in Ballard: If
the fair cross-section rule is to govern the selection of juries,
as we have concluded it must, women cannot be systematically
excluded from jury panels from which petit juries are drawn. This
conclusion is consistent with the current judgment of the country,
now evidenced by legislative or constitutional provisions in every
State and at the federal level qualifying women for jury service.
[ Footnote 13 ] V There remains the argument that women as a class serve a
distinctive role in society and that jury service would so
substantially interfere with that function that the State has ample
justification for excluding women from service unless they
volunteer, even though the result is that almost all jurors are
men. It is true that Hoyt v. Florida, 368 U. S.
57 (1961), held that such a system [ Footnote 14 ] did not deny due process of law or
equal protection Page 419 U. S. 534 of the laws because there was a sufficiently rational basis for
such an exemption. [ Footnote
15 ] But Hoyt did not involve a defendant's Sixth
Amendment right to a jury drawn from a fair cross-section of the
community and the prospect of depriving him of that right if women
as a class are systematically excluded. The right to a proper jury
cannot be overcome on merely rational grounds. [ Footnote 16 ] There must be weightier
reasons if a distinctive class representing 53% of the eligible
jurors is for all practical purposes to be excluded from jury
service. No such basis has been tendered here.
The States are free to grant exemptions from jury service to
individuals in case of special hardship or incapacity and to those
engaged in particular occupations the uninterrupted performance of
which is critical to the community's welfare. Rawlins v.
Georgia, 201 U. S. 638 (1906). It would not appear that such exemptions would pose
substantial threats that the remaining pool of jurors would not be
representative of the community. A system excluding all women,
however, is a wholly different matter. It is untenable to suggest
these days that it would be a special hardship for each and every
woman to perform jury service or that society cannot Page 419 U. S. 535 spare any women from their present duties. [ Footnote 17 ] This may be the case
with many, and it may be burdensome to sort out those who should be
exempted from those who should serve. But that task is performed in
the case of men, and the administrative convenience in dealing with
women as a class is insufficient justification for diluting the
quality of community judgment represented by the jury in criminal
trials. VI Although this judgment may appear a foregone conclusion from the
pattern of some of the Court's cases over the past 30 years, as
well as from legislative developments at both federal and state
levels, it is nevertheless true that, until today, no case had
squarely held that the exclusion of women from jury venires
deprives a criminal Page 419 U. S. 536 defendant of his Sixth Amendment right to trial by an impartial
jury drawn from a fair cross-section of the community. It is
apparent that the first Congress did not perceive the Sixth
Amendment as requiring women on criminal jury panels, for the
direction of the First Judiciary Act of 1789 was that federal
jurors were to have the qualifications required by the States in
which the federal court was sitting, [ Footnote 18 ] and, at the time, women were disqualified
under state law in every State. Necessarily, then, federal juries
in criminal cases were all male, and it was not until the Civil
Rights Act of 197, 71 Stat. 638, 28 U.S.C. § 1861 (1964 ed.), that
Congress itself provided that all citizens, with limited
exceptions, were competent to sit on federal juries. Until that
time, federal courts were required by statute to exclude women from
jury duty in those States where women were disqualified. Utah was
the first State to qualify women for juries; it did so in 1898, n 13, supra. Moreover, Hoyt v. Florida was decided and has stood for
the proposition that, even if women as a group could not be
constitutionally disqualified from jury service, there was ample
reason to treat all women differently from men for the purpose of
jury service and to exclude them unless they volunteered. [ Footnote 19 ] Page 419 U. S. 537 Accepting as we do, however, the view that the Sixth Amendment
affords the defendant in a criminal trial the opportunity to have
the jury drawn from venires representative of the community, we
think it is no longer tenable to hold that women as a class may be
excluded or given automatic exemptions based solely on sex if the
consequence is that criminal jury venires are almost totally male.
To this extent we cannot follow the contrary implications of the
prior cases, including Hoyt v. Florida. If it was ever the
case that women were unqualified to sit on juries or were so
situated that none of them should be required to perform jury
service, that time has long since passed. If at one time it could
be held that Sixth Amendment juries must be drawn from a fair
cross-section of the community but that this requirement permitted
the almost total exclusion of women, this is not the case today.
Communities differ at different times and places. What is a fair
cross-section at one time or place is not necessarily a fair
cross-section at another time or a different place. Nothing
persuasive has been presented to us in this case suggesting that
all-male venires in the parishes involved here are fairly
representative of the local population otherwise eligible for jury
service. VII Our holding does not augur or authorize the fashioning of
detailed jury selection codes by federal courts. The Page 419 U. S. 538 fair cross-section principle must have much leeway in
application. The States remain free to prescribe relevant
qualifications for their jurors and to provide reasonable
exemptions so long as it may be fairly said that the jury lists or
panels are representative of the community. Carter v. Jury
Comm'n, supra, as did Brown v. Allen, supra; Rawlins v.
Georgia, supra, and other cases, recognized broad discretion
in the States in this respect. We do not depart from the principles
enunciated in Carter. But, as we have said, Louisiana's
special exemption for women operates to exclude them from petit
juries, which, in our view, is contrary to the command of the Sixth
and Fourteenth Amendments.
It should also be emphasized that, in holding that petit juries
must be drawn from a source fairly representative of the community,
we impose no requirement that petit juries actually chosen must
mirror the community and reflect the various distinctive groups in
the population. Defendants are not entitled to a jury of any
particular composition, Fay v. New York, 332 U.
S. 261 , 332 U. S. 284 (1947); Apodaca v. Oregon, 406 U.S. at 406 U. S. 413 (plurality opinion); but the jury wheels, pools of names, panels,
or venires from which juries are drawn must not systematically
exclude distinctive groups in the community, and thereby fail to be
reasonably representative thereof.
The judgment of the Louisiana Supreme Court is reversed, and the
case remanded to that court for further proceedings not
inconsistent with this opinion. So ordered. MR. CHIEF JUSTICE BURGER concurs in the result.
[ Footnote 1 ]
La.Const., Art. VII, § 41, read, in pertinent part:
"The Legislature shall provide for the election and drawing of
competent and intelligent jurors for the trial of civil and
criminal cases; provided, however, that no woman shall be drawn for
jury service unless she shall have previously filed with the clerk
of the District Court a written declaration of her desire to be
subject to such service."
As of January 1, 1975, this provision of the Louisiana
Constitution was repealed and replaced by the following provision,
La.Const., Art. V, § 33:
"(A) Qualifications."
"A citizen of the state who has reached the age of majority is
eligible to serve as a juror within the parish in which he is
domiciled. The legislature may provide additional
qualifications."
"(B) Exemptions."
"The supreme court shall provide by rule for exemption of
jurors."
[ Footnote 2 ]
La.Code Crim.Proc., Art. 402, provided:
"A woman shall not be selected for jury service unless she has
previously filed with the clerk of court of the parish in which she
resides a written declaration of her desire to be subject to jury
service."
This provision has been repealed, effective January 1, 1975. The
repeal, however, has no effect on the conviction obtained in this
case.
[ Footnote 3 ]
The stipulation appears in the Appendix, at 82-84, filed in Edwards v. Healy, No. 73-759, now pending before the
Court.
[ Footnote 4 ] Ibid. [ Footnote 5 ]
The death sentence imposed on appellant was annulled and set
aside by the Supreme Court of Louisiana in accord with this Court's
decision in Furman v. Georgia, 408 U.
S. 238 (1972), with instructions to the District Court
to impose a life sentence on remand. The Supreme Court of Louisiana
granted a rehearing to appellant on certain other issues not
relevant to this appeal, 282 So.
2d 491 , 500 (1973), and later denied a second petition for
rehearing.
[ Footnote 6 ]
Pub.L. 90-274, 82 Stat. 53, 28 U.S.C. § 1861 et
seq. [ Footnote 7 ]
H.R.Rep. No. 1076, 90th Cong., 2d Sess., 8 (1968):
"It must be remembered that the jury is designed not only to
understand the case, but also to reflect the community's sense of
justice in deciding it. As long as there are significant departures
from the cross-sectional goal, biased juries are the result --
biased in the sense that they reflect a slanted view of the
community they are supposed to represent." See S.Rep. No. 92-516, p. 3 (1971).
[ Footnote 8 ]
S.Rep. No. 891, 90th Cong., 1st Sess., 9 (1967): "A jury chosen
from a representative community sample is a fundamental of our
system of justice."
Both the Senate and House Reports made reference to the decision
of the Court of Appeals in Rabinowitz v. United States, 366 F.2d 34, 57 (CA5 1966), which, in sustaining an attack on the
composition of grand and petit jury venires in the Middle District
of Georgia, had held that both the Constitution and 28 U.S.C. §
1861, prior to its amendment in 1968, required a system of jury
selection "that will probably result in a fair cross-section of the
community being placed on the jury rolls." See S.Rep. No.
891, supra, at 11, 18; H.R.Rep. No. 1076, supra, n 7, at 4, 5.
Elimination of the "key man" system throughout the federal
courts was the primary focus of the Federal Jury Selection and
Service Act of 1968. See H.R.Rep. No. 1076, supra, at 4 and n. 1.
[ Footnote 9 ]
114 Cong.Rec. 3992 (1968) (remarks of Mr. Rogers). See
also 118 Cong.Rec. 6939 (1972) (remarks of Mr. Poff).
[ Footnote 10 ]
114 Cong.Rec. 3999 (1968) (remarks of Mr. Machen).
[ Footnote 11 ] Id. at 6609 (remarks of Sen. Tydings).
[ Footnote 12 ] Compare Peters v. Kiff, 407 U.
S. 493 , 407 U. S.
502 -504 (1972) (opinion of MARSHALL, J., joined by
DOUGLAS and STEWART, JJ.):
"These principles compel the conclusion that a State cannot,
consistent with due process, subject a defendant to indictment or
trial by a jury that has been selected in an arbitrary and
discriminatory manner, in violation of the Constitution and laws of
the United States. Illegal and unconstitutional jury selection
procedures cast doubt on the integrity of the whole judicial
process. They create the appearance of bias in the decision of
individual cases, and they increase the risk of actual bias as
well."
" * * * *" "But the exclusion from jury service of a substantial and
identifiable class of citizens has a potential impact that is too
subtle and too pervasive to admit of confinement to particular
issues or particular cases. . . ."
"Moreover, we are unwilling to make the assumption that the
exclusion of Negroes has relevance only for issues involving race.
When any large and identifiable segment of the community is
excluded from jury service, the effect is to remove from the jury
room qualities of human nature and varieties of human experience,
the range of which is unknown and perhaps unknowable. It is not
necessary to assume that the excluded group will consistently vote
as a class in order to conclude, as we do, that its exclusion
deprives the jury of a perspective on human events that may have
unsuspected importance in any case that may be presented."
(Footnote omitted.) Controlled studies of the performance of
women as jurors conducted subsequent to the Court's decision in
Ballard have concluded that women bring to juries their own
perspectives and values that influence both jury deliberation and
result. See generally Rudolph, Women on Juries --
Voluntary or Compulsory?, 44 J.Am.Jud.Soc. 206 (1961); 55 J.
Sociology & Social Research 442 (1971); 3 J. Applied Social
Psychology 267 (1973); 19 Sociometry 3 (1956).
[ Footnote 13 ]
This is a relatively modern development. Under the English
common law, women, with the exception of the trial of a narrow
class of cases, were not considered to be qualified for jury
service by virtue of the doctrine of propter defectum
sexus, a "defect of sex." 3 W. Blackstone, Commentaries *362.
This common law rule was made statutory by Parliament in 1870, 33
& 34 Vict., c. 77, and then rejected by Parliament in 1919, 9
& 10 Geo. 5, c. 71. In this country, women were disqualified by
state law to sit as jurors until the end of the 19th century. They
were first deemed qualified for jury service by a State in 1898,
Utah Rev.Stat.Ann., Tit. 35, § 1297 (1898). Today, women are
qualified as jurors in all the States. The jury service statutes
and rules of most States do not on their face extend to women the
type of exemption presently before the Court, although the
exemption provisions of some States do appear to treat men and
women differently in certain respects.
[ Footnote 14 ]
Florida Stat.1959, § 40.01(1), provided that grand and petit
jurors be taken from male and female citizens of the State
possessed of certain qualification.s and also provided that
"the name of no female person shall be taken for jury service
unless said person has registered with the clerk of the circuit
court her desire to be placed on the jury list." Hoyt v. Florida, 368 U. S. 57 , 368 U. S. 58 (1961).
[ Footnote 15 ]
The state interest, as articulated by the Court, was based on
the assumption that "woman is still regarded as the center of home
and family life." Hoyt v. Florida, supra, at 368 U. S. 62 .
Louisiana makes a similar argument here, stating that its grant of
an automatic exemption from jury service to females involves only
the State's attempt "to regulate and provide stability to the
state's own idea of family life." Brief for Appellee 12.
[ Footnote 16 ]
In Hoyt, the Court. determined both that the underlying
classification was rational and that the State's proffered
rationale for extending this exemption to females without family
responsibilities was justified by administrative convenience. 368
U.S. at 368 U. S.
62 -63.
[ Footnote 17 ]
In Hoyt v. Florida, supra, the Court placed some
emphasis on the notion, advanced by the State there and by
Louisiana here in support of the rationality of its statutory
scheme, that "woman is still regarded as the center of home and
family life." 368 U.S. at 368 U. S. 62 .
Statistics compiled by the Department of Labor indicate that, in
October, 1974, 54.2% of all women between 18 and 64 years of age
were in the labor force. United States Dept. of Labor, Women in the
Labor Force (Oct.1974). Additionally, in March, 1974, 45.7% of
women with children under the age of 18 were in the labor force;
with respect to families containing children between the ages of
six and 17, 67.3% of mothers who were widowed, divorced, or
separated were in the workforce, while 51.2% of the mothers whose
husbands were present in the household were in the workforce. Even
in family units in which the husband was present and which
contained a child under three years old, 31% of the mothers were in
the workforce. United States Dept. of Labor, Marital and Family
Characteristics of the Labor Force, Table F (March 1974). While
these statistics perhaps speak more to the evolving nature of the
structure of the family unit in American society than to the nature
of the role played by women who happen to be members of a family
unit, they certainly put to rest the suggestion that all women
should be exempt from jury service based solely on their sex and
the presumed role in the home.
[ Footnote 18 ]
Section 29 of that Act provided that
"the jurors shall have the same qualifications as are requisite
for jurors by the laws of the State of which they are citizens, to
serve in the highest courts of law of such State. . . ."
1 Stat. 88.
[ Footnote 19 ] Hoyt v. Florida, as had Fay v. New York, 332 U. S. 261 , 332 U. S.
289 -290 (1947), also referred to the historic view that
jury service could constitutionally be confined to males:
"We need not, however, accept appellant's invitation to canvass
in this case the continuing validity of this Court's dictum in Strauder v. West Virginia, 100 U. S.
303 , 100 U. S. 310 , to the effect
that a State may constitutionally 'confine' jury duty 'to males.'
This constitutional proposition has gone unquestioned for more than
eighty years in the decisions of the Court, see Fay v. New
York, supra, at 332 U. S. 289 -290, and had
been reflected, until 1957, in congressional policy respecting jury
service in the federal courts themselves."
368 U.S. at 368 U. S. 60 .
(Footnote omitted.) See also Glasser v. United States, 315 U. S. 60 , 315 U. S. 64 -65, 315 U. S. 85 -86
(1942).
It is most interesting to note that Strauder v. West
Virginia itself stated:
"[T]he constitution of juries is a very essential part of the
protection such a mode of trial is intended to secure. The very
idea of a jury is a body of men composed of the peers or equals of
the person whose rights it is selected or summoned to determine;
that is, of his neighbors, fellows, associates, persons having the
same legal status in society as that which he holds." 100 U.S.
303 , 100 U. S. 308 (1880).
MR. JUSTICE REHNQUIST, dissenting.
The Court's opinion reverses a conviction without a suggestion,
much less a showing, that the appellant has been unfairly treated
or prejudiced in any way by the Page 419 U. S. 539 manner in which his jury was selected. In so doing, the Court
invalidates a jury selection system which it approved by a
substantial majority only 13 years ago. I disagree with the Court,
and would affirm the judgment of the Supreme Court of
Louisiana.
The majority opinion canvasses various of our jury trial cases,
beginning with Smith v. Texas, 311 U.
S. 128 (1940). Relying on carefully chosen quotations,
it concludes that the "unmistakable import" of our cases is that
the fair cross-section requirement "is an essential component of
the Sixth Amendment right to a jury trial." I disagree. Fairly
read, the only "unmistakable import" of those cases is that due
process and equal protection prohibit jury selection systems which
are likely to result in biased or partial juries. Smith v.
Texas, supra, concerned the equal protection claim of a Negro
who was indicted by a grand jury from which Negroes had been
systematically excluded. Glasser v. United States, 315 U. S. 60 (1942), dealt with allegations that the only women selected for
jury service were members of a private organization which had
conducted pro-prosecution classes for prospective jurors. Brown
v. Allen, 344 U. S. 443 (1953), rejected the equal protection and due process contentions
of several black defendants that members of their race had been
discriminatorily excluded from their juries. Carter v. Jury
Comm'n, 396 U. S. 320 (1970), similarly dealt with equal protection challenges to a jury
selection system, but the persons claiming such rights were blacks
who had sought to serve as jurors.
In Hoyt v. Florida, 368 U. S. 57 (1961), this Court gave plenary consideration to contentions that a
system such as Louisiana's deprived a defendant of equal protection
and due process. These contentions were rejected, despite
circumstances which were much more suggestive of possible bias and
prejudice than are those here -- the defendant Page 419 U. S. 540 in Hoyt was a woman whose defense to charges of
murdering her husband was that she had been driven temporarily
insane by his suspected infidelity and by his rejection of her
efforts at reconciliation. Id. at 368 U. S. 58 -59.
The complete swing of the judicial pendulum 13 years later must
depend for its validity on the proposition that, during those
years, things have changed in constitutionally significant ways. I
am not persuaded of the sufficiency of either of the majority's
proffered explanations as to intervening events.
The first determinative event, in the Court's view, is Duncan v. Louisiana, 391 U. S. 145 (1968). Because the Sixth Amendment was there held applicable to
the States, the Court feels free to dismiss Hoyt as a case
which dealt with entirely different issues, even though, in fact,
it presented the identical problem. But Duncan's rationale
is a good deal less expansive than is suggested by the Court's
present interpretation of that case. Duncan rests on the
following reasoning:
"The test for determining whether a right extended by the Fifth
and Sixth Amendments with respect to federal criminal proceedings
is also protected against state action by the Fourteenth Amendment
has been phrased in a variety of ways in the opinions of this
Court. The question has been asked whether a right is among those
'fundamental principles of liberty and justice which lie at the
base of all our civil and political institutions,' Powell v.
Alabama, 287 U. S. 45 , 287 U. S.
67 (1932); whether it is 'basic in our system of
jurisprudence,' In re Oliver, 333 U. S.
257 , 333 U. S. 273 (1948); and
whether it is 'a fundamental right, essential to a fair trial,' Gideon v. Wainwright, 372 U. S. 335 , 372 U. S.
343 -344 (1963); Malloy v. Hogan, 378 U. S. 1 , 378 U. S. 6 (1964); Pointer
v. Texas, 380 U. S. 400 , 380 U. S.
403 (1965). . . . Because we believe that trial
by Page 419 U. S. 541 jury in criminal cases is fundamental to the American scheme
of justice, we hold that the Fourteenth Amendment guarantees a
right of jury trial in all criminal cases. . . ." Id. at 391 U. S.
148 -149. (Emphasis added.)
That this is a sturdy test, one not readily satisfied by every
discrepancy between federal and state practice, was made clear not
only in Williams v. Florida, 399 U. S.
78 (1970), and Apodaca v. Oregon, 406 U.
S. 404 (1972), but also in Duncan itself. In
explaining the conclusion that a jury trial is fundamental to our
scheme of justice, and therefore should be required of the States,
the Court pointed out that jury trial was designed to be a defense
"against arbitrary law enforcement," 391 U.S. at 391 U. S. 156 ,
and "to prevent oppression by the Government." Id. at 391 U. S. 155 .
The Court stated its belief that jury trial for serious offenses is
"essential for preventing miscarriages of justice and for assuring
that fair trials are provided for all defendants." Id. at 391 U. S.
158 .
I cannot conceive that today's decision is necessary to guard
against oppressive or arbitrary law enforcement, or to prevent
miscarriages of justice and to assure fair trials. Especially is
this so when the criminal defendant involved makes no claims of
prejudice or bias. The Court does accord some slight attention to
justifying its ruling in terms of the basis on which the right to
jury trial was read into the Fourteenth Amendment. It concludes
that the jury is not effective, as a prophylaxis against arbitrary
prosecutorial and judicial power, if the "jury pool is made up of
only special segments of the populace or if large, distinctive
groups are excluded from the pool." Ante at 419 U. S. 530 .
It fails, however, to provide any satisfactory explanation of the
mechanism by which the Louisiana system undermines the prophylactic
role of the jury, either in general or in this case. The best it
can do is to Page 419 U. S. 542 posit " a flavor, a distinct quality,'" which allegedly is
lost if either sex is excluded. Ante at 419 U. S. 532 .
However, this "flavor" is not of such importance that the
Constitution is offended if any given petit jury is not so
enriched. Ante at 419 U. S. 538 . This smacks more of mysticism than of
law. The Court does not even purport to practice its mysticism in a
consistent fashion -- presumably doctors, lawyers, and other
groups, whose frequent exemption from jury service is endorsed by
the majority, also offer qualities as distinct and important as
those at issue here. In Hoyt, this Court considered a stronger due process
claim than is before it today, but found that fundamental fairness
had not been offended. I do not understand how our intervening
decision in Duncan can support a different result. After
all, Duncan imported the Sixth Amendment into the Due
Process Clause only because, and only to the extent that, this was
perceived to be required by fundamental fairness.
The second change since Hoyt that appears to undergird
the Court's turnabout is societal in nature, encompassing both our
higher degree of sensitivity to distinctions based on sex, and the
"evolving nature of the structure of the family unit in American
society." Ante at 419 U. S. 535 n. 17. These are matters of degree, and it
is perhaps of some significance that, in 1961, Mr. Justice Harlan
saw fit to refer to the
"enlightened emancipation of women from the restrictions and
protections of bygone years, and their entry into many parts of
community life formerly considered to be reserved to men." Hoyt, 368 U.S. at 368 U. S. 61 -62.
Nonetheless, it may be fair to conclude that the Louisiana system
is, in fact, an anachronism, inappropriate at this "time or place." Ante at 419 U. S. 537 .
But surely constitutional adjudication is a more canalized function
than enforcing as against the States this Court's perception of
modern life. Page 419 U. S. 543 Absent any suggestion that appellant's trial was unfairly
conducted, or that its result was unreliable, I would not require
Louisiana to retry him (assuming the State can once again produce
its evidence and witnesses) in order to impose on him the sanctions
which its laws provide. | Here is a summary of the case:
In *Taylor v. Louisiana*, the United States Supreme Court ruled that a Louisiana law, which required women to file a written declaration of their desire to be subject to jury service, violated the Sixth Amendment's guarantee of a jury trial. The Court held that the systematic exclusion of women from jury panels, amounting to 53% of eligible citizens in the judicial district, was unconstitutional. The Court rejected the state's justification for the law and emphasized the right to a jury selected from a fair cross-section of the community. The Court's decision reflected a changing societal perspective on gender equality and the evolving nature of the American family structure.
Is there anything else you would like me to summarize? |
Criminal Trials & Prosecutions | California v. Green | https://supreme.justia.com/cases/federal/us/399/149/ | U.S. Supreme Court California v. Green, 399
U.S. 149 (1970) California v. Green No. 387 Argued April 20, 1970 Decided June 23, 1970 399
U.S. 149 CERTIORARI TO THE SUPREME COURT OF
CALIFORNIA Syllabus Respondent was convicted of furnishing marihuana to a minor in
violation of California law, chiefly on the basis of evidence
consisting of prior inconsistent statements made by the minor
(Porter) (1) at respondent's preliminary hearing and (2) to a
police officer. These statements were admitted under California
Evidence Code § 1235 to prove the truth of the matters asserted
therein. The District Court of Appeal reversed. The California
Supreme Court affirmed, and held § 1235 unconstitutional insofar as
it permitted the substantive use of a witness' prior inconsistent
Statements even though such statements were subject to
cross-examination at a prior hearing. Held: 1. The Confrontation Clause of the Sixth Amendment, as made
applicable to the States by the Fourteenth Amendment, is not
violated by admitting a declarant's out-of-court statements as long
as he is testifying as a witness at trial and is subject to full
cross-examination. The purposes of the Amendment are satisfied at
the time of trial, even if not before, since the witness is under
oath, is subject to cross-examination, and his demeanor can be
observed by the trier of fact. Pp. 399 U. S.
153 -164.
2. Even in the absence of an opportunity for full
cross-examination at trial, the admission into evidence of the
preliminary hearing testimony would not violate the Constitution.
For the preliminary hearing in this case (where Porter was under
oath, and where respondent was represented by counsel and had full
opportunity for cross-examination) was not significantly different
from an actual trial as far as the purposes of the Confrontation
Clause are concerned, and it has long been held that admitting the
prior trial testimony of an unavailable witness does not violate
that clause. A different result should not follow where, as in this
case, the witness was actually produced. Pp. 399 U. S.
165 -168.
3. The question whether Porter's claimed lapse of memory at the
trial about important events described in his earlier statement to
the officer so affected respondent's right to cross-examine as Page 399 U. S. 150 to make a critical difference in the application of the
Confrontation Clause is an issue that should first be resolved by
the state court. Pp. 399 U. S.
168 -170. 70 Cal. 2d
654 , 451 P.2d 422, vacated and remanded.
MR. JUSTICE WHITE delivered the opinion of the Court.
Section 1235 of the California Evidence Code, effective as of
January 1, 1967, provides that
"[e]vidence of a statement made by a witness is not made
inadmissible by the hearsay rule if the statement is inconsistent
with his testimony at the hearing and is offered in compliance with
Section 770. [ Footnote 1 ]"
In People v. Johnson, 68 Cal. 2d
646 , 441 P.2d 111 (1968), cert. denied, 393 U.S. 1051
(1969), the California Supreme Court held that, prior statements of
a witness that were not subject to cross-examination when
originally made, could not be introduced under this section to
prove the charges against a defendant without violating the
defendant's right of confrontation guaranteed by the Sixth
Amendment and made applicable to Page 399 U. S. 151 the States by the Fourteenth Amendment. In the case now before
us, the California Supreme Court applied the same ban to a prior
statement of a witness made at a preliminary hearing, under oath
and subject to full cross-examination by an adequately counseled
defendant. We cannot agree with the California court for two
reasons, one of which involves rejection of the holding in People v. Johnson. I In January, 1967, one Melvin Porter, a 16-year-old minor, was
arrested for selling marihuana to an undercover police officer.
Four days after his arrest, while in the custody of juvenile
authorities, Porter named respondent Green as his supplier. As
recounted later by one Officer Wade, Porter claimed that Green had
called him earlier that month, had asked him to sell some "stuff"
or "grass," and had that same afternoon personally delivered a
shopping bag containing 29 "baggies" of marihuana. It was from this
supply that Porter had made his sale to the undercover officer. A
week later, Porter testified at respondent's preliminary hearing.
He again named respondent as his supplier, although he now claimed
that, instead of personally delivering the marihuana, Green had
showed him where to pick up the shopping bag, hidden in the bushes
at Green's parents' house. Porter's story at the preliminary
hearing was subjected to extensive cross-examination by
respondent's counsel -- the same counsel who represented respondent
at his subsequent trial. At the conclusion of the hearing,
respondent was charged with furnishing marihuana to a minor in
violation of California law.
Respondent's trial took place some two months later before a
court sitting without a jury. The State's chief witness was again
young Porter. But this time, Porter, in the words of the California
Supreme Court, proved to be "markedly evasive and uncooperative on
the Page 399 U. S. 152 stand." People v. Green, 70 Cal. 2d
654 , 657, 451 P.2d 422, 423 (1969). He testified that
respondent had called him in January, 1967, and asked him to sell
some unidentified "stuff." He admitted obtaining shortly thereafter
29 plastic "baggies" of marihuana, some of which he sold. But, when
pressed as to whether respondent had been his supplier, Porter
claimed that he was uncertain how he obtained the marihuana,
primarily because he was at the time on "acid" (LSD), which he had
taken 20 minutes before respondent phoned. Porter claimed that he
was unable to remember the events that followed the phone call, and
that the drugs he had taken prevented his distinguishing fact from
fantasy. See, e.g., App. 7-11, 24-25.
At various points during Porter's direct examination, the
prosecutor read excerpts from Porter's preliminary hearing
testimony. This evidence was admitted under § 1235 for the truth of
the matter contained therein. With his memory "refreshed" by his
preliminary hearing testimony, Porter "guessed" that he had indeed
obtained the marihuana from the backyard of respondent's parents'
home, and had given the money from its sale to respondent. On
cross-examination, however, Porter indicated that it was his memory
of the preliminary testimony which was "mostly" refreshed, rather
than his memory of the events themselves, and he was still unsure
of the actual episode. See App. 25. Later in the trial,
Officer Wade testified, relating Porter's earlier statement that
respondent had personally delivered the marihuana. This statement
was also admitted as substantive evidence. Porter admitted making
the statement, App. 59, and insisted that he had been telling the
truth as he then believed it both to Officer Wade and at the
preliminary hearing; but he insisted that he was also telling the
truth now in claiming inability to remember the actual events. Page 399 U. S. 153 Respondent was convicted. The District Court of Appeal reversed,
holding that the use of Porter's prior statements for the truth of
the matter asserted therein denied respondent his right of
confrontation under the California Supreme Court's recent decision
in People v. Johnson, supra. The California Supreme Court
affirmed, finding itself "impelled" by recent decisions of this
Court to hold § 1235 unconstitutional insofar as it permitted the
substantive use of prior inconsistent statements of a witness even
though the statements were subject to cross-examination at a prior
hearing. We granted the State's petition for certiorari, 396 U.S.
1001 (1970). II The California Supreme Court construed the Confrontation Clause
of the Sixth Amendment to require the exclusion of Porter's prior
testimony offered in evidence to prove the State's case against
Green because, in the court's view, neither the right to
cross-examine Porter at the trial concerning his current and prior
testimony nor the opportunity to cross-examine Porter at the
preliminary hearing satisfied the commands of the Confrontation
Clause. We think the California court was wrong on both counts.
Positing that this case posed an instance of a witness who gave
trial testimony inconsistent with his prior, out-of-court
statements, [ Footnote 2 ] the
California court, on the authority of its decision in People v.
Johnson, supra, held that belated cross-examination before the
trial court
"is not an adequate substitute for the right to
cross-examination contemporaneous with the original testimony
before a different tribunal." People v. Green, supra, at 659, 451 P.2d at 425. We
disagree. Page 399 U. S. 154 Section 1235 of the California Evidence Code represents a
considered choice by the California Legislature [ Footnote 3 ] between two opposing positions
concerning the extent to which a witness' prior statements may be
introduced at trial without violating hearsay rules of evidence.
The orthodox view, adopted in most jurisdictions, [ Footnote 4 ] has been that the out-of-court
statements are inadmissible for the usual reasons that have led to
the exclusion of hearsay statements: the statement may not have
been made under oath; the declarant may not have been subjected to
cross-examination when he made the statement; and the jury cannot
observe the declarant's demeanor at the time he made the statement.
Accordingly, under this view, the statement may not be offered to
show the truth of the matters asserted therein, but can be
introduced under appropriate limiting instructions to impeach the
credibility of the witness who has changed his story at trial. In
contrast, the minority view, adopted in some jurisdictions
[ Footnote 5 ] and supported by
most legal commentators and by recent proposals to codify the law
of evidence, [ Footnote 6 ]
would Page 399 U. S. 155 permit the substantive use of prior inconsistent statements on
the theory that the usual dangers of hearsay are largely
nonexistent where the witness testifies at trial.
"The whole purpose of the Hearsay rule has been already
satisfied, [because] the witness is present and subject to
cross-examination [and] [t]here is ample opportunity to test him as
to the basis for his former statement. [ Footnote 7 ]"
Our task in this case is not to decide which of these positions,
purely as a matter of the law of evidence, is the sounder. The
issue before us is the considerably narrower one of whether a
defendant's constitutional right "to be confronted with the
witnesses against him" is necessarily inconsistent with a State's
decision to change its hearsay rules to reflect the minority view
described above. While it may readily be conceded that hearsay
rules and the Confrontation Clause are generally designed to
protect similar values, it is quite a different thing to suggest
that the overlap is complete, and that the Confrontation Clause is
nothing more or less than a codification of the rules of hearsay
and their exceptions as they existed historically at common law.
Our decisions have never established such a congruence; indeed, we
have more than once found a violation of Page 399 U. S. 156 confrontation values even though the statements in issue were
admitted under an arguably recognized hearsay exception. See
Barber v. Page, 390 U. S. 719 (1968); Pointer v. Texas, 380 U.
S. 400 (196). The converse is equally true: merely
because evidence is admitted in violation of a long-established
hearsay rule does not lead to the automatic conclusion that
confrontation rights have been denied. [ Footnote 8 ]
Given the similarity of the values protected, however, the
modification of a State's hearsay rules to create new exceptions
for the admission of evidence against a defendant will often raise
questions of compatibility with the defendant's constitutional
right to confrontation. Such questions require attention to the
reasons for, and the basic scope of, the protections offered by the
Confrontation Clause.
The origin and development of the hearsay rules and of the
Confrontation Clause have been traced by others, and need not be
recounted in detail here. [ Footnote
9 ] It is sufficient to note that the particular vice that gave
impetus to the confrontation claim was the practice of trying
defendants on "evidence" which consisted solely of ex
parte affidavits or depositions secured by the examining
magistrates, thus denying the defendant the opportunity to
challenge his accuser in a face-to-face encounter in front of the
trier of fact. Prosecuting attorneys
"would frequently allege matters which the prisoner denied and
called upon them to prove. The Page 399 U. S. 157 proof was usually given by reading depositions, confessions of
accomplices, letters, and the like, and this occasioned frequent
demands by the prisoner to have his 'accusers,' i.e., the
witnesses against him, brought before him face to face. . . .
[ Footnote 10 ]"
But objections occasioned by this practice appear primarily to
have been aimed at the failure to call the witness to confront
personally the defendant at his trial. So far as appears, in
claiming confrontation rights, no objection was made against
receiving a witness' out-of-court depositions or statements so long
as the witness was present at trial to repeat his story and to
explain or repudiate any conflicting prior stories before the trier
of fact.
Our own decisions seem to have recognized at an early date that
it is this literal right to "confront" the witness at the time of
trial that forms the core of the values furthered by the
Confrontation Clause:
"The primary object of the constitutional provision in question
was to prevent depositions or ex parte affidavits, such as
were sometimes admitted in civil cases, being used against the
prisoner in lieu of a personal examination and cross-examination of
the witness in which the accused has an opportunity Page 399 U. S. 158 not only of testing the recollection and sifting the conscience
of the witness, but of compelling him to stand face to face with
the jury in order that they may look at him, and judge by his
demeanor upon the stand and the manner in which he gives his
testimony whether he is worthy of belief." Mattox v. United States, 156 U.
S. 237 , 156 U. S.
242 -243 (1895). Viewed historically, then, there is good
reason to conclude that the Confrontation Clause is not violated by
admitting a declarant's out-of-court statements as long as the
declarant is testifying as a witness and subject to full and
effective cross-examination.
This conclusion is supported by comparing the purposes of
confrontation with the alleged dangers in admitting an out-of-court
statement. Confrontation: (1) insures that the witness will give
his statements under oath -- thus impressing him with the
seriousness of the matter and guarding against the lie by the
possibility of a penalty for perjury; (2) forces the witness to
submit to cross-examination, the "greatest legal engine ever
invented for the discovery of truth"; [ Footnote 11 ] (3) permits the jury that is to decide
the defendant's fate to observe the demeanor of the witness in
making his statement, thus aiding the jury in assessing his
credibility.
It is, of course, true that the out-of-court statement may have
been made under circumstances subject to none of these protections.
But if the declarant is present and testifying at trial, the
out-of-court statement, for all practical purposes, regains most of
the lost protections. If the witness admits the prior statement is
his, or if there is other evidence to show the statement is his,
the danger of faulty reproduction is negligible, and the jury can
be confident that it has before it two conflicting statements by
the same witness. Thus, as far as the Page 399 U. S. 159 oath is concerned, the witness must now affirm, deny, or qualify
the truth of the prior statement under the penalty of perjury;
indeed, the very fact that the prior statement was not given under
a similar circumstance may become the witness' explanation for its
inaccuracy -- an explanation a jury may be expected to understand
and take into account in deciding which, if either, of the
statements represents the truth.
Second, the inability to cross-examine the witness at the time
he made his prior statement cannot easily be shown to be of crucial
significance as long as the defendant is assured of full and
effective cross-examination at the time of trial. The most
successful cross-examination at the time the prior statement was
made could hardly hope to accomplish more than has already been
accomplished by the fact that the witness is now telling a
different, inconsistent story, and -- in this case -- one that is
favorable to the defendant. We cannot share the California Supreme
Court's view that belated cross-examination can never serve as a
constitutionally adequate substitute for cross-examination
contemporaneous with the original statement. The main danger in
substituting subsequent for timely cross-examination seems to lie
in the possibility that the witness'
"[f]alse testimony is apt to harden and become unyielding to the
blows of truth in proportion as the witness has opportunity for
reconsideration and influence by the suggestions of others, whose
interest may be, and often is, to maintain falsehood, rather than
truth." State v. Saporen, 205 Minn. 358, 362, 285 N.W. 898, 901
(1939). That danger, however, disappears when the witness has
changed his testimony so that, far from "hardening," his prior
statement has softened to the point where he now repudiates it.
[ Footnote 12 ] Page 399 U. S. 160 The defendant's task in cross-examination is, of course, no
longer identical to the task that he would have faced if the
witness had not changed his story, and hence had to be examined as
a "hostile" witness giving evidence for the prosecution. This
difference, however, far from lessening, may actually enhance, the
defendant's ability to attack the prior statement. For the witness,
favorable to the defendant, should be more than willing to give the
usual suggested explanations for the inaccuracy of his prior
statement, such as faulty perception or undue haste in recounting
the event. Under such circumstances, the defendant is not likely to
be hampered in effectively attacking the prior statement solely
because his attack comes later in time.
Similar reasons lead us to discount as a constitutional matter
the fact that the jury at trial is foreclosed from viewing the
declarant's demeanor when he first made his out-of-court statement.
The witness who now relates a different story about the events in
question must necessarily assume a position as to the truth value
of his prior statement, thus giving the jury a chance to observe
and evaluate his demeanor as he either disavows or qualifies his
earlier statement. The jury is alerted by the inconsistency in the
stories, and its attention is sharply focused on determining either
that one of the stories reflects the truth, or that the witness,
who has apparently lied once, is simply too lacking in credibility
to warrant its believing either story. The defendant's
confrontation rights are not violated, even though some demeanor
evidence that would have been relevant in resolving this
credibility issue is forever lost.
It may be true that a jury would be in a better position to
evaluate the truth of the prior statement if it could somehow be
whisked magically back in time to witness a gruelling
cross-examination of the declarant as he first gives his statement.
But the question, as we Page 399 U. S. 161 see it, must be not whether one can somehow imagine the jury in
"a better position," but whether subsequent cross-examination at
the defendant's trial will still afford the trier of fact a
satisfactory basis for evaluating the truth of the prior statement.
On that issue, neither evidence [ Footnote 13 ] nor reason convinces us that contemporaneous
cross-examination before the ultimate trier of fact is so much more
effective than subsequent examination that it must be made the
touchstone of the Confrontation Clause.
Finally, we note that none of our decisions interpreting the
Confrontation Clause requires excluding the out-of-court statements
of a witness who is available and testifying at trial. The concern
of most of our cases has been focused on precisely the opposite
situation -- situations where statements have been admitted in the
absence of the declarant and without any chance to cross-examine
him at trial. These situations have arisen through application of a
number of traditional "exceptions" to the hearsay rule, which
permit the introduction of evidence despite the absence of the
declarant usually on the theory that the evidence possesses other
indicia of "reliability" and is incapable of being admitted,
despite good faith efforts of the State, in any way that will
secure Page 399 U. S. 162 confrontation with the declarant. [ Footnote 14 ] Such exceptions, dispensing altogether with
the literal right to "confrontation" and cross-examination, have
been subjected on several occasions to careful scrutiny by this
Court. In Pointer v. Texas, 380 U.
S. 400 (1965), for example, the State introduced at
defendant's trial the transcript of a crucial witness' testimony
from a prior preliminary hearing. The witness himself, one
Phillips, had left the jurisdiction, and did not appear at
trial.
"Because the transcript of Phillips' statement offered against
petitioner at his trial had not been taken at a time and under
circumstances affording petitioner through counsel an adequate
opportunity to cross-examine Phillips,"
380 U.S. at 380 U. S. 407 ,
we held that its introduction violated the defendant's
confrontation rights. Similarly, in Barber v. Page, 390 U. S. 719 (1968), the State introduced the preliminary hearing testimony of
an absent witness, incarcerated in a federal prison, under an
"unavailability" exception to its hearsay rules. We held that that
exception would not justify the denial of confrontation where the
State had not made a good faith effort to obtain the presence of
the allegedly "unavailable" witness.
We have no occasion in the present case to map out a theory of
the Confrontation Clause that would determine the validity of all
such hearsay "exceptions" permitting the introduction of an absent
declarant's statements. For where the declarant is not absent, but
is present to testify and to submit to cross-examination, our
cases, if anything, support the conclusion that the admission of
his out-of-court statements does not create a confrontation
problem. Thus, in Douglas v. Alabama, 380 U.
S. 415 (1965), decided on the same day as Pointer, we reversed a conviction in which the prosecution
read Page 399 U. S. 163 into the record an alleged confession of the defendant's
supposed accomplice, Loyd, who refused to testify on
self-incrimination grounds. The confrontation problem arose
precisely because Loyd could not be cross-examined as to his prior
statement; had such cross-examination taken place, the opinion
strongly suggests that the confrontation problem would have been
nonexistent:
"In the circumstances of this case, petitioner's inability to
cross-examine Loyd as to the alleged confession plainly denied him
the right of cross-examination secured by the Confrontation Clause.
. . . Loyd could not be cross-examined on a statement imputed to,
but not admitted by, him. . . . [S]ince [the State's] evidence
tended to show only that Loyd made the confession,
cross-examination . . . as to its genuineness could not substitute
for cross-examination of Loyd to test the truth of the statement
itself. . . ."
"Hence, effective confrontation of Loyd was possible only if
Loyd affirmed the statement as his."
380 U.S. at 380 U. S.
419 -420.
Again, in Bruton v. United States, 391 U.
S. 123 (1968), the Court found a violation of
confrontation rights in the admission of a codefendant's
confession, implicating Bruton, where the codefendant did not take
the stand. The Court again emphasized that the error arose because
the declarant "does not testify, and cannot be tested by
cross-examination," 391 U.S. at 391 U. S. 136 ,
suggesting that no confrontation problem would have existed if
Bruton had been able to cross-examine his codefendant. [ Footnote 15 ] Cf. Page 399 U. S. 164 Harrington v. Californoa, 395 U.
S. 250 , 395 U. S.
252 -253 (1969). Indeed, Bruton's refusal to regard
limiting instructions as capable of curing the error, suggests that
there is little difference as far as the Constitution is concerned
between permitting prior inconsistent statements to be used only
for impeachment purposes and permitting them to be used for
substantive purposes as well.
We find nothing, then, in either the history or the purposes of
the Confrontation Clause, or in the prior decisions of this Court,
that compels the conclusion reached by the California Supreme Court
concerning the validity of California's § 1235. Contrary to the
judgment of that court, the Confrontation Clause does not require
excluding from evidence the prior statements of a witness who
concedes making the statements, and who may be asked to defend or
otherwise explain the inconsistency between his prior and his
present version of the events in question, thus opening himself to
full cross-examination at trial as to both stories. Page 399 U. S. 165 III We also think that Porter's preliminary hearing testimony was
admissible as far as the Constitution is concerned wholly apart
from the question of whether respondent had an effective
opportunity for confrontation at the subsequent trial. For Porter's
statement at the preliminary hearing had already been given under
circumstances closely approximating those that surround the typical
trial. Porter was under oath; respondent was represented by counsel
-- the same counsel, in fact, who later represented him at the
trial; respondent had every opportunity to cross-examine Porter as
to his statement, and the proceedings were conducted before a
judicial tribunal, equipped to provide a judicial record of the
hearings. Under these circumstances, Porter's statement would, we
think, have been admissible at trial even in Porter's absence if
Porter had been actually unavailable despite good faith efforts of
the State to produce him. That being the case, we do not think a
different result should follow where the witness is actually
produced.
This Court long ago held that admitting the prior testimony of
an unavailable witness does not violate the Confrontation Clause. Mattox v. United States, 156 U. S. 237 (1895). That case involved testimony given at the defendant's first
trial by a witness who had died by the time of the second trial,
but we do not find the instant preliminary hearing significantly
different from an actual trial to warrant distinguishing the two
cases for purposes of the Confrontation Clause. Indeed, we
indicated as much in Pointer v. Texas, 380 U.
S. 400 , 380 U. S. 407 (1965), where we noted that
"[t]he case before us would be quite a different one had
Phillips' statement been taken at a full-fledged hearing at which
petitioner had been represented by counsel who had been given a Page 399 U. S. 166 complete and adequate opportunity to cross-examine."
And in Barber v. Page, 390 U.
S. 719 , 390 U. S.
725 -726 (1968), although noting that the preliminary
hearing is ordinarily a less searching exploration into the merits
of a case than a trial, we recognized that
"there may be some justification for holding that the
opportunity for cross-examination of a witness at a preliminary
hearing satisfies the demands of the confrontation clause where the
witness is shown to be actually unavailable. . . ."
In the present case, respondent's counsel does not appear to
have been significantly limited in any way in the scope or nature
of his cross-examination of the witness Porter at the preliminary
hearing. If Porter had died or was otherwise unavailable, the
Confrontation Clause would not have been violated by admitting his
testimony given at the preliminary hearing -- the right of
cross-examination then afforded provides substantial compliance
with the purposes behind the confrontation requirement, as long as
the declarant's inability to give live testimony is in no way the
fault of the State. Compare Barber v. Page, supra, with Motes
v. United States, 178 U. S. 458 (1900).
But nothing in Barber v. Page or in other cases in this
Court indicates that a different result must follow where the State
produces the declarant and swears him as a witness at the trial. It
may be that the rules of evidence applicable in state or federal
courts would restrict resort to prior sworn testimony where the
declarant is present at the trial. But, as a constitutional matter,
it is untenable to construe the Confrontation Clause to permit the
use of prior testimony to prove the State's case where the
declarant never appears, but to bar that testimony where the
declarant is present at the trial, exposed to the defendant and the
trier of fact, and subject Page 399 U. S. 167 to cross-examination. [ Footnote 16 ] As in the case where the witness is
physically unproducible, the State here has made every effort to
introduce its evidence through the live testimony of the witness;
it produced Porter at trial, swore him as a witness, and tendered
him for cross-examination. Whether Porter then testified in a
manner consistent or inconsistent with his preliminary hearing
testimony, claimed a loss of memory, claimed his privilege Page 399 U. S. 168 against compulsory self-incrimination, or simply refused to
answer, nothing in the Confrontation Clause prohibited the State
from also relying on his prior testimony to prove its case against
Green. [ Footnote 17 ] IV There is a narrow question lurking in this case concerning the
admissibility of Porter's statements to Officer Wade. In the
typical case to which the California court addressed itself, the
witness at trial gives a version of the ultimate events different
from that given on a prior occasion. In such a case, as our holding
in 399 U. S. we
find little reason to distinguish among prior inconsistent
statements on the basis of the circumstances under which the prior
statements were given. The subsequent opportunity for
cross-examination at trial with respect to both present and past
versions of the event is adequate to make equally admissible, as
far as the Confrontation Clause is concerned, both the casual,
off-hand remark to a stranger and the carefully recorded testimony
at a prior hearing. Here, however, Porter claimed at trial that he
could not remember the events that occurred after respondent
telephoned him, and, hence, failed to give any current version of
the more important events described in his earlier statement.
Whether Porter's apparent lapse of memory so affected Green's
right to cross-examine as to make a critical difference in the
application of the Confrontation Clause Page 399 U. S. 169 in this case [ Footnote
18 ] is an issue which is not ripe for decision at this
juncture. The state court did not focus on this precise question,
which was irrelevant given its broader and erroneous premise that
an out-of-court statement of a witness is inadmissible as
substantive evidence, whatever the nature of the opportunity to
cross-examine at the trial. Nor has either party addressed itself
to the question. Its resolution depends much upon the Page 399 U. S. 170 unique facts in this record, and we are reluctant to proceed
without the state court's views of what the record actually
discloses relevant to this particular issue. What is more, since we
hold that the admission of Porter's preliminary hearing testimony
is not barred by the Sixth Amendment despite his apparent lapse of
memory, the reception into evidence of the Porter statement to
Officer Wade may pose a harmless error question which is more
appropriately resolved by the California courts in the first
instance. Similarly, faced on remand with our decision that § 1235
is not invalid on its face, the California Supreme Court may choose
to dispose of the case on other grounds raised by Green but not
passed upon by that court; for example, because of its ruling on §
1235, the California court deliberately put aside the issue of the
sufficiency of the evidence to sustain conviction. [ Footnote 19 ]
We therefore vacate the judgment of the California Supreme Court
and remand the case to that court for further proceedings not
inconsistent with this opinion. It is so ordered. MR. JUSTICE MARSHALL took no part in the decision of this
case. Page 399 U. S. 171 [ Footnote 1 ]
Cal.Evid.Code § 1235 (1966). Section 770 merely requires that
the witness be given an opportunity to explain or deny the prior
statement at some point in the trial. See Cal.Evid.Code §
770 (1966); People v. Johnson, 68 Cal. 2d
646 , 650 n. 2, 441 P.2d 111, 114 n. 2 (1968), cert.
denied, 393 U.S. 1051 (1969).
[ Footnote 2 ] See People v. Green, 70 Cal. 2d
654 , 657 n. 1, 451 P.2d 422, 424 n. 1 (1969).
[ Footnote 3 ] See the comments of the California Law Revision
Commission, Cal.Evid.Code § 1235 (1966).
[ Footnote 4 ] E.g., Ellis v. United States, 138 F.2d 612, 616-621
(C.A. 8th Cir.1943); State v. Saporen, 205 Minn. 358,
361-362, 285 N.W. 898, 90901 (1939). The cases are collected in 3
J. Wigmore, Evidence § 1018 (3d ed.1940) [hereinafter cited as
Wigmore] and Annot., 133 A.L.R. 1454, 1455-1457 (1941).
[ Footnote 5 ] See Jett v. Commonwealth, 436
S.W.2d 788 (Ky.1969); Gelhaar v. State, 41 Wis.2d 230, 163 N.W.2d
609 (1969). See also United States v. De Sisto, 329
F.2d 929 (C.A.2d Cir.) (Friendly, J.), cert. denied, 377
U.S. 979 (1964); United States v. Block, 88 F.2d 618, 620
(C.A.2d Cir.) (L. Hand, J.), cert. denied, 301 U.S. 690
(1937); Di Carlo v. United States, 6 F.2d 364, 368 (C.A.2d
Cir.) (L. Hand, J.), cert. denied, 268 U.S. 706
(1925).
[ Footnote 6 ]
Dean Wigmore was the first noted commentator to adopt this
position, abandoning his earlier approval, in the first edition of
his Treatise, of the orthodox view. See 3 Wigmore § 1018
n. 2. Both the Model Code and the Uniform Rules have since followed
the Wigmore position, see Model Code of Evidence Rule
503(b) (1942); Uniform Rule of Evidence 63(1) (1953), as has the
recent preliminary draft of the rules of evidence for the lower
federal courts, see Committee on Rules of Practice and
Procedure of the Judicial Conference of the United States,
Preliminary Draft of Proposed Rules of Evidence for the United
States District Courts and Magistrates, Rule 8-01(c)(2) (1969). For
commentators who have urged views similar to Wigmore's see C. McCormick, Evidence § 39 (1954); Maguire, The Hearsay System:
Around and Through the Thicket, 14 Vand.L.Rev. 741, 747 (1961);
Morgan, Hearsay Dangers and the Application of the Hearsay Concept,
62 Harv.L.Rev. 177, 92-196 (1948).
[ Footnote 7 ]
3 Wigmore § 1018.
[ Footnote 8 ] See The Supreme Court, 1967 Term, 82 Harv.L.Rev. 63,
236 (1968); Note, Confrontation and the Hearsay Rule, 75 Yale L.J.
1434, 1436 (1966).
[ Footnote 9 ] See, e.g., McCormick, supra, n 6, at 455-457; 5 Wigmore § 1364; Morgan, supra, n 6, at
179-183. See also 9 W. Holdsworth, A History of English
Law 177-187, 214-219 (3d ed.1944); Note, Preserving the Right to
Confrontation -- A New Approach to Hearsay Evidence in Criminal
Trials, 113 U.Pa.L.Rev. 741, 746-747 (1965).
[ Footnote 10 ]
1 J. Stephen, A History of the Criminal Law of England 326
(1883). See also 9 Holdsworth, supra, n 9, at 225-228.
A famous example is provided by the trial of Sir Walter Raleigh
for treason in 1603. A crucial element of the evidence against him
consisted of the statements of one Cobham, implicating Raleigh in a
plot to seize the throne. Raleigh had since received a written
retraction from Cobham, and believed that Cobham would now testify
in his favor. After a lengthy dispute over Raleigh's right to have
Cobham called as a witness, Cobham was not called, and Raleigh was
convicted. See 1 Stephen, supra, at 333-336; 9
Holdsworth, supra, at 216-217, 226-228. At least one
author traces the Confrontation Clause to the common law reaction
against these abuses of the Raleigh trial. See F. Heller,
The Sixth Amendment 104 (1951).
[ Footnote 11 ]
5 Wigmore § 1367.
[ Footnote 12 ] See Comment, Substantive Use of Extrajudicial
Statements of Witnesses Under the Proposed Federal Rules of
Evidence, 4 U.Rich.L.Rev. 110, 117-118 (1969); 82 Harv.L.Rev. 475
n. 16 (1968).
[ Footnote 13 ]
The California Supreme Court, in its earlier decision on this
issue, stated that
"[t]his practical truth [the importance of immediate
cross-examination] is daily verified by trial lawyers, not one of
whom would willingly postpone to both a later date and a different
forum his right to cross-examine a witness against his client." People v. Johnson, 68 Cal. 2d
646 , 655, 441 P.2d 111, 118 (1968), cert. denied, 393
U.S. 1051 (1969). The citations that follow this sentence are to
books on trial practice that shed little empirical light on the
actual comparative effectiveness of subsequent, as opposed to
timely, cross-examination. As the text suggests, where the witness
has changed his story at trial to favor the defendant, he should,
if anything, be more, rather than less, vulnerable to defense
counsel's explanations for the inaccuracy of his former
statement.
[ Footnote 14 ] See generally, e.g., Wigmore §§ 1420-1422.
[ Footnote 15 ]
Whether admission of the statement would have violated federal
evidentiary rules against hearsay, see 391 U.S. at 391 U. S. 128 n. 3, is, as emphasized earlier in this opinion, a wholly separate
question. Indeed, failure to comply with federal evidentiary
standards appears to be the reason for the result in Bridges v.
Wixon, 326 U. S. 135 (1945) -- the only case which might be thought to suggest the
existence of a possible constitutional problem in admitting a
witness' prior inconsistent statements as substantive evidence.
There, the Court reversed a deportation order based on such
evidence, but the holding was an alternative one, and explicitly
rested on the ground that the relevant agency rules did not permit
the use of such statements. See 326 U.S. at 326 U. S.
151 -153. While the Court did suggest that the use of
such statements in a criminal case would run "counter to the
notions of fairness on which our legal system is founded," id. at 326 U. S. 154 ,
the discussion and citations appear to refer to the "orthodox"
position earlier adopted by this Court as a matter of federal
evidentiary, not constitutional, law. See Hickory v. United
States, 151 U. S. 303 , 151 U. S. 309 (1894). While we may agree that considerations of due process,
wholly apart from the Confrontation Clause, might prevent
convictions where a reliable evidentiary basis is totally lacking, see Thompson v. Louisville, 362 U.
S. 199 (1960), we do not read Bridges as
declaring that the Constitution is necessarily violated by the
admission of a witness' prior inconsistent statement for the truth
of the matter asserted. The Court's opinion in Bridges does not discuss the Confrontation Clause.
[ Footnote 16 ]
The explanation advanced for the contrary conclusion seems to be
that, where the witness is dead or otherwise unavailable, the State
may in good faith assume he would have given the same story at
trial, and may introduce the former testimony as reasonably
reliable and as prompted by the factor of "necessity." On the
contrary, it is argued, where the witness is present to testify but
does not relate the same story, "necessity," "reliability," and the
assumption that the story would be the same are all destroyed. See People v. Green, 70 Cal. 2d
654 , 664 and n. 11, 451 P.2d 422, 428 429 and n. 11 (1969);
Brief for Respondent 32. But the only "necessity" that exists in
either case is the State's "need" to introduce relevant evidence
that, through no fault of its own, cannot be introduced in any
other way. And the "assumption" that the witness would have given
the same story if he had been available at trial is little more
than another way of saying that the testimony was given under
circumstances that make it reasonably reliable -- there is nothing
in a witness' death, by itself, for example, which would justify
assuming his story would not have changed at trial. Finally, the
"reliability" of the statement is based on the circumstances under
which it was given -- circumstances that remain unaffected
regardless of whether the witness is present or absent at the later
trial. Surely, in terms of protecting the defendant's interests and
the jury's ability to assess the reliability of the evidence it
hears, it seems most unlikely that respondent in this case would
have been better off, as the dissent seems to suggest, if Porter
had died and his prior testimony were admitted than he was in the
instant case, where Porter's conduct on the stand cast substantial
doubt on his prior statement. As long as the State has made a good
faith effort to produce the witness, the actual presence or absence
of the witness cannot be constitutionally relevant for purposes of
the "unavailability" exception.
[ Footnote 17 ]
The hearsay exception itself has generally recognized that a
witness is "unavailable" for purposes of the exception where,
through lapse of memory or a plea of the Fifth Amendment privilege,
the State cannot secure his live testimony. See 5 Wigmore
§§ 1408, 1409.
[ Footnote 18 ]
Even among proponents of the view that prior statements should
be admissible as substantive evidence, disagreement appears to
exist as to whether to apply this rule to the case of a witness who
disclaims all present knowledge of the ultimate event. Commentators
have noted that, in such a case, the opportunities for testing the
prior statement through cross-examination at trial may be
significantly diminished. See Falknor, The Hearsay Rule
and Its Exceptions, 2 U.C.L.A.L.Rev. 43, 53 (1954); 31 N.Y.U.L.Rev.
1101, 1105 (1956). While both the Model Code and the Uniform Rules
would apparently admit prior inconsistent statements even where the
witness claims to have no present knowledge or recollection of the
event, see Model Code of Evidence Rule 503(b), Comment b, at 234 (1942); Uniform Rule of Evidence 63(1), Comment
(1953), the preliminary draft of proposed rules of evidence for
lower federal courts seems to limit admissibility to the case where
the witness actually testifies concerning the substance of the
event at issue, see Committee on Rules of Practice and
Procedure of the Judicial Conference of the United States,
Preliminary Draft of Proposed Rules of Evidence for the United
States District Courts and Magistrates, rule 8-01(c)(2)(i),
Advisory Comm. Notes at 165 (1969). See Comment,
Substantive Use of Extrajudicial Statements of Witnesses Under the
Proposed Federal Rules of Evidence, 4 U.Rich.L.Rev. 110, 119 and n.
40 (1969). The latter position accords with the common law practice
of not permitting prior inconsistent statements to be introduced
even for impeachment purposes until and unless the witness has
actually given "inconsistent" testimony concerning the substance of
the event described in the prior statement. Id. at 119,
121; see e.g., Westinghouse Electric Corp. v. Wray Equipment
Corp., 286 F.2d 491, 493 (C.A. 1st Cir.), cert.
denied, 366 U.S. 929 (1961); 3 Wigmore § 1043.
[ Footnote 19 ]
This issue is not insubstantial. Conviction here rests almost
entirely on the evidence in Porter's two prior statements, which
were themselves inconsistent in some respects. See, e.g., Brief for Respondent 3 and n. 2, 49-50. The California Supreme
Court also found it unnecessary to reach respondent's additional
contentions of suppression of evidence and prejudicial misconduct. See People v. Green, 70 Cal. 2d
654 , 666, 451 P.2d 422, 429 (1969). Moreover, as noted earlier
in this opinion, ante at 399 U. S. 153 and n. 2, the California court suggested that Porter's prior
statements may not even have been admissible under § 1235 as
"inconsistent" with his testimony at trial. Compare People v.
Green, supra, at 657 n. 1, 451 P.2d at 424 n. 1, with n 18, supra. MR. CHIEF JUSTICE BURGER, concurring.
I join fully in MR. JUSTICE WHITE's opinion for the Court. I add
this comment only to emphasize the importance of allowing the
States to experiment and innovate, especially in the area of
criminal justice. If new standards and procedures are tried in one
State, their success or failure will be a guide to others and to
the Congress.
Here, California, by statute, recently adopted a rule of
evidence [ Footnote 2/1 ] that, as
MR. JUSTICE WHITE observes, has long been advocated by leading
commentators. Two other States, Kentucky [ Footnote 2/2 ] and Wisconsin, [ Footnote 2/3 ] have, within the past year, embraced
similar doctrines by judicial decisions. None of these States has
yet had sufficient experience with their innovations to determine
whether or not the modification is sound, wise, and workable. The
California Supreme Court, in striking down the California statute,
seems to have done so in the mistaken belief that this Court,
through the Confrontation Clause, has imposed rigid limits on the
States in this area. As the Court's opinion indicates, that
conclusion is erroneous. The California statute meets the tests of
the Sixth and Fourteenth Amendments, and, accordingly, the wisdom
of the statute is properly left to the State of California; other
jurisdictions will undoubtedly watch the experiment with interest.
The circumstances of this case demonstrate again that neither the
Constitution, as originally drafted, nor any amendment, nor indeed
any need, dictates that we must have absolute uniformity in the Page 399 U. S. 172 criminal law in all the States. Federal authority was never
intended to be a "ramrod" to compel conformity to nonconstitutional
standards.
[ Footnote 2/1 ]
Cal.Evid.Code § 1235 (1966).
[ Footnote 2/2 ] Jett v. Commonwealth, 436
S.W.2d 788 (Ky.1969).
[ Footnote 2/3 ] Gelhaar v. State, 41 Wis.2d 230, 163 N.W.2d
609 (1969), petition for certiorari pending, No. 389,
Misc., O.T. 1969.
MR. JUSTICE HARLAN, concurring.
The precise holding of the Court today is that the Confrontation
Clause of the Sixth Amendment does not preclude the introduction of
an out-of-court declaration, taken under oath and subject to
cross-examination, to prove the truth of the matters asserted
therein, when the declarant is available as a witness at trial.
With this, I agree. [ Footnote
3/1 ]
The California decision that we today reverse demonstrates,
however, the need to approach this case more broadly than the Court
has seen fit to do, and to confront squarely the Confrontation
Clause, because the holding of the California Supreme Court is the
result of an understandable misconception, as I see things, of
numerous decisions of this Court, old and recent, that have
indiscriminately equated "confrontation" with "cross-examination."
[ Footnote 3/2 ] See Bruton v.
United States, 391 U. S. 123 (1968); Roberts v. Russell, 392 U.
S. 293 (1968); Pointer v. Texas, 380 U.
S. 400 (1965); Douglas v. Alabama, 380 U.
S. 415 (1965); Brookhart v. Janis, 384 U. S.
1 (1966); Page 399 U. S. 173 Barber v. Page, 390 U. S. 719 (168); Smith v. Illinois, 390 U.
S. 129 (1968); Bridges v. Wixon, 326 U.
S. 135 (1945); Salinger v. United States, 272 U. S. 542 , 272 U. S. 548 (1926) (dictum); Reynolds v. United States, 98 U. S.
145 (1879); Mattox v. United States, 156 U. S. 237 (1895); Motes v. United States, 178 U.
S. 458 (1900); Kirby v. United States, 174 U. S. 47 (1899); and Dowdell v. United States, 221 U.
S. 325 , 221 U. S. 330 (1911). [ Footnote 3/3 ]
These decisions have, in my view, left ambiguous whether and to
what extent the Sixth Amendment "constitutionalizes" the hearsay
rule of the common law.
If "confrontation" is to be equated with the right to
cross-examine, it would transplant the ganglia of hearsay rules and
their exceptions into the body of constitutional protections. The
stultifying effect of such a course upon this aspect of the law of
evidence in both state and federal systems need hardly be labored,
and it is good that the Court today, as I read its opinion, firmly
eschews that course.
Since, in my opinion, this state decision imperatively
demonstrates the need for taking a fresh look at the constitutional
concept of "confrontation," I do not think that stare
decisis should be allowed to stand in the way, albeit the
presently controlling cases are of recent vintage. [ Footnote 3/4 ] As the Court's opinion suggests, the
Confrontation Page 399 U. S. 174 Clause comes to us on faded parchment. History seems to give us
very little insight into the intended scope of the Sixth Amendment
Confrontation Clause. Commentators have been prone to slide too
easily from confrontation to cross-examination.
Against this amorphous backdrop, I reach two conclusions. First,
the Confrontation Clause of the Sixth Amendment reaches no farther
than to require the prosecution to produce any available witness whose declarations it seeks to use in a
criminal trial. Second, even were this conclusion deemed untenable
as a matter of Sixth Amendment law, it is surely agreeable to
Fourteenth Amendment "due process," which, in my view, is the
constitutional framework in which state cases of this kind should
be judged. For it could scarcely be suggested that the Fourteenth
Amendment takes under its umbrella all common law hearsay rules and
their exceptions.
I begin with the Sixth Amendment, and defer until Parts 399 U. S. S.
189|>IV the application of these principles to the instant
case. I The Confrontation Clause of the Sixth Amendment is not one that
we may assume the Framers understood as the embodiment of settled
usage at common law. Cf. my dissenting opinion in Baldwin v. New York, ante, p. 399 U. S. 117 .
Such scant evidence as can be culled from the usual sources
suggests that the Framers understood "confrontation" to be
something less than a right to exclude hearsay, and the common law
significance Page 399 U. S. 175 of the term is so ambiguous as not to warrant the assumption
that the Framers were announcing a principle whose meaning was so
well understood that this Court should be constrained to accept
those dicta in the common law that equated confrontation with
cross-examination. A The text of the Sixth Amendment reads:
"In all criminal prosecutions, the accused shall enjoy the right
. . . to be confronted with the witnesses against him."
Simply as a matter of English, the clause may be read to confer
nothing more than a right to meet face to face all those who appear
and give evidence at trial. [ Footnote
3/5 ] Since, however, an extrajudicial declarant is no less a
"witness," the clause is equally susceptible of being interpreted
as a blanket prohibition on the use of any hearsay testimony.
Neither of these polar readings is wholly satisfactory, still
less compelling. Similar guarantees to those of the Sixth Amendment
are found in a number of the colonial constitutions, [ Footnote 3/6 ] and it appears to have been
assumed that a confrontation provision would be included in the
Bill of Rights that was to be added to the Constitution after
ratification. [ Footnote 3/7 ] The
Congressmen who drafted the Bill of Page 399 U. S. 176 Rights amendments were primarily concerned with the political
consequences of the new clauses, and paid scant attention to the
definition and meaning of particular guarantees. Thus, the
Confrontation Clause was apparently included, without debate, along
with the rest of the Sixth Amendment package of rights -- to
notice, counsel, and compulsory process -- all incidents of the
adversarial proceeding before a jury as evolved during the 17th and
18th centuries. [ Footnote 3/8 ] If
anything, the confrontation guarantee may be thought, along with
the right to compulsory process, merely to constitutionalize the
right to a defense as we know it, a right not always enjoyed by the
accused, whose only defense prior to the late 17th century was to
argue that the prosecution had not completely proved its case.
[ Footnote 3/9 ] See H.
Stephen, "The Trial of Page 399 U. S. 177 Sir Walter Raleigh," Transactions of the Royal Historical
Society 172, 184 (4th ser. Vol. 2, 1919); F. Heller, The Sixth
Amendment 106-107 (1951). Such glimmer of light as history may be
thought to shed comes from the brief congressional colloquy on the
reach of the companion guarantee of compulsory process. The debate
suggests that this also broad and sweeping right was understood to
be qualified by an availability requirement. After what is now the
Sixth Amendment was put on the floor, the annals report the
following:
"Mr. BURKE moved to amend this proposition in such a manner as
to leave it in the power of the accused to put off the trial to the
next session, provided he made it appear to the court that the
evidence of the witnesses, for whom process was granted but not
served, was material to his defence."
"Mr. HARTLEY said that, in securing him the right of compulsory
process, the Government did all it could; the remainder must
lie in the discretion of the court. "
"Mr. SMITH, of South Carolina, thought the regulation would come
properly in as part of the Judicial system."
1 Annals of Cong. 756. (Emphasis added.)
In the face of this colloquy, I cannot accept Professor Heller's
assertion in his book on the Sixth Amendment attributing to the
Framers a sweeping intent to prevent "introduction of evidence
given by witnesses whom the accused has not had an opportunity to
cross-examine," supra at 105. So far as I have been able
to ascertain, this thesis finds support only in the assumption,
traceable to Professor Hadley, [ Footnote 3/10 ] that:
"The right of the accused in a Page 399 U. S. 178 criminal prosecution to be confronted with the witnesses against
him did not originate with the provision of the Sixth Amendment,
but was a common law right which had gained recognition as a result
of the abuses in the trial of Sir Walter Raleigh." Id. at 104. Heller's approach, resting as it does
essentially on assertion, [ Footnote
3/11 ] is neither persuasive as a historical reading nor tenable
in view of decisions by this Court that have held that the
confrontation right is not abridged by the use of hearsay that
would not have satisfied the dying declaration exception, which
was, according to Heller, the only apparent extant exception to the
hearsay exclusionary rule at the time the Sixth Amendment was
ratified. [ Footnote 3/12 ]
Wigmore's more ambulatory view -- that the Confrontation Clause
was intended to constitutionalize the hearsay rule and all its
exceptions as evolved by the courts -- rests also on assertion
without citation, and attempts to settle on ground that would
appear to be equally infirm Page 399 U. S. 179 as a matter of logic. [ Footnote
3/13 ] Wigmore's reading would have the practical consequence of
rendering meaningless what was assuredly, in some sense, meant to
be an enduring guarantee. It is inconceivable that, if the Framers
intended to constitutionalize a rule of hearsay, they would have
licensed the judiciary to read it out of existence by creating new
and unlimited exceptions.
From the scant information available, it may tentatively be
concluded that the Confrontation Clause was meant to
constitutionalize a barrier against flagrant abuses, trials by
anonymous accusers, and absentee witnesses. That the Clause was
intended to ordain common law rules of evidence with constitutional
sanction is doubtful, notwithstanding English decisions that equate
confrontation and hearsay. Rather, having established a broad
principle, it is far more likely that the Framers anticipated it
would be supplemented, as a matter of Judge-made common law, by
prevailing rules of evidence. B Judicial Precedent. -- The history tending to suggest
that availability underlies the confrontation right, as discussed
above, is, in my view, confirmed by a circumspect analysis of the
early decisions of this Court. [ Footnote 3/14 ] Page 399 U. S. 180 The early decision that consider the confrontation right at any
length all involved ex parte testimony submitted by
deposition and affidavit. See Reynolds v. United States, 98 U. S. 145 (1879); Mattox v. United States, 156 U.
S. 237 (1895); Motes v. United States, 178 U. S. 458 (1900); Kirby v. United States, 174 U. S.
47 (1899). [ Footnote
3/15 ] It was in this context that Mr. Justice Brown, Page 399 U. S. 181 in an oft-quoted passage from Mattox v. United States, set forth as the primary objective of the constitutional guarantee,
the prevention of
"depositions or ex parte affidavits, such as were
sometimes admitted in civil cases, being used against the prisoner
in lieu of a personal examination and cross-examination of the
witness in which the accused has an opportunity not only of testing
the recollection and sifting the conscience of the witness, but
also of compelling him to stand face to face with the jury in order
that they may look at him, and judge by his demeanor upon the stand
and the manner in which he gives his testimony whether he is worthy
of belief."
156 U.S. at 156 U. S.
242 -243. See also Dowdell v. United
States , 221 U.S. Page 399 U. S. 182 325, 221 U. S. 330 (1911); Snyder v. Massachusetts, 291 U. S.
97 , 291 U. S. 107 (1934).
This restricted reading of the clause cannot be defended --
taking, as it does, a metaphysical approach, one that attempts to
differentiate between affidavits, as a substitute for first-hand
testimony, and extrajudicial testimonial utterances. Indeed, the
problems with the latter are somewhat greater, and the difficulty
in establishing accurately what an extrajudicial declarant said has
sometimes been considered an infirmity of hearsay evidence. See C. McCormick, Evidence § 224, at 458 (1954).
Conceptual difficulties aside, it would seem that the early
recognition of the dying declaration as an exception to the
Confrontation Clause, Mattox v. United States, supra; Kirby v.
United States, supra; Robertson v. Baldwin, 165 U.
S. 275 (1897), proceeded on the assumption that
extrajudicial testimonial declarations were also a concern of the
Sixth Amendment. [ Footnote
3/16 ]
Notwithstanding language that appears to equate the
Confrontation Clause with a right to cross-examine, and, by
implication, exclude hearsay, the early holdings and dicta can, I
think, only be harmonized by viewing the confrontation guarantee as
being confined to an availability rule, one that requires the
production of a witness when he is available to testify. This view
explains the recognition of the dying declaration exception, which
dispenses with any requirement of cross-examination, and the
refusal to make an exception for prior recorded statements, taken
subject to cross-examination Page 399 U. S. 183 by the accused, when the witness is still available to testify. Compare Mattox v. United States, supra, with Motes v. United
States, supra. This rationalization of the early decisions is not only
justified by logic, but also anchored in precedent. In West v.
Louisiana, 194 U. S. 258 (1904), this Court, in reviewing its early confrontation decisions,
emphasized availability as the thread that tied them together. West involved the admission into evidence at trial of
deposition testimony, taken subject to cross-examination and under
oath, where the deponent was "permanently absent from the State and
was a nonresident thereof, and . . . his attendance could not be
procured." Ibid. Referring, inter alia, to Motes, Mattox, Kirby, and Reynolds, the Court
concluded that,
"in not one of those cases was it held that, under facts such as
[were before the Court], there would have been a violation of the
Constitution in admitting the deposition in evidence."
194 U.S. at 194 U. S. 266 .
That the uppermost consideration was the availability of the
witness is further underscored by the West discussion of
the common law rule that admitted deposition testimony
"upon proof being made to the satisfaction of the court that the
witness was, at the time of the trial, dead, insane, too ill ever
to be expected to attend the trial, or kept away by the connivance
of the defendant."
194 U.S. at 194 U. S. 262 .
[ Footnote 3/17 ] Page 399 U. S. 184 II Recent decisions have, in my view, fallen into error on two
scores. As a matter of jurisprudence, I think it unsound, for
reasons I have often elaborated, see, e.g., my dissenting
opinions in Duncan v. Louisiana, 391 U.
S. 145 , 391 U. S. 171 (1968), and Baldwin v. New York, ante, p. 399 U. S. 117 , to
incorporate as such the guarantees of the Bill of Rights into the
Due Process Clause. While, in this particular instance, this would
be of little practical consequence if the Court had confined the
Sixth Amendment guarantee to an "availability" requirement, some
decisions have, unfortunately, failed to separate, even as a
federal matter, restrictions on the abuse of hearsay testimony,
part of the due process right of a reliable and trustworthy
conviction, and the right to confront an available witness. See 399
U.S. 149 fn3/20|>n. 20, infra. By incorporating into the Fourteenth Amendment its
misinterpretation of the Sixth Amendment, these decisions have, in
one blow, created the present dilemma, that of bringing about a
potential for a constitutional rule of hearsay for both state and
federal courts. However ill-advised would be the
constitutionalization of hearsay rules in federal courts, the
undesirability of imposing those brittle rules on the States is
manifest. Given the ambulatory fortunes of the hearsay doctrine,
evidenced by the disagreement among scholars over the value of
excluding hearsay and the trend toward liberalization of the
exceptions, [ Footnote 3/18 ] it
would be most unfortunate for this Page 399 U. S. 185 Court to limit the flexibility of the States and choke
experimentation in this evolving area of the law. Cf. Baldwin
v. New York, supra. [ Footnote
3/19 ] I adhere to what I consider Page 399 U. S. 186 to be the sound view expressed in Stein v. New York, 346 U. S. 156 , 346 U. S. 196 (1953): "The hearsay evidence rule, with all its subtleties,
anomalies and ramifications, [should] not be read into the
Fourteenth Amendment." What I would hold binding on the States as a
matter of due process is what I also deem the correct meaning of
the Sixth Amendment's Confrontation Clause -- that a State may not,
in a criminal case, use hearsay when the declarant is available. See West v. Louisiana, supra. [ Footnote 3/20 ] Page 399 U. S. 187 There is no reason in fairness why a State should not, as long
as it retains a traditional adversarial trial, produce a witness
and afford the accused an opportunity to cross-examine him when he
can be made available. That this principle is an essential element
of fairness is attested to not only by precedent, Motes v.
United States, supra; Barber v. Page, supra; Smith v. Illinois,
supra, but also by the traditional and present exceptions to
the hearsay rule which recognize greater flexibility for receiving
evidence when the witness is not available. Furthermore it
accommodates the interest of the State in making a case, yet
recognizes the obligation to accord the accused the fullest
opportunity to present his best defense. [ Footnote 3/21 ] For those rare cases where a conviction
occurs after a trial where no credible evidence could be said to
justify the result, there remains the broader due process
requirement that a conviction cannot be founded on no evidence. See 399
U.S. 149 fn3/20|>n. 20, supra. Page 399 U. S. 188 III Putting aside for the moment the "due process" aspect of this
case, see 399
U.S. 149 fn3/10|>n. 20, supra, it follows, in my
view, that there is no "confrontation" reason why the prosecution
should not use a witness' prior inconsistent statement for the
truth of the matters therein asserted. Here, the prosecution has
produced its witness, Porter, and made him available for trial
confrontation. That, in my judgment, perforce satisfies the Sixth
Amendment. Indeed, notwithstanding the conventional
characterization of an available witness' prior out-of-court
statements as hearsay when offered affirmatively for the truth of
the matters asserted, see Hickory v. United States, 151 U. S. 303 , 151 U. S. 309 (1894); Southern R. Co. v. Gray, 241 U.
S. 333 , 241 U. S. 337 (1916); Bridges v. Wixon, 326 U.
S. 135 (1945), this is hearsay only in a technical
sense, since the witness may be examined at the trial as to the
circumstances of memory, opportunity to observe, meaning, and
veracity. See Comment, Model Code of Evidence, supra, 399
U.S. 149 fn3/18|>n. 18. I think it fair to say that the fact
that the jury has no opportunity to reconstruct a witness' demeanor
at the time of his declaration, and the absence of oath, are minor
considerations.
The fact that the witness, though physically available, cannot
recall either the underlying events that are the subject of an
extrajudicial statement or previous testimony or recollect the
circumstances under which the statement was given does not have
Sixth Amendment consequence. The prosecution has no less fulfilled
its obligation simply because a witness has a lapse of memory. The
witness is, in my view, available. To the extent that the witness
is, in a practical sense, unavailable for cross-examination on the
relevant facts, for reasons Page 399 U. S. 189 stated in 399 U. S. I
think confrontation is nonetheless satisfied. [ Footnote 3/22 ] IV I turn finally to the question of whether this conviction stands
on such unreliable evidence that reversal is required. Cf.
Stovall v. Denno, 388 U. S. 293 (1967); Thompson v. City of Louisville, 362 U.
S. 199 (1960). I cannot conclude that the preliminary
hearing testimony was obtained under circumstances, as such, so
unreliable that its admission requires reversal as a matter of due
process, even though it was crucial to the central issue in the
case. Compare Stovall v. Denno, supra; Simmons v. United
States, 390 U. S. 377 (1968). The statement given to Officer Wade does, however, raise
such a possibility. I accordingly would remand the case to the
California Supreme Court for consideration of that question and,
whether or not it deems the second statement too unreliable to have
been admitted, to decide whether this conviction should be reversed
under California law for want of sufficient evidence to sustain a
conviction beyond a reasonable doubt. See In re Winship, 397 U. S. 358 (1970).
[ Footnote 3/1 ]
The Court declines to consider the admissibility of Porter's
out-of-court declaration to Officer Wade, and remands for a
determination as to whether it was properly admissible under
California law. I consider this in 399 U. S. infra. [ Footnote 3/2 ]
While this broad problem that lies beneath the surface of
today's case would, in my view, have been more appropriately
considered in a more conventional hearsay setting, where the maker
of extrajudicial statement is not present at trial, it has been
briefed and argued by both sides, and I reach it now
notwithstanding the pendency of No. 21, Dutton v. Evans, on our docket. Dutton was argued before us on Oct. 15,
1969, and, on Apr. 27, 1970, was set for reargument. 397 U.S. 1060.
The case will be heard at the next Term.
[ Footnote 3/3 ]
The easy assumption that confrontation is the right to exclude
hearsay also appears in cases involving state criminal prosecutions
where this Court, as a matter of due process, declined to hold
applicable to the States the Sixth Amendment's right to
confrontation. See, e.g., Stein v. New York, 346 U.
S. 156 (1953); but see West v. Louisiana, 194 U. S. 258 (1904).
[ Footnote 3/4 ]
This is not merely a case of prior decisions that may have been
incorrectly decided or rationalized. The unworkability of
constitutionalizing any aspect of the conventional hearsay rule
means what is at stake is the future of sound constitutional
development in this area. Cf. Swift & Co. v. Wickham, 382 U. S. 111 , 382 U. S. 116 (1965), where we noted the mischief of "perpetuation of an
unworkable rule." Moragne v. States Marine Lines, 398 U. S. 375 (1970); Boys Markets v. Retail Clerks, 398 U.
S. 235 (1970); my dissenting opinion in Baldwin v.
New York, ante, p. 399 U. S. 117 , and
my separate opinion in Welsh v. United States, 398 U. S. 333 , 398 U. S. 344 (1970), and my dissenting opinion in Desist v. United
States, 394 U. S. 244 , 394 U. S. 256 (1969).
[ Footnote 3/5 ]
The Georgia Constitution of 1877 lends some support for this
restricted reading of confrontation. See Art. I, § 1, � 5,
which provided that the accused "shall be confronted with the
witnesses testifying against him. . . ." (Emphasis added.)
The natural reading of the provision, phrased as it is, would be to
restrict the guarantee to individuals who are appearing in
court.
[ Footnote 3/6 ]
Massachusetts, New Hampshire, North Carolina, Maryland, and
Virginia all included in their early constitutions a confrontation
provision. See F. Heller, The Sixth Amendment 22-24
(1951). The documents are reprinted in F. Thorpe, The Federal and
State Constitutions, passim (1909). Wigmore has collected
the state provisions. 5 J. Wigmore, Evidence § 1397, at 127-130 (3d
ed.1940).
[ Footnote 3/7 ] See 1 J. Elliot's Debates 328, 334 (1876).
[ Footnote 3/8 ] See 1 Annals of Cong. (1789-1790). Thus, my own
research satisfies me that the prevailing view -- that the usual
primary sources and digests of the early debates contain no
informative material on the confrontation right -- is correct.
Note, Confrontation and the Hearsay Rule, 75 Yale L.J. 1434, 1436
n. 10 (1966); Note, Preserving the Right to Confrontation -- A New
Approach to Hearsay Evidence in Criminal Trials, 113 U.Pa.L.Rev.
741, 742 (1965); Note, Confrontation, Cross-Examination, And the
Right to Prepare a Defense, 56 Geo.L.J. 939, 953 (1968). For a
review of the history of confrontation at English common law, see Pollitt, The Right of Confrontation: Its History and
Modern Dress, 8 J.Pub.L. 381 (1959).
[ Footnote 3/9 ] See H. Stephen, "The Trial of Sir Walter Raleigh,"
Transactions of the Royal Historical Society 172, 184 (4th ser.
Vol. 2, 1919). In discussing Raleigh's trial, Stephen notes,
"The modern reader of Raleigh's trial is struck by the fact that
he had no assistance from counsel. He likewise would not have been
allowed to call witnesses had he wished to do so. . . . [The
accused was] defended by the argument that the case against [him]
had to be completely proved. If this was done, no witnesses or
counsel on the other side need be attended to; if it was not done,
none was needed." See also Heller, supra, 399
U.S. 149 fn3/6|>n. 6, at 106-107, and the remarks of Governor
Randolph at the Virginia ratification convention reported at 3 J.
Elliot's Debates 467 (1876).
[ Footnote 3/10 ]
Hadley, The Reform of Criminal Procedure, 10 Proceedings of the
Academy of Political Science 39, 400-401 (1923). Hadley's brief
remarks would seem to indicate that the abuse that provoked concern
was the use of affidavit and deposition testimony.
[ Footnote 3/11 ]
The only support offered for this reading is the assertion that
the Framers were concerned to prevent the abuses that occurred at
the infamous treason trial of Sir Walter Raleigh. The abuses there,
however, went far beyond a conviction based on hearsay. As one
commentator has noted, the reams of deposition testimony given by
Raleigh's alleged accomplice, who turned State's evidence,
contained only innuendo, and no credible assertion of substance
sufficient to support a verdict. See Stephen, "The Trial
of Sir Walter Raleigh," supra, 399
U.S. 149 fn3/9|>n. 9. In this light, the Sixth Amendment
guarantee might well be read as establishing a basic presumption of
producing witnesses without dignifying every hearsay ruling with
constitutional significance.
[ Footnote 3/12 ]
Heller, supra, 399
U.S. 149 fn3/6|>n. 6, at 105, citing H. Rottschaefer,
Handbook of American Constitutional Law 796 (1939). This view is
open to question. Wigmore, for one, takes the position that several
exceptions to the hearsay rule existed as of the time the Sixth
Amendment was adopted. 5 Wigmore, Evidence § 1397, at 130.
[ Footnote 3/13 ]
The basis of Wigmore's assertion is that the only right to
confrontation known at common law was that enshrined in the hearsay
rule. He concludes that, in view of the seemingly absolute
prohibition on the use of hearsay declarations, it is impossible to
apply literally to the Confrontation Clause, and that the Framers
intended confrontation to mean common law hearsay principles. See 5 Wigmore, Evidence § 1397, at 130-131.
[ Footnote 3/14 ]
The early decisions and recent cases are replete with dicta to
the effect that confrontation is equivalent to cross-examination.
Instead of treating cases like Brookhart v. Janis, supra;
Pointer v. Texas, supra; and Douglas v. Alabama,
supra, as denials of "due process," see infra, the
Court has employed sweeping language, and said, for example,
"a major reason underlying the constitutional confrontation rule
is to give a defendant charged with crime an opportunity to
cross-examine the witnesses against him." Pointer v. Texas, 380 U.S. at 380 U. S.
406 -407. This kind of broad language, tending to equate
confrontation and cross-examination, and the holding in Bruton, have conjured the spectre of the
constitutionalization of the hearsay rule that the dissent is
apparently willing to treat with.
It is not surprising that confrontation and hearsay have been
considered fungible. The labels were not until recently likely to
affect the result in a federal trial. See comment in the
Preliminary Draft of Proposed Rules of Evidence for the United
States District Courts and Magistrates 156 (1969). Cf. Alford
v. United States, 282 U. S. 687 (1931) (right to cross-examine not treated as a denial of
confrontation).
The portent of the label now emerges to the fore in federal
cases, however, against the backdrop of recent developments that
accord special treatment to constitutional errors, see
Harrington v. California, 395 U. S. 250 (1969) (harmless error); Chapman v. California, 386 U. S. 18 (1967); Kaufman v. United States, 394 U.
S. 217 , 394 U. S. 226 (1969) (collateral relief), and, for the States, in the context of
incorporation, which makes every hearsay ruling a potential 28
U.S.C. § 2254 issue. An additional consequence of
constitutionalizing the hearsay rules would be to put them beyond
the reach of Congress. But see Katzenbach v. Morgan, 384 U. S. 641 (1966).
[ Footnote 3/15 ]
Only Kirby did not, strictly speaking, involve the use
of deposition testimony. In Kirby's case, the Government sought to
introduce a judgment of conviction obtained against three
perpetrators of a theft in order to prove that property found in
Kirby's possession was, in fact, stolen. In Reynolds, the
Court held that an accused cannot complain about the introduction
of prior recorded testimony when the witness' absence is procured
by the defense. In Mattox, the Court, analogizing to the
exception to the hearsay rule for dying declarations, held
admissible prior recorded testimony taken under oath and subjected
to cross-examination where the witness had died since the first
trial. In Motes, the Court declined to countenance
testimony taken subject to cross-examination where it appeared the
Government might have produced the witness.
Most later cases have also involved written testimony. See,
e.g., Barber v. Page, supra; Pointer v. Texas, supra; Douglas v.
Alabama, supra, (confession); Stein v. New York, 346 U. S. 156 , 346 U. S. 194 (1953) (confession); West v. Louisiana, 194 U.
S. 258 (1904); cf. Greene v. McElroy, 360 U. S. 474 (1959). Other problems treated under the rubric of confrontation
have included, inter alia, the exclusion of the accused
from his trial, In re Oliver, 333 U.
S. 257 (1948); Brookhart v. Janis, supra; cf. Snyder
v. Massachusetts, 291 U. S. 97 (1934)
(a viewing); Parker v. Gladden, 385 U.
S. 363 (1966) (improper remarks by bailiff); Turner
v. Louisiana, 379 U. S. 466 (1965).
That, historically, the primary concern was the possibility of
trial by affidavit may be evidenced by several early state
constitutional provisions that specifically made exceptions to
confrontation by providing for use of depositions when the witness
is unavailable. See, e.g., California Const., 1879, Art.
I, § 13 ("The Legislature shall have power to provide for the
taking, in the presence of the party accused and his counsel, of
depositions of witnesses in criminal cases, other than cases of
homicide when there is reason to believe that the witness, from
inability or other cause, will not attend at the trial."); Colorado
Const., 1876, Art. II, § 16; Montana Cont., 1889, Art. III, §§ 16,
17; Ohio Const., 1851, Art. I, § 10; Texas Const., 1876, Art. I, §
10, as amended 1918.
[ Footnote 3/16 ]
Interestingly, in Hopt v. Utah, 110
U. S. 674 (1884) the Court, speaking through the same
Justice who wrote Kirby, in holding that it was error to
permit a surgeon to testify that he had examined the body of the
alleged victim of the charged homicide when the surgeon's knowledge
as to the identity of the deceased came from a third party, relied
only on hearsay principles, and made no allusion to the
Confrontation Clause.
[ Footnote 3/17 ]
That the critical element is availability cannot be doubted. The West opinion does not emphasize the opportunity to
cross-examine at the time of taking the depositions, and, as
already remarked, that would appear to be of secondary concern,
given the recognition in Mattox of the dying declaration
exception. West, moreover, perforce stands for the
proposition that confrontation is indifferent to any limitations on
the nature of cross-examination at a preliminary hearing that
underlie the dissent in this case.
In view of the extended discussion of federal precedents and the
express rejection of West's contentions thereunder, for present
purposes, it is of no consequence that the case involved a state
criminal prosecution and that the Court declined to hold the Sixth
Amendment applicable as such.
[ Footnote 3/18 ]
While the importance of the right to cross-examine is not to be
minimized, see 5 Wigmore, supra, § 1367, the
desirability of excluding otherwise relevant evidence simply
because it has not been tested by cross-examination has been
frequently questioned. See generally C. McCormick,
Evidence §§ 224, 302-305, at 459, 628-634 (1954); ALI Model Code of
Evidence Rules 502, 503, and Comment, at 231-232 (1942);
Preliminary Draft of Proposed Rules of Evidence for the United
States District Courts and Magistrates, Rule 8-03, at 173 (1969);
Uniform Rules of Evidence, Rule 63 (liberalized exceptions). See also James, The Role of Hearsay in a Rational Scheme
of Evidence, 34 Ill.L.Rev. 788 (1940); Chadbourn, Bentham and The
Hearsay Rule -- A Benthamic View of Rule 63(4)(c) of the Uniform
Rules of Evidence, 75 Harv.L.Rev. 932, 942-951 (1962) (Uniform
Rules too restricted); McCormick, Hearsay, 10 Rutgers L.Rev. 620,
630 (1956) (commenting on Uniform Rules); cf. Quick,
Evidence, 6 Wayne L.Rev. 163, 168 (1959) (apparently critical of
the trend toward admissibility). Judges, too, have disagreed on the
desirability of excluding hearsay, compare Chief Justice
Marshall's view set forth in Queen v.
Hepburn , 7 Cranch 290 (1813), and that of
Justice Story in Ellicott v.
Pearl , 10 Pet. 412, 35 U. S. 436 (1836), with that of Judge Learned Hand set forth in his
lecture to the Association of the Bar of the City of New York, The
Deficiencies of Trials to Reach the Heart of the Matter, 3 Lectures
on Legal Topics, 1921-1922 P. 89 (1926).
[ Footnote 3/19 ] See Report of the New Jersey Supreme Court Committee on
Evidence (1963). The potential for suffocating creative thinking is
suggested by the commentary on the Uniform Rules of Evidence by the
California Law Revision Commission. Prior to Pointer in
1962, the commission noted that, despite the federal rule, it was
free, consistent with due process, to consider and adopt Uniform
Rule 63(3)(b)(ii), providing for use of testimony from a former
trial when there was an identity of issues and reason to believe
there would have been adequate cross-examination and the declarant
is unavailable. The commission recommended adoption of Rule
63(3)(b)(ii). See Tentative Recommendation and a Study
Relating to the Uniform Rules of Evidence (1962), in 4 California
Law Revision Commission: Reports, Recommendations and Studies
454-457 (1963). The provision was omitted from the new evidence
code with a comment that a defendant in a criminal prosecution
should not be made to rely on another individual's
cross-examination. Evidence Code with Official Comments 1250
(California Law Revision Commission 1965). While this Court's
decision in Pointer was apparently not responsible for the
decision to omit this provision, since the final commission report
was submitted in January, 1965, prior to Pointer, it is
clear that, were hearsay constitutionalized, California could not
even have considered this innovation.
[ Footnote 3/20 ]
This is not to say that the right to cross-examination is not an
element of due process. Alford v. United States, 282 U. S. 687 (1931); In re Oliver, 333 U. S. 257 (1948); Snyder v. Massachusetts, 291 U. S.
97 (1934); Smith v. Illinois, 390 U.
S. 129 (1968). Due process does not permit a conviction
based on no evidence, Thompson v. City of Louisville, 362 U. S. 199 (1960); Nixon v. Herndon, 273 U.
S. 536 (1927), or on evidence so unreliable and
untrustworthy that it may be said that the accused had been tried
by a kangaroo court. Cf. In re Oliver, supra; Turner v.
Louisiana, 379 U. S. 466 (1965).
In Stovall v. Denno, 388 U. S. 293 (1967), and Simmons v. United States, 390 U.
S. 377 (1968), the underlying principle was refined. The
Court there recognized that evidence of identification -- always a
critical issue in a criminal trial -- should not be received if the
circumstances of a pretrial confrontation were so infected by
suggestiveness as to give rise to an irreparable likelihood of
misidentification. By the same token, I would not permit a
conviction to stand where the critical issues at trial were
supported only by ex parte testimony not subjected to
cross-examination, and not found to be reliable by the trial judge. Cf. United States v. Kearney, 136 U.S.App.D.C. 328, 420
F.2d 170 (1969). It will, of course, be the unusual situation where
the prosecution's entire case is built upon hearsay testimony of an
unavailable witness. In such circumstance, the defendant would be
entitled to a hearing on the reliability of the testimony. Cf. ALI, Model Code of Evidence; United States v.
Kearney, supra. Due process also requires that the defense be
given ample opportunity to alert the jury to the pitfalls of
accepting hearsay at face value, and the defendant would, of
course, upon request be entitled to cautionary instructions. Cf. § 6.17, Manual on Jury Instructions, 33 F.R.D. 601
(missing witnesses). On the basis of this approach, I would stand
by my concurrence in the result in Pointer v. Texas,
supra, both because the out-of-court statement formed the bulk
of the prosecutor's case and also because there was no showing that
the witness could not have been made available for
cross-examination. See also Brookhart v. Janis, 384 U. S. 1 (1966); Barber v. Page, 390 U. S. 719 (1968). The result in Douglas v. Alabama, to which I also
still adhere, can be rationalized under this test, since there, the
inadmissible confession "constituted the only direct evidence" that
petitioner had committed the murder. 380 U.S. at 380 U. S. 419 .
An additional factor would move me to stand by Douglas. It
was a case of prosecutorial misconduct. By placing the witness on
the stand and reading in the confession, the prosecutor, in effect,
increased the reliability of the confession in the jury's eyes in
view of the witness' apparent acquiescence as opposed to
repudiation.
[ Footnote 3/21 ] Cf. Napue v. Illinois, 360 U.
S. 264 (1959); Mooney v. Holohan, 294 U.
S. 103 (1935).
[ Footnote 3/22 ]
The lengths to which the prosecution must go to produce a
witness before it may offer evidence of an extrajudicial
declaration is a question of reasonableness. Barber v. Page,
supra; cf. Mullane v. Central Hanover Trust Co., 339 U.
S. 306 (1950). A good faith effort is, of course,
necessary, and added expense or inconvenience is no excuse. It
should also be open to the accused to request a continuance if the
unavailability is only temporary. Cf. Peterson v. United
States, 344 F.2d 419, 425 (C.A. 5th Cir.1965).
MR. JUSTICE BRENNAN, dissenting.
Respondent was convicted of violating California Health and
Safety Code § 11532, which prohibits furnishing narcotics to a
minor. The only issue at his trial was Page 399 U. S. 190 whether he had in fact, furnished Porter, a minor, with
marihuana. On the direct testimony, it does not appear that he
could have been constitutionally convicted, for it seems that there
would have been insufficient evidence to sustain a finding of
guilt. The State presented three witnesses to prove respondent's
guilt: Porter and Officers Wade and Dominguez. As the Court states,
Porter testified at trial that
"he was uncertain how he obtained the marihuana, primarily
because he was at the time on 'acid' (LSD), which he had taken 20
minutes before respondent phoned. Porter claimed that he was unable
to remember the events that followed the phone call, and that the
drugs he had taken prevented his distinguishing fact from
fantasy." Ante at 399 U. S. 152 .
Officer Wade had no personal knowledge of the facts of the alleged
offense; he was able only to report the content of an extrajudicial
statement that Porter had made to him. Officer Dominguez testified
about an incident wholly separate from the alleged offense; his
testimony was consistent with the defense account of the facts.
[ Footnote 4/1 ]
Thus, the evidence on which respondent was found guilty
consisted of two pretrial statements by Porter. The first was the
account given Officer Wade. It was unsworn, and not subject to
defense cross-examination. Porter's demeanor while making the
statement was not observed by the trial factfinder. The statement
was made under unreliable circumstances -- it was taken four days
after Porter's arrest for selling marihuana to an undercover agent,
and while he was still in custody. [ Footnote 4/2 ] No Page 399 U. S. 191 written transcript of the statement was introduced at trial.
Officer Wade recounted it simply as he remembered Porter's words.
[ Footnote 4/3 ] The second statement
was given by Porter during respondent's preliminary hearing. It was
sworn and subject to cross-examination. Defense counsel, however,
did not engage in a searching examination. [ Footnote 4/4 ] Again, Porter's demeanor while he made
this statement was unobserved by the trial factfinder. The
statement was put before this factfinder, of course, when, at
various points during Porter's direct examination at trial, the
prosecutor read excerpts from his preliminary hearing
testimony.
Accordingly, the facts of this case present two questions
regarding the application of California Evidence Code § 1235:
first, whether the Confrontation Clause permits a witness'
extrajudicial statement to be admitted at trial as substantive
evidence when the witness claims to be unable to remember the
events with which his prior statement dealt, and, second, whether
the clause permits a witness' preliminary hearing statement, made
under oath and subject to cross-examination, to be introduced at
trial as substantive evidence when the witness claims to be unable
to remember the events with which the statement dealt. In my view,
neither statement can be introduced without unconstitutionally
restricting the right of the accused to challenge incriminating
evidence in the presence of the factfinder who will determine his
guilt or innocence. Page 399 U. S. 192 I The Court points out that
"the particular vice that gave impetus to the confrontation
claim was the practice of trying defendants on 'evidence,' which
consisted solely of ex parte affidavits or depositions
secured by the examining magistrates, thus denying the defendant
the opportunity to challenge his accuser in a face-to-face
encounter in front of the trier of fact." Ante at 399 U. S. 156 .
A face-to-face encounter, of course, is important not so that the
accused can view at trial his accuser's visage, but so that he can
directly challenge the accuser's testimony before the factfinder. See 5 J. Wigmore, Evidence §§ 1364, 1365 (3d ed.1940). We
made this clear in Mattox v. United States, 156 U.
S. 237 , 156 U. S.
242 -243 (1895), where we stressed the necessity of
"a personal examination and cross-examination of the witness in
which the accused has an opportunity not only of testing the
recollection and sifting the conscience of the witness, but of
compelling him to stand face to face with the jury in order that
they may look at him, and judge by his demeanor upon the stand and
the manner in which he gives his testimony whether he is worthy of
belief."
There is no way to test the recollection and sift the conscience
of a witness regarding the facts of an alleged offense if he is
unwilling or unable to be questioned about them; [ Footnote 4/5 ] defense counsel cannot probe the
story of a silent witness and attempt to expose facts that qualify
or discredit it. The impetus to truth inherent in the oath sworn by
the witness, in the penalty for perjury, and, in Page 399 U. S. 193 the serious purpose of the courtroom have no effect on him so
far as the facts of the alleged offense are concerned. Nor,
obviously, can the factfinder view his demeanor while he recounts
the facts. If the witness claims that he is unable to remember the
pertinent events, it is true that this assertion can be challenged,
and that, in making and defending it, the witness will be affected
by his oath, the penalty for perjury, and the courtroom atmosphere.
It is equally true that the trial factfinder can observe and weigh
the witness' demeanor as he makes and defends such a claim. But a
decision by the factfinder that the witness is lying sheds no
direct light on the accuracy of any pretrial statement made by him;
that statement remains without the support or discredit that can
come only from the probing of its factual basis while the witness
stands face to face with the accused and the factfinder. If the
factfinder decides that the witness is honestly unable to remember
the events in question, that conclusion may or may not directly
guide the factfinder in assessing the reliability of the pretrial
statement. If, for example, the witness were unable to remember the
pertinent facts because he was under the influence of drugs at the
time they occurred, the factfinder might reasonably disregard any
pretrial account of these events given by the witness.
This Court has already explicitly held in Douglas v.
Alabama, 380 U. S. 415 , 380 U. S.
419 -420 (1965), that the Confrontation Clause forbids
the substantive use at trial of a prior extrajudicial statement
when the declarant is present at trial but unwilling to testify
about the events with which his prior statement dealt. In Douglas, the prosecution introduced the alleged confession
of the accused's supposed accomplice, one Loyd, who was unwilling
to testify about the pertinent events for fear of
self-incrimination. We held that
"petitioner's inability to cross-examine Loyd as to the alleged
confession plainly denied Page 399 U. S. 194 him the right of cross-examination secured by the Confrontation
Clause. Loyd's alleged statement that the petitioner fired the
shotgun constituted the only direct evidence that he had done so. .
. . [E]ffective confrontation of Loyd was possible only if Loyd
affirmed the statement as his. However, Loyd did not do so, but
relied on his privilege to refuse to answer."
For purposes of the Confrontation Clause, there is no
significant difference between a witness who fails to testify about
an alleged offense because he is unwilling to do so and a witness
whose silence is compelled by an inability to remember. Both are
called to the stand to testify. The jury may view the demeanor of
each as he indicates why he will not discuss the crucial events.
But in neither instance are the purposes of the Confrontation
Clause satisfied, because the witness cannot be questioned at trial
concerning the pertinent facts. In both cases, if a pretrial
statement is introduced for the truth of the facts asserted, the
witness becomes simply a conduit for the admission of stale
evidence, whose reliability can never be tested before the trial
factfinder by cross-examination of the declarant about the
operative events, and by observation of his demeanor as he
testifies about them.
Unlike the Court, I see no reason to leave undecided the
inadmissibility of Porter's statements to Officer Wade. We have
before us the transcript of Porter's trial testimony. He could not
remember the operative events. Whether he feigned loss of memory is
irrelevant to respondent's confrontation claim. Under Douglas, his statement to Officer Wade must be excluded as
substantive evidence. [ Footnote
4/6 ] Page 399 U. S. 195 II The question remains whether the fact that a pretrial statement
was obtained at a preliminary hearing, under oath and subject to
cross-examination, distinguishes that statement for confrontation
purposes from an extrajudicial statement. I thought that our
decision in Barber v. Page, 390 U.
S. 719 (1968), resolved this issue. In Barber we stated that confrontation at a preliminary hearing cannot
compensate for the absence of confrontation at trial, because the
nature and objectives of the two proceedings differ significantly.
In that case, the prosecution argued that the accused had waived
his right to cross-examination at the preliminary hearing. Though
we rejected that argument, to put beyond doubt the necessity for
confrontation at trial, we stated:
"Moreover, we would reach the same result on the facts of this
case had petitioner's counsel actually cross-examined [the witness]
at the preliminary hearing. . . . The right to confrontation is
basically a trial right. It includes both the opportunity to
cross-examine and the occasion for the jury to weigh the demeanor
of the witness. A preliminary hearing is ordinarily a much less
searching exploration into the merits of a case than a trial,
simply because its function is the more limited one of determining
whether probable cause exists to hold the accused for trial." Id. at 390 U. S. 725 .
[ Footnote 4/7 ] Page 399 U. S. 196 We applied Barber retroactively in Berger v.
California, 393 U. S. 314 (1969), a case in which defense counsel did have an opportunity to
cross-examine the witness at the preliminary hearing. We held,
nonetheless, that "[c]learly, petitioner's inability to
cross-examine . . . at trial may have had a significant effect on
the integrity of the factfinding process.'" Id. at 393 U. S.
315 . Preliminary hearings in California are not atypical in their
nature and objectives:
"In most California criminal prosecutions, the preliminary
examination is conducted as a rather perfunctory uncontested
proceeding with only one likely denouement -- an order holding the
defendant for trial. Only television lawyers customarily demolish
the prosecution in the magistrate's court. The prosecution need
show only 'probable cause,' a burden vastly lighter than proof
beyond a reasonable doubt." People v. Gibbs, 255 Cal. App.
2d 739 , 743-744, 63 Cal. Rptr. 471, 475 (1967).
It follows that the purposes of the Confrontation Clause cannot
be satisfied by a face-to-face encounter at Page 399 U. S. 197 the preliminary hearing. Cross-examination at the hearing pales
beside that which takes place at trial. This is so for a number of
reasons. First, as noted, the objective of the hearing is to
establish the presence or absence of probable cause, not guilt or
innocence proved beyond a reasonable doubt; thus, if evidence
suffices to establish probable cause, defense counsel has little
reason at the preliminary hearing to show that it does not
conclusively establish guilt -- or, at least, he had little reason
before today's decision. Second, neither defense nor prosecution is
eager before trial to disclose its case by extensive examination at
the preliminary hearing; thorough questioning of a prosecution
witness by defense counsel may easily amount to a grant of gratis discovery to the State. Third, the schedules of
neither court nor counsel can easily accommodate lengthy
preliminary hearings. Fourth, even were the judge and lawyers not
concerned that the proceedings be brief, the defense and
prosecution have generally had inadequate time before the hearing
to prepare for extensive examination. Finally, though counsel were
to engage in extensive questioning, a part of its force would never
reach the trial factfinder, who would know the examination only
second hand. As the California Supreme Court stated:
"[L]ost in a cold reading of the preliminary transcript is the
more subtle, yet undeniable, effect of counsel's rhetorical style,
his pauses for emphasis and his variations in tone, as well as his
personal rapport with the jurors, as he pursues his
cross-examination. For example, . . . while the lawyer"
"must keep control of himself . . . , [t]his does not mean that
the cross-examiner never should fight with a witness, raise his
voice, or become angry. Forensic indignation, whether expressed
physically or verbally, may produce good results in special
circumstances."
"In addition, counsel may well conduct Page 399 U. S. 198 his cross-examination in a different manner before a committing
magistrate than before a trial court or jury. Thus, . . . counsel
must always temper his cross-examination to the individual jurors,
using their reactions as a guide to the most effective line of
questioning."
"The cross-examiner must remember that he is a performer, and
the jurors are his audience. No good performer ignores his
audience, and all performances are conducted for the purpose of
favorably impressing the audience. . . ."
"We conclude that experience demonstrates the essentiality of
truly contemporaneous cross-examination."
70 Cal. 2d at 662-663, 451 P.2d at 427.
If cross-examination at the preliminary hearing rarely
approximates that at trial, observation by the trial factfinder of
the witness' demeanor as he gives his prior testimony is virtually
nonexistent. Unless the committing magistrate is also the trial
factfinder, the demeanor purpose of the Confrontation Clause is
wholly negated by substituting confrontation at the preliminary
hearing for confrontation at trial. And yet, in the words of the
California court,
"[i]t is because demeanor -- attitude and manner -- is a
significant factor in weighing testimonial evidence that it is
axiomatic the trier of fact, before whom the witness testified and
was cross-examined . . . , is the sole judge of the credibility of
a witness and of the weight to be given his testimony." Id. at 662, 451 P.2d at 427. No such determination of
credibility is possible when the witness comes before the trial
factfinder by the reading of a cold transcript.
It appears, then, that, in terms of the purposes of the
Confrontation Clause, an equation of face-to-face encounter at the
preliminary hearing with confrontation at trial must rest largely
on the fact that the witness testified Page 399 U. S. 199 at the hearing under oath, subject to the penalty for perjury,
and in a courtroom atmosphere. These factors are not insignificant,
but, by themselves, they fall far short of satisfying the demands
of constitutional confrontation. Moreover, the atmosphere and
stakes are different in the two proceedings. In the hurried,
somewhat pro forma context of the average preliminary
hearing, a witness may be more careless in his testimony than in
the more measured and searching atmosphere of a trial. Similarly, a
man willing to perjure himself when the consequences are simply
that the accused will stand trial may be less willing to do so when
his lies may condemn the defendant to loss of liberty. In short, it
ignores reality to assume that the purposes of the Confrontation
Clause are met during a preliminary hearing. Accordingly, to
introduce preliminary hearing testimony for the truth of the facts
asserted, when the witness is in court and either unwilling or
unable to testify regarding the pertinent events, denies the
accused his Sixth Amendment right to grapple effectively with
incriminating evidence.
The Court's ruling, moreover, may have unsettling effects on the
nature and objectives of future preliminary hearings. The
California Court defined the problem:
"Were we to equate preliminary and trial testimony, one
practical result might be that the preliminary hearing, designed to
afford an efficient and speedy means of determining the narrow
question of probable cause, would tend to develop into a full-scale
trial. This would invite thorough and lengthy cross-examination,
with the consequent necessity of delays and continuances to bring
in rebuttal and impeachment witnesses, to gather all available
evidence, and to assure generally that nothing remained for later
challenge. In time, this result would prostitute the accepted
purpose of preliminary Page 399 U. S. 200 hearings, and might place an intolerable burden on the time and
resources of the courts of first instance."
70 Cal. 2d at 664, 451 P.2d at 428.
Conscientious defense counsel, aware that today's decision has
increased the likelihood of the use of preliminary hearing
testimony at trial, may well wish to conduct a full-scale,
unlimited cross-examination of prosecution witnesses at the
hearing. We held in Coleman v. Alabama, ante, p. 399 U. S. 1 , that an
accused has a right to assistance of counsel during a preliminary
hearing. And we have made clear that
"it is a denial of the accused's constitutional right to a fair
trial to force him to trial with such expedition as to deprive him
of the effective aid and assistance of counsel." White v. Ragen, 324 U. S. 760 , 324 U. S. 764 (194). In light of today's decision, may defense counsel be denied
requests for delay that are reasonably necessary to enable him to
conduct a thorough examination at the preliminary hearing? What
limits, if any, may still be placed on the defense's use of the
preliminary hearing as a discovery device to extract information
from the prosecution that is reasonably necessary not to a
determination of probable cause, but to a rigorous examination of
government witnesses? Do the requisites of "effective assistance of
counsel" require defense counsel to conduct such an examination?
[ Footnote 4/8 ] Page 399 U. S. 201 The Court relies heavily on the traditional practice of
admitting the prior testimony of a witness who is physically
unavailable at trial. It finds no ground for distinguishing between
the pretrial declarant who fails to testify at trial because he is
not physically present and the pretrial declarant who, though
present at trial, fails to testify because he is unwilling or
unable to do so. The Court reasons that the "necessity" for the
introduction of either declarant's prior statement is "the State's need' to introduce relevant evidence," and that the testimony's
"reliability" rests "on the circumstances under which it was given -- circumstances
that remain unaffected regardless of whether the witness is present
or absent at the later trial." Ante at 399 U. S. 167 n. 16. I disagree.
The State, obviously, does need to introduce relevant evidence.
But the "necessity" that justifies the admission of pretrial
statements is not the prosecution's need to convict, but the
factfinder's need to be presented with reliable evidence to aid its
determination of guilt or innocence. Whether a witness' assertions
are reliable ordinarily has little or no bearing on their
admissibility, for they are subject to the corrective influences of
his demeanor and cross-examination. If, however, there is no
possibility that his assertions can be so tested at trial, then
their reliability becomes an important factor in deciding whether
to permit their presentation to the factfinder. When a probability
exists that incriminating pretrial testimony is unreliable, its
admission, absent confrontation, will prejudicially distort the
factfinding process.
The reliability of pretrial testimony, in turn, is not
determined simply by the circumstances under which it Page 399 U. S. 202 was given. It is also influenced by subsequent developments. If,
for example, prior testimony is later disavowed by the declarant in
an extrajudicial but convincing statement, it would be unrealistic
to argue at a later trial, from which the declarant was physically
absent, that the reliability of his prior testimony was unaffected
by the intervening event.
The subsequent developments under consideration here are (1)
failure to testify at trial because of physical unavailability and
(2) failure to testify because of unwillingness to do so or
inability to remember. In my view, these developments have very
different implications for the reliability of prior testimony.
Physical unavailability is generally a neutral factor; in most
instances, it does not cast doubt on the witness' earlier
assertions. Inability to remember the pertinent events, on the
other hand, or unwillingness to testify about them, whether because
of feigned loss of memory or fear of self-incrimination, does cast
such doubt. Honest inability to remember at trial raises serious
question about clarity of memory at the time of the pretrial
statement. The deceit inherent in feigned loss of memory lessens
confidence in the probity of prior assertions. And fear of
self-incrimination at trial suggests that the witness may have
shaped prior testimony so as to avoid dangerous consequences for
himself. Reliability cannot be assumed simply because a prior
statement was made at a preliminary hearing.
In sum, I find that Porter's real or pretended lapse of memory
about the pertinent events casts serious doubt upon the reliability
of his preliminary hearing testimony. It is clear that, so long as
a witness, such as Porter, cannot or will not testify about these
events at trial, the accused remains unable to challenge
effectively that witness' prior assertions about them. The probable
unreliability of the prior testimony, coupled with the
impossibility Page 399 U. S. 203 of its examination during trial, denies the accused his right to
probe and attempt to discredit incriminating evidence. Accordingly,
I would hold California Evidence Code § 1235 in violation of the
Confrontation Clause to the extent that it permits the substantive
use at trial of prior statements, whether extrajudicial or
testimonial, when the declarant is present at trial but unable or
unwilling to be questioned about the events with which the prior
statements dealt. I would therefore affirm the reversal of
respondent's conviction.
[ Footnote 4/1 ] See People v. Green, 70 Cal. 2d
654 , 657-658, 451 P.2d 422, 424 (1969).
[ Footnote 4/2 ]
Porter declared under oath on May. 12, 1967, that,
"when I was arrested and was in custody, the police kept telling
me that they knew it was JOHN GREEN I was involved with, and that,
unless I implicated him, that they would see that I was out of
circulation for a long time. . . ."
[ Footnote 4/3 ] Cf. Goldberg v. Kelly, 397 U.
S. 254 , 397 U. S. 269 (1970), where the Court stated that
"[t]he second-hand presentation to the decisionmaker by the
caseworker has its own deficiencies; since the caseworker usually
gathers the facts upon which the charge of ineligibility rests, the
presentation of the recipients side of the controversy cannot
safely be left to him."
[ Footnote 4/4 ]
No question, for example, was asked Porter by either the defense
or prosecution as to whether he was under the influence of drugs at
the time of the alleged offense.
[ Footnote 4/5 ]
If, on the other hand, the witness is willing and able to
testify at trial about the operative events, the demands of the
Confrontation Clause may be met, even though the witness
contradicts his pretrial assertions. I see no need on the facts
presented here, however, to resolve this issue.
[ Footnote 4/6 ]
The fact that, in appropriate circumstances, such a statement
may be admitted to impeach a witness is not as anomalous as the
Court suggests, ante at 399 U. S. 164 .
If, for example, Porter's pretrial statements had been admitted at
respondent's trial solely for impeachment purposes, they would not
have provided substantive proof of his guilt, and, as noted, there
would then very likely have been insufficient evidence to sustain
his conviction.
[ Footnote 4/7 ]
The California Supreme Court in the present case discussed in
more detail the distinctions between a preliminary hearing and
trial, stating that
"the purpose of a preliminary hearing is not a full exploration
of the merits of a cause or of the testimony of the witnesses. It
is designed and adapted solely to answer the far narrower
preliminary question of whether probable cause exists for a
subsequent trial. The judge in preliminary proceedings is not
required to be convinced of the defendant's guilt 'beyond a
reasonable doubt,' but need only look for reasonable credibility in
the charge against him. A fortiori, a witness' testimony,
though the only evidence adduced, need not be convincing or
credible beyond a reasonable doubt, and cross-examination which
would surely impeach a witness at trial would not preclude a
finding of probable cause at the preliminary stage. Even given the
opportunity . . . , neither prosecution nor defense is generally
willing or able to fire all its guns at this early stage of the
proceedings, for considerations both of time and efficacy. . . .
Indeed, it is seldom that either party has had time for
investigation to obtain possession of adequate information to
pursue in depth direct or cross-examination."
70 Cal. 2d at 663, 451 P.2d at 428. See also Virgin Islands
v. Aquino, 378 F.2d 540, 549 (C.A.3d Cir.1967).
[ Footnote 4/8 ]
Beyond these problems, today's holding raises another practical
difficulty: how extensive must cross-examination at the preliminary
hearing be before constitutional confrontation is deemed to have
occurred? Is the mere opportunity for face-to-face encounter
sufficient? Perhaps so. The Court states that "respondent had every
opportunity to cross-examine Porter as to his statement" at the
hearing. Ante at 399 U. S. 165 .
Does that mean that, if defense counsel fails to take advantage of
the opportunity, that the accused can subsequently be convicted at
trial on the basis of wholly untested evidence? If more than an
unexercised chance to cross-examine is required, how thorough and
effective must the questioning be before it satisfies the
Confrontation Clause? Is it significant, for example, that, in the
present case, neither the defense nor prosecution explored the most
elemental fact about Porter's testimony -- the possibility that he
was under the influence of drugs at the time of the alleged
offense? | The Supreme Court held that admitting a witness' prior inconsistent statements into evidence does not violate the Confrontation Clause of the Sixth Amendment, as long as the witness is testifying at trial and is subject to cross-examination. The Court also found that even without the opportunity for full cross-examination at trial, using preliminary hearing testimony would not violate the Constitution. The case was remanded to the state court to determine whether the witness' lapse of memory affected the defendant's right to cross-examine. |
Criminal Trials & Prosecutions | Duncan v. Louisiana | https://supreme.justia.com/cases/federal/us/391/145/ | U.S. Supreme Court Duncan v. Louisiana, 391
U.S. 145 (1968) Duncan v. Louisiana No. 410 Argued January 17,
1968 Decided May 20, 1968 391
U.S. 145 APPEAL FROM THE SUPREME COURT OF
LOUISIANA. Syllabus Under Louisiana law, simple battery is a misdemeanor punishable
by a maximum of two years' imprisonment and a $300 fine. Appellant
was convicted of simple battery and sentenced to 60 days in prison
and a fine of $150. He had requested a jury trial, which was denied
because the Louisiana Constitution grants jury trials only in cases
where capital punishment or imprisonment at hard labor may be
imposed. The Louisiana Supreme Court denied certiorari. Held: 1. Since trial by jury in criminal cases is fundamental to the
American scheme of justice, the Fourteenth Amendment guarantees a
right of jury trial in all criminal cases which, were they tried in
a federal court, would come within the Sixth Amendment's guarantee
of trial by jury. Pp. 391 U. S.
147 -158.
2. The penalty authorized for a particular crime is of major
relevance in determining whether it is a serious one subject to the
mandates of the Sixth Amendment, and it is sufficient here, without
defining the boundary between petty offenses and serious crimes, to
hold that a crime punishable by two years in prison is a serious
crime, and that appellant was entitled to a jury trial. Pp. 391 U. S.
159 -162.
250 La. 253, 195 So. 2d 142, reversed and remanded. Page 391 U. S. 146 MR. JUSTICE WHITE delivered the opinion of the Court.
Appellant, Gary Duncan, was convicted of simple battery in the
Twenty-fifth Judicial District Court of Louisiana. Under Louisiana
law, simple battery is a misdemeanor, punishable by a maximum of
two years' imprisonment and a $300 fine. Appellant sought trial by
jury, but, because the Louisiana Constitution grants jury trials
only in cases in which capital punishment or imprisonment at hard
labor may be imposed, [ Footnote
1 ] the trial judge denied the request. Appellant was convicted
and sentenced to serve 60 days in the parish prison and pay a fine
of $10. Appellant sought review in the Supreme Court of Louisiana,
asserting that the denial of jury trial violated rights guaranteed
to him by the United States Constitution. The Supreme Court,
finding "[n]o error of law in the ruling complained of," denied
appellant a writ of certiorari. [ Footnote 2 ] Pursuant to 28 U.S.C. Page 391 U. S. 147 § 1257(2) appellant sought review in this Court, alleging that
the Sixth and Fourteenth Amendments to the United States
Constitution secure the right to jury trial in state criminal
prosecutions where a sentence as long as two years may be imposed.
We noted probable jurisdiction, [ Footnote 3 ] and set the case for oral argument with No.
52, Bloom v. Illinois, post, p. 391 U. S. 194 .
Appellant was 19 years of age when tried. While driving on
Highway 23 in Plaquemines Parish on October 18, 1966, he saw two
younger cousins engaged in a conversation by the side of the road
with four white boys. Knowing his cousins, Negroes who had recently
transferred to a formerly all-white high school, had reported the
occurrence of racial incidents at the school, Duncan stopped the
car, got out, and approached the six boys. At trial, the white boys
and a white onlooker testified, as did appellant and his cousins.
The testimony was in dispute on many points, but the witnesses
agreed that appellant and the white boys spoke to each other, that
appellant encouraged his cousins to break off the encounter and
enter his car, and that appellant was about to enter the car
himself for the purpose of driving away with his cousins. The
whites testified that, just before getting in the car, appellant
slapped Herman Landry, one of the white boys, on the elbow. The
Negroes testified that appellant had not slapped Landry, but had
merely touched him. The trial judge concluded that the State had
proved beyond a reasonable doubt that Duncan had committed simple
battery, and found him guilty. I The Fourteenth Amendment denies the States the power to "deprive
any person of life, liberty, or property, without due process of
law." In resolving conflicting Page 391 U. S. 148 claims concerning the meaning of this spacious language, the
Court has looked increasingly to the Bill of Rights for guidance;
many of the rights guaranteed by the first eight Amendments to the
Constitution have been held to be protected against state action by
the Due Process Clause of the Fourteenth Amendment. That clause now
protects the right to compensation for property taken by the State;
[ Footnote 4 ] the rights of
speech, press, and religion covered by the First Amendment;
[ Footnote 5 ] the Fourth
Amendment rights to be free from unreasonable searches and seizures
and to have excluded from criminal trials any evidence illegally
seized; [ Footnote 6 ] the right
guaranteed by the Fifth Amendment to be free of compelled
self-incrimination; [ Footnote
7 ] and the Sixth Amendment rights to counsel, [ Footnote 8 ] to a speedy [ Footnote 9 ] and public [ Footnote 10 ] trial, to confrontation of opposing
witnesses, [ Footnote 11 ] and
to compulsory process for obtaining witnesses. [ Footnote 12 ]
The test for determining whether a right extended by the Fifth
and Sixth Amendments with respect to federal criminal proceedings
is also protected against state action by the Fourteenth Amendment
has been phrased in a variety of ways in the opinions of this
Court. The question has been asked whether a right is among those
" fundamental principles of liberty and justice which lie at the
base of all our civil and political institutions,'" Powell v.
Alabama, 287 U. S. 45 , 287 U. S. 67 (1932); [ Footnote 13 ]
whether Page 391 U. S. 149 it is "basic in our system of jurisprudence," In re
Oliver, 333 U. S. 257 , 333 U. S. 273 (1948), and whether it is "a fundamental right, essential to a fair
trial," Gideon v. Wainwright, 372 U.
S. 335 , 372 U. S.
343 -344 (1963); Malloy v. Hogan, 378 U. S.
1 , 378 U. S. 6 (1964); Pointer v. Texas, 380 U.
S. 400 , 380 U. S. 403 (1965). The claim before us is that the right to trial by jury
guaranteed by the Sixth Amendment meets these tests. The position
of Louisiana, on the other hand, is that the Constitution imposes
upon the States no duty to give a jury trial in any criminal case,
regardless of the seriousness of the crime or the size of the
punishment which may be imposed. Because we believe that trial by
jury in criminal cases is fundamental to the American scheme of
justice, we hold that the Fourteenth Amendment guarantees a right
of jury trial in all criminal cases which -- were they to be tried
in a federal court -- would come within the Sixth Amendment's
guarantee. [ Footnote 14 ]
Since we consider the appeal before Page 391 U. S. 150 us to be such a case, we hold that the Constitution was violated
when appellant's demand for jury trial was refused. Page 391 U. S. 151 The history of trial by jury in criminal cases has been
frequently told. [ Footnote
15 ] It is sufficient for present purposes to say that, by the
time our Constitution was written, jury trial in criminal cases had
been in existence in England for several centuries and carried
impressive credentials traced by many to Magna Carta. [ Footnote 16 ] Its preservation and
proper operation as a protection against arbitrary rule were among
the major objectives of the revolutionary settlement which was
expressed in the Declaration and Bill of Rights of 1689. In the
18th century, Blackstone could write:
"Our law has therefore wisely placed this strong and two-fold
barrier, of a presentment and a trial by jury, between the
liberties of the people and the prerogative of the crown. It was
necessary, for preserving the admirable balance of our
constitution, to vest the executive power of the laws in the
prince; and yet this power might be dangerous and destructive to
that very constitution, if exerted without check or control, by
justices of oyer and terminer occasionally named by the crown, who
might then, as in France or Turkey, imprison, dispatch, or exile
any man that was obnoxious to the government, by an instant
declaration that such is their will and pleasure. But the founders
of the English law have, with excellent forecast, contrived that .
. . the truth of every accusation, whether preferred in the shape
of indictment, information, or appeal, should afterwards be
confirmed by the unanimous Page 391 U. S. 152 suffrage of twelve of his equals and neighbours, indifferently
chosen and superior to all suspicion. [ Footnote 17 ]"
Jury trial came to America with English' colonists, and received
strong support from them. Royal interference with the jury trial
was deeply resented. Among the resolutions adopted by the First
Congress of the American Colonies (the Stamp Act Congress) on
October 19, 1765 -- resolutions deemed by their authors to state
"the most essential rights and liberties of the colonists"
[ Footnote 18 ] -- was the
declaration:
"That trial by jury is the inherent and invaluable right of
every British subject in these colonies."
The First Continental Congress, in the resolve of October 14,
1774, objected to trials before judges dependent upon the Crown
alone for their salaries and to trials in England for alleged
crimes committed in the colonies; the Congress therefore
declared:
"That the respective colonies are entitled to the common law of
England, and more especially to the great and inestimable privilege
of being tried by their peers of the vicinage, according to the
course of that law. [ Footnote
19 ]"
The Declaration of Independence stated solemn objections to the
King's making "Judges dependent on his Will alone, for the tenure
of their offices, and the amount and payment of their salaries," to
his "depriving us in many cases, of the benefits of Trial by Jury,"
and to his "transporting us beyond Seas to be tried for pretended
offenses." The Constitution itself, in Art. III, § 2,
commanded:
"The Trial of all Crimes. except in Cases of Impeachment, shall
be by Jury, and such Trial shall Page 391 U. S. 153 be held in the State where the said Crimes shall have been
committed."
Objections to the Constitution because of the absence of a bill
of rights were met by the immediate submission and adoption of the
Bill of Rights. Included was the Sixth Amendment which, among other
things, provided:
"In all criminal prosecutions, the accused shall enjoy the right
to a speedy and public trial, by an impartial jury of the State and
district wherein the crime shall have been committed. [ Footnote 20 ]"
The constitutions adopted by the original States guaranteed jury
trial. Also, the constitution of every State entering the Union
thereafter in one form or another protected the right to jury trial
in criminal cases.
Even such skeletal history is impressive support for considering
the right to jury trial in criminal cases to be fundamental to our
system of justice, an importance Page 391 U. S. 154 frequently recognized in the opinions of this Court. For
example, the Court has said:
"Those who emigrated to this country from England brought with
them this great privilege 'as their birthright and inheritance, as
a part of that admirable common law which had fenced around and
interposed barriers on every side against the approaches of
arbitrary power.' [ Footnote
21 ]"
Jury trial continues to receive strong support. The laws of
every State guarantee a right to jury trial in serious criminal
cases; no State has dispensed with it; nor are there significant
movements underway to do so. Indeed, the three most recent state
constitutional revisions, in Maryland, Michigan, and New York,
carefully preserved the right of the accused to have the judgment
of a jury when tried for a serious crime. [ Footnote 22 ]
We are aware of prior cases in this Court in which the
prevailing opinion contains statements contrary to our holding
today that the right to jury trial in serious criminal cases is a
fundamental right, and hence must be recognized by the States as
part of their obligation to extend due process of law to all
persons within their jurisdiction. Louisiana relies especially on Maxwell v. Dow, 176 U. S. 581 (1900); Palko v. Connecticut, 302 U.
S. 319 (1937), and Snyder v. Massachusetts, 291 U. S. 97 (1934). None of these cases, however, dealt with a State which had
purported to dispense entirely with a Page 391 U. S. 155 jury trial in serious criminal cases. Maxwell held that
no provision of the Bill of Rights applied to the States -- a
position long since repudiated -- and that the Due Process Clause
of the Fourteenth Amendment did not prevent a State from trying a
defendant for a noncapital offense with fewer than 12 men on the
jury. It did not deal with a case in which no jury at all had been
provided. In neither Palko nor Snyder was jury
trial actually at issue, although both cases contain important
dicta asserting that the right to jury trial is not essential to
ordered liberty and may be dispensed with by the States regardless
of the Sixth and Fourteenth Amendments. These observations, though
weighty and respectable, are nevertheless dicta, unsupported by
holdings in this Court that a State may refuse a defendant's demand
for a jury trial when he is charged with a serious crime. Perhaps
because the right to jury trial was not directly at stake, the
Court's remarks about the jury in Palko and Snyder took no note of past or current developments
regarding jury trials, did not consider its purposes and functions,
attempted no inquiry into how well it was performing its job, and
did not discuss possible distinctions between civil and criminal
cases. In Malloy v. Hogan, supra, the Court rejected Palko's discussion of the self-incrimination clause.
Respectfully, we reject the prior dicta regarding jury trial in
criminal cases.
The guarantees of jury trial in the Federal and State
Constitutions reflect a profound judgment about the way in which
law should be enforced and justice administered. A right to jury
trial is granted to criminal defendants in order to prevent
oppression by the Government. [ Footnote 23 ] Page 391 U. S. 156 Those who wrote our constitutions knew from history and
experience that it was necessary to protect against unfounded
criminal charges brought to eliminate enemies and against judges
too responsive to the voice of higher authority. The framers of the
constitutions strove to create an independent judiciary, but
insisted upon further protection against arbitrary action.
Providing an accused with the right to be tried by a jury of his
peers gave him an inestimable safeguard against the corrupt or
overzealous prosecutor and against the compliant, biased, or
eccentric judge. If the defendant preferred the common sense
judgment of a jury to the more tutored but perhaps less sympathetic
reaction of the single judge, he was to have it. Beyond this, the
jury trial provisions in the Federal and State Constitutions
reflect a fundamental decision about the exercise of official power
-- a reluctance to entrust plenary powers over the life and liberty
of the citizen to one judge or to a group of judges. Fear of
unchecked power, so typical of our State and Federal Governments in
other respects, found expression in the criminal law in this
insistence upon community participation in the determination of
guilt or innocence. The deep commitment of the Nation to the right
of jury trial in serious criminal cases as a defense against
arbitrary law enforcement qualifies for protection under the Due
Process Clause of the Fourteenth Amendment, and must therefore be
respected by the States.
Of course, jury trial has "its weaknesses and the potential for
misuse," Singer v. United States, 380 U. S.
24 , 380 U. S. 35 (1965). We are aware of the long debate, especially in this
century, among those who write about the administration Page 391 U. S. 157 of justice, as to the wisdom of permitting untrained laymen to
determine the facts in civil and criminal proceedings. [ Footnote 24 ] Although the debate has
been intense, with powerful voices on either side, most of the
controversy has centered on the jury in civil cases. Indeed, some
of the severest critics of civil juries acknowledge that the
arguments for criminal juries are much stronger. [ Footnote 25 ] In addition, at the heart of
the dispute have been express or implicit assertions that juries
are incapable of adequately understanding evidence or determining
issues of fact, and that they are unpredictable, quixotic, and
little better than a roll of dice. Yet the most recent and
exhaustive study of the jury in criminal cases concluded that
juries do understand the evidence and come to sound conclusions in
most of the cases presented to them, and that, when juries differ
with the result at which the judge would have arrived, it is
usually because they are serving some of the very purposes for
which they were created and for which they are now employed.
[ Footnote 26 ]
The State of Louisiana urges that holding that the Fourteenth
Amendment assures a right to jury trial will cast doubt on the
integrity of every trial conducted without a jury. Plainly, this is
not the import of our holding. Our conclusion is that, in the
American States, as in the federal judicial system, a general grant
of jury trial for Page 391 U. S. 158 serious offenses is a fundamental right, essential for
preventing miscarriages of justice and for assuring that fair
trials are provided for all defendants. We would not assert,
however, that every criminal trial -- or any particular trial --
held before a judge alone is unfair or that a defendant may never
be as fairly treated by a judge as he would be by a jury. Thus, we
hold no constitutional doubts about the practices, common in both
federal and state courts, of accepting waivers of jury trial
[ Footnote 27 ] and
prosecuting petty crimes without extending a right to jury trial.
[ Footnote 28 ] However, the
fact is that, in most places, more trials for serious crimes are to
juries than to a court alone; a great many defendants prefer the
judgment of a jury to that of a court. [ Footnote 29 ] Even where defendants are satisfied with
bench trials, the right to a jury trial very likely serves its
intended purpose of making judicial or prosecutorial unfairness
less likely. [ Footnote
30 ] Page 391 U. S. 159 II Louisiana's final contention is that even if it must grant jury
trials in serious criminal cases, the conviction before us is valid
and constitutional because here the petitioner was tried for simple
battery and was sentenced to only 60 days in the parish prison. We
are not persuaded. It is doubtless true that there is a category of
petty crimes or offenses which is not subject to the Sixth
Amendment jury trial provision [ Footnote 31 ] and should not be subject to the Fourteenth
Amendment jury trial requirement here applied to the States. Crimes
carrying possible penalties up to six months do not require a jury
trial if they otherwise qualify as petty offenses, Cheff v.
Schnackenberg, 384 U. S. 373 (1966). But the penalty authorized for a particular crime is of
major relevance in determining whether it is serious or not and may
in itself, if severe enough, subject the trial to the mandates of
the Sixth Amendment. District of Columbia
v. Page 391 U. S. 160 Clawans, 300 U. S. 617 (1937). The penalty authorized by the law of the locality may be
taken "as a gauge of its social and ethical judgments," 300 U.S. at 300 U. S. 628 ,
of the crime in question. In Clawans, the defendant was
jailed for 60 days, but it was the 90-day authorized punishment on
which the Court focused in determining that the offense was not one
for which the Constitution assured trial by jury. In the case
before us, the Legislature of Louisiana has made simple battery a
criminal offense punishable by imprisonment for up to two years and
a fine. The question, then, is whether a crime carrying such a
penalty is an offense which Louisiana may insist on trying without
a jury.
We think not. So-called petty offenses were tried without juries
both in England and in the Colonies, and have always been held to
be exempt from the otherwise comprehensive language of the Sixth
Amendment's jury trial provisions. There is no substantial evidence
that the Framers intended to depart from this established common
law practice, and the possible consequences to defendants from
convictions for petty offenses have been thought insufficient to
outweigh the benefits to efficient law enforcement and simplified
judicial administration resulting from the availability of speedy
and inexpensive nonjury adjudications. These same considerations
compel the same result under the Fourteenth Amendment. Of course,
the boundaries of the petty offense category have always been
ill-defined, if not ambulatory. In the absence of an explicit
constitutional provision, the definitional task necessarily falls
on the courts, which must either pass upon the validity of
legislative attempts to identify those petty offenses which are
exempt from jury trial or, where the legislature has not addressed
itself to the problem, themselves face the question in the first
instance. In either case, it is necessary to draw a line in the
spectrum of crime, separating petty from serious Page 391 U. S. 161 infractions. This process, although essential, cannot be wholly
satisfactory, for it requires attaching different consequences to
events which, when they lie near the line, actually differ very
little.
In determining whether the length of the authorized prison term
or the seriousness of other punishment is enough, in itself, to
require a jury trial, we are counseled by District of Columbia
v. Clawans, supra, to refer to objective criteria, chiefly the
existing laws and practices in the Nation. In the federal system,
petty offenses are defined as those punishable by no more than six
months in prison and a $500 fine. [ Footnote 32 ] In 49 of the 50 States, crimes subject to
trial without a jury, which occasionally include simple battery,
are punishable by no more than one year in jail. [ Footnote 33 ] Moreover, in the late 18th
century in America, crimes triable without a jury were, for the
most part, punishable by no more than a six-month prison term,
although there appear to have been exceptions to this rule.
[ Footnote 34 ] We need not,
however, settle in this case the exact location of the line between
petty offenses and serious crimes. It is sufficient for our
purposes to hold Page 391 U. S. 162 that a crime punishable by two years in prison is, based on past
and contemporary standards in this country, a serious crime, and
not a petty offense. [ Footnote
35 ] Consequently, appellant was entitled to a jury trial, and
it was error to deny it.
The judgment below is reversed and the case is remanded for
proceedings not inconsistent with this opinion.
[For concurring opinion of MR. JUSTICE FORTAS, see
post, p. 391 U. S.
211 .]
[ Footnote 1 ]
La.Const., Art. VII, § 41:
"All cases in which the punishment may not be at hard labor
shall . . . be tried by the judge without a jury. Cases, in which
the punishment may be at hard labor, shall be tried by a jury of
five, all of whom must concur to render a verdict; cases, in which
the punishment is necessarily at hard labor, by a jury of twelve,
nine of whom must concur to render a verdict; cases in which the
punishment may be capital, by a jury of twelve, all of whom must
concur to render a verdict."
La.Rev.Stat. § 14:35 (1950):
"Simple battery is a battery, without the consent of the victim,
committed without a dangerous weapon."
"Whoever commits a simple battery shall be fined not more than
three hundred dollars, or imprisoned for not more than two years,
or both."
[ Footnote 2 ]
250 La. 253, 195 So .2d 142 (1967).
[ Footnote 3 ]
389 U.S. 809 (1967).
[ Footnote 4 ] Chicago, B. & Q. R. Co. v. Chico, 166 U.
S. 226 (1897).
[ Footnote 5 ] See, e.g., Fiske v. Kansas, 274 U.
S. 380 (1927).
[ Footnote 6 ] See Mapp v. Ohio, 367 U. S. 643 (1961).
[ Footnote 7 ] Malloy v. Hogan, 378 U. S. 1 (1964).
[ Footnote 8 ] Gideon v. Wainwright, 372 U. S. 335 (1963).
[ Footnote 9 ] Klopfer v. North Carolina, 386 U.
S. 213 (1967).
[ Footnote 10 ] In re Oliver, 333 U. S. 257 (1948).
[ Footnote 11 ] Pointer v. Texas, 380 U. S. 400 (1965).
[ Footnote 12 ] Washington v. Texas, 388 U. S. 14 (1967).
[ Footnote 13 ]
Quoting from Hebert v. Louisiana, 272 U.
S. 312 , 272 U. S. 316 (1926).
[ Footnote 14 ]
In one sense, recent cases applying provisions of the first
eight Amendments to the States represent a new approach to the
"incorporation" debate. Earlier the Court can be seen as having
asked, when inquiring into whether some particular procedural
safeguard was required of a State, if a civilized system could be
imagined that would not accord the particular protection. For
example, Palko v. Connecticut, 302 U.
S. 319 , 302 U. S. 325 (1937), stated:
"The right to trial by jury and the immunity from prosecution
except as the result of an indictment may have value and
importance. Even so, they are not of the very essence of a scheme
of ordered liberty. . . . Few would be so narrow or provincial as
to maintain that a fair and enlightened system of justice would be
impossible without them."
The recent cases, on the other hand, have proceeded upon the
valid assumption that state criminal processes are not imaginary
and theoretical schemes but actual systems bearing virtually every
characteristic of the common law system that has been developing
contemporaneously in England and in this country. The question thus
is whether given this kind of system a particular procedure is
fundamental -- whether, that is, a procedure is necessary to an
Anglo-American regime of ordered liberty. It is this sort of
inquiry that can justify the conclusions that state courts must
exclude evidence seized in violation of the Fourth Amendment, Mapp v. Ohio, 367 U. S. 643 (1961); that state prosecutors may not comment on a defendant's
failure to testify, Griffin v. California, 380 U.
S. 609 (1965), and that criminal punishment may not be
imposed for the status of narcotics addiction, Robinson v.
California, 370 U. S. 660 (1962). Of immediate relevance for this case are the Court's
holdings that the States must comply with certain provisions of the
Sixth Amendment, specifically that the States may not refuse a
speedy trial, confrontation of witnesses, and the assistance, at
state expense if necessary, of counsel. See cases cited in
nn. 8-12 supra. Of
each of these determinations that a constitutional provision
originally written to bind the Federal Government should bind the
States as well it might be said that the limitation in question is
not necessarily fundamental to fairness in every criminal system
that might be imagined but is fundamental in the context of the
criminal processes maintained by the American States.
When the inquiry is approached in this way the question whether
the States can impose criminal punishment without granting a jury
trial appears quite different from the way it appeared in the older
cases opining that States might abolish jury trial. See, e.g.,
Maxwell v. Dow, 176 U. S. 581 (1900). A criminal process which was fair and equitable but used no
juries is easy to imagine. It would make use of alternative
guarantees and protections which would serve the purposes that the
jury serves in the English and American systems. Yet no American
State has undertaken to construct such a system. Instead, every
American State, including Louisiana, uses the jury extensively, and
imposes very serious punishments only after a trial at which the
defendant has a right to a jury's verdict. In every State,
including Louisiana, the structure and style of the criminal
process -- the supporting framework and the subsidiary procedures
-- are of the sort that naturally complement jury trial, and have
developed in connection with and in reliance upon jury trial.
[ Footnote 15 ] E.g., W. Forsyth, History of Trial by Jury (1852); J.
Thayer, A Preliminary Treatise on Evidence at the Common Law
(1898); W. Holdsworth, History of English Law.
[ Footnote 16 ] E.g., 4 W. Blackstone, Commentaries on the Laws of
England 349 (Cooley ed. 1899). Historians no longer accept this
pedigree. See, e.g., 1 F. Pollock & F. Maitland, The
History of English Law Before the Time of Edward I, at 173, n. 3
(2d ed.1909).
[ Footnote 17 ]
Blackstone, supra, at 349-350.
[ Footnote 18 ]
R. Perry, ed., Sources of Our Liberties 270 (1959).
[ Footnote 19 ] Id. at 288.
[ Footnote 20 ]
Among the proposed amendments adopted by the House of
Representatives in 1789 and submitted to the Senate was Article
Fourteen:
"No State shall infringe the right of trial by Jury in criminal
cases, nor the rights of conscience, nor the freedom of speech, or
of the press."
The Senate deleted this article in adopting the amendments which
became the Bill of Rights. Journal of the First Session of the
Senate 72; 1 Annals of Congress 76; Brennan, The Bill of Rights and
the States, in E. Cahn, The Great Rights 65, 69 (1963); E.
Dumbauld, The Bill of Rights 46, 215 (1957). This relatively clear
indication that the framers of the Sixth Amendment did not intend
its jury trial requirement to bind the States is, of course, of
little relevance to interpreting the Due Process Clause of the
Fourteenth Amendment, adopted specifically to place limitations
upon the States. Cf. Fiske v. Kansas, 274 U.
S. 380 (1927); Gitlow v. New York, 268 U.
S. 652 , 268 U. S. 666 (1925).
[ Footnote 21 ] Thompson v. Utah, 170 U. S. 343 , 170 U. S.
349 -350 (1898), quoting 2 J. Story, Commentaries on the
Constitution of the United States § 1779. See also Irvin v.
Dowd, 366 U. S. 717 , 366 U. S.
721 -722 (1961); United States ex rel. Toth v.
Quarles, 350 U. S. 11 , 350 U. S. 16 (1955); Ex parte
Milligan , 4 Wall. 2, 71 U. S. 122 -123
(1866); People v. Garbutt, 17 Mich. 9, 27 (1868).
[ Footnote 22 ]
Proposed Maryland Constitution, Art. 1, § 1.07 (defeated at
referendum May 14, 1968); Michigan Constitution, Art. 1, § 14;
Proposed New York Constitution, Art. 1, § 7b (defeated at
referendum Nov. 7, 1967).
[ Footnote 23 ]
"The [jury trial] clause was clearly intended to protect the
accused from oppression by the Government. . . ." Singer v.
United States, 380 U. S. 24 , 380 U. S. 31 (1965).
"The first object of any tyrant in Whitehall would be to make
Parliament utterly subservient to his will, and the net to
overthrow or diminish trial by jury, for no tyrant could afford to
leave a subject's freedom in the hands of twelve of his countrymen.
So that trial by jury is more than an instrument of justice and
more than one wheel of the constitution: it is the lamp that shows
that freedom lives."
P. Devlin, Trial by Jury 164 (1956).
[ Footnote 24 ]
A thorough summary of the arguments that have been made for and
against jury trial and an extensive bibliography of the relevant
literature is available at Hearings on Recording of Jury
Deliberations before the Subcommittee to Investigate the
Administration of the Internal Security Act of the Senate Committee
on the Judiciary, 84th Cong., 1st Sess., 63-81 (1955). A more
selective bibliography appears at H. Kalven, Jr. & H. Zeisel,
The American Jury 4, n. 2 (1966).
[ Footnote 25 ] E.g, J. Frank, Courts on Trial 145 (1949); H. Sidgwick,
The Elements of Politics 498 (4th ed.1919).
[ Footnote 26 ]
Kalven & Zeisel, n 24, supra. [ Footnote 27 ] See Patton v. United States, 281 U.
S. 276 (1930).
[ Footnote 28 ] See 391 U. S. infra. [ Footnote 29 ]
Kalven & Zeisel, n 24, supra, c. 2.
[ Footnote 30 ]
Louisiana also asserts that, if due process is deemed to include
the right to jury trial, States will be obligated to comply with
all past interpretations of the Sixth Amendment, an amendment which
in its inception was designed to control only the federal courts
and which throughout its history has operated in this limited
environment where uniformity is a more obvious and immediate
consideration. In particular, Louisiana objects to application of
the decisions of this Court interpreting the Sixth Amendment as
guaranteeing a 12-man jury in serious criminal cases, Thompson
v. Utah, 170 U. S. 343 (1898); as requiring a unanimous verdict before guilt can be found, Maxwell v. Dow, 176 U. S. 581 , 176 U. S. 586 (1900), and as barring procedures by which crimes subject to the
Sixth Amendment jury trial provision are tried in the first
instance without a jury, but, at the first appellate stage, by de novo trial with a jury, Callan v. Wilson, 127 U. S. 540 , 127 U. S. 557 (1888). It seems very unlikely to us that our decision today will
require widespread changes in state criminal processes. First, our
decisions interpreting the Sixth Amendment are always subject to
reconsideration, a fact amply demonstrated by the instant decision.
In addition, most of the States have provisions for jury trials
equal in breadth to the Sixth Amendment, if that amendment is
construed, as it has been, to permit the trial of petty crimes and
offenses without a jury. Indeed, there appear to be only four
States in which juries of fewer than 12 can be used without the
defendant's consent for offenses carrying a maximum penalty of
greater than one year. Only in Oregon and Louisiana can a
less-than-unanimous jury convict for an offense with a maximum
penalty greater than one year. However 10 States authorize
first-stage trials without juries for crimes carrying lengthy
penalties; these States give a convicted defendant the right to a de novo trial before a jury in a different court. The
statutory provisions are listed in the briefs filed in this
case.
[ Footnote 31 ] Cheff v. Schnackenberg, 384 U.
S. 373 (1966); District of Columbia v. Clawans, 300 U. S. 617 (1937); Schick v. United States, 195 U. S.
65 (1904); Natal v. Louisiana, 139 U.
S. 621 (1891); see Callan v. Wilson, 127 U. S. 540 (1888). See generally Frankfurter & Corcoran, Petty
Federal Offenses and the Constitutional Guaranty of Trial by Jury,
39 Harv.L.Rev. 917 (1926); Kaye, Petty Offenders Have No Peers, 26
U.Chi.L.Rev. 245 (1959).
[ Footnote 32 ]
18 U.S.C. § 1.
[ Footnote 33 ]
Indeed, there appear to be only two instances, aside from the
Louisiana scheme, in which a State denies jury trial for a crime
punishable by imprisonment for longer than six months. New Jersey's
disorderly conduct offense, N.J.Stat.Ann. § 2A:169-4 (1953),
carries a one-year maximum sentence, but no jury trial. The denial
of jury trial was upheld by a 4-3 vote against state constitutional
attack in State v. Maier, 13 N.J. 235, 99 A.2d
21 (1953). New York State provides a jury within New York City
only for offenses bearing a maximum sentence greater than one year. See People v. Sarlabria, 42 Misc.2d 464, 249 N.Y.S.2d 66
(Sup.Ct.1964).
[ Footnote 34 ]
Frankfurter & Corcoran, n 31, supra. In the instant case Louisiana has
not argued that a penalty of two years' imprisonment is
sufficiently short to qualify as a "petty offense," but only that
the penalty actually imposed on Duncan, imprisonment for 60 days,
is within the petty offense category.
[ Footnote 35 ]
It is argued that Cheff v. Schnackenberg, 384 U.
S. 373 (1966), interpreted the Sixth Amendment as
meaning that, to the extent that the length of punishment is a
relevant criterion in distinguishing between serious crimes and
petty offenses, the critical factor is not the length of the
sentence authorized, but the length of the penalty actually
imposed. In our view, that case does not reach the situation where
a legislative judgment as to the seriousness of the crime is
imbedded in the statute in the form of an express authorization to
impose a heavy penalty for the crime in question. Cheff involved criminal contempt, an offense applied to a wide range of
conduct, including conduct not so serious as to require jury trial
absent a long sentence. In addition, criminal contempt is unique in
that legislative bodies frequently authorize punishment without
stating the extent of the penalty which can be imposed. The
contempt statute under which Cheff was prosecuted, 18 U.S.C. § 401,
treated the extent of punishment as a matter to be determined by
the forum court. It is therefore understandable that this Court, in Cheff, seized upon the penalty actually imposed as the
best evidence of the seriousness of the offense for which Cheff was
tried.
MR. JUSTICE BLACK, with whom MR. JUSTICE DOUGLAS joins,
concurring.
The Court today holds that the right to trial by jury guaranteed
defendants in criminal cases in federal courts by Art. III of the
United States Constitution and by the Sixth Amendment is also
guaranteed by the Fourteenth Amendment to defendants tried in state
courts. With Page 391 U. S. 163 this holding I agree for reasons given by the Court. I also
agree because of reasons given in my dissent in Adamson v.
California, 332 U. S. 46 , 332 U. S. 68 . In
that dissent, at 332 U. S. 90 , I
took the position, contrary to the holding in Twining v. New
Jersey, 211 U. S. 78 , that
the Fourteenth Amendment made all of the provisions of the Bill of
Rights applicable to the States. This Court, in Palko v.
Connecticut, 302 U. S. 319 , 302 U. S. 323 ,
decided in 1937, although saying "[t]here is no such general rule,"
went on to add that the Fourteenth Amendment may make it unlawful
for a State to abridge by its statutes the
"freedom of speech which the First Amendment safeguards against
encroachment by the Congress. . . or the like freedom of the press
. . . or the free exercise of religion . . . or the right of
peaceable assembly . . . or the right of one accused of crime to
the benefit of counsel. . . . In these and other situations,
immunities that are valid as against the federal government by
force of the specific pledges of particular amendments have been
found to be implicit in the concept of ordered liberty, and thus,
through the Fourteenth Amendment, become valid as against the
states." Id. at 302 U. S.
324 -325. And the Palko opinion went on to
explain, 302 U.S. at 302 U. S. 326 ,
that certain Bill of Rights provisions were made applicable to the
States by bringing them "within the Fourteenth Amendment by a
process of absorption." Thus, Twining v. New Jersey,
supra, refused to hold that any one of the Bill of Rights'
provisions was made applicable to the States by the Fourteenth
Amendment, but Palko, which must be read as overruling Twining on this point, concluded that the Bill of Rights
Amendments that are "implicit in the concept of ordered liberty"
are "absorbed" by the Fourteenth as protections against Page 391 U. S. 164 state invasion. In this situation, I said in Adamson v.
California, 332 U.S. at 332 U. S. 89 ,
that, while "I would . . . extend to all the people of the nation
the complete protection of the Bill of Rights," that,
"[i]f the choice must be between the selective process of the Palko decision applying some of the Bill of Rights to the
States, or the Twining rule applying none of them, I would
choose the Palko selective process." See Gideon v. Wainwright, 372 U.
S. 335 . And I am very happy to support this selective
process through which our Court has, since the Adamson case, held most of the specific Bill of Rights protections
applicable to the States to the same extent they are applicable to
the Federal Government. Among these are the right to trial by jury
decided today, the right against compelled self-incrimination, the
right to counsel, the right to compulsory process for witnesses,
the right to confront witnesses, the right to a speedy and public
trial, and the right to be free from unreasonable searches and
seizures.
All of these holdings making Bill of Rights provisions
applicable as such to the States mark, of course, a departure from
the Twining doctrine holding that none of those provisions
were enforceable as such against the States. The dissent in this
case, however, makes a spirited and forceful defense of that now
discredited doctrine. I do not believe that it is necessary for me
to repeat the historical and logical reasons for my challenge to
the Twining holding contained in my Adamson dissent and Appendix to it. What I wrote there in 1947 was the
product of years of study and research. My appraisal of the
legislative history followed 10 years of legislative experience as
a Senator of the United States, not a bad way, I suspect, to learn
the value of what is said in legislative debates, committee
discussions, committee reports, and various other steps taken in
the course of passage of bills, resolutions, Page 391 U. S. 165 and proposed constitutional amendments. My Brother HARLAN's
objections to my Adamson dissent history, like that of
most of the objectors, relies most heavily on a criticism written
by Professor Charles Fairman and published in the Stanford Law
Review. 2 Stan.L.Rev. 5 (1949). I have read and studied this
article extensively, including the historical references, but am
compelled to add that, in my view, it has completely failed to
refute the inferences and arguments that I suggested in my Adamson dissent . Professor Fairman's "history" relies
very heavily on what was not said in the state
legislatures that passed on the Fourteenth Amendment. Instead of
relying on this kind of negative pregnant, my legislative
experience has convinced me that it is far wiser to rely on what was said, and, most importantly, said by the men who
actually sponsored the Amendment in the Congress. I know from my
years in the United States Senate that it is to men like
Congressman Bingham, who steered the Amendment through the House,
and Senator Howard, who introduced it in the Senate, that members
of Congress look when they seek the real meaning of what is being
offered. And they vote for or against a bill based on what the
sponsors of that bill and those who oppose it tell them it means.
The historical appendix to my Adamson dissent leaves no
doubt in my mind that both its sponsors and those who opposed it
believed the Fourteenth Amendment made the first eight Amendments
of the Constitution (the Bill of Rights) applicable to the
States.
In addition to the adoption of Professor Fairman's "history,"
the dissent states that
"the great words of the four clauses of the first section of the
Fourteenth Amendment would have been an exceedingly peculiar way to
say that 'The rights heretofore guaranteed against federal
intrusion by the first eight Amendments are henceforth guaranteed
against state intrusion as Page 391 U. S. 166 well.'"
Dissenting opinion, n. 9. In response to this, I can say only
that the words "No State shall make or enforce any law which shall
abridge the privileges or immunities of citizens of the United
States" seem to me an eminently reasonable way of expressing the
idea that, henceforth, the Bill of Rights shall apply to the
States. [ Footnote 2/1 ] What more
precious "privilege" of American citizenship could there be than
that privilege to claim the protections of our great Bill of
Rights? I suggest that any reading of "privileges or immunities of
citizens of the United States" which excludes the Bill of Rights'
safeguards renders the words of this section of the Fourteenth
Amendment meaningless. Senator Howard, who introduced the
Fourteenth Amendment for passage in the Senate, certainly read the
words this way. Although I have cited his speech at length in my Adamson dissent appendix, I believe it would be worthwhile
to reproduce a part of it here.
"Such is the character of the privileges and immunities spoken
of in the second section of the fourth article of the Constitution
[the Senator had just read from the old opinion of Corfield v.
Coryell, 6 Fed.Cas. 546 (No. 3,230) (E. D.Pa. 1825)]. To these
privileges and immunities, whatever they may be -- for they are not
and cannot be fully defined in their entire extent and precise
nature to these should be added the personal rights guarantied and
secured by the first eight amendments of the Constitution; such as
the freedom of speech and of the press; the right of the people
peaceably to assemble and petition the Government for a redress of
grievances, a right appertaining Page 391 U. S. 167 to each and all the people; the right to keep and to bear arms;
the right to be exempted from the quartering of soldiers in a house
without the consent of the owner; the right to be exempt from
unreasonable searches and seizures, and from any search or seizure
except by virtue of a warrant issued upon a formal oath or
affidavit; the right of an accused person to be informed of the
nature of the accusation against him, and his right to be tried by
an impartial jury of the vicinage, and also the right to be secure
against excessive bail and against cruel and unusual
punishments."
"Now, sir, here is a mass of privileges, immunities, and rights,
some of them secured by the second section of the fourth article of
the Constitution, which I have recited, some by the first eight
amendments of the Constitution, and it is a fact well worthy of
attention that the course of decision of our courts and the present
settled doctrine is, that all these immunities, privileges, rights,
thus guarantied by the Constitution or recognized by it, are
secured to the citizens solely as a citizen of the United States
and as a party in their courts. They do not operate in the
slightest degree as a restraint or prohibition upon State
legislation. . . ."
". . . The great object of the first section of this amendment
is, therefore, to restrain the power of the States and compel them
at all times to respect these great fundamental guarantees."
Cong.Globe, 39th Cong, 1st Sess., 2765-2766 (1866). From this I
conclude, contrary to my Brother HARLAN, that, if anything, it is
"exceedingly peculiar" to read the Fourteenth Amendment differently
from the way I do.
While I do not wish at this time to discuss at length my
disagreement with Brother HARLAN's forthright and frank restatement
of the now discredited Twining doctrine, [ Footnote 2/2 ] Page 391 U. S. 168 I do want to point out what appears to me to be the basic
difference between us. His view, as was indeed the view of Twining, is that "due process is an evolving concept," and
therefore that it entails a "gradual process of judicial inclusion
and exclusion" to ascertain those "immutable principles . . . of
free government which no member of the Union may disregard." Thus,
the Due Process Clause is treated as prescribing no specific and
clearly ascertainable constitutional command that judges must obey
in interpreting the Constitution, but rather as leaving judges free
to decide at any particular time whether a particular rule or
judicial formulation embodies an "immutable principl[e] of free
government" or is "implicit in the concept of ordered liberty," or
whether certain conduct "shocks the judge's conscience" or runs
counter to some other similar, undefined and undefinable standard.
Thus, due process, according to my Brother HARLAN, is to be a
phrase with no permanent meaning, but one which is found to shift
from time to time in accordance with judges' predilections and
understandings of what is best for the country. If due process
means this, the Fourteenth Amendment, in my opinion, might as well
have been written that
"no person shall be deprived of life, liberty or property except
by laws that the judges of the United States Supreme Court shall
find to be consistent with the immutable principles of free
government."
It is impossible for me to believe that such unconfined power is
given to judges in our Constitution that is a written one in order
to limit governmental power.
Another tenet of the Twining doctrine as restated by my
Brother HARLAN is that "due process of law requires only
fundamental fairness." But the "fundamental Page 391 U. S. 169 fairness" test is one on a par with that of shocking the
conscience of the Court. Each of such tests depends entirely on the
particular judge's idea of ethics and morals, instead of requiring
him to depend on the boundaries fixed by the written words of the
Constitution. Nothing in the history of the phrase "due process of
law" suggests that constitutional controls are to depend on any
particular judge's sense of values. The origin of the Due Process
Clause is Chapter 39 of Magna Carta, which declares that
"No free man shall be taken, outlawed, banished, or in any way
destroyed, nor will We proceed against or prosecute him, except by
the lawful judgment of his peers and by the law of the
land. [ Footnote 2/3 ]"
(Emphasis added.) As early as 1354, the words "due process of
law" were used in an English statute interpreting Magna Carta,
[ Footnote 2/4 ] and, by the end of
the 14th century, "due process of law" and "law of the land" were
interchangeable. Thus, the origin of this clause was an attempt by
those who wrote Magna Carta to do away with the so-called trials of
that period where people were liable to sudden arrest and summary
conviction in courts and by judicial commissions with no sure and
definite procedural protections and under laws that might have been
improvised to try their particular cases. Chapter 39 of Magna Carta
was a guarantee that the government would take neither life,
liberty, nor property without a trial in accord with the law of the
land that already existed at the time the alleged offense was
committed. This means that the Due Process Clause gives all
Americans, whoever they are and wherever they happen to be, the
right to be tried by independent and unprejudiced courts using
established procedures and applying valid preexisting laws. There
is not one word of legal history that justifies making the Page 391 U. S. 170 term "due process of law" mean a guarantee of a trial free from
laws and conduct which the courts deem at the time to be
"arbitrary," "unreasonable," "unfair," or "contrary to civilized
standards." The due process of law standard for a trial is one in
accordance with the Bill of Rights and laws passed pursuant to
constitutional power, guaranteeing to all alike a trial under the
general law of the land.
Finally I want to add that I am not bothered by the argument
that applying the Bill of Rights to the States, "according to the
same standards that protect those personal rights against federal
encroachment," [ Footnote 2/5 ]
interferes with our concept of federalism in that it may prevent
States from trying novel social and economic experiments. I have
never believed that under the guise of federalism the States should
be able to experiment with the protections afforded our citizens
through the Bill of Rights. As Justice Goldberg said so wisely in
his concurring opinion in Pointer v. Texas, 380 U.
S. 400 :
"to deny to the States the power to impair a fundamental
constitutional right is not to increase federal power, but, rather,
to limit the power of both federal and state governments in favor
of safeguarding the fundamental rights and liberties of the
individual. In my view, this promotes, rather than undermines, the
basic policy of avoiding excess concentration of power in
government, federal or state, which underlies our concepts of
federalism."
380 U.S. at 380 U. S. 414 .
It seems to me totally inconsistent to advocate, on the one hand,
the power of this Court to strike down any state law or practice
which it finds "unreasonable" or "unfair" and, on the other hand,
urge that the States be Page 391 U. S. 171 given maximum power to develop their own laws and procedures.
Yet the due process approach of my Brothers HARLAN and FORTAS
( see other concurring opinion, post, p. 391 U. S. 211 )
does just that, since, in effect, it restricts the States to
practices which a majority of this Court is willing to approve on a
case-by-case basis. No one is more concerned than I that the States
be allowed to use the full scope of their powers as their citizens
see fit. And that is why I have continually fought against the
expansion of this Court's authority over the States through the use
of a broad, general interpretation of due process that permits
judges to strike down state laws they do not like.
In closing, I want to emphasize that I believe as strongly as
ever that the Fourteenth Amendment was intended to make the Bill of
Rights applicable to the States. I have been willing to support the
selective incorporation doctrine, however, as an alternative,
although perhaps less historically supportable than complete
incorporation. The selective incorporation process, if used
properly, does limit the Supreme Court in the Fourteenth Amendment
field to specific Bill of Rights' protections only and keeps judges
from roaming at will in their own notions of what policies outside
the Bill of Rights are desirable and what are not. And, most
importantly for me, the selective incorporation process has the
virtue of having already worked to make most of the Bill of Rights'
protections applicable to the States.
[ Footnote 2/1 ]
My view has been and is that the Fourteenth Amendment, as a
whole, makes the Bill of Rights applicable to the States. This
would certainly include the language of the Privileges and
Immunities Clause, as well as the Due Process Clause.
[ Footnote 2/2 ]
For a more thorough exposition of my views against this approach
to the Due Process Clause, see my concurring opinion in Rochin v. California, 342 U. S. 165 , 342 U. S.
174 .
[ Footnote 2/3 ] See Murray's Lessee v. Hoboken
Land and Improvement Co. , 18 How. 272, 59 U. S.
276 .
[ Footnote 2/4 ]
28 Edw. 3, c. 3 (1354)
[ Footnote 2/5 ] See Malloy v. Hogan, 378 U. S. 1 , 378 U. S. 10 ; Pointer v. Texas, 380 U. S. 40 , 380 U. S. 406 ; Miranda v. Arizona, 384 U. S. 436 , 384 U. S.
464 .
MR. JUSTICE HARLAN, whom MR. JUSTICE STEWART joins,
dissenting.
Every American jurisdiction provides for trial by jury in
criminal cases. The question before us is not whether jury trial is
an ancient institution, which it is; nor whether it plays a
significant role in the administration Page 391 U. S. 172 of criminal Justice, which it does; nor whether it will endure,
which it shall. The question in this case is whether the State of
Louisiana, which provides trial by jury for all felonies, is
prohibited by the Constitution from trying charges of simple
battery to the court alone. In my view, the answer to that
question, mandated alike by our constitutional history and by the
longer history of trial by jury, is clearly "no."
The States have always borne primary responsibility for
operating the machinery of criminal justice within their borders,
and adapting it to their particular circumstances. In exercising
this responsibility, each State is compelled to conform its
procedures to the requirements of the Federal Constitution. The Due
Process Clause of the Fourteenth Amendment requires that those
procedures be fundamentally fair in all respects. It does not, in
my view, impose or encourage nationwide uniformity for its own
sake; it does not command adherence to forms that happen to be old,
and it does not impose on the States the rules that may be in force
in the federal courts except where such rules are also found to be
essential to basic fairness.
The Court's approach to this case is an uneasy and illogical
compromise among the views of various Justices on how the Due
Process Clause should be interpreted. The Court does not say that
those who framed the Fourteenth Amendment intended to make the
Sixth Amendment applicable to the States. And the Court concedes
that it finds nothing unfair about the procedure by which the
present appellant was tried. Nevertheless, the Court reverses his
conviction: it holds, for some reason not apparent to me, that the
Due Process Clause incorporates the particular clause of the Sixth
Amendment that requires trial by jury in federal criminal cases --
including, as I read its opinion, the sometimes trivial
accompanying baggage of judicial interpretation in federal
contexts. Page 391 U. S. 173 I have raised my voice many times before against the Court's
continuing undiscriminating insistence upon fastening on the States
federal notions of criminal justice, [ Footnote 3/1 ] and I must do so again in this instance.
With all respect, the Court's approach and its reading of history
are altogether topsy-turvy. I I believe I am correct in saying that every member of the Court
for at least the last 135 years has agreed that our Founders did
not consider the requirements of the Bill of Rights so fundamental
that they should operate directly against the States. [ Footnote 3/2 ] They were wont to believe
rather that the security of liberty in America rested primarily
upon the dispersion of governmental power across a federal system.
[ Footnote 3/3 ] The Bill of Rights
was considered unnecessary by some, [ Footnote 3/4 ] but insisted upon by others in order to
curb the possibility of abuse of power by the strong central
government they were creating. [ Footnote 3/5 ]
The Civil War Amendments dramatically altered the relation of
the Federal Government to the States. The first section of the
Fourteenth Amendment imposes Page 391 U. S. 174 highly significant restrictions on state action. But the
restrictions are couched in very broad and general terms:
citizenship; privileges and immunities; due process of law; equal
protection of the laws. Consequently, for 100 years, this Court has
been engaged in the difficult process Professor Jaffe has well
called "the search for intermediate premises." [ Footnote 3/6 ] The question has been, where does the
Court properly look to find the specific rules that define and give
content to such terms as "life, liberty, or property" and "due
process of law"?
A few members of the Court have taken the position that the
intention of those who drafted the first section of the Fourteenth
Amendment was simply, and exclusively, to make the provisions of
the first eight Amendments applicable to state action. [ Footnote 3/7 ] This view has never been
accepted by this Court. In my view, often expressed elsewhere,
[ Footnote 3/8 ] the first section of
the Fourteenth Amendment was meant neither to incorporate, nor to
be limited to, the specific guarantees of the first eight
Amendments. The overwhelming historical evidence marshalled by
Professor Fairman demonstrates, to me conclusively, that the
Congressmen and state legislators who wrote, debated, and ratified
the Fourteenth Amendment did not think they were "incorporating"
the Bill of Rights [ Footnote 3/9 ]
and Page 391 U. S. 175 the very breadth and generality of the Amendment's provisions
suggest that its authors did not suppose that the Nation would
always be limited to mid-19th century conceptions of "liberty" and
"due process of law," but that the increasing experience and
evolving conscience of the American people would add new
"intermediate premises." In short, neither history nor sense
supports using the Fourteenth Amendment to put the States in a Page 391 U. S. 176 constitutional straitjacket with respect to their own
development in the administration of criminal or civil law.
Although I therefore fundamentally disagree with the total
incorporation view of the Fourteenth Amendment, it seems to me that
such a position does at least have the virtue, lacking in the
Court's selective incorporation approach, of internal consistency:
we look to the Bill of Rights, word for word, clause for clause,
precedent for precedent because, it is said, the men who wrote the
Amendment wanted it that way. For those who do not accept this
"history," a different source of "intermediate premises" must be
found. The Bill of Rights is not necessarily irrelevant to the
search for guidance in interpreting the Fourteenth Amendment, but
the reason for and the nature of its relevance must be
articulated.
Apart from the approach taken by the absolute incorporationists,
I can see only one method of analysis that has any internal logic.
That is to start with the words "liberty" and "due process of law"
and attempt to define them in a way that accords with American
traditions and our system of government. This approach, involving a
much more discriminating process of adjudication than does
"incorporation," is, albeit difficult, the one that was followed
throughout the 19th and most of the present century. It entails a
"gradual process of judicial inclusion and exclusion," [ Footnote 3/10 ] seeking, with due
recognition of constitutional tolerance for state experimentation
and disparity, to ascertain those "immutable principles . . . of
free government which no member of the Union may disregard."
[ Footnote 3/11 ] Due process was
not restricted to rules fixed in the past, for that "would be to
deny every quality Page 391 U. S. 177 of the law but its age, and to render it incapable of progress
or improvement." [ Footnote 3/12 ]
Nor did it impose nationwide uniformity in details, for
"[t]he Fourteenth Amendment does not profess to secure to all
persons in the United States the benefit of the same laws and the
same remedies. Great diversities in these respects may exist in two
States separated only by an imaginary line. On one side of this
line there may be a right of trial by jury, and on the other side
no such right. Each State prescribes its own modes of judicial
proceeding. [ Footnote 3/13 ]"
Through this gradual process, this Court sought to define
"liberty" by isolating freedoms that Americans of the past and of
the present considered more important than any suggested
countervailing public objective. The Court also, by interpretation
of the phrase "due process of law," enforced the Constitution's
guarantee that no State may imprison an individual except by fair
and impartial procedures.
The relationship of the Bill of Rights to this "gradual process"
seems to me to be twofold. In the first place, it has long been
clear that the Due Process Clause imposes some restrictions on
state action that parallel Bill of Rights restrictions on federal
action. Second, and more important than this accidental overlap, is
the fact that the Bill of Rights is evidence, at various points, of
the content Americans find in the term "liberty" and of American
standards of fundamental fairness.
An example, both of the phenomenon of parallelism and the use of
the first eight Amendments as evidence of a historic commitment, is
found in the partial definition Page 391 U. S. 278 of "liberty" offered by Mr. Justice Holmes, dissenting in Gitlow v. New York, 268 U. S. 652 :
"The general principle of free speech . . . must be taken to be
included in the Fourteenth Amendment, in view of the scope that has
been given to the word 'liberty' as there used, although perhaps it
may be accepted with a somewhat larger latitude of interpretation
than is allowed to Congress by the sweeping language that governs
or ought to govern the laws of the United States." Id. at 268 U. S. 672 .
As another example, Mr. Justice Frankfurter, speaking for the Court
in Wolf v. Colorado, 338 U. S. 25 , 338 U. S. 27 -28,
recognized that
"[t]he security of one's privacy against arbitrary intrusion by
the police -- which is at the core of the Fourth Amendment -- is
basic to a free society. It is therefore implicit in 'the concept
of ordered liberty' and as such enforceable against the States
through the Due Process Clause."
The Court has also found among the procedural requirements of
"due process of law" certain rules paralleling requirements of the
first eight Amendments. For example, in Powell v. Alabama, 287 U. S. 45 , the
Court ruled that a State could not deny counsel to an accused in a
capital case:
"The fact that the right involved is of such a character that it
cannot be denied without violating those 'fundamental principles of
liberty and justice which lie at the base of all our civil and
political institutions' . . . is obviously one of those compelling
considerations which must prevail in determining whether it is
embraced within the due process clause of the Fourteenth Amendment, although it be specifically dealt with in another part of
the federal Constitution." Id. at 287 U. S. 67 .
(Emphasis added.) Page 391 U. S. 179 Later, the right to counsel was extended to all felony cases.
[ Footnote 3/14 ] The Court has
also ruled, for example, that "due process" means a speedy process,
so that liberty will not be long restricted prior to an
adjudication, and evidence of fact will not become stale; [ Footnote 3/15 ] that, in a system
committed to the resolution of issues of fact by adversary
proceedings the right to confront opposing witnesses must be
guaranteed; [ Footnote 3/16 ] and
that, if issues of fact are tried to a jury, fairness demands a
jury impartially selected. [ Footnote
3/17 ] That these requirements are fundamental to procedural
fairness hardly needs redemonstration
In all of these instances, the right guaranteed against the
States by the Fourteenth Amendment was one that had also been
guaranteed against the Federal Government by one of the first eight
Amendments. The logically critical thing, however, was not that the
rights had been found in the Bill of Rights, but that they were
deemed, in the context of American legal history, to be
fundamental. This was perhaps best explained by Mr. Justice
Cardozo, speaking for a Court that included Chief Justice Hughes
and Justices Brandeis and Stone, in Palko v. Connecticut, 302 U. S. 319 :
"If the Fourteenth Amendment has absorbed them, the process of
absorption has had its source in the belief that neither liberty
nor justice would exist if they were sacrificed." Id. at 302 U. S. 326 .
Referring to Powell v. Alabama, supra, Mr. Justice Cardozo
continued:
"The decision did not turn upon the fact that the benefit of
counsel would have been guaranteed to Page 391 U. S. 180 the defendants by the provisions of the Sixth Amendment if they
had been prosecuted in a federal court. The decision turned upon
the fact that, in the particular situation laid before us in the
evidence the benefit of counsel was essential to the substance of a
hearing." Id. at 302 U. S. 327 .
Mr. Justice Cardozo then went on to explain that the Fourteenth
Amendment did not impose on each State every rule of procedure that
some other State, or the federal courts, thought desirable, but
only those rules critical to liberty:
"The line of division may seem to be wavering and broken if
there is a hasty catalogue of the cases on the one side and the
other. Reflection and analysis will induce a different view. There
emerges the perception of a rationalizing principle which gives to
discrete instances a proper order and coherence. The right to trial
by jury and the immunity from prosecution except as the result of
an indictment may have value and importance. Even so, they are not
of the very essence of a scheme of ordered liberty. To abolish them
is not to violate a 'principle of justice so rooted in the
traditions and conscience of our people as to be ranked as
fundamental.' . . . Few would be so narrow or provincial as to
maintain that a fair and enlightened system of justice would be
impossible without them." Id. at 302 U. S. 325 .
(Emphasis added.)
Today's Court still remains unwilling to accept the total
incorporationists' view of the history of the Fourteenth Amendment.
This, if accepted, would afford a cogent reason for applying the
Sixth Amendment to the States. The Court is also, apparently,
unwilling to face the task of determining whether denial of trial
by jury in the situation before us, or in other situations, is
fundamentally Page 391 U. S. 181 unfair. Consequently, the Court has compromised on the ease of
the incorporationist position, without its internal logic. It has
simply assumed that the question before us is whether the Jury
Trial Clause of the Sixth Amendment should be incorporated into the
Fourteenth, jot-for-jot and case-for-case, or ignored. Then the
Court merely declares that the clause in question is "in", rather
than "out." [ Footnote 3/18 ]
The Court has justified neither its starting place nor its
conclusion. If the problem is to discover and articulate the rules
of fundamental fairness in criminal proceedings, there is no reason
to assume that the whole body of rules developed in this Court
constituting Sixth Amendment jury trial must be regarded as a unit.
The requirement of trial by jury in federal criminal cases has
given rise to numerous subsidiary questions respecting the exact
scope and content of the right. It surely cannot be that every
answer the Court has given, or will give, to such a question is
attributable to the Founders; or even that every rule announced
carries equal conviction of this Court; still less can it be that
every such subprinciple is equally fundamental to ordered
liberty.
Examples abound. I should suppose it obviously fundamental to
fairness that a "jury" means an "impartial Page 391 U. S. 182 jury." [ Footnote 3/19 ] I
should think it equally obvious that the rule, imposed long ago in
the federal courts, that "jury" means "jury of exactly twelve,"
[ Footnote 3/20 ] is not
fundamental to anything: there is no significance except to mystics
in the number 12. Again, trial by jury has been held to require a
unanimous verdict of jurors in the federal courts, [ Footnote 3/21 ] although unanimity has not
been found essential to liberty in Britain, where the requirement
has been abandoned. [ Footnote
3/22 ]
One further example is directly relevant here. The coexistence
of a requirement of jury trial in federal criminal cases and a
historic and universally recognized exception for "petty crimes"
has compelled this Court, on occasion, to decide whether a
particular crime is petty, or is included within the guarantee.
[ Footnote 3/23 ] Individual cases
have been decided without great conviction and without reference to
a guiding principle. The Court today holds, for no discernible
reason, that, if and when the line is drawn its exact location will
be a matter of such fundamental importance that it will be
uniformly imposed on the States. This Court is compelled to decide
such Page 391 U. S. 183 obscure borderline questions in the course of administering
federal law. This does not mean that its decisions are demonstrably
sounder than those that would be reached by state courts and
legislatures, let alone that they are of such importance that
fairness demands their imposition throughout the Nation.
Even if I could agree that the question before us is whether
Sixth Amendment jury trial is totally "in" or totally "out," I can
find in the Court's opinion no real reasons for concluding that it
should be "in." The basis for differentiating among clauses in the
Bill of Rights cannot be that only some clauses are in the Bill of
Rights, or that only some are old and much praised, or that only
some have played an important role in the development of federal
law. These things are true of all. The Court says that some clauses
are more "fundamental" than others, but it turns out to be using
this word in a sense that would have astonished Mr. Justice Cardozo
and which, in addition, is of no help. The word does not mean
"analytically critical to procedural fairness," for no real
analysis of the role of the jury in making procedures fair is even
attempted. Instead, the word turns out to mean "old," "much
praised," and "found in the Bill of Rights." The definition of
"fundamental" thus turns out to be circular. II Since, as I see it, the Court has not even come to grips with
the issues in this case, it is necessary to start from the
beginning. When a criminal defendant contends that his state
conviction lacked "due process of law," the question before this
Court, in my view, is whether he was denied any element of
fundamental procedural fairness. Believing, as I do, that due
process is an evolving concept and that old principles are subject
to reevaluation in light of later experience, I think it
appropriate to deal on its merits with the question whether
Louisiana denied Page 391 U. S. 184 appellant due process of law when it tried him for simple
assault without a jury.
The obvious starting place is the fact tat this Court has, in
the past, held that trial by jury is not a requisite of
criminal due process. In the leading case, Maxwell v. Dow, 176 U. S. 581 , Mr.
Justice Peckham wrote as follows for the Court: [ Footnote 3/24 ]
"Trial by jury has never been affirmed to be a necessary
requisite of due process of law. . . ."
" * * * *" ". . . The right to be proceeded against only by indictment, and
the right to a trial by twelve jurors, are of the same nature, and
are subject to the same judgment, and the people in the several
States have the same right to provide by their organic law for the
change of both or either. . . . [T]he State has full control over
the procedure in its courts, both in civil and criminal cases,
subject only to the qualification that such procedure must not work
a denial of fundamental rights or conflict with specific and
applicable provisions of the Federal Constitution. The legislation
in question is not, in our opinion, open to either of these
objections." Id. at 176 U. S.
603 -605. Page 391 U. S. 185 In Hawaii v. Mankichi, 190 U.
S. 197 , the question was whether the Territory of Hawaii
could continue its pre-annexation procedure of permitting
conviction by nonunanimous juries. The Congressional Resolution of
Annexation had provided that municipal legislation of Hawaii that
was not contrary to the United States Constitution could remain in
force. The Court interpreted the resolution to mean only that those
requirements of the Constitution that were "fundamental" would be
binding in the Territory. After concluding that a municipal statute
allowing a conviction of treason on circumstantial evidence would violate a "fundamental" guarantee of the
Constitution, the Court continued:
"We would even go farther, and say that most, if not all, the
privileges and immunities contained in the bill of rights of the
Constitution were intended to apply from the moment of annexation;
but we place our decision of this case upon the ground that the two
rights alleged to be violated in this case [Sixth Amendment jury
trial and grand jury indictment] are not fundamental in their
nature, but concern merely a method of procedure which sixty years
of practice had shown to be suited to the conditions of the
islands, and well calculated to conserve the rights of their
citizens to their lives, their property and their wellbeing." Id. at 190 U. S.
217 -218. Numerous other cases in this Court have assumed
that jury trial is not fundamental to ordered liberty. [ Footnote 3/25 ]
Although it is of course open to this Court to reexamine these
decisions, I can see no reason why they Page 391 U. S. 186 should now be overturned. It can hardly be said that time has
altered the question, or brought significant new evidence to bear
upon it. The virtues and defects of the jury system have been hotly
debated for a long time, [ Footnote
3/26 ] and are hotly debated today, without significant change
in the lines of argument. [ Footnote
3/27 ]
The argument that jury trial is not a requisite of due process
is quite simple. The central proposition of Palko, supra, a proposition to which I would adhere, is that "due process of law"
requires only that criminal trials be fundamentally fair. As stated
above, apart from the theory that it was historically intended as a
mere shorthand for the Bill of Rights, I do not see what else "due
process of law" can intelligibly be thought to mean. If due process
of law requires only fundamental Page 391 U. S. 187 fairness, [ Footnote 3/28 ] then
the inquiry in each case must be whether a state trial process was
a fair one. The Court has held, properly I think, that, in an
adversary process, it is a requisite of fairness, for which there
is no adequate substitute, that a criminal defendant be afforded a
right to counsel and to cross-examine opposing witnesses. But it
simply has not been demonstrated, nor, I think, can it be
demonstrated, that trial by jury is the only fair means of
resolving issues of fact.
The jury is of course not without virtues. It affords ordinary
citizens a valuable opportunity to participate in a process of
government, an experience fostering, one hopes, a respect for law.
[ Footnote 3/29 ] It eases the
burden on judges by enabling them to share a part of their
sometimes awesome responsibility. [ Footnote 3/30 ] A jury may, at times, afford a higher
justice by refusing to enforce harsh laws (although it necessarily
does so haphazardly, raising the questions whether arbitrary
enforcement of harsh laws is better than total enforcement, and
whether the jury system is to be defended on the ground that jurors
sometimes disobey their oaths). [ Footnote 3/31 ] And the jury may, or may Page 391 U. S. 188 not, contribute desirably to the willingness of the general
public to accept criminal judgments as just. [ Footnote 3/32 ]
It can hardly be gainsaid, however, that the principal original
virtue of the jury trial -- the limitations a jury imposes on a
tyrannous judiciary -- has largely disappeared. We no longer live
in a medieval or colonial society. Judges enforce laws enacted by
democratic decision, not by regal fiat. They are elected by the
people or appointed by the people's elected officials, and are
responsible not to a distant monarch alone, but to reviewing
courts, including this one. [ Footnote
3/33 ]
The jury system can also be said to have some inherent defects,
which are multiplied by the emergence of the criminal law from the
relative simplicity that existed when the jury system was devised.
[ Footnote 3/34 ] It is a
cumbersome process, not only imposing great cost in time and money
on both the State and the jurors themselves, [ Footnote 3/35 ], but also contributing to delay in
the machinery of justice. [ Footnote
3/36 ] Untrained jurors are presumably less adept at reaching
accurate conclusions of fact than judges, Page 391 U. S. 189 particularly if the issues are many or complex. [ Footnote 3/37 ] And it is argued by some
that trial by jury, far from increasing public respect for law,
impairs it: the average man, it is said, reacts favorably neither
to the notion that matters he knows to be complex are being decided
by other average men, [ Footnote
3/38 ] nor to the way the jury system distorts the process of
adjudication. [ Footnote 3/39 ]
That trial by jury is not the only fair way of adjudicating
criminal guilt is well attested by the fact that it is not the
prevailing way, either in England or in this country. For England,
one expert makes the following estimates. Parliament generally
provides that new statutory offenses, unless they are of
"considerable gravity," shall be tried to judges; consequently,
summary offenses now outnumber offenses for which jury trial is
afforded by more than six to one. Then, within the latter category,
84% of all cases are, in fact, tried to the court. Over all, "the
ratio of defendants actually tried by jury becomes in some years
little more than 1 percent." [ Footnote 3/40 ] Page 391 U. S. 190 In the United States, where it has not been as generally assumed
that jury waiver is permissible, [ Footnote 3/41 ] the statistics are only slightly less
revealing. Two experts have estimated that, of all prosecutions for
crimes triable to a jury, 75% are settled by guilty plea and 40% of
the remainder are tried to the court. [ Footnote 3/42 ] In one State, Maryland, which has always
provided for waiver, the rate of court trial appears in some years
to have reached 90%. [ Footnote
3/43 ] The Court recognizes the force of these statistics in
stating,
"We would not assert, however, that every criminal trial -- or
any particular trial -- held before a judge alone is unfair, or
that a defendant may never be as fairly treated by a judge as he
would be by a jury." Ante at 391 U. S. 158 .
I agree. I therefore see no reason why this Court should reverse
the conviction of appellant, absent any suggestion that his
particular trial was, in fact, unfair, or compel the State of
Louisiana to afford jury trial in an as yet unbounded category of
cases that can, without unfairness, be tried to a court.
Indeed, even if I were persuaded that trial by jury is a
fundamental right in some criminal cases, I could see nothing
fundamental in the rule, not yet formulated by the Court that
places the prosecution of appellant for simple battery within the
category of "jury crimes", rather than "petty crimes." Trial by
jury is ancient, Page 391 U. S. 191 it is true. Almost equally ancient, however, is the discovery
that, because of it,
"the King's most loving Subjects are much travailed and
otherwise encumbered in coming and keeping of the said six Weeks
Sessions, to their Costs, Charges, Unquietness. [ Footnote 3/44 ]"
As a result, through the long course of British and American
history, summary procedures have been used in a varying category of
lesser crimes as a flexible response to the burden jury trial would
otherwise impose.
The use of summary procedures has long been widespread. British
procedure in 1776 exempted from the requirement of jury trial
"[v]iolations of the laws relating to liquor, trade and
manufacture, labor, smuggling, traffic on the highway, the Sabbath,
'cheats,' gambling, swearing, small thefts, assaults, offenses to property, servants and seamen, vagabondage . . . [and]
at least a hundred more. [ Footnote
3/45 ] . . ."
45 (Emphasis added.) Penalties for such offenses included heavy
fines (with imprisonment until they were paid), whippings, and
imprisonment at hard labor. [ Footnote
3/46 ]
Nor had the Colonies a cleaner slate, although practices varied
greatly from place to place with conditions. In Massachusetts,
crimes punishable by whipping (up to 10 strokes), the stocks (up to
three hours), the ducking stool, and fines and imprisonment were
triable to magistrates. [ Footnote
3/47 ] The decision of a magistrate could, in theory, Page 391 U. S. 192 be appealed to a jury, but a stiff recognizance made exercise of
this right quite rare. [ Footnote
3/48 ] New York was somewhat harsher. For example, "anyone
adjudged by two magistrates to be an idle, disorderly or vagrant
person might be transported whence he came, and, on reappearance,
be whipped from constable to constable with thirty-one lashes by
each." [ Footnote 3/49 ] Anyone
committing a criminal offense "under the degree of Grand Larceny"
and unable to furnish bail within 48 hours could be summarily tried
by three justices. [ Footnote
3/50 ] With local variations, examples could be multiplied.
The point is not that many offenses that English-speaking
communities have, at one time or another, regarded as triable
without a jury are more serious, and carry more serious penalties,
than the one involved here. The point is, rather, that, until
today, few people would have thought the exact location of the line
mattered very much. There is no obvious reason why a jury trial is
a requisite of fundamental fairness when the charge is robbery, and
not a requisite of fairness when the same defendant, for the same
actions, is charged with assault and petty theft. [ Footnote 3/51 ] The reason for the historic
exception for relatively minor crimes is the obvious one: the
burden of jury trial was thought to outweigh its marginal
advantages. Exactly why the States should not be allowed to make
continuing adjustments, based on the state of Page 391 U. S. 193 their criminal dockets and the difficulty of summoning jurors,
simply escapes me.
In sum, there is a wide range of views on the desirability of
trial by jury, and on the ways to make it most effective when it is
used; there is also considerable variation from State to State in
local conditions such as the size of the criminal caseload, the
ease or difficulty of summoning jurors, and other trial conditions
bearing on fairness. We have before us, therefore, an almost
perfect example of a situation in which the celebrated dictum of
Mr. Justice Brandeis should be invoked. It is, he said,
"one of the happy incidents of the federal system that a single
courageous State may, if its citizens choose, serve as a
laboratory. . . ." New State Ice Co. v. Liebmann, 285 U.
S. 262 , 285 U. S. 280 ,
311 (dissenting opinion). This Court, other courts, and the
political process are available to correct any experiments in
criminal procedure that prove fundamentally unfair to defendants.
That is not what is being done today: instead, and quite without
reason, the Court has chosen to impose upon every State one means
of trying criminal cases; it is a good means, but it is not the
only fair means, and it is not demonstrably better than the
alternatives States might devise.
I would affirm the judgment of the Supreme Court of
Louisiana.
[ Footnote 3/1 ] See, e.g., my opinions in Mapp v. Ohio, 367 U. S. 643 , 367 U. S. 672 (dissenting); Ker v. California, 374 U. S.
23 , 374 U. S. 44 (concurring); Malloy v. Hogan, 378 U. S.
1 , 378 U. S. 14 (dissenting); Pointer v. Texas, 380 U.
S. 400 , 380 U. S. 408 (concurring); Griffin v. California, 380 U.
S. 609 , 380 U. S. 615 (concurring); Klopfer v. North Carolina, 386 U.
S. 213 , 386 U. S. 226 (concurring).
[ Footnote 3/2 ] Barron v.
Baltimore , 7 Pet. 243 (1833), held that the first
eight Amendments restricted only federal action.
[ Footnote 3/3 ]
The locus classicus for this viewpoint is The
Federalist No. 51 (Madison).
[ Footnote 3/4 ]
The Bill of Rights was opposed by Hamilton and other proponents
of a strong central government. See The Federalist No. 84; see generally C. Rossiter, 1787: The Grand Convention 284,
302-303.
[ Footnote 3/5 ]
In Barron v. Baltimore, supra, at 32 U. S. 250 ,
Chief Justice Marshall said,
"These amendments demanded security against the apprehended
encroachments of the general government -- not against those of the
local governments."
[ Footnote 3/6 ]
Jaffe, Was Brandeis an Activist? The Search for Intermediate
Premises, 80 Harv.L.Rev. 986 (1967).
[ Footnote 3/7 ] See Adamson v. California, 332 U. S.
46 , 332 U. S. 71 (dissenting opinion of BLACK, J.); O'Neil v. Vermont, 144 U. S. 323 , 144 U. S. 366 ,
370 (dissenting opinion of Harlan, J.) (1892); H. Black, "Due
Process of Law," in A Constitutional Faith 23 (1968).
[ Footnote 3/8 ]
In addition to the opinions cited in 391
U.S. 145 fn3/1|>n. 1, supra, see, e.g., in opinions
in Poe v. Ullman, 367 U. S. 497 , 367 U. S. 522 ,
at 367 U. S.
539 -545 (dissenting), and Griswold v.
Connecticut, 381 U. S. 479 , 381 U. S. 499 (concurring).
[ Footnote 3/9 ]
Fairman, Does the Fourteenth Amendment Incorporate the Bill of
Rights? The Original Understanding, 2 Stan.L.Rev. 5 (1949).
Professor Fairman was not content to rest upon the overwhelming
fact that the great words of the four clauses of the first section
of the Fourteenth Amendment would have been an exceedingly peculiar
way to say that
"The rights heretofore guaranteed against federal intrusion by
the first eight Amendments are henceforth guaranteed against state
intrusion as well."
He therefore sifted the mountain of material comprising the
debates and committee reports relating to the Amendment in both
Houses of Congress and in the state legislatures that passed upon
it. He found that, in the immense corpus of comments on the purpose
and effects of the proposed amendment, and on its virtues and
defects, there is almost no evidence whatever for "incorporation."
The first eight Amendments are so much as mentioned by only two
members of Congress, one of whom effectively demonstrated (a) that
he did not understand Barron v.
Baltimore , 7 Pet. 243, and therefore did not
understand the question of incorporation, and (b) that he was not
himself understood by his colleagues. One state legislative
committee report, rejected by the legislature as a whole, found § 1
of the Fourteenth Amendment superfluous because it duplicated the
Bill of Rights: the committee obviously did not understand Barron v. Baltimore either. That is all Professor Fairman
could find, in hundreds of pages of legislative discussion prior to
passage of the Amendment, that even suggests incorporation.
To this negative evidence the judicial history of the Amendment
could be added. For example, it proved possible for a Court whose
members had lived through Reconstruction to reiterate the doctrine
of Barron v. Baltimore, that the Bill of Rights did not
apply to the States, without so much as questioning whether the
Fourteenth Amendment had any effect on the continued validity of
that principle. E.g., Walker v. Sauvinet, 92 U. S.
90 ; see generally Morrison, Does the Fourteenth
Amendment Incorporate the Bill of Rights? The Judicial
Interpretation, 2 Stan.L.Rev. 140 (1949).
[ Footnote 3/10 ] Davidson v. New Orleans, 96 U. S.
97 , 96 U. S.
104 .
[ Footnote 3/11 ] Holden v. Hardy, 169 U. S. 366 , 169 U. S.
389 .
[ Footnote 3/12 ] Hurtado v. California, 110 U.
S. 516 , 110 U. S.
529 .
[ Footnote 3/13 ] Missouri v. Lewis, 101 U. S. 22 , 101 U. S.
31 .
[ Footnote 3/14 ] Gideon v. Wainwright, 372 U. S. 335 . The
right to counsel was found in the Fourteenth Amendment because, the
Court held, it was essential to a fair trial. See 372 U.S.
at 372 U. S.
342 -345.
[ Footnote 3/15 ] Klopfer v. North Carolina, 386 U.
S. 213 .
[ Footnote 3/16 ] Pointer v. Texas, 380 U. S. 400 .
[ Footnote 3/17 ] Irvin v. Dowd, 366 U. S. 717 .
[ Footnote 3/18 ]
The same illogical way of dealing with a Fourteenth Amendment
problem was employed in Malloy v. Hogan, 378 U. S.
1 , which held that the Due Process Clause guaranteed the
protection of the Self-Incrimination Clause of the Fifth Amendment
against state action. I disagreed at that time both with the way
the question was framed and with the result the Court reached. See my dissenting opinion, id. at 378 U. S. 14 . I
consider myself bound by the Court's holding in Malloy with respect to self-incrimination. See my concurring
opinion in Griffin v. California, 380 U.
S. 609 , 380 U. S. 615 .
I do not think that Malloy held, nor would I consider
myself bound by a holding, that every question arising under the
Due Process Clause shall be settled by an arbitrary decision
whether a clause in the Bill of Rights is "in" or "out."
[ Footnote 3/19 ]
The Court has so held in, e.g., Irvin v. Dowd, 366 U. S. 717 . Compare Dennis v. United States, 339 U.
S. 162 .
[ Footnote 3/20 ] E.g., Rassmussen v. United States, 197 U.
S. 516 .
[ Footnote 3/21 ] E.g., Andres v. United States, 333 U.
S. 740 . With respect to the common law number and
unanimity requirements, the Court suggests that these present no
problem because "our decisions interpreting the Sixth Amendment are
always subject to reconsideration. . . ." Ante at 391 U. S. 158 ,
n. 30. These examples illustrate a major danger of the
"incorporation" approach -- that provisions of the Bill of Rights
may be watered down in the needless pursuit of uniformity. Cf. my concurring opinion in Ker v. California, 374 U. S. 23 , 374 U. S. 44 .
MR. JUSTICE WHITE alluded to this problem in his dissenting opinion
in Malloy v. Hogan, supra, at 378 U. S. 38 .
[ Footnote 3/22 ]
Criminal Justice Act of 1967, § 13.
[ Footnote 3/23 ] E.g., Callan v. Wilson, 127 U.
S. 540 ; District of Columbia v. Clawans, 300 U. S. 617 ; District of Columbia v. Colts, 282 U. S.
63 .
[ Footnote 3/24 ]
The precise issue in Maxwell was whether a jury of
eight, rather than 12, jurors could be employed in criminal
prosecutions in Utah. The Court held that this was permissible
because the Fourteenth Amendment did not require the States to
provide trial by jury at all. The Court seems to think this was
dictum. As a technical matter, however, a statement that is
critical to the chain of reasoning by which a result is, in fact,
reached does not become dictum simply because a later court can
imagine a totally different way of deciding the case. See
Jordan v. Massachusetts, 225 U. S. 167 , 225 U. S. 176 ,
citing Maxwell for the proposition that "the requirement
of due process does not deprive a State of the power to dispense
with jury trial altogether."
[ Footnote 3/25 ] E.g., Irvin v. Dowd, supra, at 366 U. S. 721 ; Fay v. New York, 332 U. S. 261 , 332 U. S. 288 ; Palko v. Connecticut, supra, at 302 U. S. 325 ; Snyder v. Massachusetts, 291 U. S. 97 , 291 U. S. 105 ; Brown v. New Jersey , 175 U. S. 172 , 175 U. S. 175 ; Missouri v. Lewis, supra, at 101 U. S.
31 .
[ Footnote 3/26 ] E.g., Deady, Trial by Jury, 17 Am.L.Rev. 398, 399-400
(1883):
"Still in these days of progress and experiment, when everything
is on trial at the bar of human reason or conceit, it is quite the
fashion to speak of jury trial as something that has outlived its
usefulness. Intelligent and well meaning people often sneer at it
as an awkward and useless impediment to the speedy and correct
administration of justice, and a convenient loophole for the escape
of powerful and popular rogues. Considering the kind of jury trials
we sometimes have in the United States, it must be admitted that
this criticism is not without foundation."
[ Footnote 3/27 ] See generally Kalven, Memorandum Regarding Jury System,
printed in Hearings on Recording of Jury Deliberations before the
Subcommittee to Investigate the Administration of the Internal
Security Act of the Senate Committee on the Judiciary, 84th Cong.,
1st Sess., 63-81. In particular,
"the debate has been going on for a long time (at least since
1780), and the arguments which were advanced pro and con haven't
changed much in the interim. Nor, contrary to my first impression,
does there seem to be any particular period in which the debate
grows hotter or colder. It has always been a hot debate." Id. at 63.
[ Footnote 3/28 ] See, e.g., Snyder v. Massachusetts, supra, at 291 U. S.
107 -108 (Cardozo, J.):
"So far as the Fourteenth Amendment is concerned, the presence
of a defendant [at trial] is a condition of due process to the
extent that a fair and just hearing would be thwarted by his
absence, and to that extent only."
[ Footnote 3/29 ]
The point is made by, among others, A. Tocqueville. 1 Democracy
in America 285 (Reeve tr.).
[ Footnote 3/30 ]
The argument is developed by Curtis, The Trial Judge and the
Jury, 5 Vand.L.Rev. 150 (1952). For example,
"Juries relieve the judge of the embarrassment of making the
necessary exceptions. They do this, it is true, by violating their
oaths, but this, I think, is better than tempting the judge to
violate his oath of office." Id. at 157.
[ Footnote 3/31 ] See generally G. Williams, The Proof of Guilt 257-263;
W. Forsyth, History of Trial by Jury 261.
[ Footnote 3/32 ] See J. Stephen, A General View of the Criminal Law of
England 208-209.
[ Footnote 3/33 ] See, e.g., Sunderland, The Inefficiency of the American
Jury, 13 Mich.L.Rev. 302, 305:
"But times have changed, and the government itself is now under
the absolute control of the people. The judges, if appointed, are
selected by the agents of the people, and if elected are selected
by the people directly. The need for the jury as a political weapon
of defense has been steadily diminishing for a hundred years,
until, now, the jury must find some other justification for its
continuance."
[ Footnote 3/34 ] See, e.g., Sunderland, supra, at 303:
"Life was simple when the jury system was young, but, with the
steadily growing complexity of society and social practices, the
facts which enter into legal controversies have become much more
complex."
[ Footnote 3/35 ] Compare Green, Jury Injustice, 20 Jurid.Rev. 132,
133.
[ Footnote 3/36 ] Cf. Lummus, Civil Juries and the Law's Delay, 12
B.U.L.Rev. 487.
[ Footnote 3/37 ] See, e.g., McWhorter, Abolish the Jury, 57 Am.L.Rev.
42. Statistics on this point are difficult to accumulate for the
reason that the only way to measure jury performance is to compare
the result reached by a jury with the result the judge would have
reached in the same case. While judge-jury comparisons have many
values, it is impossible to obtain a statistical comparison of
accuracy in this manner. See generally H. Kalven & H.
Zeisel, The American Jury, passim. [ Footnote 3/38 ] E.g., Boston, Some Practical Remedies for Existing
Defects in the Administration of Justice, 61 U.Pa.L.Rev. 1, 16:
"There is not one important personal or property interest,
outside of a Court of justice, which any of us would willingly
commit to the first twelve men that come along the street. . .
."
[ Footnote 3/39 ] E.g., McWhorter, supra, at 46:
"It is the jury system that consumes time at the public expense
in gallery playing and sensational and theatrical exhibitions
before the jury, whereby the public interest and the dignity of the
law are swallowed up in a morbid, partisan or emotional personal
interest in the parties immediately concerned."
[ Footnote 3/40 ]
Williams, supra, at 302.
[ Footnote 3/41 ]
For example, in the federal courts the right of the defendant to
waive a jury was in doubt as recently as 1930, when it was
established in Patton v. United States, 281 U.
S. 276 . It was settled in New York only in 1957, People v. Carroll, 7 Misc.2d 581, 161 N.Y.S.2d 339, aff'd, 3 N.Y.2d 686, 148 N.E.2d 875.
[ Footnote 3/42 ]
Kalven & Zeisel, supra, at 12-32.
[ Footnote 3/43 ] See Oppenheim, Waiver of Trial by Jury in Criminal
Cases, 25 Mich.L.Rev. 695, 728.
[ Footnote 3/44 ]
37 Hen. 8, c. 7
[ Footnote 3/45 ]
Frankfurter & Corcoran, Petty Federal Offenses and the
Constitutional Guaranty of Trial by Jury, 39 Harv.L.Rev. 917, 928.
The source of the authors' information is R. Burn, Justice of the
Peace (1776).
[ Footnote 3/46 ]
Frankfurter & Corcoran, supra, at 93934.
[ Footnote 3/47 ] See id. at 938-942.
[ Footnote 3/48 ] Ibid. [ Footnote 3/49 ]
Frankfurter & Corcoran, supra, at 945. They refer
to the Vagrancy Act of 1721, 2 Col.L. (N.Y.) 56.
[ Footnote 3/50 ]
Frankfurter & Corcoran, supra, at 945.
[ Footnote 3/51 ]
The example is taken from Day, Petty Magistrates' Courts in
Connecticut, 17 J.Crim.L.C. & P.S. 343, 346-347, cited in
Kalven & Zeisel, supra, at 17. The point is that the
"huge proportion" of criminal charges for which jury trial has not
been available in America, E. Puttkammer, Administration of
Criminal Law 87-88, is increased by the judicious action of weary
prosecutors. | Here is a summary of the case:
In *Duncan v. Louisiana*, the United States Supreme Court held that the Fourteenth Amendment guarantees a right to a jury trial in state criminal cases where the potential sentence is greater than six months' imprisonment. The Court found that trial by jury in criminal cases is fundamental to the American scheme of justice and that the penalty authorized for a crime is a significant factor in determining its seriousness. In this case, the appellant, Gary Duncan, was convicted of simple battery under Louisiana law and sentenced to 60 days in prison and a fine. The Court held that a crime punishable by two years in prison is a serious crime, and Duncan was entitled to a jury trial. The Court reversed the conviction and remanded the case. |
Criminal Trials & Prosecutions | Barker v. Wingo | https://supreme.justia.com/cases/federal/us/407/514/ | U.S. Supreme Court Barker v. Wingo, 407
U.S. 514 (1972) Barker v. Wingo No. 71-5255 Argued April 11, 1972 Decided June 22, 1972 407
U.S. 514 CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE SIXTH
CIRCUIT Syllabus Petitioner was not brought to trial for murder until more than
five years after he had been arrested, during which time the
prosecution obtained numerous continuances, initially for the
purpose of first trying petitioner's alleged accomplice so that his
testimony, if conviction resulted, would be available at
petitioner's trial. Before the accomplice was finally convicted, he
was tried six times. Petitioner made no objection to the
continuances until three and one-half years after he was arrested.
After the accomplice was finally convicted, petitioner, after
further delays because of a key prosecution witness' illness, was
tried and convicted. In this habeas corpus proceeding, the Court of
Appeals, concluding that petitioner had waived his right to a
speedy trial for the period prior to his demand for trial, and, in
any event, had not been prejudiced by the delay, affirmed the
District Court's judgment against petitioner. Held: A defendant's constitutional right to a speedy
trial cannot be established by any inflexible rule, but can be
determined only on an ad hoc balancing basis in which the
conduct of the prosecution and that of the defendant are weighed.
The court should assess such factors as the length of and reason
for the delay, the defendant's assertion of his right, and
prejudice to the defendant. In this case, the lack of any serious
prejudice to petitioner and the fact, as disclosed by the record,
that he did not want a speedy trial outweigh opposing
considerations, and compel the conclusion that petitioner was not
deprived of his due process right to a speedy trial. Pp. 407 U. S.
519 -536.
442 F.2d 1141, affirmed.
POWELL, J., delivered the opinion for a unanimous Court. WHITE,
J., filed a concurring opinion, in which BRENNAN, J., joined, post, p. 407 U. S.
536 . Page 407 U. S. 515 MR. JUSTICE POWELL delivered the opinion of the Court.
Although a speedy trial is guaranteed the accused by the Sixth
Amendment to the Constitution, [ Footnote 1 ] this Court has dealt with that right on
infrequent occasions. See Beavers v. Haubert, 198 U. S.
77 (1905); Pollard v. United States, 352 U. S. 354 (1957); United States v. Ewell, 383 U.
S. 116 (1966); United States v. Marion, 404 U. S. 307 (1971). See also United States v. Provoo, 17 F.R.D. 183
(D. Md.), aff'd, 30 U.S. 857 (1955). The Court's opinion
in Klopfer v. North Carolina, 386 U.
S. 213 (1967), established that the right to a speedy
trial is "fundamental," and is imposed by the Due Process Clause of
the Fourteenth Amendment on the States. [ Footnote 2 ] See Smith v. Hooey, 393 U.
S. 374 (1969); Dickey v. Florida, 398 U. S.
30 (1070). As MR. JUSTICE BRENNAN Page 407 U. S. 516 pointed out in his concurring opinion in Dickey, in
none of these cases have we attempted to set out the criteria by
which the speedy trial right is to be judged. 398 U.S. at 398 U. S. 401 .
This case compels us to make such an attempt. I On July 20, 1958, in Christian County, Kentucky, an elderly
couple was beaten to death by intruders wielding an iron tire tool.
Two suspects, Silas Manning and Willie Barker, the petitioner, were
arrested shortly thereafter. The grand jury indicted them on
September 15. Counsel was appointed on September 17, and Barker's
trial was set for October 21. The Commonwealth had a stronger case
against Manning, and it believed that Barker could not be convicted
unless Manning testified against him. Manning was naturally
unwilling to incriminate himself. Accordingly, on October 23, the
day Silas Manning was brought to trial, the Commonwealth sought and
obtained the first of what was to be a series of 16 continuances of
Barker's trial. [ Footnote 3 ]
Barker made no objection. By first convicting Manning, the
Commonwealth would remove possible problems of self-incrimination,
and would be able to assure his testimony against Barker.
The Commonwealth encountered more than a few difficulties in its
prosecution of Manning. The first trial ended in a hung jury. A
second trial resulted in a conviction, but the Kentucky Court of
Appeals reversed because of the admission of evidence obtained by
an illegal search. Manning v. Commonwealth, 328
S.W.2d 421 (1959). At his third trial, Manning was again
convicted, and the Court of Appeals again reversed Page 407 U. S. 517 because the trial court had not granted a change of venue. Manning v. Commonwealth, 346
S.W.2d 755 (1961). A fourth trial resulted in a hung jury.
Finally, after five trials, Manning was convicted, in March, 1962,
of murdering one victim, and, after a sixth trial, in December,
1962, he was convicted of murdering the other. [ Footnote 4 ]
The Christian County Circuit Court holds three terms each year
-- in February, June, and September. Barker's initial trial was to
take place in the September term of 1958. The first continuance
postponed it until the February, 1959, term. The second continuance
was granted for one month only. Every term thereafter for as long a
the Manning prosecutions were in process, the Commonwealth
routinely moved to continue Barker's case to the next term. When
the case was continued from the June, 1959, term until the
following September, Barker, having spent 10 months in jail,
obtained his release by posting a $5,000 bond. He thereafter
remained free in the community until his trial. Barker made no
objection, through his counsel, to the first 11 continuances.
When, on February 12, 1962, the Commonwealth moved for the
twelfth time to continue the case until the following term,
Barker's counsel filed a motion to dismiss the indictment. The
motion to dismiss was denied two weeks later, and the
Commonwealth's motion for a continuance was granted. The
Commonwealth was granted further continuances in June, 1962, and
September, 1962, to which Barker did not object.
In February, 1963, the first term of court following Manning's
final conviction, the Commonwealth moved to set Barker's trial for
March 19. But on the day scheduled for trial, it again moved for a
continuance until the June term. It gave as its reason the
illness Page 407 U. S. 518 of the ex-sheriff who was the chief investigating officer in the
case. To this continuance, Barker objected unsuccessfully.
The witness was still unable to testify in June, and the trial,
which had been set for June 19, was continued again until the
September term over Barker's objection. This time the court
announced that the case would be dismissed for lack of prosecution
if it were not tried during the next term. The final trial date was
set for October 9, 1963. On that date, Barker again moved to
dismiss the indictment, and this time specified that his right to a
speedy trial had been violated. [ Footnote 5 ] The motion was denied; the trial commenced
with Manning a the chief prosecution witness; Barker was convicted
and given a life sentence.
Barker appealed his conviction to the Kentucky Court of Appeals,
relying in part on his speedy trial claim. The court affirmed. Barker v. Commonwealth, 385
S.W.2d 671 (1964). In February, 1970, Barker petitioned for
habeas corpus in the United States District Court for the Western
District of Kentucky. Although the District Court rejected the
petition without holding a hearing, the court granted petitioner
leave to appeal in forma pauperis and a certificate of
probable cause to appeal. On appeal, the Court of Appeals for the
Sixth Circuit affirmed the District Court. 442 F.2d 1141 (1971). It
ruled that Barker had waived his speedy trial claim for the entire
period before February, 1963, the date on which the court believed
he had first objected to the delay by filing a motion to dismiss.
In this belief the court was mistaken, for the record reveals Page 407 U. S. 519 that the motion was filed in February, 1962. The Commonwealth so
conceded at oral argument before this Court. [ Footnote 6 ] The court held further that the
remaining period after the date on which Barker first raised his
claim and before his trial -- which it thought was only eight
months but which was actually 20 months -- was not unduly long. In
addition, the court held that Barker had shown no resulting
prejudice, and that the illness of the ex-sheriff was a valid
justification for the delay. We granted Barker's petition for
certiorari. 404 U.S. 1037 (1972). II The right to a speedy trial is generically different from any of
the other rights enshrined in the Constitution for the protection
of the accused. In addition to the general concern that all accused
persons be treated according to decent and fair procedures, there
is a societal interest in providing a speedy trial which exists
separate from, and at times in opposition to, the interests of the
accused. The inability of courts to provide a prompt trial has
contributed to a large backlog of cases in urban courts which,
among other things, enables defendants to negotiate more
effectively for pleas of guilty to lesser offenses and otherwise
manipulate the system. [ Footnote
7 ] In addition, persons released on bond for lengthy periods
awaiting trial have an opportunity to commit other crimes.
[ Footnote 8 ] It must be of
little comfort to the residents of Christian County, Kentucky, to
know that Barker was at large on bail for over four years while
accused of a vicious Page 407 U. S. 520 and brutal murder of which he was ultimately convicted.
Moreover, the longer an accused is free awaiting trial, the more
tempting becomes his opportunity to jump bail and escape. [ Footnote 9 ] Finally, delay between
arrest and punishment may have a detrimental effect on
rehabilitation. [ Footnote
10 ]
If an accused cannot make bail, he is generally confined, as was
Barker for 10 months, in a local jail. This contributes to the
overcrowding and generally deplorable state of those institutions.
[ Footnote 11 ] Lengthy
exposure to these conditions "has a destructive effect on human
character, and makes the rehabilitation of the individual offender
much more difficult." [ Footnote
12 ] At times the result may even be violent rioting. [ Footnote 13 ] Finally, lengthy
pretrial detention is costly. The cost of maintaining a prisoner in
jail varies from $3 to $9 per day, and this amounts to millions
across Page 407 U. S. 521 the Nation. [ Footnote 14 ]
In addition, society loses wages which might have been earned, and
it must often support families of incarcerated breadwinners.
A second difference between the right to speedy trial and the
accused's other constitutional rights is that deprivation of the
right may work to the accused's advantage. Delay is not an uncommon
defense tactic. As the time between the commission of the crime and
trial lengthens, witnesses may become unavailable or their memories
may fade. If the witnesses support the prosecution, its case will
be weakened, sometimes seriously so. And it is the prosecution
which carries the burden of proof. Thus, unlike the right to
counsel or the right to be free from compelled self-incrimination,
deprivation of the right to speedy trial does not per se prejudice the accused's ability to defend himself.
Finally, and perhaps most importantly, the right to speedy trial
is a more vague concept than other procedural rights. It is, for
example, impossible to determine with precision when the right has
been denied. We cannot definitely say how long is too long in a
system where justice is supposed to be swift but deliberate.
[ Footnote 15 ] As a
consequence, there is no fixed point in the criminal process when
the State can put the defendant to the choice of either exercising
or waiving the right to a speedy trial. If, for example, the State
moves for Page 407 U. S. 522 a 60-day continuance, granting that continuance is not a
violation of the right to speedy trial unless the circumstances of
the case are such that further delay would endanger the values the
right protects. It is impossible to do more than generalize about
when those circumstances exist. There is nothing comparable to the
point in the process when a defendant exercises or waives his right
to counsel or his right to a jury trial. Thus, as we recognized in Beavers v. Haubert, supra, any inquiry into a speedy trial
claim necessitates a functional analysis of the right in the
particular context of the case:
"The right of a speedy trial is necessarily relative. It is
consistent with delays, and depends upon circumstances. It secures
rights to a defendant. It does not preclude the rights of public
justice."
198 U.S. at 198 U. S.
87 .
The amorphous quality of the right also leads to the
unsatisfactorily severe remedy of dismissal of the indictment when
the right has been deprived. This is indeed a serious consequence,
because it means that a defendant who may be guilty of a serious
crime will go free, without having been tried. Such a remedy is
more serious than an exclusionary rule or a reversal for a new
trial, [ Footnote 16 ] but it
is the only possible remedy. III Perhaps because the speedy trial right is so slippery, two rigid
approaches are urged upon us as ways of eliminating some of the
uncertainty which courts experience Page 407 U. S. 523 in protecting the right. The first suggestion is that we hold
that the Constitution requires a criminal defendant to be offered a
trial within a specified time period. The result of such a ruling
would have the virtue of clarifying when the right is infringed and
of simplifying courts' application of it. Recognizing this, some
legislatures have enacted laws, and some courts have adopted
procedural rules which more narrowly define the right. [ Footnote 17 ] The United States Court
of Appeals for the Second Circuit has promulgated rules for the
district courts in that Circuit establishing that the government
must be ready for trial within six months of the date of arrest,
except in unusual circumstances, or the charge will be dismissed.
[ Footnote 18 ] This type of
rule is also recommended by the American Bar Association. [ Footnote 19 ]
But such a result would require this Court to engage in
legislative or rulemaking activity, rather than in the adjudicative
process to which we should confine our efforts. We do not establish
procedural rules for the States, except when mandated by the
Constitution. We find no constitutional basis for holding that the
speedy trial right can be quantified into a specified number of
days or months. The States, of course, are free to prescribe a
reasonable period consistent with constitutional standards, but our
approach must be less precise.
The second suggested alternative would restrict
consideration Page 407 U. S. 524 of the right to those case in which the accused has demanded a
speedy trial. Most States have recognized what is loosely referred
to as the "demand rule," [ Footnote 20 ] although eight States reject it. [ Footnote 21 ] It is not clear,
however, precisely what is meant by that term. Although every
federal court of appeals that has considered the question has
endorsed some kind of demand rule, some have regarded the rule
within the concept of waiver, [ Footnote 22 ] whereas others have viewed it as a factor to
be weighed Page 407 U. S. 525 in assessing whether there has been a deprivation of the speedy
trial right. [ Footnote 23 ]
We shall refer to the former approach as the demand-waiver
doctrine. The demand-waiver doctrine provides that a defendant
waives any consideration of his right to speedy trial for any
period prior to which he has not demanded a trial. Under this rigid
approach, a prior demand is a necessary condition to the
consideration of the speedy trial right. This essentially was the
approach the Sixth Circuit took below.
Such an approach, by presuming waiver of a fundamental right
[ Footnote 24 ] from inaction,
is inconsistent with this Court's pronouncements on waiver of
constitutional rights. The Court has defined waiver as "an
intentional relinquishment or abandonment of a known right or
privilege." Johnson v. Zerbst, 304 U.
S. 458 , 304 U. S. 464 (1938). Courts should "indulge every reasonable presumption against
waiver," Aetna Ins. Co. v. Kennedy, 301 U.
S. 389 , 301 U. S. 393 (1937), and they should "not presume acquiescence Page 407 U. S. 526 in the loss of fundamental rights," Ohio Bell Tel. Co. v.
Public Utilities Comm'n, 301 U. S. 292 , 301 U. S. 307 (137). In Carnley v. Cochran, 369 U.
S. 506 (1962), we held:
"Presuming waiver from a silent record is impermissible. The
record must show, or there must be an allegation and evidence which
show, that an accused was offered counsel but intelligently and
understandably rejected the offer. Anything less is not
waiver." Id. at 369 U. S. 516 .
The Court has ruled similarly with respect to waiver of other
rights designed to protect the accused. See, e.g., Miranda v.
Arizona, 384 U. S. 436 , 384 U. S.
475 -476 (1966); Boykin v. Alabama, 395 U.
S. 238 (1969).
In excepting the right to speedy trial from the rule of waiver
we have applied to other fundamental rights, courts that have
applied the demand-waiver rule have relied on the assumption that
delay usually works for the benefit of the accused, and on the
absence of any readily ascertainable time in the criminal process
for a defendant to be given the choice of exercising or waiving his
right. But it is not necessarily true that delay benefits the
defendant. There are cases in which delay appreciably harms the
defendant's ability to defend himself. [ Footnote 25 ] Page 407 U. S. 527 Moreover, a defendant confined to jail prior to trial is
obviously disadvantaged by delay as is a defendant released on bail
but unable to lead a normal life because of community suspicion and
his own anxiety.
The nature of the speedy trial right does make it impossible to
pinpoint a precise time in the process when the right must be
asserted or waived, but that fact does not argue for placing the
burden of protecting the right solely on defendants. A defendant
has no duty to bring himself to trial; [ Footnote 26 ] the State has that duty as well as the
duty of insuring that the trial is consistent with due process.
[ Footnote 27 ] Moreover, for
the reasons earlier expressed, society has a particular interest in
bringing swift prosecutions, and society's representatives are the
ones who should protect that interest.
It is also noteworthy that such a rigid view of the
demand-waiver rule places defense counsel in an awkward position.
Unless he demands a trial early and often, he is in danger of
frustrating his client's right. If counsel is willing to tolerate
some delay because he finds it reasonable and helpful in preparing
his own case, he may be unable to obtain a speedy trial for his
client at the end of that time. Since, under the demand-waiver
rule, no time Page 407 U. S. 528 runs until the demand is made, the government will have whatever
time is otherwise reasonable to bring the defendant to trial after
a demand has bee made. Thus, if the first demand is made three
months after arrest in a jurisdiction which prescribes a six-month
rule, the prosecution will have a total of nine months -- which may
be wholly unreasonable under the circumstances. The result in
practice is likely to be either an automatic, pro forma demand made immediately after appointment of counsel or delays
which, but for the demand-waiver rule, would not be tolerated. Such
a result is not consistent with the interests of defendants,
society, or the Constitution.
We reject, therefore, the rule that a defendant who fails to
demand a speedy trial forever waives his right. [ Footnote 28 ] This does not mean, however,
that the defendant has no responsibility to assert his right. We
think the better rule is that the defendant's assertion of or
failure to assert his right to a speedy trial is one of the factors
to be considered in an inquiry into the deprivation of the right.
Such a formulation avoids the rigidities of the demand-waiver rule
and the resulting possible unfairness in its application. It allows
the trial court Page 407 U. S. 529 to exercise a judicial discretion based on the circumstances,
including due consideration of any applicable formal procedural
rule. It would permit, for example, a court to attach a different
weight to a situation in which the defendant knowingly fails to
object from a situation in which his attorney acquiesces in long
delay without adequately informing his client, or from a situation
in which no counsel is appointed. It would also allow a court to
weigh the frequency and force of the objections, as opposed to
attaching significant weight to a purely pro forma objection.
In ruling that a defendant has some responsibility to assert a
speedy trial claim, we do not depart from our holdings in other
cases concerning the waiver of fundamental rights, in which we have
placed the entire responsibility on the prosecution to show that
the claimed waiver was knowingly and voluntarily made. Such cases
have involved rights which must be exercised or waived at a
specific time or under clearly identifiable circumstances, such as
the rights to plead not guilty, to demand a jury trial, to exercise
the privilege against self-incrimination, and to have the
assistance of counsel. We have shown above that the right to a
speedy trial is unique in its uncertainty as to when and under what
circumstances it must be asserted or may be deemed waived. But the
rule we announce today, which comports with constitutional
principles, places the primary burden on the courts and the
prosecutors to assure that cases are brought to trial. We hardly
need add that, if delay is attributable to the defendant, then his
waiver may be given effect under standard waiver doctrine, the
demand rule aside.
We therefore reject both of the inflexible approaches -- the
fixed-time period because it goes further than the Constitution
requires; the demand-waiver rule because it is insensitive to a
right which we have deemed Page 407 U. S. 530 fundamental. The approach we accept is a balancing test, in
which the conduct of both the prosecution and the defendant are
weighed. [ Footnote 29 ] IV A balancing test necessarily compels courts to approach speedy
trial cases on an ad hoc basis. We can do little more than
identify some of the factors which courts should assess in
determining whether a particular defendant has been deprived of his
right. Though some might express them in different ways, we
identify four such factors: length of delay, the reason for the
delay, the defendant's assertion of his right, and prejudice to the
defendant. [ Footnote 30 ]
The length of the delay is to some extent a triggering
mechanism. Until there is some delay which is presumptively
prejudicial, there is no necessity for inquiry into the other
factors that go into the balance. Nevertheless, because of the
imprecision of the right to speedy trial, the length of delay that
will provoke such an inquiry is necessarily dependent upon the
peculiar Page 407 U. S. 531 circumstances of the case. [ Footnote 31 ] To take but one example, the delay that can
be tolerated for an ordinary street crime is considerably less than
for a serious, complex conspiracy charge.
Closely related to length of delay is the reason the government
assigns to justify the delay. Here, too, different weights should
be assigned to different reasons. A deliberate attempt to delay the
trial in order to hamper the defense should be weighted heavily
against the government. [ Footnote 32 ] A more neutral reason such as negligence or
overcrowded courts should be weighted less heavily but nevertheless
should be considered since the ultimate responsibility for such
circumstances must rest with the government, rather than with the
defendant. Finally, a valid reason, such as a missing witness,
should serve to justify appropriate delay.
We have already discussed the third factor, the defendant's
responsibility to assert his right. Whether and how a defendant
asserts his right is closely related to the other factors we have
mentioned. The strength of his efforts will be affected by the
length of the delay, to some extent by the reason for the delay,
and most particularly by the personal prejudice, which is not
always readily identifiable, that he experiences. The more serious
the deprivation, the more likely a defendant is to complain. The
defendant's assertion of his speedy trial right, then, is entitled
to strong evidentiary weight in determining Page 407 U. S. 532 whether the defendant is being deprived of the right. We
emphasize that failure to assert the right will make it difficult
for a defendant to prove that he was denied a speedy trial.
A fourth factor is prejudice to the defendant. Prejudice, of
course, should be assessed in the light of the interests of
defendants which the speedy trial right was designed to protect.
This Court has identified three such interests: (i) to prevent
oppressive pretrial incarceration; (ii) to minimize anxiety and
concern of the accused; and (iii) to limit the possibility that the
defense will be impaired. [ Footnote 33 ] Of these, the most serious is the last,
because the inability of a defendant adequately to prepare his case
skews the fairness of the entire system. If witnesses die or
disappear during a delay, the prejudice is obvious. There is also
prejudice if defense witnesses are unable to recall accurately
events of the distant past. Loss of memory, however, is not always
reflected in the record, because what has been forgotten can rarely
be shown.
We have discussed previously the societal disadvantages of
lengthy pretrial incarceration, but obviously the disadvantages for
the accused who cannot obtain his release are even more serious.
The time spent in jail awaiting trial has a detrimental impact on
the individual. It often means loss of a job; it disrupts family
life; and it enforces idleness. Most jails offer little or no
recreational or rehabilitative programs. [ Footnote 34 ] The time spent in Page 407 U. S. 533 jail is simply dead time. Moreover, if a defendant is locked up,
he is hindered in his ability to gather evidence, contact
witnesses, or otherwise prepare his defense. [ Footnote 35 ] Imposing those consequences on
anyone who has not yet been convicted is serious. It is especially
unfortunate to impose them on those persons who are ultimately
found to be innocent. Finally, even if an accused is not
incarcerated prior to trial, he is still disadvantaged by
restraints on his liberty and by living under a cloud of anxiety,
suspicion, and often hostility. See cases cited in n 33, supra. We regard none of the four factors identified above as either a
necessary or sufficient condition to the finding of a deprivation
of the right of speedy trial. Rather, they are related factors, and
must be considered together with such other circumstances as may be
relevant. In sum, these factors have no talismanic qualities;
courts must still engage in a difficult and sensitive balancing
process. [ Footnote 36 ] But,
because we are dealing with a fundamental right of the accused,
this process must be carried out with full recognition that the
accused's interest in a speedy trial is specifically affirmed in
the Constitution. V The difficulty of the task of balancing these factors is
illustrated by this case, which we consider to be close. It is
clear that the length of delay between arrest and trial -- well
over five years -- was extraordinary. Only Page 407 U. S. 534 seven months of that period can be attributed to a strong
excuse, the illness of the ex-sheriff who was in charge of the
investigation. Perhaps some delay would have been permissible under
ordinary circumstances so that Manning could be utilized as a
witness in Barker's trial, but more than four years was too long a
period, particularly since a good part of that period was
attributable to the Commonwealth's failure or inability to try
Manning under circumstances that comported with due process.
Two counterbalancing factors, however, outweigh these
deficiencies. The first is that prejudice was minimal. Of course,
Barker was prejudiced to some extent by living for over four years
under a cloud of suspicion and anxiety. Moreover, although he was
released on bond for most of the period, he did spend 10 months in
jail before trial. But there is no claim that any of Barker's
witnesses died or otherwise became unavailable owing to the delay.
The trial transcript indicates only two very minor lapses of memory
-- one on the part of a prosecution witness -- which were in no way
significant to the outcome.
More important than the absence of serious prejudice is the fact
that Barker did not want a speedy trial. Counsel was appointed for
Barker immediately after his indictment, and represented him
throughout the period. No question is raised as to the competency
of such counsel. [ Footnote
37 ] Despite the fact that counsel had notice of the motions for
continuances, [ Footnote 38 ]
the record shows no action whatever taken between October 21, 1958,
and February 12, 1962, that could be construed as the assertion of
the speedy trial right. On the latter date, in response to another
motion for continuance, Barker moved Page 407 U. S. 535 to dismiss the indictment. The record does not show on what
ground this motion was based, although it is clear that no
alternative motion was made for a immediate trial. Instead, the
record strongly suggests that, while he hoped to take advantage of
the delay in which he had acquiesced, and thereby obtain a
dismissal of the charges, he definitely did not want to be tried.
Counsel conceded as much at oral argument:
"Your honor, I would concede that Willie Mae Barker probably --
I don't know this for a fact -- probably did not want to be tried.
I don't think any man wants to be tried. And I don't consider this
a liability on his behalf. I don't blame him."
Tr. of Oral Arg. 39. The probable reason for Barker's attitude
was that he was gambling on Manning's acquittal. The evidence was
not very strong against Manning, as the reversals and hung juries
suggest, and Barker undoubtedly thought that, if Manning were
acquitted, he would never be tried. Counsel also conceded this:
"Now, it's true that the reason for this delay was the
Commonwealth of Kentucky's desire to secure the testimony of the
accomplice, Silas Manning. And it's true that, if Silas Manning
were never convicted, Willie Mae Barker would never have been
convicted. We concede this." Id. at 15. [ Footnote
39 ] Page 407 U. S. 536 That Barker was gambling on Manning's acquittal is also
suggested by his failure, following the pro forma motion
to dismiss filed in February, 1962, to object to the Commonwealth's
next two motions for continuances. Indeed, it was not until March,
1963, after Manning's convictions were final, that Barker, having
lost his gamble, began to object to further continuances. At that
time, the Commonwealth's excuse was the illness of the ex-sheriff,
which Barker has conceded justified the further delay. [ Footnote 40 ]
We do not hold that there may never be a situation in which an
indictment may be dismissed on speedy trial grounds where the
defendant has failed to object to continuances. There may be a
situation in which the defendant was represented by incompetent
counsel, was severely prejudiced, or even cases in which the
continuances were granted ex parte. But barring
extraordinary circumstances, we would be reluctant indeed to rule
that a defendant was denied this constitutional right on a record
that strongly indicates, as does this one, that the defendant did
not want a speedy trial. We hold, therefore, that Barker was not
deprived of his due process right to a speedy trial.
The judgment of the Court of Appeals is Affirmed. [ Footnote 1 ]
The Sixth Amendment provides:
"In all criminal prosecutions, the accused shall enjoy the right
to a speedy and public trial, by an impartial jury of the State and
district wherein the crime shall have been committed, which
district shall have been previously ascertained by law, and to be
informed of the nature and cause of the accusation; to be
confronted with the witnesses against him; to have compulsory
process for obtaining witnesses in his favor, and to have the
Assistance of Counsel for his defence."
[ Footnote 2 ]
"We hold here that the right to a speedy trial is as fundamental
as any of the rights secured by the Sixth Amendment." 386 U.S. at 386 U. S.
223 .
[ Footnote 3 ]
There is no explanation in the record why, although Barker's
initial trial was set for October 21, no continuance was sought
until October 23, two days after the trial should have begun.
[ Footnote 4 ]
Apparently Manning chose not to appeal these final two
convictions.
[ Footnote 5 ]
The written motion Barker filed alleged that he had objected to
every continuance since February, 1959. The record does not reflect
any objections until the motion to dismiss, filed in February 1962,
and the objection to the continuances ought by the Commonwealth in
March, 1963, and June, 1963.
[ Footnote 6 ]
Tr of Oral Arg. 33.
[ Footnote 7 ]
Report of the President's Commission on Crime in the District of
Columbia 256 (1966).
[ Footnote 8 ]
In Washington, D.C. in 1968, 70.1% of the persons arrested for
robbery and released prior to trial were re-arrested while on bail.
Mitchell, Bail Reform and the Constitutionality of Pretrial
Detention, 55 Va.L.Rev. 1223, 1236 (1969), citing Report of the
Judicial Council Committee to Study the Operation of the Bail
Reform Act in the District of Columbia 20-21 (1969).
[ Footnote 9 ]
The number of these offenses has been increasing. See Annual Report of the Director of the Administrative Office of the
United States Courts, 1971, p. 321.
[ Footnote 10 ]
"[I]t is desirable that punishment should follow offence as
closely as possible; for its impression upon the minds of men is
weakened by distance, and, besides, distance adds to the
uncertainty of punishment, by affording new chances of escape."
J. Bentham, The Theory of Legislation 326 (Ogden ed.1931).
[ Footnote 11 ]
To Establish Justice, To Insure Domestic Tranquility, Final
Report of the National Commission on the Causes and Prevention of
Violence 152 (1969).
[ Footnote 12 ]
Testimony of James V. Bennett, Director, Bureau of Prisons,
Hearings on Federal Bail Procedures before the Subcommittee on
Constitutional Rights and the Subcommittee on Improvements in
Judicial Machinery of the Senate Committee on the Judiciary, 88th
Cong., 2d Sess., 46 (1964).
[ Footnote 13 ] E.g., the "Tombs" riots in New York City in 1970. N.Y.
Times, Oct. 3, 1970, p. 1, col. 8.
[ Footnote 14 ]
The Challenge of Crime in a Free Society, A Report by the
President's Commission on Law Enforcement and Administration of
Justice 131 (1967).
[ Footnote 15 ]
"[I]n large measure because of the many procedural safeguards
provided an accused, the ordinary procedures for criminal
prosecution are designed to move at a deliberate pace. A
requirement of unreasonable speed would have a deleterious effect
both upon the rights of the accused and upon the ability of society
to protect itself." United States v. Ewell, 383 U.
S. 116 , 383 U. S. 120 (1966).
[ Footnote 16 ]
MR. JUSTICE WHITE noted in his opinion for the Court in Ewell, supra, at 383 U. S. 121 ,
that overzealous application of this remedy would infringe "the
societal interest in trying people accused of crime, rather than
granting them immunization because of legal error. . . ."
[ Footnote 17 ]
For examples, see American Bar Association Project on
Standards for Criminal Justice, Speedy Trial 14-16 (Approved Draft
1968); Note, The Right. to a Speedy Criminal Trial, 57 Col.L.Rev.
846, 863 (1957).
[ Footnote 18 ]
Second Circuit Rules Regarding Prompt Disposition of Criminal
Cases (1971).
[ Footnote 19 ]
ABA Project, supra, n 17, at 14. For an example of a proposed statutory rule, see Note, The Lagging Right to a Speedy Trial, 51
Va.L.Rev. 1587, 1619 (1965).
[ Footnote 20 ] E.g., Pines v. District Court of Woodbury County, 233
Iowa 1284, 10 N.W.2d 574 (1943). See generally Note, The
Right to a Speedy Criminal Trial, 57 Col.L.Rev. 846, 853 (1957);
Note, The Lagging Right to a Speedy Trial, 51 Va.L.Rev. 1587,
1601-1602 (1965).
[ Footnote 21 ] See State v. Maldonado, 92 Ariz. 70, 373 P.2d 583 (en banc), cert. denied, 371 U.S. 928 (1962); Hicks v.
People, 148 Colo. 26, 364 P.2d 877 (1961) (en banc); People v. Prosser, 309 N.Y. 353, 130
N.E.2d 891 (1955); Zehrlaut v. State, 230 Ind. 175, 102 N.E.2d
203 (1951); Flanary v. Commonwealth, 184 Va. 204, 35
S.E.2d 135 (1945); Ex parte Chalfant, 81 W.Va. 93, 93 S.E.
1032 (1917); State v. Hess, 180 Kan. 472, 304 P.2d 474 (1956); State v. Dodson, 226 Ore. 458, 360 P.2d
782 (1961). But see State v. Vawter, 236 Ore. 85, 386 P.2d
915 (1963).
[ Footnote 22 ] See United States v. Hill, 310 F.2d 601 (CA4 1962); Bruce v. United States, 351 F.2d 318 (CA5 1965), cert.
denied, 384 U.S. 921 (1966); United States v. Perez, 398 F.2d 658 (CA7 1968), cert. denied, 393 U.S. 1080
(1969); Pietch v. United States, 110 F.2d 817 (CA. 10), cert. denied, 310 U.S. 648 (1940); Smith v. United
States, 118 U.S.App.D.C. 38, 331 F.2d 784 (1964) (en banc).
The opinion below in this case demonstrates that the Sixth Circuit
takes a similar approach.
As an indication of the importance which these courts have
attached to the demand rule, see Perez, supra, in which
the court held that a defendant waived any speedy trial claim,
because he knew of an indictment and made no demand for an
immediate trial, even though the record gave no indication that he
was represented by counsel at the time when he should have made his
demand, and even though he was not informed by the court or the
prosecution of his right to a speedy trial.
[ Footnote 23 ]
Although stating that they recognize a demand rule, the approach
of the Eighth and Ninth Circuits seems to be that a denial of
speedy trial can be found despite an absence of a demand under some
circumstances. See Bandy v. United States, 408 F.2d 518
(CA8 1969) (a purposeful or oppressive delay may overcome a failure
to demand); Moser v. United States, 381 F.2d 363 (CA9
1967) (despite a failure to demand, the court balanced other
considerations).
The Second Circuit's approach is unclear. There are cases in
which a failure to demand is strictly construed as a waiver. E.g., United States v. DeMasi, 445 F.2d 251 (1971). In
other cases, the court has seemed to be willing to consider claims
in which there was no demand. E.g., United States ex rel.
Solomon v. Mancusi, 412 F.2d 88, cert. denied, 396
U.S. 936 (1969). Certainly the District Courts in the Second
Circuit have not regarded the demand rule as being rigid. See
United States v. Mann, 291 F.
Supp. 268 (SDNY 1968); United States v.
Dillon, 183 F.
Supp. 541 (SDNY 1960).
The First Circuit also seems to reject the more rigid approach. Compare United States v. Butler, 426 F.2d 1275 (1970), with Needel v. Scafati, 412 F.2d 761, cert.
denied, 396 U.S. 861 (1969).
[ Footnote 24 ] See n 2, supra. [ Footnote 25 ]
If a defendant deliberately bypasses state procedure for some
strategic, tactical, or other reason, a federal judge on habeas
corpus may deny relief if he finds that the bypassing was the
considered choice of the petitioner. The demand doctrine
presupposes that failure to demand trial is a deliberate choice for
supposed advantage on the assumption that delay always benefits the
accused, but the delay does not inherently benefit the accused any
more than it does the state. Consequently, a man should not be
presumed to have exercised a deliberate choice because of silence
or inaction that could equally mean that he is unaware of the
necessity for a demand.
Note, The Lagging Right to a Speedy Trial, 51 Va.L.Rev. 1587,
1610 (1965) (footnotes omitted).
[ Footnote 26 ]
As MR. CHIEF JUSTICE BURGER wrote for the Court in Dickey v.
Florida: "Although a great many accused persons seek to put off the
confrontation as long as possible, the right to a prompt inquiry
into criminal charges is fundamental, and the duty of the charging
authority is to provide a prompt trial." 398 U.S.
30 , 398 U. S. 37 -38
(1970) (footnote omitted).
[ Footnote 27 ]
As a circuit judge, MR. JUSTICE BLACKMUN wrote:
"The government and, for that matter, the trial court are not
without responsibility for the expeditious trial of criminal cases.
The burden for trial promptness is not solely upon the defense. The
right to 'a speedy . . . trial' is constitutionally guaranteed,
and, as such, is not to be honored only for the vigilant and the
knowledgeable." Hodges v. United States, 408 F.2d 543, 551 (CA8
1969).
[ Footnote 28 ]
The American Bar Association also rejects the rigid demand
waiver rule:
"One reason for this position is that there are a number of
situations, such as where the defendant is unaware of the charge or
where the defendant is without counsel, in which it is unfair to
require a demand. . . . Jurisdictions with a demand.requirement are
faced with the continuing problem of defining exceptions, a process
which has not always been carried out with uniformity. . . . More
important, the demand requirement is inconsistent with the public
interest in prompt disposition of criminal cases. . . . [T]he trial
of a criminal case should not be unreasonably delayed merely
because the defendant does not think that it is in his best
interest to seek prompt disposition of the charge."
ABA Project, supra, n 17, at 17.
[ Footnote 29 ]
Nothing we have said should be interpreted as disapproving a
presumptive rule adopted by a court in the exercise of its
supervisory powers which establishes a fixed time period within
which cases must normally be brought. See n 18, supra. [ Footnote 30 ] See, e.g., United States v. Simmons, 338 F.2d 804, 807
(CA2 1964), cert. denied, 380 U.S. 983 (1965); Note, The
Right to a Speedy Trial, 20 Stan.L.Rev. 476, 478 n. 15 (1968).
In his concurring opinion in Dickey, MR. JUSTICE
BRENNAN identified three factors for consideration: the source of
the delay, the reasons for it, and whether the delay prejudiced the
interests protected by the right. 398 U.S. at 398 U. S. 48 . He
included consideration of the defendant's failure to assert his
right in the cause-of-delay category, and he thought the length of
delay was relevant primarily to the reasons for delay and its
prejudicial effects. Id. n. 12. In essence, however, there
is little difference between his approach and the one we adopt
today. See also Note, The Right to a Speedy Trial, supra, for another slightly different approach.
[ Footnote 31 ]
For example, the First Circuit thought a delay of nine months
overly long, absent a good reason, in a case that depended on
eyewitness testimony. United States v. Butler, 426 F.2d
1275, 1277 (1970).
[ Footnote 32 ]
We have indicated on previous occasions that it is improper for
the prosecution intentionally to delay "to gain some tactical
advantage over [defendants] or to harass them." United States
v. Marion, 404 U. S. 307 , 404 U. S. 325 (1971). See Pollard v. United States, 352 U.
S. 354 , 352 U. S. 361 (1957).
[ Footnote 33 ] United States v. Powell, 383 U.S. at 383 U. S. 120 ; Smith v. Hooey, 393 U. S. 374 , 393 U. S.
377 -378 (1969). In Klopfer v. North Carolina, 386 U. S. 213 , 386 U. S.
221 -222 (1967), we indicated that a defendant awaiting
trial on bond might be subjected to public scorn, deprived of
employment, and chilled in the exercise of his right to speak for,
associate with, and participate in unpopular political causes.
[ Footnote 34 ] See To Establish Justice, To Insure Domestic
Tranquility, Final Report of the National Commission on the Causes
and Prevention of Violence 152 (1969).
[ Footnote 35 ]
There is statistical evidence that persons who are detained
between arrest and trial are more likely to receive prison
sentences than those who obtain pretrial release, although other
factors bear upon this correlation. See Wald, Pretrial
Detention and Ultimate Freedom: A Statistical Study, 39
N.Y.U.L.Rev. 631 (1964).
[ Footnote 36 ]
For an example of how the speedy trial issue should be
approached, see Judge Frankel's excellent opinion in United States v. Mann, 291 F.
Supp. 268 (SDNY 1968).
[ Footnote 37 ]
Tr. of Oral Arg. 39.
[ Footnote 38 ] Id. at 4.
[ Footnote 39 ]
Hindsight is, of course, 20/20, but we cannot help noting that,
if Barker had moved immediately and persistently for a speedy trial
following indictment, and if he had been successful, he would have
undoubtedly been acquitted, since Manning's testimony was crucial
to the Commonwealth's case. It could not have been anticipated at
the outset, however, that Manning would have been tried six times
over a four-year period. Thus, the decision to gamble on Manning's
acquittal may have been a prudent choice at the time it was
made.
[ Footnote 40 ]
At oral argument, counsel for Barker stated:
"That was after the sheriff, the material witness, was ill; the
man who had arrested the petitioner, yes. And the Sixth Circuit
held that this was a sufficient reason for delay, and we don't deny
this. We concede that this was sufficient for the delay from March,
1963, to October, but it does not explain the delays prior to
that."
Tr. of Oral Arg. 120.
MR. JUSTICE WHITE, with whom MR. JUSTICE BRENNAN joins,
concurring.
Although the Court rejects petitioner's speedy trial claim and
arms denial of his petition for habeas corpus, Page 407 U. S. 537 it is apparent that had Barker not so clearly acquiesced in the
major delays involved in this case, the result would have been
otherwise. From the Commonwealth's point of view, it is fortunate
that the case was set for early trial and that postponements took
place only upon formal requests to which Barker had opportunity to
object.
Because the Court broadly assays the factors going into
constitutional judgments under the speedy trial provision, it is
appropriate to emphasize that one of the major purposes of the
provision is to guard against inordinate delay between public
charge and trial, which, wholly aside from possible prejudice to a
defense on the merits, may
"seriously interfere with the defendant's liberty, whether he is
free on bail or not, and that may disrupt his employment, drain his
financial resources, curtail his associations, subject him to
public obloquy, and create anxiety in him, his family and his
friends." United States v. Marion, 404 U.
S. 307 , 404 U. S. 320 (1971). These factors are more serious for some than for others,
but they are inevitably present in every case to some extent, for
every defendant will either be incarcerated pending trial or on
bail subject to substantial restrictions on his liberty. It is also
true that many defendants will believe that time is on their side,
and will prefer to suffer whatever disadvantages delay may entail.
But, for those who desire an early trial, these personal factors
should prevail if the only countervailing considerations offered by
the State are those connected with crowded dockets and
prosecutorial case loads. A defendant desiring a speedy trial,
therefore, should have it within some reasonable time; and only
special circumstances presenting a more pressing public need with
respect to the case itself should suffice to justify delay. Only if
such special considerations are in the case, and if they outweigh
the inevitable personal prejudice resulting from delay, would Page 407 U. S. 538 it be necessary to consider whether there has been or would be
prejudice to the defense at trial.
"[T]he major evils protected against by the speedy trial
guarantee exist quite apart from actual or possible prejudice to an
accused's defense." United States v. Marion, supra, at 404 U. S.
320 .
Of course, cases will differ among themselves as to the
allowable time between charge and trial so as to permit prosecution
and defense adequately to prepare their case. But unreasonable
delay in run-of-the-mill criminal cases cannot be justified by
simply asserting that the public resources provided by the State's
criminal justice system are limited, and that each case must await
its turn. As the Court points out, this approach also subverts the
State's own goals in seeking to enforce its criminal laws. | The Supreme Court ruled that a defendant's right to a speedy trial must be determined on a case-by-case basis, balancing factors such as the length of the delay, the reasons for it, the defendant's assertion of his right, and any prejudice caused by the delay. In this case, the Court found that the petitioner's right to a speedy trial was not violated, considering the lack of serious prejudice and the petitioner's apparent acquiescence to the delays. The Court emphasized the importance of guarding against inordinate delay, which can interfere with a defendant's liberty and cause personal disruption, regardless of any prejudice to the defense. |
Criminal Trials & Prosecutions | Argersinger v. Hamlin | https://supreme.justia.com/cases/federal/us/407/25/ | U.S. Supreme Court Argersinger v. Hamlin, 407 U.S.
25 (1972) Argersinger v. Hamlin No. 70-5015 Argued December 6,
1971 Reargued February 28,
1972 Decided June 12, 1972 407 U.S.
25 CERTIORARI TO THE SUPREME COURT OF
FLORIDA Syllabus The right of an indigent defendant in a criminal trial to the
assistance of counsel, which is guaranteed by the Sixth Amendment
as made applicable to the States by the Fourteenth, Gideon v.
Wainwright, 372 U. S. 335 , is
not governed by the classification of the offense or by whether or
not a jury trial is required. No accused may be deprived of his
liberty as the result of any criminal prosecution, whether felony
or misdemeanor, in which he was denied the assistance of counsel.
In this case, the Supreme Court of Florida erred in holding that
petitioner, an indigent who was tried for an offense punishable by
imprisonment up to six months, a $1,000 fine, or both, and given a
90-day jail sentence, had no right to court-appointed counsel, on
the ground that the right extends only to trials "for non-petty
offenses punishable by more than six months imprisonment." Pp. 407 U. S.
27 -40. 236 So. 2d
442 , reversed.
DOUGLAS, J., delivered the opinion of the Court, in which
BRENNAN, STEWART, WHITE, MARSHALL, and BLACKMUN, JJ., joined.
BRENNAN, J., filed a concurring opinion, in which DOUGLAS and
STEWART, JJ., joined, post, p. 407 U. S. 40 .
BURGER, C.J., filed an opinion concurring in the result, post, p. 407 U. S. 41 .
POWELL, J., filed an opinion concurring in the result, in which
REHNQUIST, J., joined, post, p. 407 U. S.
44 . Page 407 U. S. 26 MR. JUSTICE DOUGLAS delivered the opinion of the Court.
Petitioner, an indigent, was charged in Florida with carrying a
concealed weapon, an offense punishable by imprisonment up to six
months, a $1,000 fine, or both. The trial was to a judge, and
petitioner was unrepresented by counsel. He was sentenced to serve
90 days in jail, and brought this habeas corpus action in the
Florida Supreme Court, alleging that, being deprived of his right
to counsel, he was unable as an indigent layman properly to raise
and present to the trial court good and sufficient defenses to the
charge for which he stands convicted. The Florida Page 407 U. S. 27 Supreme Court, by a four-to-three decision, in ruling on the
right to counsel, followed the line we marked out in Duncan v.
Louisiana, 391 U. S. 145 , 391 U. S. 159 ,
as respects the right to trial by jury, and held that the right to
court-appointed counsel extends only to trials "for non-petty
offenses punishable by more than six months imprisonment." 236 So. 2d
442 , 443. [ Footnote 1 ]
The case is here on a petition for certiorari, which we granted.
401 U.S. 908. We reverse.
The Sixth Amendment, which, in enumerated situations, has been
made applicable to the States by reason of the Fourteenth Amendment
( see Duncan v. Louisiana, supra; Washington v. Texas, 388 U. S. 14 ; Klopfer v. North Carolina, 386 U.
S. 213 ; Pointer v. Texas, 380 U.
S. 400 ; Gideon v. Wainwright, 372 U.
S. 335 ; and In re Oliver, 333 U.
S. 257 ), provides specified standards for "all criminal
prosecutions." Page 407 U. S. 28 One is the requirement of a "public trial." In re Oliver,
supra, held that the right to a "public trial" was applicable
to a state proceeding even though only a 60-day sentence was
involved. 333 U.S. at 333 U. S.
272 .
Another guarantee is the right to be informed of the nature and
cause of the accusation. Still another, the right of confrontation. Pointer v. Texas, supra. And another, compulsory process
for obtaining witnesses in one's favor. Washington v. Texas,
supra. We have never limited these rights to felonies or to
lesser but serious offenses.
In Washington v. Texas, supra, we said,
"We have held that due process requires that the accused have
the assistance of counsel for his defense, that he be confronted
with the witnesses against him, and that he have the right to a
speedy and public trial."
388 U.S. at 388 U. S. 18 .
Respecting the right to a speedy and public trial, the right to be
informed of the nature and cause of the accusation, the right to
confront and cross-examine witnesses, the right to compulsory
process for obtaining witnesses, it was recently stated,
"It is simply not arguable, nor has any court ever held, that
the trial of a petty offense may be held in secret, or without
notice to the accused of the charges, or that, in such cases, the
defendant has no right to confront his accusers or to compel the
attendance of witnesses in his own behalf."
Junker, The Right to Counsel in Misdemeanor Cases, 43
Wash.L.Rev. 685, 705 (1968). District of Columbia v. Clawans, 300 U.
S. 617 , illustrates the point. There, the offense was
engaging without a license in the business of dealing in
second-hand property, an offense punishable by a fine of $300 or
imprisonment for not more than 90 days. The Court held that the
offense was a "petty" one, and could be tried without a jury. But
the conviction was reversed Page 407 U. S. 29 and a new trial ordered, because the trial court had
prejudicially restricted the right of cross-examination, a right
guaranteed by the Sixth Amendment.
The right to trial by jury, also guaranteed by the Sixth
Amendment by reason of the Fourteenth, was limited by Duncan v.
Louisiana, supra, to trials where the potential punishment was
imprisonment for six months or more. But, as the various opinions
in Baldwin v. New York, 399 U. S. 66 , make
plain, the right to trial by jury has a different geneology, and is
brigaded with a system of trial to a judge alone. As stated in Duncan: "Providing an accused with the right to be tried by a jury of
his peers gave him an inestimable safeguard against the corrupt or
overzealous prosecutor and against the compliant, biased, or
eccentric judge. If the defendant preferred the common sense
judgment of a jury to the more tutored, but perhaps less
sympathetic, reaction of the single judge, he was to have it.
Beyond this, the jury trial provisions in the Federal and State
Constitutions reflect a fundamental decision about the exercise of
official power -- a reluctance to entrust plenary powers over the
life and liberty of the citizen to one judge or to a group of
judges. Fear of unchecked power, so typical of our State and
Federal Governments in other respects, found expression in the
criminal law in this insistence upon community participation in the
determination of guilt or innocence. The deep commitment of the
Nation to the right of jury trial in serious criminal cases as a
defense against arbitrary law enforcement qualifies for protection
under the Due Process Clause of the Fourteenth Amendment, and must
therefore be respected by the States."
391 U.S. at 391 U. S.
156 . Page 407 U. S. 30 While there is historical support for limiting the "deep
commitment" to trial by jury to "serious criminal cases," [ Footnote 2 ] there is no such support
for a similar limitation on the right to assistance of counsel:
"Originally, in England, a person charged with treason or felony
was denied the aid of counsel, except in respect of legal questions
which the accused himself might suggest. At the same time, parties
in civil cases and persons accused of misdemeanors were entitled to
the full assistance of counsel. . . ."
" * * * *" "[It] appears that, in at least twelve of the thirteen colonies,
the rule of the English common law, in the respect now under
consideration, had been definitely rejected, and the right to
counsel fully recognized in all criminal prosecutions, save that,
in one or two instances, the right was limited to capital offenses
or to the more serious crimes. . . ." Powell v. Alabama, 287 U. S. 45 , 287 U. S. 60 , 287 U. S.
64 -65.
The Sixth Amendment thus extended the right to counsel beyond
its common law dimensions. But there is nothing in the language of
the Amendment, its history, or in the decisions of this Court to
indicate that it was intended to embody a retraction of the right
in petty offenses wherein the common law previously did require
that counsel be provided. See James v. Headley, 410 F.2d
325, 331-332, n. 9.
We reject, therefore, the premise that, since prosecutions for
crimes punishable by imprisonment for less than Page 407 U. S. 31 six months may be tried without a jury, they may also be tried
without a lawyer.
The assistance of counsel is often a requisite to the very
existence of a fair trial. The Court in Powell v. Alabama,
supra, at 287 U. S. 669 --
a capital case -- said:
"The right to be heard would be, in many cases, of little avail
if it did not comprehend the right to be heard by counsel. Even the
intelligent and educated layman has small, and sometimes no, skill
in the science of law. If charged with crime, he is incapable,
generally, of determining for himself whether the indictment is
good or bad. He is unfamiliar with the rules of evidence. Left
without the aid of counsel, he may be put on trial without a proper
charge, and convicted upon incompetent evidence, or evidence
irrelevant to the issue or otherwise inadmissible. He lacks both
the skill and knowledge adequately to prepare his defense, even
though he have a perfect one. He requires the guiding hand of
counsel at every step in the proceedings against him. Without it,
though he be not guilty, he faces the danger of conviction because
he does not know how to establish his innocence. If that be true of
men of intelligence, how much more true is it of the ignorant and
illiterate, or those of feeble intellect."
In Gideon v. Wainwright, supra (overruling Betts v.
Brady, 316 U. S. 455 ), we
dealt with a felony trial. But we did not so limit the need of the
accused for a lawyer. We said:
"[I]n our adversary system of criminal justice, any person haled
into court who is too poor to hire a lawyer cannot be assured a
fair trial unless counsel is provided for him. This seems to us to
be an obvious truth. Governments, both state and federal, Page 407 U. S. 32 quite properly spend vast sums of money to establish machinery
to try defendants accused of crime. Lawyers to prosecute are
everywhere deemed essential to protect the public's interest in an
orderly society. Similarly, there are few defendants charged with
crime, few indeed, who fail to hire the best lawyers they can get
to prepare and present their defenses. That government hires
lawyers to prosecute and defendants who have the money hire lawyers
to defend are the strongest indications of the widespread belief
that lawyers in criminal courts are necessities, not luxuries. The
right of one charged with crime to counsel may not be deemed
fundamental and essential to fair trials in some countries, but it
is in ours. From the very beginning, our state and national
constitutions and laws have laid great emphasis on procedural and
substantive safeguards designed to assure fair trials before
impartial tribunals in which every defendant stands equal before
the law. This noble ideal cannot be realized if the poor man
charged with crime has to face his accusers without a lawyer to
assist him."
372 U.S. at 372 U. S. 344 .
[ Footnote 3 ]
Both Powell and Gideon involved felonies. But
their rationale has relevance to any criminal trial, where an
accused is deprived of his liberty. Powell and Gideon suggest that there are certain fundamental rights
applicable to all such criminal prosecutions, even those, such Page 407 U. S. 33 as In re Oliver, supra, where the penalty is 60 days'
imprisonment:
"A person's right to reasonable notice of a charge against him,
and an opportunity to be heard in his defense -- a right to his day
in court -- are basic in our system of jurisprudence, and these
rights include, as a minimum, a right to examine the witnesses
against him, to offer testimony, and to be represented by
counsel. "
333 U.S. at 333 U. S. 273 (emphasis supplied).
The requirement of counsel may well be necessary for a fair
trial even in a petty offense prosecution. We are by no means
convinced that legal and constitutional questions involved in a
case that actually leads to imprisonment even for a brief period
are any less complex than when a person can be sent off for six
months or more. See, e.g., Powell v. Texas, 392 U.
S. 514 ; Thompson v. Louisville, 362 U.
S. 199 ; Shuttlesworth v. Birmingham, 382 U. S. 87 .
The trial of vagrancy cases is illustrative. While only brief
sentences of imprisonment may be imposed, the cases often bristle
with thorny constitutional questions. See Papachristou v.
Jacksonville, 405 U. S. 156 . In re Gault, 387 U. S. 1 , dealt
with juvenile delinquency and an offense which, if committed by an
adult, would have carried a fine of $5 to $50 or imprisonment in
jail for not more than two months ( id. at 387 U. S. 29 ),
but which, when committed by a juvenile, might lead to his
detention in a state institution until he reached the age of 21. Id. at 387 U. S. 36 -37.
We said ( id. at 387 U. S. 36 )
that
"[t]he juvenile needs the assistance of counsel to cope with
problems of law, to make skilled inquiry into the facts, to insist
upon regularity of the proceedings, and to ascertain whether he has
a defense and to prepare and submit it. The child 'requires the
guiding hand of counsel Page 407 U. S. 34 at every step in the proceedings against him,' citing Powell
v. Alabama, 287 U.S. at 287 U. S.
69 . The premise of Gault is that, even in
prosecutions for offenses less serious than felonies, a fair trial
may require the presence of a lawyer."
Beyond the problem of trials and appeals is that of the guilty
plea, a problem which looms large in misdemeanor, as well as in
felony, cases. Counsel is needed so that the accused may know
precisely what he is doing, so that he is fully aware of the
prospect of going to jail or prison, and so that he is treated
fairly by the prosecution.
In addition, the volume of misdemeanor cases, [ Footnote 4 ] far greater in number than felony
prosecutions, may create an obsession for speedy dispositions,
regardless of the fairness of the result. The Report by the
President's Commission on Law Enforcement and Administration of
Justice, The Challenge of Crime in a Free Society 128 (1967) ,
states:
"For example, until legislation last year increased the number
of judges, the District of Columbia Court of General Sessions had
four judges to process the preliminary stages of more than 1,500
felony cases, 7,500 serious misdemeanor cases, and 38,000 petty
offenses and an equal number of traffic offenses per year. An
inevitable consequence of volume that large is the almost total
preoccupation Page 407 U. S. 35 in such a court with the movement of cases. The calendar is
long, speed often is substituted for care, and casually arranged
out-of-court compromise too often is substituted for adjudication.
Inadequate attention tends to be given to the individual defendant,
whether, in protecting his rights, sifting the facts at trial,
deciding the social risk he presents, or determining how to deal
with him after conviction. The frequent result is futility and
failure. As Dean Edward Barrett recently observed: "
" Wherever the visitor looks at the system, he finds great
numbers of defendants being processed by harassed and overworked
officials. Police have more cases than they can investigate.
Prosecutors walk into courtrooms to try simple cases as they take
their initial looks at the files. Defense lawyers appear having had
no more than time for hasty conversations with their clients.
Judges face long calendars with the certain knowledge that their
calendars tomorrow and the next day will be, if anything, longer,
and so there is no choice but to dispose of the cases."
" Suddenly it becomes clear that, for most defendants in the
criminal process, there is scant regard for them as individuals.
They are numbers on dockets, faceless ones to be processed and sent
on their way. The gap between the theory and the reality is
enormous."
" Very little such observation of the administration of criminal
justice in operation is required to reach the conclusion that it
suffers from basic ills."
That picture is seen in almost every report.
"The misdemeanor trial is characterized by insufficient and
frequently irresponsible preparation on the part of the defense,
the prosecution, and the court. Everything is rush, rush."
Hellerstein, The Importance of the Misdemeanor Page 407 U. S. 36 Case on Trial and Appeal, 28 The Legal Aid Brief Case 151, 152
(1970).
There is evidence of the prejudice which results to misdemeanor
defendants from this "assembly line justice." One study concluded
that
"[m]isdemeanants represented by attorneys are five times as
likely to emerge from police court with all charges dismissed as
are defendants who face similar charges without counsel."
American Civil Liberties Union, Legal Counsel for Misdemeanants,
Preliminary Report 1 (1970).
We must conclude, therefore, that the problems associated with
misdemeanor and petty [ Footnote
5 ] offenses often Page 407 U. S. 37 require the presence of counsel to insure the accused a fair
trial. MR. JUSTICE POWELL suggests that these problems are raised
even in situations where there is no prospect of imprisonment. Post at 407 U. S. 48 . We
need not consider the requirements of the Sixth Amendment as
regards the right to counsel where loss of liberty is not involved,
however, for here, petitioner was, in fact, sentenced to jail. And,
as we said in Baldwin v. New York, 399 U.S. at 399 U. S.
73 ,
"the prospect of imprisonment, for however short a time, will
seldom be viewed by the accused as a trivial or 'petty' matter, and
may well result in quite serious repercussions affecting his career
and his reputation. [ Footnote
6 ]"
We hold, therefore, that, absent a knowing and intelligent
waiver, no person may be imprisoned for any offense, whether
classified as petty, misdemeanor, or felony, unless he was
represented by counsel at his trial. [ Footnote 7 ]
That is the view of the Supreme Court of Oregon, with which we
agree. It said, in Stevenson v. Holzman, 254 Ore. 94, 102, 458 P.2d
414 , 418:
"We hold that no person may be deprived of his Page 407 U. S. 38 liberty who has been denied the assistance of counsel as
guaranteed by the Sixth Amendment. This holding is applicable to
all criminal prosecutions, including prosecutions for violations of
municipal ordinances. The denial of the assistance of counsel will
preclude the imposition of a jail sentence. [ Footnote 8 ]"
We do not sit as an ombudsman to direct state courts how to
manage their affairs, but only to make clear the federal
constitutional requirement. How crimes should be classified is
largely a state matter. [ Footnote
9 ] The fact that traffic charges technically fall within the
category of "criminal prosecutions" does not necessarily mean that
many of them will be brought into the class [ Footnote 10 ] where imprisonment actually
occurs. Page 407 U. S. 39 The American Bar Association Project on Standards for Criminal
Justice states:
"As a matter of sound judicial administration, it is preferable
to disregard the characterization of the offense as felony,
misdemeanor or traffic offense. Nor is it adequate to require the
provision of defense services for all offenses which carry a
sentence to jail or prison. Often, as a practical matter, such
sentences are rarely, if ever, imposed for certain types of
offenses, so that, for all intents and purposes, the punishment
they carry is, at most, a fine. Thus, the standard seeks to
distinguish those classes of cases in which there is real
likelihood that incarceration may follow conviction from those
types in which there is no such likelihood. It should be noted that
the standard does not recommend a determination of the need for
counsel in terms of the facts of each particular case; it draws a
categorical line at those types of offenses for which incarceration
as a punishment is a practical possibility."
Providing Defense Services 40 (Approved Draft 1968). Page 407 U. S. 40 Under the rule we announce today, every judge will know when the
trial of a misdemeanor starts that no imprisonment may be imposed,
even though local law permits it, unless the accused is represented
by counsel. He will have a measure of the seriousness and gravity
of the offense, and therefore know when to name a lawyer to
represent the accused before the trial starts.
The run of misdemeanors will not be affected by today's ruling.
But, in those that end up in the actual deprivation of a person's
liberty, the accused will receive the benefit of "the guiding hand
of counsel" so necessary when one's liberty is in jeopardy. Reversed. [ Footnote 1 ]
For a survey of the opinions of judges, prosecutors, and
defenders concerning the right to counsel of persons charged with
misdemeanors, see 1 L. Silverstein, Defense of the Poor in
Criminal Cases in American State Courts 127-135 (1965).
A review of federal and state decisions following Gideon is contained in Comment, Right to Counsel: The
Impact of Gideon v. Wainwright in the Fifty States, 3
Creighton L.Rev. 103 (1970).
Twelve States provide counsel for indigents accused of "serious
crime" in the misdemeanor category. Id. at 119-124.
Nineteen States provide for the appointment of counsel in most
misdemeanor cases. Id. at 124-133. One of these is Oregon,
whose Supreme Court said, in Stevenson v. Holzman, 254
Ore. 94, 100-101, 458 P.2d
414 , 418,
"If our objective is to insure a fair trial in every criminal
prosecution, the need for counsel is not determined by the
seriousness of the crime. The assistance of counsel will best avoid
conviction of the innocent -- an objective as important in the
municipal court as in a court of general jurisdiction."
California's requirement extends to traffic violations. Blake v. Municipal Court, 242 Cal.
App. 2d 731 , 51 Cal. Rptr. 771.
Overall, 31 States have now extended the right to defendants
charged with crimes less serious than felonies. Comment, Right to
Counsel, supra, at 134.
[ Footnote 2 ] See Frankfurter & Corcoran, Petty Federal Offenses
and the Constitutional Guaranty of Trial by Jury, 39 Harv.L.Rev.
917, 980-982 (1926); James v. Headley, 410 F.2d 325, 331. Cf. Kaye, Petty Offenders Have No Peers!, 26 U.Chi.L.Rev.
245 (1959).
[ Footnote 3 ] See also Johnson v. Zerbst, 304 U.
S. 458 , 304 U. S.
462 -463:
"[The Sixth Amendment] embodies a realistic recognition of the
obvious truth that the average defendant does not have the
professional legal skill to protect himself when brought before a
tribunal with power to take his life or liberty, wherein the
prosecution is [re]presented by experienced and learned counsel.
That which is simple, orderly and necessary to the lawyer, to the
untrained layman may appear intricate, complex and mysterious."
[ Footnote 4 ]
In 1965, 314,000 defendants were charged with felonies in state
courts, and 24,000 were charged with felonies in federal courts.
President's Commission on Law Enforcement and Administration of
Justice, Task Force Report: The Courts 55 (1967). Exclusive of
traffic offenses, however, it is estimated that there are annually
between four and five million court cases involving misdemeanors. Ibid. And, while there are no authoritative figures,
extrapolations indicate that there are probably between 40.8 and 50
million traffic offenses each year. Note, Dollars and Sense of an
Expanded Right to Counsel, 55 Iowa L.Rev. 1249, 1261 (1970).
[ Footnote 5 ]
Title 18 U.S.C. § 1 defines a petty offense as one in which the
penalty does not exceed imprisonment for six months, or a fine of
not more than $500, or both. Title 18 U.S.C. § 3006A(b) provides
for the appointment of counsel for indigents in all cases "other
than a petty offense." But, as the Court of Appeals for the Fifth
Circuit noted in James v. Headley, 410 F.2d at 330-331, 18
U.S.C. § 3006A, which was enacted as the Criminal Justice Act of
1964, contains a congressional plan for furnishing legal
representation at federal expense for certain indigents, and does
not purport to cover the full range of constitutional rights to
counsel.
Indeed, the Conference Report on the Criminal Justice Act of
1964 made clear the conferees' belief that the right to counsel
extends to all offenses, petty and serious alike. H.R.Conf.Rep. No.
1709, 88th Cong., 2d Sess. (1964).
In that connection, the Federal Rules of Criminal Procedure, as
amended in 1966, provide in Rule 44(a):
"Every defendant who is unable to obtain counsel shall be
entitled to have counsel assigned to represent him at every stage
of the proceedings from his initial appearance before the
commissioner or the court through appeal, unless he waives such
appointment."
The Advisory Committee note on Rule 44 says:
"Like the original rule, the amended rule provides a right to
counsel which is broader in two respects than that for which
compensation is provided in the Criminal Justice Act of 1964: "
"(1) The right extends to petty offenses to be tried in the
district courts, and"
"(2) The right extends to defendants unable to obtain counsel
for reasons other than financial."
[ Footnote 6 ] See Marston v. Oliver, 324 F.
Supp. 691 , 696 (ED Va.1971):
"Any incarceration of over thirty days, more or less, will
usually result in loss of employment, with a consequent substantial
detriment to the defendant and his family."
[ Footnote 7 ]
We do not share MR. JUSTICE POWELL's doubt that the Nation's
legal resources are sufficient to implement the rule we announce
today. It has been estimated that between 1,575 and 2,300 full-time
counsel would be required to represent all indigent misdemeanants,
excluding traffic offenders. Note, Dollars and Sense of an Expanded
Right to Counsel, 55 Iowa L.Rev. 1249, 1260-1261 (1970). These
figures are relatively insignificant when compared to the estimated
355,200 attorneys in the United States (Statistical Abstract of the
United States 153 (1971)), a number which is projected to double by
the year 1985. See Ruud, That Burgeoning Law School
Enrollment, 58 A.B.A.J. 146, 147. Indeed, there are 18,000 new
admissions to the bar each year -- 3,500 more lawyers than are
required to fill the "estimated 14,500 average annual openings." Id. at 148.
[ Footnote 8 ]
Article I, § 9, of the proposed Revised Constitution of Oregon
provides:
"Every person has the right to assistance of counsel in all
official proceedings and dealings with public officers that may
materially affect him. If he cannot afford counsel, he has the
right to have counsel appointed for him in any case in which he may
lose his liberty."
[ Footnote 9 ]
One partial solution to the problem of minor offenses may well
be to remove them from the court system. The American Bar
Association Special Committee on Crime Prevention and Control
recently recommended, inter alia, that:
"Regulation of various types of conduct which harm no one other
than those involved ( e.g., public drunkenness, narcotics
addiction, vagrancy, and deviant sexual behavior) should be taken
out of the courts. The handling of these matters should be
transferred to nonjudicial entities, such as detoxification
centers, narcotics treatment centers and social service agencies.
The handling of other nonserious offenses, such as housing code and
traffic violations, should be transferred to specialized
administrative bodies."
ABA Report, New Perspectives on Urban Crime iv (1972). Such a
solution, of course, is peculiarly within the province of state and
local legislatures.
[ Footnote 10 ]
"Forty thousand traffic charges (arising out of 150,000
nonparking traffic citations) were disposed of by court action in
Seattle during 1964. The study showed, however, that in only about
4,500 cases was there any possibility of imprisonment as the result
of a traffic conviction. In only three kinds of cases was the
accused exposed to any danger of imprisonment: (1) where the
offense charged was hit-and-run, reckless or drunken driving; or
(2) where any additional traffic violation was charged against an
individual subject to a suspended sentence for a previous
violation; or (3) where, whatever the offense charged, the
convicted individual was unable to pay the fine imposed."
Junker, The Right to Counsel in Misdemeanor Cases, 43
Wash.L.Rev. 685, 711 (1968).
Of the 1,288,975 people convicted by the City of New York in
1970 for traffic infractions such as jaywalking and speeding, only
24 were fined and imprisoned, given suspended sentences, or jailed.
Criminal Court of the City of New York Annual Report 11 (1970). Of
the 19,187 convicted of more serious traffic offenses, such as
driving under the influence, reckless driving, and leaving the
scene of an accident, 404 (2.1%) were subject to some form of
imprisonment. Ibid. MR. JUSTICE BRENNAN, with whom MR. JUSTICE DOUGLAS and MR.
JUSTICE STEWART join, concurring.
I join the opinion of the Court and add only an observation upon
its discussion of legal resources, ante at 407 U. S. 37 n.
7. Law students as well as practicing attorneys may provide an
important source of legal representation for the indigent. The
Council on Legal Education for Professional Responsibility (CLEPR)
informs us that more than 125 of the country's 147 accredited law
schools have established clinical programs in which
faculty-supervised students aid clients in a variety of civil and
criminal matters.* CLEPR Newsletter, May 1972, p. 2. These programs
supplement practice rules enacted in 38 States authorizing students
to practice law under prescribed conditions. Ibid. Like
the American Bar Association's Model Student Practice Rule (1969),
most of these regulations permit students to make supervised Page 407 U. S. 41 court appearances as defense counsel in criminal cases. CLEPR,
State Rules Permitting the Student Practice of Law: Comparisons and
Comments 13 (1971). Given the huge increase in law school
enrollments over the past few years, see Ruud, That
Burgeoning Law School Enrollment, 58 A.B.A.J. 146 (1972), I think
it plain that law students can be expected to make a significant
contribution, quantitatively and qualitatively, to the
representation of the poor in many areas, including cases reached
by today's decision.
* A total of 57 law schools have also established clinical
programs in corrections, where law students, under faculty
supervision, aid prisoners in the preparation of petitions for
post-conviction relief. CLEPR Newsletter, May 1972, p. 3. See
United States v. Simpson, 141 U.S.App.D.C. 8, 15-16, 436 F.2d
162, 169-170 (1970).
MR. CHIEF JUSTICE BURGER, concurring in the result.
I agree with much of the analysis in the opinion of the Court
and with MR. JUSTICE POWELL's appraisal of the problems. Were I
able to confine my focus solely to the burden that the States will
have to bear in providing counsel, I would be inclined, at this
stage of the development of the constitutional right to counsel, to
conclude that there is much to commend drawing the line at
penalties in excess of six months' confinement. Yet several cogent
factors suggest the infirmities in any approach that allows
confinement for any period without the aid of counsel at trial; any
deprivation of liberty is a serious matter. The issues that must be
dealt with in a trial for a petty offense or a misdemeanor may
often be simpler than those involved in a felony trial, and yet be
beyond the capability of a layman, especially when he is opposed by
a law-trained prosecutor. There is little ground, therefore, to
assume that a defendant, unaided by counsel, will be any more able
adequately to defend himself against the lesser charges that may
involve confinement than more serious charges. Appeal from a
conviction after an uncounseled trial is not likely to be of much
help to a defendant, since the die is usually cast when judgment is
entered on an uncounseled trial record. Page 407 U. S. 42 Trial judges sitting in petty and misdemeanor cases -- and
prosecutors -- should recognize exactly what will be required by
today's decision. Because no individual can be imprisoned unless he
is represented by counsel, the trial judge and the prosecutor will
have to engage in a predictive evaluation of each case to determine
whether there is a significant likelihood that, if the defendant is
convicted, the trial judge will sentence him to a jail term. The
judge can preserve the option of a jail sentence only by offering
counsel to any defendant unable to retain counsel on his own. This
need to predict will place a new load on courts already
overburdened and already compelled to deal with far more cases in
one day than is reasonable and proper. Yet the prediction is not
one beyond the capacity of an experienced judge, aided as he should
be by the prosecuting officer. As to jury cases, the latter should
be prepared to inform the judge as to any prior record of the
accused, the general nature of the case against the accused,
including any use of violence, the severity of harm to the victim,
the impact on the community, and the other factors relevant to the
sentencing process. Since the judge ought to have some degree of
such information after judgment of guilt is determined, ways can be
found in the more serious misdemeanor cases when jury trial is not
waived to make it available to the judge before trial.* This will
not mean a full "presentence" report on every defendant in every
case before the jury passes on guilt, but a prosecutor should know
before trial whether he intends to urge a jail sentence, and, if he
does, he should be prepared to aid the court with the factual and
legal basis for his view on that score. Page 407 U. S. 43 This will mean not only that more defense counsel must be
provided, but also additional prosecutors and better facilities for
securing information about the accused as it bears on the
probability of a decision to confine.
The step we take today should cause no surprise to the legal
profession. More than five years ago, the profession, speaking
through the American Bar Association in a Report on Standards
Relating to Providing Defense Services, determined that society's
goal should be "that the system for providing counsel and
facilities for the defense be as good as the system which society
provides for the prosecution." American Bar Association Project on
Standards for Criminal Justice, Providing Defense Services 1
(Approved Draft 1968). The ABA was not addressing itself, as we
must in this case, to the constitutional requirement, but only to
the broad policy issue. Elsewhere in the Report the ABA stated
that:
"The fundamental premise of these standards is that
representation by counsel is desirable in criminal cases both from
the viewpoint of the defendant and of society." Id. at 3. After considering the same general factors
involved in the issue we decide today, the ABA Report specifically
concluded that:
"Counsel should be provided in all criminal proceedings for
offenses punishable by loss of liberty, except those types of
offenses for which such punishment is not likely to be imposed,
regardless of their denomination as felonies, misdemeanors or
otherwise." Id. § 4.1, pp. 37-38. In a companion ABA Report on
Standards Relating to the Prosecution Function and the Defense
Function, Page 407 U. S. 44 the same basic theme appears in the positive standard cast in
these terms:
"Counsel for the accused is an essential component of the
administration of criminal justice. A court properly constituted to
hear a criminal case must be viewed as a tripartite entity
consisting of the judge (and jury, where appropriate), counsel for
the prosecution, and counsel for the accused." Id. at 153 (Approved Draft 1968).
The right to counsel has historically been an evolving concept.
The constitutional requirements with respect to the issue have
dated in recent times from Powell v. Alabama, 287 U. S.
45 (1932), to Gideon v. Wainwright, 372 U. S. 335 (1963). Part of this evolution has been expressed in the policy
prescriptions of the legal profession itself, and the contributions
of the organized bar and individual lawyers -- such as those
appointed to represent the indigent defendants in the Powell and Gideon cases -- have been notable. The
holding of the Court today may well add large new burdens on a
profession already overtaxed, but the dynamics of the profession
have a way of rising to the burdens placed on it.
* In a nonjury case, the prior record of the accused should not
be made known to the trier of fact except by way of traditional
impeachment.
MR. JUSTICE POWELL, with whom MR. JUSTICE REHNQUIST joins,
concurring in the result. Gideon v. Wainwright, 372 U. S. 335 (1963), held that the States were required by the Due Process
Clause of the Fourteenth Amendment to furnish counsel to all
indigent defendants charged with felonies. [ Footnote 2/1 ] The question Page 407 U. S. 45 before us today is whether an indigent defendant convicted of an
offense carrying a maximum punishment of six months' imprisonment,
a fine of $1,000, or both, and sentenced to 90 days in jail, is
entitled, as a matter of constitutional right, to the assistance of
appointed counsel. The broader question is whether the Due Process
Clause requires that an indigent charged with a state petty offense
[ Footnote 2/2 ] be afforded the
right to appointed counsel.
In the case under review, the Supreme Court of Florida agreed
that indigents charged with serious misdemeanors were entitled to
appointed counsel, but, by a vote of four to three, it limited that
right to offenses punishable by more than six months' imprisonment.
[ Footnote 2/3 ] The state court, in
drawing a six-month line, followed the lead of this Court in Duncan v. Louisiana, 391 U. S. 145 (1968), and in the subsequent case of Baldwin v. New York, 399 U. S. 66 (1970), which was decided shortly after the opinion below, in which
the Court held that the due process right to a trial by jury in
state criminal cases was limited to cases in which the offense
charged was punishable by more than six months' imprisonment. It is
clear that, wherever the right to counsel line is to be drawn, it
must be drawn so that an indigent Page 407 U. S. 46 has a right to appointed counsel in all cases in which there is
a due process right to a jury trial. An unskilled layman may be
able to defend himself in a nonjury trial before a judge
experienced in piecing together unassembled facts, but, before a
jury, the guiding hand of counsel is needed to marshal the evidence
into a coherent whole consistent with the best case on behalf of
the defendant. If there is no accompanying right to counsel, the
right to trial by jury becomes meaningless.
Limiting the right to jury trial to cases in which the offense
charged is punishable by more than six months' imprisonment does
not compel the conclusion that the indigent's right to appointed
counsel must be similarly restricted. The Court's opinions in Duncan, Baldwin, and District of Columbia v.
Clawans, 300 U. S. 617 (1937), reveal that the jury trial limitation has historic origins
at common law. No such history exists to support a similar
limitation of the right to counsel; to the contrary, at common law,
the right to counsel was available in misdemeanor, but not in
felony, cases. [ Footnote 2/4 ] Only
as recently as Gideon has an indigent in a state trial had
a right to appointed counsel in felony cases. Moreover, the
interest protected by the right to have guilt or innocence
determined by a jury -- tempering the possibly arbitrary and harsh
exercise of prosecutorial and judicial power [ Footnote 2/5 ] -- while important, is not as fundamental
to the guarantee of a fair trial as is the right to counsel.
[ Footnote 2/6 ] Page 407 U. S. 47 I am unable to agree with the Supreme Court of Florida that an
indigent defendant, charged with a petty offense, may in every case
be afforded a fair trial without the assistance of counsel. Nor can
I agree with the new rule of due process, today enunciated by the
Court, that, "absent a knowing and intelligent waiver, no person
may be imprisoned . . . unless he was represented by counsel at his
trial." Ante at 407 U. S. 37 . It
seems to me that the line should not be drawn with such
rigidity.
There is a middle course, between the extremes of Florida's
six-month rule and the Court's rule, which comports with the
requirements of the Fourteenth Amendment. I would adhere to the
principle of due process that requires fundamental fairness in
criminal trials, a principle which I believe encompasses the right
to counsel in petty cases whenever the assistance of counsel is
necessary to assure a fair trial. I I am in accord with the Court that an indigent accused's need
for the assistance of counsel does not mysteriously evaporate when
he is charged with an offense punishable by six months or less. In Powell v. Alabama [ Footnote
2/7 ] and Gideon, [ Footnote
2/8 ] both of which involved felony prosecutions, this Court
noted that few laymen can present adequately their own cases, much
less identify and argue relevant legal questions. Many petty
offenses will also present complex legal and factual issues that
may not be fairly tried if the defendant is not assisted by
counsel. Even in relatively simple cases, some defendants, because
of ignorance or some other handicap, will be incapable of defending
themselves. The consequences of a misdemeanor conviction, whether
they be a brief period served under the sometimes deplorable
conditions Page 407 U. S. 48 found in local jails or the effect of a criminal record on
employability, are frequently of sufficient magnitude not to be
casually dismissed by the label "petty." [ Footnote 2/9 ]
Serious consequences also may result from convictions not
punishable by imprisonment. Stigma may attach to a drunken driving
conviction or a hit-and-run escapade. [ Footnote 2/10 ] Losing one's driver's license is more
serious for some individuals than a brief stay in jail. In Bell
v. Burson, 402 U. S. 535 (1971), we said:
"Once licenses are issued, as in petitioner's case, their
continued possession may become essential in the pursuit of a
livelihood. Suspension of issued licenses thus involves state
action that adjudicates important interests of the licensees. In
such cases, the licenses are not to be taken away without that
procedural due process required by the Fourteenth Amendment." Id. at 402 U. S. 539 .
When the deprivation of property rights and interests is of
sufficient consequence, [ Footnote
2/11 ] denying the assistance of counsel to indigents who are
incapable of defending themselves is a denial of due process. Page 407 U. S. 49 This is not to say that due process requires the appointment of
counsel in all petty cases, or that assessment of the possible
consequences of conviction is the sole test for the need for
assistance of counsel. The flat six-month rule of the Florida court
and the equally inflexible rule of the majority opinion apply to
all cases within their defined areas, regardless of circumstances.
It is precisely because of this mechanistic application that I find
these alternatives unsatisfactory. Due process, perhaps the most
fundamental concept in our law, embodies principles of fairness,
rather than immutable line drawing as to every aspect of a criminal
trial. While counsel is often essential to a fair trial, this is by
no means a universal fact. Some petty offense cases are complex;
others are exceedingly simple. As a justification for furnishing
counsel to indigents accused of felonies, this Court noted
"That government hires lawyers to prosecute and defendants who
have the money hire lawyers to defend are the strongest indications
of the widespread belief that lawyers in criminal courts are
necessities, not luxuries. [ Footnote
2/12 ]"
Yet government often does not hire lawyers to prosecute petty
offenses; instead, the arresting police officer presents the case.
Nor does every defendant who can afford to do so hire lawyers to
defend petty charges. Where the possibility of a jail sentence is
remote and the probable fine seems small, or where the evidence of
guilt is overwhelming, the costs of assistance of counsel may
exceed the benefits. [ Footnote
2/13 ] It is anomalous that the Court's opinion today will
extend Page 407 U. S. 50 the right of appointed counsel to indigent defendants in cases
where the right to counsel would rarely be exercised by nonindigent
defendants.
Indeed, one of the effects of this ruling will be to favor
defendants classified as indigents over those not so classified,
yet who are in low income groups where engaging counsel in a minor
petty offense case would be a luxury the family could not afford.
The line between indigency and assumed capacity to pay for counsel
is necessarily somewhat arbitrary, drawn differently from State to
State and often resulting in serious inequities to accused persons.
The Court's new rule will accent the disadvantage of being barely
self-sufficient economically.
A survey of state courts in which misdemeanors are tried showed
that procedures were often informal, presided over by lay judges.
Jury trials were rare, and the prosecution was not vigorous.
[ Footnote 2/14 ] It is as
inaccurate to say that no defendant can obtain a fair trial without
the assistance of counsel in such courts as it is to say that no
defendant needs the assistance of counsel if the offense charged is
only a petty one. [ Footnote
2/15 ]
Despite its overbreadth, the easiest solution would be a
prophylactic rule that would require the appointment of counsel to
indigents in all criminal cases. The simplicity of such a rule is
appealing, because it could be Page 407 U. S. 51 applied automatically in every case, but the price of pursuing
this easy course could be high indeed in terms of its adverse
impact on the administration of the criminal justice systems of 50
States. This is apparent when one reflects on the wide variety of
petty or misdemeanor offenses, the varying definitions thereof, and
the diversity of penalties prescribed. The potential impact on
state court systems is also apparent in view of the variations in
types of courts and their jurisdictions, ranging from justices of
the peace and part-time judges in the small communities to the
elaborately staffed police courts which operate 24 hours a day in
the great metropolitan centers.
The rule adopted today does not go all the way. It is limited to
petty offense cases in which the sentence is some imprisonment. The
thrust of the Court's position indicates, however, that, when the
decision must be made, the rule will be extended to all petty
offense cases except perhaps the most minor traffic violations. If
the Court rejects on constitutional grounds, as it has today, the
exercise of any judicial discretion as to need for counsel if a
jail sentence is imposed, one must assume a similar rejection of
discretion in other petty offense cases. It would be illogical --
and without discernible support in the Constitution -- to hold that
no discretion may ever be exercised where a nominal jail sentence
is contemplated and, at the same time, endorse the legitimacy of
discretion in "non-jail" petty offense cases which may result in
far more serious consequences than a few hours or days of
incarceration.
The Fifth and Fourteenth Amendments guarantee that property, as
well as life and liberty, may not be taken from a person without
affording him due process of law. The majority opinion suggests no
constitutional basis for distinguishing between deprivations of
liberty and property. In fact, the majority suggests no reason
at Page 407 U. S. 52 all for drawing this distinction. The logic it advances for
extending the right to counsel to all cases in which the penalty of
any imprisonment is imposed applies equally well to cases in which
other penalties may be imposed. Nor does the majority deny that
some "non-jail" penalties are more serious than brief jail
sentences.
Thus, although the new rule is extended today only to the
imprisonment category of cases, the Court's opinion foreshadows the
adoption of a broad prophylactic rule applicable to all petty
offenses. No one can foresee the consequences of such a drastic
enlargement of the constitutional right to free counsel. But even
today's decision could have a seriously adverse impact upon the
day-to-day functioning of the criminal justice system. We should be
slow to fashion a new constitutional rule with consequences of such
unknown dimensions, especially since it is supported neither by
history nor precedent. II The majority opinion concludes that, absent a valid waiver, a
person may not be imprisoned even for lesser offenses unless he was
represented by counsel at the trial. In simplest terms, this means
that under no circumstances, in any court in the land, may anyone
be imprisoned -- however briefly -- unless he was represented by,
or waived his right to, counsel. The opinion is disquietingly
barren of details as to how this rule will be implemented.
There are thousands of statutes and ordinances which authorize
imprisonment for six months or less, usually as an alternative to a
fine. These offenses include some of the most trivial of
misdemeanors, ranging from spitting on the sidewalk to certain
traffic offenses. They also include a variety of more serious
misdemeanors. This broad spectrum of petty offense cases daily
floods the lower criminal courts. The rule laid down today Page 407 U. S. 53 will confront the judges of each of these courts with an awkward
dilemma. If counsel is not appointed or knowingly waived, no
sentence of imprisonment for any duration may be imposed. The judge
will therefore be forced to decide in advance of trial -- and
without hearing the evidence -- whether he will forgo entirely his
judicial discretion to impose some sentence of imprisonment and
abandon his responsibility to consider the full range of
punishments established by the legislature. His alternatives,
assuming the availability of counsel, will be to appoint counsel
and retain the discretion vested in him by law, or to abandon this
discretion in advance and proceed without counsel.
If the latter course is followed, the first victim of the new
rule is likely to be the concept that justice requires a
personalized decision both as to guilt and the sentence. The notion
that sentencing should be tailored to fit the crime and the
individual would have to be abandoned in many categories of
offenses. In resolving the dilemma as to how to administer the new
rule, judges will be tempted arbitrarily to divide petty offenses
into two categories -- those for which sentences of imprisonment
may be imposed and those in which no such sentence will be given
regardless of the statutory authorization. In creating categories
of offenses which by law are imprisonable, but for which he would
not impose jail sentences, a judge will be overruling de
facto the legislative determination as to the appropriate
range of punishment for the particular offense. It is true, as the
majority notes, that there are some classes of imprisonable
offenses for which imprisonment is rarely imposed. But, even in
these, the occasional imposition of such a sentence may serve a
valuable deterrent purpose. At least the legislatures, and, until
today, the courts, have viewed the threat of Page 407 U. S. 54 imprisonment -- even when rarely carried out -- as serving a
legitimate social function.
In the brief for the United States as amicus curiae, the Solicitor General suggested that some flexibility could be
preserved through the technique of trial de novo if the
evidence -- contrary to pretrial assumptions -- justified a jail
sentence. Presumably a mistrial would be declared, counsel
appointed, and a new trial ordered. But the Solicitor General also
recognized that a second trial, even with counsel, might be unfair
if the prosecutor could make use of evidence which came out at the
first trial when the accused was uncounseled. If the second trial
were held before the same judge, he might no longer be open-minded.
Finally, a second trial held for no other reason than to afford the
judge an opportunity to impose a harsher sentence might run afoul
of the guarantee against being twice placed in jeopardy for the
same offense. [ Footnote 2/16 ] In
all likelihood, there will be no second trial, and certain offenses
classified by legislatures as imprisonable will be treated by
judges as unimprisonable.
The new rule announced today also could result in equal
protection problems. There may well be an unfair and unequal
treatment of individual defendants, depending on whether the
individual judge has determined in advance to leave open the option
of imprisonment. Thus, an accused indigent would be entitled in
some courts to counsel, while, in other courts in the same
jurisdiction, an indigent accused of the same offense would have no
counsel. Since the services of counsel may be essential to a fair
trial even in cases in which no jail sentence is imposed, the
results of this type of pretrial judgment could be arbitrary and
discriminatory. Page 407 U. S. 55 A different type of discrimination could result in the typical
petty offense case where judgment in the alternative is prescribed:
for example, "five days in jail or $100 fine." If a judge has
predetermined that no imprisonment will be imposed with respect to
a particular category of cases, the indigent who is convicted will
often receive no meaningful sentence. The defendant who can pay a
$100 fine, and does so, will have responded to the sentence in
accordance with law, whereas the indigent who commits the identical
offense may pay no penalty. Nor would there be any deterrent
against the repetition of similar offenses by indigents. [ Footnote 2/17 ]
To avoid these equal protection problems and to preserve a range
of sentencing options as prescribed by law, most judges are likely
to appoint counsel for indigents in all but the most minor offenses
where jail sentences are extremely rare. It is doubtful that the
States possess the necessary resources to meet this sudden
expansion of the right to counsel. The Solicitor General, who
suggested on behalf of the United States the rule the Court today
adopts, recognized that the consequences could be far-reaching. In
addition to the expense of compensating counsel, he noted that the
mandatory requirement of defense counsel will
"require more pretrial time of prosecutors, more courtroom time,
and this will lead to bigger backlogs with present personnel. Court
reporters will be needed as well as counsel, and they are one of
our worst bottlenecks. [ Footnote
2/18 ] " Page 407 U. S. 56 After emphasizing that the new constitutional rule should not be
made retroactive, the Solicitor General commented on the "chaos"
which could result from any mandatory requirement of counsel in
misdemeanor cases:
"[I]f . . . this Court's decision should become fully applicable
on the day it is announced, there could be a massive pileup in the
state courts which do not now meet this standard. This would
involve delays and frustrations which would not be a real
contribution to the administration of justice. [ Footnote 2/19 ]"
The degree of the Solicitor General's concern is reflected by
his admittedly unique suggestion regarding the extraordinary demand
for counsel which would result from the new rule. Recognizing
implicitly that, in many sections of the country, there simply will
not be enough lawyers available to meet this demand either in the
short or long-term, the Solicitor General speculated whether
"clergymen, social workers, probation officers, and other persons
of that type" could be used "as counsel in certain types of cases
involving relatively small sentences." [ Footnote 2/20 ] Quite apart from the practical and
political problem of amending the laws of each of the 50 States
which require a license to practice law, it is difficult to square
this suggestion with the meaning of the term "assistance of
counsel" long recognized in our law.
The majority's treatment of the consequences of the new rule
which so concerned the Solicitor General is not reassuring. In a
footnote, it is said that there are presently 355,200 attorneys,
and that the number will increase rapidly, doubling by 1985. This
is asserted to be sufficient to provide the number of full-time
counsel, estimated by one source at between 1,575 and 2,300, to
represent all indigent misdemeanants, excluding traffic Page 407 U. S. 57 offenders. It is totally unrealistic to imply that 355,200
lawyers are potentially available. Thousands of these are not in
practice, and many of those who do practice work for governments,
corporate legal departments, or the Armed Services, and are
unavailable for criminal representation. Of those in general
practice, we have no indication how many are qualified to defend
criminal cases or willing to accept assignments which may prove
less than lucrative for most. [ Footnote 2/21 ]
It is similarly unrealistic to suggest that implementation of
the Court's new rule will require no more than 1,575 to 2,300
"full-time" lawyers. In few communities are there full-time public
defenders available for, or private lawyers specializing in, petty
cases. Thus, if it were possible at all, it would be necessary to
coordinate the schedules of those lawyers who are willing to take
an Page 407 U. S. 58 occasional misdemeanor appointment with the crowded calendars of
lower courts in which cases are not scheduled weeks in advance but
instead are frequently tried the day after arrest. Finally, the
majority's focus on aggregate figures ignores the heart of the
problem, which is the distribution and availability of lawyers,
especially in the hundreds of small localities across the
country.
Perhaps the most serious potential impact of today's holding
will be on our already overburdened local courts. [ Footnote 2/22 ] The primary cause of "assembly
line" justice is a volume of cases far in excess of the capacity of
the system to handle efficiently and fairly. The Court's rule may
well exacerbate delay and congestion in these courts. We are
familiar with the common tactic of counsel of exhausting every
possible legal avenue, often without due regard to its probable
payoff. In some cases, this may be the lawyer's duty; in other
cases, it will be done for purposes of delay. [ Footnote 2/23 ] The absence of direct economic
impact on the client, plus the omnipresent ineffective assistance
of counsel claim, frequently produces a decision to litigate every
issue. It is likely that young lawyers, fresh out of law school,
will receive most of the appointments in petty offense cases. The
admirable zeal of these lawyers; their eagerness to make a
reputation; the time their not-yet crowded schedules permit them to
devote to relatively minor legal problems; their desire for
courtroom exposure; the availability in some cases of hourly fees,
lucrative to the novice; and the recent constitutional explosion in
procedural rights for the accused -- all these factors are likely
to result in the stretching Page 407 U. S. 59 out of the process with consequent increased costs to the public
and added delay and congestion in the courts. [ Footnote 2/24 ]
There is an additional problem. The ability of various States
and localities to furnish counsel varies widely. Even if there were
adequate resources on a national basis, the uneven distribution of
these resources -- of lawyers, of facilities, and available funding
-- presents the most acute problem. A number of state courts have
considered the question before the Court in this case, and have
been compelled to confront these realities. Many have concluded
that the indigent's right to appointed counsel does not extend to
all misdemeanor cases. In reaching this conclusion, the state
courts have drawn the right to counsel line in different places,
and most have acknowledged that they were moved to do so, at least
in part, by the impracticality of going further. [ Footnote 2/25 ] Page 407 U. S. 60 In other States, legislatures and courts, through the enactment
of law or rules, have drawn the line short of that adopted by the
majority. [ Footnote 2/26 ] These
cases and statutes reflect the judgment of the courts and
legislatures of many States, which understand the problems of local
judicial systems better than this Court, that the rule announced by
the Court today may seriously overtax capabilities. [ Footnote 2/27 ]
The papers filed in a recent petition to this Court for a writ
of certiorari serve as an example of what today's ruling will mean
in some localities. In November, 1971, the petition in Wright
v. Town of Wood, No. 71-5722, was filed with this Court. The
case, arising out of a South Dakota police magistrate court
conviction for the municipal offense of public intoxication, raises
the same issues before us in this case. The Court requested that
the town of Wood file a response. On March 8, 1972, a lawyer
occasionally employed by the town filed with the clerk an affidavit
explaining why the town had not responded. He explained that Wood,
South Dakota, Page 407 U. S. 61 has a population of 132, that it has no sewer or water system
and is quite poor, that the office of the nearest lawyer is in a
town 40 miles away, and that the town had decided that contesting
this case would be an unwise allocation of its limited
resources.
Though undoubtedly smaller than most, Wood is not dissimilar to
hundreds of communities in the United States with no or very few
lawyers, with meager financial resources, but with the need to have
some sort of local court system to deal with minor offenses.
[ Footnote 2/28 ] It is quite
common for the more numerous petty offenses in such towns to be
tried by local courts or magistrates, while the more serious
offenses are tried in a countywide court located in the county
seat. [ Footnote 2/29 ] It is
undoubtedly true that some injustices result from the informal
procedures of these local courts when counsel is not furnished;
certainly counsel should be furnished to some indigents in some
cases. But to require that counsel be furnished virtually every
indigent charged with an imprisonable offense would be a practical
impossibility for many small town courts. The community could
simply not enforce its own laws. [ Footnote 2/30 ] Page 407 U. S. 62 Perhaps it will be said that I give undue weight both to the
likelihood of short-term "chaos" and to the possibility of
long-term adverse effects on the system. The answer may be given
that, if the Constitution requires the rule announced by the
majority, the consequences are immaterial. If I were satisfied that
the guarantee of due process required the assistance of counsel in
every case in which a jail sentence is imposeed, or that the only
workable method of insuring justice is to adopt the majority's
rule, I would not hesitate to join the Court' opinion despite my
misgivings as to its effect upon the administration of justice.
But, in addition to the resulting problems of availability of
counsel, of costs, and especially of intolerable delay in an
already overburdened system, the majority's drawing of a new
inflexible rule may raise more Fourteenth Amendment problems than
it resolves. Although the Court's opinion does not deal explicitly
with any sentence other than deprivation of liberty, however brief,
the according of special constitutional status to cases where such
a sentence is imposed may derogate from the need for counsel in
other types of cases, unless the Court embraces an even broader
prophylactic rule. Due process requires a fair trial in all cases.
Neither the six-month rule approved below nor the rule today
enunciated by the Court is likely to achieve this result. Page 407 U. S. 63 III I would hold that the right to counsel in petty offense cases is
not absolute, but is one to be determined by the trial courts
exercising a judicial discretion on a case-by-case basis. [ Footnote 2/31 ] The determination should
be made before the accused formally pleads; many petty cases are
resolved by guilty pleas in which the assistance of counsel may be
required. [ Footnote 2/32 ] If the
trial court should conclude that the assistance of counsel is not
required in any case, it should state its reasons, so that the
issue could be preserved for review. The trial court would then
become obligated to scrutinize carefully the subsequent proceedings
for the protection of the defendant. If an unrepresented defendant
sought to enter a plea of guilty, the Court should examine the case
against him to insure that there is admissible evidence tending to
support the elements of the offense. If a case went to trial
without defense counsel, the court should intervene, when
necessary, to insure that the defendant adequately brings out the
facts in his favor, and to prevent legal issues from being
overlooked. Formal trial rules should not be applied strictly
against unrepresented defendants. Finally, appellate Page 407 U. S. 64 courts should carefully scrutinize all decisions not to appoint
counsel and the proceedings which follow.
It is impossible, as well as unwise, to create a precise and
detailed set of guidelines for judges to follow in determining
whether the appointment of counsel is necessary to assure a fair
trial. Certainly three general factors should be weighed. First,
the court should consider the complexity of the offense charged.
For example, charges of traffic law infractions would rarely
present complex legal or factual questions, but charges that
contain difficult intent elements or which raise collateral legal
questions, such as search and seizure problems, would usually be
too complex for an unassisted layman. If the offense were one where
the State is represented by counsel and where most defendants who
can afford to do so obtain counsel, there would be a strong
indication that the indigent also needs the assistance of
counsel.
Second, the court should consider the probable sentence that
will follow if a conviction is obtained. The more serious the
likely consequences, the greater is the probability that a lawyer
should be appointed. As noted in 407 U. S. imprisonment is not the only serious consequence the court should
consider.
Third, the court should consider the individual factors peculiar
to each case. These, of course, would be the most difficult to
anticipate. One relevant factor would be the competency of the
individual defendant to present his own case. The attitude of the
community toward a particular defendant or particular incident
would be another consideration. But there might be other reasons
why a defendant would have a peculiar need for a lawyer which would
compel the appointment of counsel in a case where the court would
normally think this unnecessary. Obviously, the sensitivity and
diligence of individual judges would be crucial to the operation of
a rule of fundamental fairness requiring the consideration of the
varying factors in each case. Page 407 U. S. 65 Such a rule is similar in certain respects to the special
circumstances rule applied to felony cases in Betts v.
Brady, 316 U. S. 455 (1942), and Bute v. Illinois, 333 U.
S. 640 (1948), which this Court overruled in Gideon. [ Footnote 2/33 ]
One of the reasons for seeking a more definitive standard in felony
cases was the failure of many state courts to live up to their
responsibilities in determining on a case-by-case basis whether
counsel should be appointed. See the concurring opinion of
Mr. Justice Harlan in Gideon, 372 U.S. at 372 U. S.
350 -351. But this Court should not assume that the past
insensitivity of some state courts to the rights of defendants will
continue. Certainly if the Court follows the course of reading
rigid rules into the Constitution, so that the state courts will be
unable to exercise judicial discretion within the limits of
fundamental fairness, there is little reason to think that
insensitivity will abate.
In concluding, I emphasize my long-held conviction that the
adversary system functions best and most fairly only when all
parties are represented by competent counsel. Before becoming a
member of this Court, I participated in efforts to enlarge and
extend the availability of counsel. The correct disposition of this
case, therefore, has been a matter of considerable concern to me --
as it has to the other members of the Court. We are all strongly
drawn to the ideal of extending the right to counsel, but I differ
as to two fundamentals: (i) what the Constitution requires, and (ii) the effect upon the criminal justice
system, especially in the smaller cities and the thousands of
police, municipal, and justice of the peace courts across the
country.
The view I have expressed in this opinion would accord
considerable discretion to the courts, and would allow the Page 407 U. S. 66 flexibility and opportunity for adjustment which seems so
necessary when we are imposing new doctrine on the lowest level of
courts of 50 States. Although this view would not precipitate the
"chaos" predicted by the Solicitor General as the probable result
of the Court's absolutist rule, there would still remain serious
practical problems resulting from the expansion of indigents'
rights to counsel in petty offense cases. [ Footnote 2/34 ] But the according of reviewable
discretion to the courts in determining when counsel is necessary
for a fair trial, rather than mandating a completely inflexible
rule, would facilitate an orderly transition to a far wider
availability and use of defense counsel.
In this process, the courts of first instance which decide these
cases would have to recognize a duty to consider the need for
counsel in every case where the defendant faces a significant
penalty. The factors mentioned above, and such standards or
guidelines to assure fairness as might be prescribed in each
jurisdiction by legislation or rule of court, should be considered
where relevant. The goal should be, in accord with the essence of
the adversary system, to expand as rapidly as practicable the
availability of counsel so that no person accused of crime must
stand alone if counsel is needed.
As the proceedings in the courts below were not in accord with
the views expressed above, I concur in the result of the decision
in this case.
[ Footnote 2/1 ]
While it is true that Mr. Justice Black's opinion for the Court
in Gideon is not narrowly written, Mr. Justice Harlan was
quick to suggest, in his concurring opinion, that the facts in Gideon did not require the Court to decide whether the
indigent's right to appointed counsel should extend to all criminal
cases. 372 U.S. at 372 U. S. 351 .
In opinions announced more recently, the Court has assumed that the
holding of Gideon has not yet been extended to misdemeanor
cases. See In re Gault, 387 U. S. 1 , 387 U. S. 29 (1967); Mempa v. Rhay, 389 U. S. 128 , 389 U. S. 134 (1967); Burgett v. Texas, 389 U.
S. 109 , 389 U. S. 114 (1967); Loper v. Beto, 405 U. S. 473 (1972).
[ Footnote 2/2 ]
As used herein, the term "petty offense" means any offense where
the authorized imprisonment does not exceed six months, Baldwin
v. New York, 399 U. S. 66 , 399 U. S. 69 (1970). It also includes all offenses not punishable by
imprisonment, regardless of the amount of any fine that might be
authorized. To this extent, the definition used herein differs from
the federal statutory definition of "petty offense," which includes
offenses punishable by not more than six months' imprisonment or by
a fine not exceeding $500. 18 U.S.C. § 1.
[ Footnote 2/3 ] 236 So. 2d 442 (1970).
[ Footnote 2/4 ] See Powell v. Alabama, 287 U. S.
45 , 661 (1932).
[ Footnote 2/5 ] Duncan v. Louisiana, 391 U. S. 145 , 391 U. S. 156 (1968).
[ Footnote 2/6 ]
Although we have given retroactive effect to our ruling in Gideon, Pickelsimer v. Wainwright, 375 U. S.
2 (1963), we have said that
"[t]he values implemented by the right to jury trial would not
measurably be served by requiring retrial of all person convicted
in the past by procedures not consistent with the Sixth Amendment
right to jury trial." DeStefano v. Woods, 392 U. S. 631 , 392 U. S. 634 (1968).
[ Footnote 2/7 ] Supra, 407 U.S.
25 fn2/4|>n. 4, at 68-69.
[ Footnote 2/8 ]
372 U.S. at 372 U. S.
343 -345
[ Footnote 2/9 ] See 1 L. Silverstein, Defense of the Poor in Criminal
Cases in American State Courts 132 (1965).
[ Footnote 2/10 ] See James v. Headley, 410 F.2d 325, 334-335 (CA5
1969).
[ Footnote 2/11 ]
A wide range of civil disabilities may result from misdemeanor
convictions, such as forfeiture of public office ( State ex rel.
Stinger v. v. Kruger, 280 Mo. 293, 217 S.W. 310 (1919)),
disqualification for a licensed profession (Cal.Bus. &
Prof.Code § 3094 (1962) (optometrists); N.C.Gen.Stat. § 93A(b)
(1965) (real estate brokers)), and loss of pension rights
(Fla.Stat.Ann. § 185.18(3) (1966) (police disability pension denied
when injury is result of participation in fights, riots, civil
insurrections, or while committing crime); Ind.Ann.Stat. § 28-4616
(1948) (teacher convicted of misdemeanor resulting in
imprisonment); Pa.Stat.Ann., Tit. 53, § 39323 (Supp. 1972-1973) and
§ 65599 (1957) (conviction of crime or misdemeanor)). See
generally Project, The Collateral Consequences of a Criminal
Conviction, 23 Vand.L.Rev. 929 (1970).
[ Footnote 2/12 ] Gideon v. Wainwright, 372 U.S. at 372 U. S.
344 .
[ Footnote 2/13 ]
In petty offenses, there is much less plea negotiation than in
serious offenses. See Report by the President's Commission
on Law Enforcement and Administration of Justice, The Challenge of
Crime in a Free Society (hereinafter Challenge) 134 (1967). Thus,
in cases where the evidence of guilt is overwhelming, the
assistance of counsel is less essential to obtain a lighter
sentence.
[ Footnote 2/14 ]
Silverstein, supra, 407 U.S.
25 fn2/9|>n. 9, at 125-126.
[ Footnote 2/15 ]
Neither the Report by the President's Commission on Law
Enforcement and Administration of Justice nor the American Bar
Association went the route the Court takes today. The President's
Commission recommended that counsel be provided for criminal
defendants who face "a significant penalty," and at least to those
who are in danger of "substantial loss of liberty." Challenge, supra, n. 407 U.S.
25 fn2/13|>13, at 150. The American Bar Association standard
would not extend the right to counsel to cases where "loss of
liberty" is not "likely to be imposed." American Bar Association
Project on Standards for Criminal Justice, Providing Defense
Services 370 (Approved Draft 1968). Neither supports a new,
inflexible constitutional rule.
[ Footnote 2/16 ] See Callan v. Wilson, 127 U. S. 540 (1888); North Carolina v. Pearce, 395 U.
S. 711 (1969).
[ Footnote 2/17 ]
The type of penalty discussed above (involving the discretionary
alternative of "jail or fine") presents serious problems of
fairness -- both to indigents and nonindigents and to the
administration of justice. Cf. Tate v. Short, 401 U.
S. 395 (1971). No adequate resolution of these
inherently difficult problems has yet been found. The rule adopted
by the Court today, depriving the lower courts of all discretion in
such cases unless counsel is available and is appointed, could
aggravate the problem.
[ Footnote 2/18 ]
Tr of Oral Arg. 335
[ Footnote 2/19 ] Id. at 36-37.
[ Footnote 2/20 ] Id. at 39.
[ Footnote 2/21 ]
The custom in many, if not most, localities is to appoint
counsel on a case-by-case basis. Compensation is generally
inadequate. Even in the federal courts under the Criminal Justice
Act of 1964, 18 U.S.C. § 3006A, which provides one of the most
generous compensation plans, the rates for appointed counsel -- $20
per hour spent out of court, $30 per hour of court time, subject to
a maximum total fee of $400 for a misdemeanor case and $1,000 for a
felony -- are low by American standards. Consequently, the majority
of persons willing to accept appointments are the young and
inexperienced. See Cappelletti, Part One: The Emergence of
a Modern Theme, in Cappelletti & Gordley, Legal Aid: Modern
Themes and Variations, 24 Stan.L.Rev. 347, 377-378 (1972). MR.
JUSTICE BRENNAN suggests, in his concurring opinion, that law
students might provide an important source of legal representation.
He presents no figures, however, as to how many students would be
qualified and willing to undertake the responsibilities of
defending indigent misdemeanants. Although welcome progress is
being made with programs, supported by the American Bar
Association, to enlist the involvement of law students in indigent
representation, the problems of meeting state requirements and of
assuring the requisite control and supervision are far from
insubstantial. Moreover, the impact of student participation would
be limited primarily to the 140 or less communities where these law
schools are located.
[ Footnote 2/22 ] See generally H. James, Crisis in the Courts, c. 2
(1988); Challenge, supra, 407 U.S.
25 fn2/13|>n. 13, at 145-156.
[ Footnote 2/23 ] See, e.g., James, supra, 407 U.S.
25 fn2/22|>n. 22, at 270; Schrag, On Her Majesty's Secret
Service: Protecting the Consumer in New York City, 80 Yale L.J.
1529 (1971).
[ Footnote 2/24 ]
In Cook County, Illinois, a recent study revealed that the
members of the Chicago Bar Association's Committee on the Defense
of Prisoners who are appointed to represent indigent defendants
elect a jury trial in 63% of their trial cases, while other
appointed counsel and retained counsel do so in 33%, and the public
defender in only 15%.
"One possible explanation for this contrast is that committee
counsel, who are sometimes serving in part to gain experience, are
more willing to undertake a jury trial than is an assistant public
defender, who is very busy and very conscious of the probable extra
penalty accruing to a defendant who loses his case before a
jury."
D. Oaks & W. Lehman, A Criminal Justice System and the
Indigent 159 (1968) (footnote omitted).
[ Footnote 2/25 ] See Irvin v. State, 44 Ala.App. 101, 203 So. 2d 283
(1967); Burrage v. Superior Court, 105 Ariz. 53, 459 P.2d 313 (1969); Cableton v. State, 243 Ark. 351, 420 S.W.2d 534 (1967); State ex rel. Argersinger v.
Hamlin, 236 So. 2d 442 (Fla.1970); People v. Dupree, 42 Ill. 2d
249 , 246 N.E.2d
281 (1969); People v. Millory, 378 Mich. 538, 147 N.W.2d
66 (1967); Hendrix v. City of Seattle, 76 Wash. 2d
142 , 456 P.2d
696 (1969), cert. denied, 397 U.S. 948 (1970); State ex rel. Plutschack v. Department of Health and Social
Services, 37 Wis.2d 713, 155 N.W.2d 549 (1968).
[ Footnote 2/26 ] See Hawaii Const., Art. I, § 11 (1968); Idaho Code §§
19-851, 19-852 (Supp. 1971); Kan.Stat.Ann. § 22-4503 (Supp. 1971);
Ky.Rule Crim.Proc. 8.04; La.Rev.Stat. § 15:141(F) (1967); Me.Rule
Crim.Proc. 44; Md.Rule 719b2(a); Neb.Rev.Stat. § 29-1803 (1964);
Nev.Rev.Stat. §§ 171.188, 193.140 (1969); N.Mex.Stat.Ann. § 41-22-3
(Supp. 1971); Utah Code Ann. § 772 (Supp. 1971); Vt.Stat.Ann., Tit.
13, § 6503 (Supp. 1971); Va.Code Ann. § 19.1-241.1 (Supp.
1971).
[ Footnote 2/27 ] See Kamisar & Choper, The Right to Counsel in
Minnesota: Some Field Findings and Legal Policy Observations, 48
Minn.L.Rev. 1, 68 (1963). Local judges interviewed by the authors
concluded that the right to counsel should not be extended to petty
cases.
"If no such dividing line can be drawn, if the question of
assigned counsel in misdemeanor cases resolves itself into an 'all
or nothing' proposition, then, the thrust of their views was that
limited funds and lawyer manpower and the need for judicial economy
dictate that it be 'nothing.'"
(Footnote omitted.) But see State v. Borst, 278 Minn.
388, 154 N.W.2d
888 (1967).
[ Footnote 2/28 ] See Cableton v. State, 243 Ark., at 358, 420 S.W.2d at
538-539:
"[T]here are more justices of the peace in Arkansas than there
are resident practicing lawyers, and . . . there are counties in
which there are no practicing lawyers. The impact of [right to
counsel in misdemeanor cases] would seriously impair the
administration of justice in Arkansas, and impose an intolerable
burden upon the legal profession."
(Footnote omitted.)
[ Footnote 2/29 ] See Silverstein, supra, 407 U.S.
25 fn2/9|>n. 9, at 125-126.
[ Footnote 2/30 ]
The successful implementation of the majority's rule would
require state and local governments to appropriate considerable
funds, something they have not been willing to do. Three States,
with 21% of the Nation's population, provide more than 50% of all
state appropriations for indigent defense. Note, Dollars and Sense
of an Expanded Right to Counsel, 55 Iowa L.Rev. 1249, 1265 (1970).
For example, in 1971, the State of Kansas spent $570,000 defending
indigents in felony cases -- up from $376,000 in 1969. Although the
budgetary request for 1972 was $612,000, the legislature has
appropriated only $400,000. Brief for Appellant in James v.
Strange, No. 71-11, decided today, post, p. 407 U. S. 128 . "In
view of American resources, the funds spent on the legal services
program can only be regarded as trivial." Cappelletti, supra, 407 U.S.
25 fn2/21|>n. 21, at 379.
"Although the American economy is over 8 times the size of the
British, and the American population is almost 4 times as great,
American legal aid expenditures are less than 2 times as high." Id. at 379 n. 210
[ Footnote 2/31 ]
It seems to me that such an individualized rule, unlike a
six-month rule and the majority's rule, does not present equal
protection problems under this Court's decisions in Griffin v.
Illinois, 351 U. S. 12 (1956); Douglas v. California, 372 U.
S. 353 (1963); and Mayer v. City of Chicago, 404 U. S. 189 (1971).
[ Footnote 2/32 ] See, e.g., Katz, Municipal Courts -- Another Urban Ill,
20 Case Western Reserve L.Rev. 87, 92-96 (1968). Cf. Hamilton
v. Alabama, 368 U. S. 52 (1961); White v. Maryland, 373 U. S.
59 (1963); Harvey v. Mississippi, 340 F.2d 263
(CA5 1965).
Although there is less plea negotiating in petty cases, see 407 U.S.
25 fn2/13|>n. 13, supra, the assistance of counsel
may still be needed so that the defendant who is not faced with
overwhelming evidence of guilt can make an intelligent decision
whether to go to trial.
[ Footnote 2/33 ]
I do not disagree with the overruling of Betts; I am in
complete accord with Gideon. Betts, like Gideon, concerned the right to counsel in a felony case. See 407 U.S.
25 fn2/1|>n. 1, supra. Neither case controls today's
result.
[ Footnote 2/34 ]
Indeed, it is recognized that many of the problems identified in
this opinion will result from any raising of the standards as to
the requirement of counsel. It is my view that relying upon
judicial discretion to assure fair trial of petty offenses not only
comports with the Constitution, but will minimize problems which
otherwise could affect adversely the administration of criminal
justice in the very courts which already are under the most severe
strain. | In Argersinger v. Hamlin, the Supreme Court ruled that an indigent defendant in a criminal trial has the right to legal assistance, regardless of the classification of the offense or the presence of a jury trial. The Court reversed the Florida Supreme Court's decision, which had denied the right to court-appointed counsel to an indigent petitioner charged with a misdemeanor punishable by up to six months' imprisonment. The Sixth Amendment, applied to the states through the Fourteenth Amendment, guarantees the right to counsel in all criminal prosecutions, and an accused cannot be deprived of liberty without it. |
Criminal Trials & Prosecutions | U.S. v. Ash | https://supreme.justia.com/cases/federal/us/413/300/ | U.S. Supreme Court United States v. Ash, 413
U.S. 300 (1973) United States v. Ash No. 71-1255 Argued January 10,
1973 Decided June 21, 1973 413
U.S. 300 CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA
CIRCUIT Syllabus The Sixth Amendment does not grant an accused the right to have
counsel present when the Government conducts a post-indictment
photographic display, containing a picture of the accused, for the
purpose of allowing a witness to attempt an identification of the
offender. A pretrial event constitutes a "critical stage" when the
accused requires aid in coping with legal problems or help in
meeting his adversary. Since the accused is not present at the time
of the photographic display, and, as here, asserts no right to be
present, there is no possibility that he might be misled by his
lack of familiarity with the law or overpowered by his professional
adversary. United States v. Wade, 388 U.
S. 218 , distinguished. Pp. 413 U. S.
306 -321.
149 U.S.App.D.C. 1, 461 F.2d 92, reversed and remanded.
BLACKMUN, J., delivered the opinion of the Court, in which
BURGER, C.J., and WHITE, POWELL, and REHNQUIST, JJ., joined.
STEWART, J., filed an opinion concurring in the judgment, post, p. 413 U. S. 321 .
BRENNAN, J., filed a dissenting opinion, in which DOUGLAS and
MARSHALL, JJ., joined, post, p. 413 U. S.
326 .
MR. JUSTICE BLACKMUN delivered the opinion of the Court.
In this case, the Court is called upon to decide whether Page 413 U. S. 301 the Sixth Amendment [ Footnote
1 ] grants an accused the right to have counsel present whenever
the Government conducts a post-indictment photographic display,
containing a picture of the accused, for the purpose of allowing a
witness to attempt an identification of the offender. The United
States Court of Appeals for the District of Columbia Circuit,
sitting en banc, held, by a 5-to-4 vote, that the accused possesses
this right to counsel. 149 U.S.App.D.C. 1, 461 F.2d 92 (1972). The
court's holding is inconsistent with decisions of the courts of
appeals of nine other circuits. [ Footnote 2 ] We granted certiorari Page 413 U. S. 302 to resolve the conflict and to decide this important
constitutional question. 407 U.S. 909 (1972). We reverse and
remand. I On the morning of August 26, 1965, a man with a stocking mask
entered a bank in Washington, D.C., and began waving a pistol. He
ordered an employee to hang up the telephone and instructed all
others present not to move. Seconds later, a second man, also
wearing a stocking mask, entered the bank, scooped up money from
tellers' drawers into a bag, and left. The gunman followed, and
both men escaped through an alley. The robbery lasted three or four
minutes.
A Government informer, Clarence McFarland, told authorities that
he had discussed the robbery with Charles J. Ash, Jr., the
respondent here. Acting on this information, an FBI agent, in
February, 1966, showed five black-and-white mug shots of Negro
males of generally the same age, height, and weight, one of which
was of Ash, to four witnesses. All four made uncertain
identifications of Ash's picture. At this time, Ash was not in
custody, and had not been charged. On April 1, 1966, an indictment
was returned charging Ash and a codefendant, John L. Bailey, in
five counts related to this Page 413 U. S. 303 bank robbery, in violation of D.C.Code Ann. § 22901 and 18
U.S.C. § 2113(a).
Trial was finally set for May, 1968, almost three years after
the crime. In preparing for trial, the prosecutor decided to use a
photographic display to determine whether the witnesses he planned
to call would be able to make in-court identifications. Shortly
before the trial, an FBI agent and the prosecutor showed five color
photographs to the four witnesses who previously had tentatively
identified the black-and-white photograph of Ash. Three of the
witnesses selected the picture of Ash, but one was unable to make
any selection. None of the witnesses selected the picture of Bailey
which was in the group. This post-indictment [ Footnote 3 ] identification provides the basis for
respondent Ash's claim that he was denied the right to counsel at a
"critical stage" of the prosecution.
No motion for severance was made, and Ash and Bailey were tried
jointly. The trial judge held a hearing on the suggestive nature of
the pretrial photographic displays. [ Footnote 4 ] The judge did not make a clear ruling on
suggestive nature, but held that the Government had demonstrated by
"clear and convincing" evidence that in-court identifications would
be "based on observation of Page 413 U. S. 304 the suspect other than the intervening observation." App.
664.
At trial, the three witnesses who had been inside the bank
identified Ash as the gunman, but they were unwilling to state that
they were certain of their identifications. None of these made an
in-court identification of Bailey. The fourth witness, who had been
in a car outside the bank and who had seen the fleeing robbers
after they had removed their masks, made positive in-court
identifications of both Ash and Bailey. Bailey's counsel then
sought to impeach this in-court identification by calling the FBI
agent who had shown the color photographs to the witnesses
immediately before trial. Bailey's counsel demonstrated that the
witness who had identified Bailey in court had failed to identify a
color photograph of Bailey. During the course of the examination,
Bailey's counsel also, before the jury, brought out the fact that
this witness had selected another man as one of the robbers. At
this point, the prosecutor became concerned that the jury might
believe that the witness had selected a third person when, in fact,
the witness had selected a photograph of Ash. After a conference at
the bench, the trial judge ruled that all five color photographs
would be admitted into evidence. The Court of Appeals held that
this constituted the introduction of a post-indictment
identification at the prosecutor's request and over the objection
of defense counsel. [ Footnote
5 ] Page 413 U. S. 305 McFarland testified as a Government witness. He said he had
discussed plans for the robbery with Ash before the event and,
later, had discussed the results of the robbery with Ash in the
presence of Bailey. McFarland was shown to possess an extensive
criminal record and a history as an informer.
The jury convicted Ash on all counts. It was unable to reach a
verdict on the charges against Bailey, and his motion for acquittal
was granted. Ash received concurrent sentences on the several
counts, the two longest being 80 months to 12 years.
The five-member majority of the Court of Appeals held that Ash's
right to counsel, guaranteed by the Sixth Amendment, was violated
when his attorney was not given the opportunity to be present at
the photographic displays conducted in May, 1968, before the trial.
The majority relied on this Court's lineup cases, United States
v. Wade, 388 U. S. 218 (1967), and Gilbert v. California, 388 U.
S. 263 (1967), and on Stovall v. Denno, 388 U. S. 293 (1967).
The majority did not reach the issue of suggestiveness; their
opinion implies, however, that they would order a remand for
additional findings by the District Court. 149 U.S.App.D.C. at 7,
461 F.2d at 98. The majority refrained from deciding whether the
in-court identifications could have independent bases, id. at 14-15 and nn. 20, 21, 461 F.2d at 105 106 and nn. 20, 21, but
expressed doubt that the identifications at the trial had
independent origins.
Dissenting opinions, joined by four judges, disagreed with the
decision of the majority that the photographic identification was a
"critical stage" requiring counsel, and criticized the majority's
suggestion that the in-court identifications were tainted by
defects in the photographic identifications. Id. at 14-43,
461 F.2d at 106-134. Page 413 U. S. 306 II The Court of Appeals relied exclusively on that portion of the
Sixth Amendment providing, "In all criminal prosecutions, the
accused shall enjoy the right . . . to have the Assistance of
Counsel for his defence." The right to counsel in Anglo-American
law has a rich historical heritage, and this Court has regularly
drawn on that history in construing the counsel guarantee of the
Sixth Amendment. We reexamine that history in an effort to
determine the relationship between the purposes of the Sixth
Amendment guarantee and the risks of a photographic identification.
In Powell v. Alabama, 287 U. S. 45 , 666
(1932), the Court discussed the English common law rule that
severely limited the right of a person accused of a felony to
consult with counsel at trial. The Court examined colonial
constitutions and statutes, and noted that,
"in at least twelve of the thirteen colonies, the rule of the
English common law, in the respect now under consideration, had
been definitely rejected, and the right to counsel fully recognized
in all criminal prosecutions save that, in one or two instances,
the right was limited to capital offenses or to the more serious
crimes." Id. at 287 U. S. 64 -65.
The Sixth Amendment counsel guarantee, thus, was derived from
colonial statutes and constitutional provisions designed to reject
the English common law rule. Apparently several concerns
contributed to this rejection at the very time when countless other
aspects of the common law were being imported. One consideration
was the inherent irrationality of the English limitation. Since the
rule was limited to felony proceedings, the result, absurd and
illogical, was that an accused misdemeanant could rely fully on
counsel, but Page 413 U. S. 307 the accused felon, in theory at least, [ Footnote 6 ] could consult counsel only on legal
questions that the accused proposed to the court. See Powell v.
Alabama, 287 U.S. at 287 U. S. 60 .
English writers were appropriately critical of this inconsistency. See, for example, 4 W. Blackstone, Commentaries *355.
A concern of more lasting importance was the recognition and
awareness that an unaided layman had little skill in arguing the
law or in coping with an intricate procedural system. The function
of counsel as a guide through complex legal technicalities long has
been recognized by this Court. Mr. Justice Sutherland's well known
observations in Powell bear repeating here:
"Even the intelligent and educated layman has small and
sometimes no skill in the science of law. If charged with crime, he
is incapable, generally, of determining for himself whether the
indictment is good or bad. He is unfamiliar with the rules of
evidence. Left without the aid of counsel, he may be put on trial
without a proper charge, and convicted upon incompetent evidence,
or evidence irrelevant to the issue or otherwise inadmissible. He
lacks both the skill and knowledge adequately to prepare his
defense, even though he have a perfect one. He requires the guiding
hand of counsel at every step in the proceedings against him.
Without it, though he be not guilty, he faces the danger of
conviction because he does not know how to establish his
innocence."
287 U.S. at 287 U. S. 69 .
The Court frequently has interpreted the Sixth Amendment Page 413 U. S. 308 to assure that the "guiding hand of counsel" is available to
those in need of its assistance. See, for example, Gideon v.
Wainwright, 372 U. S. 335 , 372 U. S.
344 -345 (1963), and Argersinger v. Hamlin, 407 U. S. 25 , 407 U. S. 31 (1972).
Another factor contributing to the colonial recognition of the
accused's right to counsel was the adoption of the institution of
the public prosecutor from the Continental inquisitorial system.
One commentator has explained the effect of this development:
"[E]arly in the eighteenth century, the American system of
judicial administration adopted an institution which was (and to
some extent still is) unknown in England: while rejecting the
fundamental juristic concepts upon which continental Europe's
inquisitorial system of criminal procedure is predicated, the
colonies borrowed one of its institutions, the public prosecutor,
and grafted it upon the body of English (accusatorial) procedure
embodied in the common law. Presumably, this innovation was brought
about by the lack of lawyers, particularly in the newly settled
regions, and by the increasing distances between the colonial
capitals on the eastern seaboard and the ever-receding western
frontier. Its result was that, at a time when virtually all but
treason trials in England were still in the nature of suits between
private parties, the accused in the colonies faced a government
official whose specific function it was to prosecute, and who was
incomparably more familiar than the accused with the problems of
procedure, the idiosyncrasies of juries, and, last but not least,
the personnel of the court."
F. Heller, The Sixth Amendment 2021 (1951) (footnote
omitted). Page 413 U. S. 309 Thus, an additional motivation for the American rule was a
desire to minimize the imbalance in the adversary system that
otherwise resulted with the creation of a professional prosecuting
official. Mr. Justice Black, writing for the Court in Johnson
v. Zerbst, 304 U. S. 458 , 304 U. S.
462 -463 (138), spoke of this equalizing effect of the
Sixth Amendment's counsel guarantee:
"It embodies a realistic recognition of the obvious truth that
the average defendant does not have the professional legal skill to
protect himself when brought before a tribunal with power to take
his life or liberty, wherein the prosecution is presented by
experienced and learned counsel."
This historical background suggests that the core purpose of the
counsel guarantee was to assure "Assistance" at trial, when the
accused was confronted with both the intricacies of the law and the
advocacy of the public prosecutor. [ Footnote 7 ] Later developments have led this Court Page 413 U. S. 310 to recognize that "Assistance" would be less than meaningful if
it were limited to the formal trial itself.
This extension of the right to counsel to events before trial
has resulted from changing patterns of criminal procedure and
investigation that have tended to generate pretrial events that
might appropriately be considered to be parts of the trial itself.
At these newly emerging and significant events, the accused was
confronted, just as at trial, by the procedural system, or by his
expert adversary, or by both. In Wade, the Court explained
the process of expanding the counsel guarantee to these
confrontations:
"When the Bill of Rights was adopted, there were no organized
police forces as we know them today. The accused confronted the
prosecutor and the witnesses against him, and the evidence was
marshalled, largely at the trial itself. In contrast, today's law
enforcement machinery involves critical confrontations of the
accused by the prosecution at pretrial proceedings where the
results might well settle the accused's fate and reduce the trial
itself to a mere formality. In recognition of these realities of
modern criminal prosecution, our cases have construed the Sixth
Amendment guarantee to apply to 'critical' Page 413 U. S. 311 stages of the proceedings."
388 U.S. at 388 U. S. 224 (footnote omitted).
The Court consistently has applied a historical interpretation
of the guarantee, and has expanded the constitutional right to
counsel only when new contexts appear presenting the same dangers
that gave birth initially to the right itself.
Recent cases demonstrate the historical method of this
expansion. In Hamilton v. Alabama, 368 U. S.
52 (1961), and in White v. Maryland, 373 U. S. 59 (1963), the accused was confronted with the procedural system and
was required, with definite consequences, to enter a plea. In Massiah v. United States, 377 U.
S. 201 (1964), the accused was confronted by prosecuting
authorities who obtained, by ruse and in the absence of defense
counsel, incriminating statements. In Coleman v. Alabama, 399 U. S. 1 (1970),
the accused was confronted by his adversary at a "critical stage"
preliminary hearing at which the uncounseled accused could not hope
to obtain so much benefit as could his skilled adversary.
The analogy between the unrepresented accused at the pretrial
confrontation and the unrepresented defendant at trial, implicit in
the cases mentioned above, was explicitly drawn in Wade: "The trial which might determine the accused's fate may well not
be that in the courtroom but that, at the pretrial confrontation,
with the State aligned against the accused, the witness the sole
jury, and the accused unprotected against the overreaching,
intentional or unintentional, and with little or no effective
appeal from the judgment there rendered by the witness -- 'that's
the man.'"
388 U.S. at 388 U. S.
235 -236. Page 413 U. S. 312 Throughout this expansion of the counsel guarantee to trial-like
confrontations, the function of the lawyer has remained essentially
the same as his function at trial. In all cases considered by the
Court, counsel has continued to act as a spokesman for, or advisor
to, the accused. The accused's right to the "Assistance of Counsel"
has meant just that, namely, the right of the accused to have
counsel acting as his assistant. In Hamilton and White, for example, the Court envisioned the lawyer as
advising the accused on available defenses in order to allow him to
plead intelligently. 368 U.S. at 368 U. S. 54 -55;
373 U.S. at 373 U. S. 60 . In Massiah, counsel could have advised his client on the
benefits of the Fifth Amendment and could have sheltered him from
the overreaching of the prosecution. 377 U.S. at 377 U. S. 205 . Cf. Miranda v. Arizona, 384 U. S. 436 , 384 U. S. 466 (1966). In Coleman, the skill of the lawyer in examining
witnesses, probing for evidence, and making legal arguments was
relied upon by the Court to demonstrate that, in the light of the
purpose of the preliminary hearing under Alabama law, the accused
required "assistance" at that hearing. 399 U.S. at 399 U. S. 9 .
The function of counsel in rendering "assistance" continued at
the lineup under consideration in Wade and its companion
cases. Although the accused was not confronted there with legal
questions, the lineup offered opportunities for prosecuting
authorities to take advantage of the accused. Counsel was seen by
the Court as being more sensitive to, and aware of, suggestive
influences than the accused himself, and as better able to
reconstruct the events at trial. Counsel present at lineup would be
able to remove disabilities of the accused in precisely the same
fashion that counsel compensated for the disabilities of the layman
at trial. Thus, the Court mentioned that the accused's memory might
be dimmed by "emotional tension," that the accused's credibility
at Page 413 U. S. 313 trial would be diminished by his status as defendant, and that
the accused might be unable to present his version effectively
without giving up his privilege against compulsory
self-incrimination. United States v. Wade, 388 U.S. at 388 U. S.
230 -231. It was in order to compensate for these
deficiencies that the Court found the need for the assistance of
counsel.
This review of the history and expansion of the Sixth Amendment
counsel guarantee demonstrates that the test utilized by the Court
has called for examination of the event in order to determine
whether the accused required aid in coping with legal problems or
assistance in meeting his adversary. Against the background of this
traditional test, we now consider the opinion of the Court of
Appeals. III Although the Court of Appeals' majority recognized the argument
that
"a major purpose behind the right to counsel is to protect the
defendant from errors that he himself might make if he appeared in
court alone,"
the court concluded that "other forms of prejudice," mentioned
and recognized in Wade, could also give rise to a right to
counsel. 149 U.S.App.D.C. at 10, 461 F.2d at 101. These forms of
prejudice were felt by the court to flow from the possibilities for
mistaken identification inherent in the photographic display.
[ Footnote 8 ] Page 413 U. S. 314 We conclude that the dangers of mistaken identification,
mentioned in Wade, were removed from context by the Court
of Appeals and were incorrectly utilized as a sufficient basis for
requiring counsel. Although Wade did discuss possibilities
for suggestion and the difficulty for reconstructing suggestivity,
this discussion occurred only after the Court had concluded that
the lineup constituted a trial-like confrontation, requiring the
"Assistance of Counsel" to preserve the adversary process by
compensating for advantages of the prosecuting authorities.
The above discussion of Wade has shown that the
traditional Sixth Amendment test easily allowed extension of
counsel to a lineup. The similarity to trial was apparent, and
counsel was needed to render "assistance" in counterbalancing any
"overreaching" by the prosecution.
After the Court in Wade held that a lineup constituted
a trial-like confrontation requiring counsel, a more difficult
issue remained in the case for consideration. The same changes in
law enforcement that led to lineups and pretrial hearings also
generated other events at which the accused was confronted by the
prosecution. The Government had argued in Wade that, if
counsel was required at a lineup, the same forceful considerations
would mandate counsel at other preparatory steps in the "gathering
of the prosecution's evidence," such as, for Page 413 U. S. 315 particular example, the taking of fingerprints or blood samples.
388 U.S. at 388 U. S.
227 .
The Court concluded that there were differences. Rather than
distinguishing these situations from the lineup in terms of the
need for counsel to assure an equal confrontation at the time, the
Court recognized that there were times when the subsequent trial
would cure a one-sided confrontation between prosecuting
authorities and the uncounseled defendant. In other words, such
stages were not "critical." Referring to fingerprints, hair,
clothing, and other blood samples, the Court explained:
"Knowledge of the techniques of science and technology is
sufficiently available, and the variables in techniques few enough,
that the accused has the opportunity for a meaningful confrontation
of the Government's case at trial through the ordinary processes of
cross-examination of the Government's expert witnesses and the
presentation of the evidence of his own experts."
388 U.S. at 388 U. S.
227 -228.
The structure of Wade, viewed in light of the careful limitation
of the Court's language to "confrontations," [ Footnote 9 ] Page 413 U. S. 316 makes it clear that lack of scientific precision and inability
to reconstruct an event are not the tests for requiring counsel in
the first instance. These are, instead, the tests to determine
whether confrontation with counsel at trial can serve as a
substitute for counsel at the pretrial confrontation. If accurate
reconstruction is possible, the risks inherent in any confrontation
still remain, but the opportunity to cure defects at trial causes
the confrontation to cease to be "critical." The opinion of the
Court even indicated that changes in procedure might cause a lineup
to cease to be a "critical" confrontation:
"Legislative or other regulations, such as those of local police
departments, which eliminate the risks of abuse and unintentional
suggestion at lineup proceedings and the impediments to meaningful
confrontation at trial may also remove the basis for regarding the
stage as 'critical.'"
388 U.S. at 388 U. S. 239 (footnote omitted). See, however, id. at 388 U. S. 262 n. (opinion of Fortas, J.).
The Court of Appeals considered its analysis complete after it
decided that a photographic display lacks scientific precision and
ease of accurate reconstruction at trial. That analysis, under Wade, however, merely carries one to the point where one
must establish that the trial itself can provide no substitute for
counsel if a pretrial confrontation is conducted in the absence of
counsel. Judge Friendly, writing for the Second Circuit in United States v. Bennett, 409 F.2d 888 (1969), recognized
that the "criticality" test of Wade, if applied outside
the confrontation context, would result in drastic expansion of the
right to counsel:
"None of the classical analyses of the assistance to be given by
counsel, Justice Sutherland's in Powell v. Alabama . . .
and Justice Black's in Johnson v. Page 413 U. S. 317 Zerbst . . . and Gideon v. Wainwright . . .
suggests that counsel must be present when the prosecution is
interrogating witnesses in the defendant's absence, even when, as
here, the defendant is under arrest; counsel is, rather, to be
provided to prevent the defendant himself from falling into traps
devised by a lawyer on the other side, and to see to it that all
available defenses are proffered. Many other aspects of the
prosecution's interviews with a victim or a witness to a crime
afford just as much opportunity for undue suggestion as the display
of photographs; so, too, do the defense's interviews, notably with
alibi witnesses." Id. at 899-900. We now undertake the threshold analysis
that must be addressed. IV A substantial departure from the historical test would be
necessary if the Sixth Amendment were interpreted to give Ash a
right to counsel at the photographic identification in this case.
Since the accused himself is not present at the time of the
photographic display, and asserts no right to be present, Brief for
Respondent 40, no possibility arises that the accused might be
misled by his lack of familiarity with the law or overpowered by
his professional adversary. Similarly, the counsel guarantee would
not be used to produce equality in a trial-like adversary
confrontation. Rather, the guarantee was used by the Court of
Appeals to produce confrontation at an event that previously was
not analogous to an adversary trial.
Even if we were willing to view the counsel guarantee in broad
terms as a generalized protection of the adversary process, we
would be unwilling to go so far as to extend the right to a portion
of the prosecutor's trial preparation interviews with witnesses.
Although photography Page 413 U. S. 318 is relatively new, the interviewing of witnesses before trial is
a procedure that predates the Sixth Amendment. In England in the
16th and 17th centuries, counsel regularly interviewed witnesses
before trial. 9 W. Holdsworth, History of English Law 226-228
(1926). The traditional counterbalance in the American adversary
system for these interviews arises from the equal ability of
defense counsel to seek and interview witnesses himself.
That adversary mechanism remains as effective for a photographic
display as for other parts of pretrial interviews. [ Footnote 10 ] No greater limitations are
placed on defense counsel in constructing displays, seeking
witnesses, and conducting photographic identifications than those
applicable to the prosecution. [ Footnote 11 ] Selection of the picture of a person other
than the accused, or the inability of a witness to make any
selection, will be useful to the defense in precisely the same
manner that the selection of Page 413 U. S. 319 a picture of the defendant would be useful to the prosecution.
[ Footnote 12 ] In this very
case, for example, the initial tender of the photographic display
was by Bailey's counsel, who sought to demonstrate that the witness
had failed to make a photographic identification. Although we do
not suggest that equality of access to photographs removes all
potential for abuse, [ Footnote
13 ] it does remove any inequality in the adversary process
itself, and thereby fully satisfies the historical spirit of the
Sixth Amendment's counsel guarantee.
The argument has been advanced that requiring counsel might
compel the police to observe more scientific procedures or might
encourage them to utilize corporeal, rather than photographic,
displays. [ Footnote 14 ] This
Court has Page 413 U. S. 320 recognized that improved procedures can minimize the dangers of
suggestion. Simmons v. United States, 390 U.
S. 377 , 390 U. S. 386 n. 6 (1968). Commentators have also proposed more accurate
techniques. [ Footnote
15 ]
Pretrial photographic identifications, however, are hardly
unique in offering possibilities for the actions of the prosecutor
unfairly to prejudice the accused. Evidence favorable to the
accused may be withheld; testimony of witnesses may be manipulated;
the results of laboratory tests may be contrived. In many ways, the
prosecutor, by accident or by design, may improperly subvert the
trial. The primary safeguard against abuses of this kind is the
ethical responsibility of the prosecutor, [ Footnote 16 ] who, as so often has been said, may
"strike hard blows," but not "foul ones." Berger v. United
States, 295 U. S. 78 , 295 U. S. 88 (1935); Brady v. Maryland, 373 U. S.
83 , 373 U. S. 87 -88
(1963). If that safeguard fails, review remains available under due
process standards. See Giglio v. United States, 405 U. S. 150 (1972); Mooney v. Holohan, 294 U.
S. 103 , 294 U. S. 112 (1935); Miller v. Pate, 386 U. S. 1 (1967); Chambers v. Mississippi, 410 U. S. 284 (1973). These same safeguard apply to misuse of photographs. See Simmons v. United States, 390 U.S. at 390 U. S.
384 . Page 413 U. S. 321 We are not persuaded that the risks inherent in the use of
photographic displays are so pernicious that an extraordinary
system of safeguards is required.
We hold, then, that the Sixth Amendment does not grant the right
to counsel at photographic displays conducted by the Government for
the purpose of allowing a witness to attempt an identification of
the offender. This holding requires reversal of the judgment of the
Court of Appeals. Although respondent Ash has urged us to examine
this photographic display under the due process standard enunciated
in Simmons v. United States, 390 U.S. at 390 U. S. 384 ,
the Court of Appeals, expressing the view that additional findings
would be necessary, refused to decide the issue. 149 U.S.App.D.C.
at 7, 461 F.2d at 98. We decline to consider this question on this
record in the first instance. It remains open, of course, on the
Court of Appeals' remand to the District Court. Reversed and remanded. [ Footnote 1 ]
"In all criminal prosecutions, the accused shall enjoy the right
. . . to have the Assistance of Counsel for his defence."
[ Footnote 2 ] United States v. Bennett, 409 F.2d 888, 898-900 (CA2), cert. denied sub nom. Haywood v. United States, 396 U.S.
852 (1969); United States ex rel. Reed v. Anderson, 461
F.2d 739 (CA3 1972) (en banc); United States v. Collins, 416 F.2d 696 (CA4 1969), cert. denied, 396 U.S. 1025
(1970); United States v. Balard, 423 F.2d 127 (CA5 1970); United States v. Serio, 440 F.2d 827, 829-830 (CA6 1971); United States v. Robinson, 406 F.2d 64, 67 (CA7), cert. denied, 395 U.S. 926 (1969); United States v.
Long, 449 F.2d 288, 301302 (CA8 1971), cert.denied, 405 U.S. 974 (1972); Allen v. Rhay, 431 F.2d 1160,
1166-1167 (CA9 1970); McGee v. United States, 402 F.2d
434, 436 (CA10 1968), cert. denied, 394 U.S. 908 (1969).
The en banc decision of the Third Circuit in Anderson overruled in part a panel decision in United States v.
Zeiler, 427 F.2d 1305 (CA3 1970).
The question has also produced conflicting decisions in state
courts. The majority view, as in the courts of appeals, rejects the
claimed right to counsel. See, e.g., McGhee v. State, 48
Ala.App. 330, 264 So. 2d 560 (Ala.Crim.App. 1972); State v. Yehling, 108 Ariz. 323, 498 P.2d 145 (1972); People v. Lawrence, 4 Cal. 3d
273 , 481 P.2d 212 (1971), cert. denied, 407 U.S. 909
(1972); Reed v. State, ___ Del. ___, 281 A.2d
142 (1971); People v. Holiday, 47 Ill. 2d
300 , 265 N.E.2d
634 (1970); Baldwin v. State, 5 Md.App. 22, 245 A.2d 98 (1968) (dicta); Commonwealth v. Ross, ___
Mass. ___, 282
N.E.2d 70 (1972), vacated on other grounds and
remanded, 410 U.S. 901 (1973); Stevenson v.
State, 244 So. 2d
30 (Miss.1971); State v. Brookins, 468 S.W.2d 42 (Mo.1971) (dicta); People v. Coles, 34 App.Div.2d 1051,
312 N.Y.S.2d 621 (1970) (dicta); State v. Moss, 187 Neb.
391, 191 N.W.2d
543 (1971); Drewry v. Commonwealth, 213 Va. 186, 191
S.E.2d 178 (1972); State v. Nettles, 81 Wash. 2d
205 , 500 P.2d
752 (1972); Kain v. State, 48 Wis.2d 212, 179 N.W.2d
777 (1970). Cf. State v. Accor, 277 N.C. 65, 175 S.E.2d
583 (1970). Several state courts, however, have granted a right
to counsel at photographic identifications. See, e.g., Cox v.
State, 219 So. 2d 762 (Fla.App. 1969) (video tapes); People v. Anderson, 389 Mich. 155, 205
N.W.2d 461 (1973); Thompson v. State, 85 Nev. 134, 451 P.2d 704 , cert. denied, 396 U.S. 893 (1969); Commonwealth v.
Whiting, 439 Pa. 205, 266 A.2d 738, cert. denied, 400
U.S. 919 (1970).
[ Footnote 3 ]
Respondent Ash does not assert a right to counsel at the
black-and-white photographic display in February, 1966, because he
recognizes that Kirby v. Illinois, 406 U.
S. 682 (1972), forecloses application of the Sixth
Amendment to events before the initiation of adversary criminal
proceedings. Tr. of Oral Arg. 21-22; Brief for Respondent 32 n.
21.
[ Footnote 4 ]
At this hearing, both the black-and-white and color photographs
were introduced as exhibits. App. 44. The FBI agents who conducted
the pretrial displays were called as witnesses and were
cross-examined fully. App. 10, 28. Two of the four witnesses who
were expected to make in-court identifications also testified, and
were cross-examined concerning the photographic identifications.
App. 55, 65.
[ Footnote 5 ]
The majority of the Court of Appeals concluded that Ash's
counsel properly had preserved his objection to introduction of the
photographs. 149 U.S.App.D.C. at 6 n. 6, 461 F.2d at 97 n. 6.
Although the contrary view of the dissenting judges has been noted
here by the Government, the majority's ruling on this issue is not
asserted by the Government as a basis for reversal. Pet. for Cert.
4 n. 5; Brief for United States 6 n. 6. Under these circumstances,
we are not inclined to disturb the ruling of the Court of Appeals
on this close procedural question. App. 104, 126-131.
[ Footnote 6 ]
Although the English limitation was not expressly rejected until
1836, the rule appears to have been relaxed in practice. 9 W.
Holdsworth, History of English Law 235 (1926); 4 W. Blackstone,
Commentaries *355-356.
[ Footnote 7 ]
Similar concerns eventually led to abandonment of the common law
rule in England. That rule originated at a time when counsel was
said to be "hardly necessary," because expert knowledge of the law
was not required at trial and systematic examination of witnesses
had not yet developed. T. Plucknett, A Concise History of the
Common Law 410 (4th ed.1948).
Confrontation with legal technicalities became common at English
trials when complex rules developed for attacking the indictment. Ibid. The English response was not an unlimited right to
counsel, however, but was rather a right for counsel to argue only
legal questions. See Powell v. Alabama, 287 U. S.
45 , 287 U. S. 60 (1932). A plea in abatement directed at insufficiency of the
indictment, for example, allowed a prisoner to "pray counsel to be
assigned to him to manage his exceptions and take more." 2 M. Hale,
Pleas of the Crown 236 (1736).
Confrontation with a professional prosecutor arose in English
treason trials before it appeared in ordinary criminal trials. See 1 J. Stephen, History of the Criminal Law of England
348-350 (1883). In 1695, this imbalance in the adversary process
was corrected by a statute granting prisoners the right to counsel
at treason trials. 7 Wm. 3, c. 3 (1695). Hawkins explained that the
professional ability of king's counsel motivated this reform,
because it had
"been found by experience that prisoners have been often under
great disadvantages from the want of counsel, in prosecutions of
high treason against the king's person, which are generally managed
for the crown with greater skill and zeal than ordinary
prosecutions. . . ."
2 W. Hawkins, Pleas of the Crown 566 (Leach ed. 1787). The 1695
statute weakened the English rule and, after a century of narrowing
practical application, see n 6, supra, the rule was finally abrogated by
statute in 1836. The Trials for Felony Act, 6 & 7 Wm. 4, c. 114
(1836).
[ Footnote 8 ]
"[T]he dangers of mistaken identification from uncounseled
lineup identifications set forth in Wade are applicable in
large measure to photographic, as well as corporeal,
identifications. These include, notably, the possibilities of
suggestive influence or mistake -- particularly where witnesses had
little or no opportunity for detailed observation during the crime;
the difficulty of reconstructing suggestivity -- even greater when
the defendant is not even present; the tendency of a witness's
identification, once given under these circumstances, to be frozen.
While these difficulties may be somewhat mitigated by preserving
the photograph shown, it may also be said that a photograph can
preserve the record of a lineup; yet this does not justify a lineup
without counsel. The same may be aid of the opportunity to examine
the participants a to what went on in the course of the
identification, whether at lineup or on photograph. Sometimes this
may suffice to bring out all pertinent fact, even at a lineup, but
this would not suffice under Wade to offset the
constitutional infringement wrought by proceeding without counsel.
The presence of counsel avoid possibilities of suggestiveness in
the manner of presentation that are otherwise ineradicable."
149 U.S.App.D.C. at 9-10, 461 F.2d at 100 101.
[ Footnote 9 ]
The Court rather narrowly defined the issues under
consideration:
"The pretrial confrontation for purpose of
identification may take the form of a lineup, also known as an
'identification parade' or 'showup,' as in the present case, or
presentation of the suspect alone to the witness, as in Stovall
v. Denno, supra. It is obvious that risks of suggestion attend
either form of confrontation. . . . But as is the case
with secret interrogations, there is serious difficulty in
depicting what transpires at lineups and other forms of
identification confrontations. " United States v. Wade, 388 U.
S. 218 , 388 U. S.
229 -230 (1967) (emphasis added). The photographic
identification could hardly have been overlooked by inadvertence,
since the Government stressed the similarity between lineups and
photographic identifications. Brief for United States in Wade, No. 334, O.T. 1966, pp. 7, 14, 19, 24.
[ Footnote 10 ]
Duplication by defense counsel is a safeguard that normally is
not available when a formal confrontation occurs. Defense counsel
has no statutory authority to conduct a preliminary hearing, for
example, and defense counsel will generally be prevented by
practical considerations from conducting his own lineup. Even in
some confrontations, however, the possibility of duplication may be
important. The Court noted this in holding that the taking of
handwriting exemplars did not constitute a "critical stage":
"If, for some reason, an unrepresentative exemplar is taken,
this can be brought out and corrected through the adversary process
at trial, since the accused can make an unlimited number of
additional exemplars for analysis and comparison by government and
defense handwriting experts." Gilbert v. California, 388 U.
S. 263 , 388 U. S. 267 (1967).
[ Footnote 11 ]
We do not suggest, of course, that defense counsel has any
greater freedom than the prosecution to abuse the photographic
identification. Evidence of photographic identifications conducted
by the defense may be excluded as unreliable under the same
standards that would be applied to unreliable identifications
conducted by the Government.
[ Footnote 12 ]
The Court of Appeals deemed it significant that a photographic
identification is admissible as substantive evidence, whereas other
parts of interviews may be introduced only for impeachment. 149
U.S.App. D. a., at 10, 461 F.2d at 101. In this case, defense
counsel for Bailey introduced the inability to identify, and that
was received into evidence. Thus, defense counsel still received
benefits equivalent to those available to the prosecution. Although
defense counsel may be concerned that repeated photographic
displays containing the accused's picture as the only common
characteristic will tend to promote identification of the accused,
the defense has other balancing devices available to it, such as
the use of a sufficiently large number of photographs to counteract
this possibility.
[ Footnote 13 ]
Although the reliability of in-court identifications and the
effectiveness of impeachment may be improved by equality of access,
we do not suggest that the prosecution's photographic
identification would be more easily reconstructed at trial simply
because defense counsel could conduct his own photographic display.
But, as we have explained supra at 413 U. S.
315 -316, the possibility of perfect reconstruction is
relevant to the evaluation of substitutes for counsel, not to the
initial designation of an event as a "critical stage."
[ Footnote 14 ]
Sobel, Assailing the Impermissible Suggestion: Evolving
Limitations on the Abuse of Pre-Trial Criminal Identification
Methods, 38 Brooklyn L.Rev. 261, 299 (1971); Comment, 43
N.Y.U.L.Rev. 1019, 1022 (1968); Note, 2 Rutgers Camden L.J. 347,
359 (1970); Note, 21 Syracuse L.Rev. 1235, 1241-1242 (1970). A
variant of this argument is that photographic identifications may
be used to circumvent the need for counsel at lineups. Brief for
Respondent 11 15.
[ Footnote 15 ] E.g., Wall, Eye-Witness Identification in Criminal
Cases 775 (1965); Sobel, supra, n 14, at 309-310; Comment, 56 Iowa L.Rev. 408, 420-421
(1970).
[ Footnote 16 ]
Throughout a criminal prosecution, the prosecutor's ethical
responsibility extends, of course, to supervision of any continuing
investigation of the case. By prescribing procedures to be used by
his agents and by screening the evidence before trial with a view
to eliminating unreliable identifications, the prosecutor is able
to minimize abuse in photographic displays even if they are
conducted in his absence.
MR. JUSTICE STEWART, concurring in the judgment.
The issue in the present case is whether, under the Sixth
Amendment, a person who has been indicted is entitled to have a
lawyer present when prosecution witnesses are shown the person's
photograph and asked if they can identify him.
The Sixth Amendment guarantees that, "[i]n all criminal
prosecutions, the accused shall enjoy the right . . . to have the
Assistance of Counsel for his defence." This Court's decisions make
it clear that a defendant is entitled to the assistance of counsel
not only at the trial itself, but at all "critical stages" of his
"prosecution." See Coleman v. Alabama, 399 U. S.
1 ; United States v. Wade, 388 U.
S. 218 ; Gilbert v. California, 388 U.
S. 263 ; Hamilton v. Alabama, 368 U. S.
52 . The requirement Page 413 U. S. 322 that there be a "prosecution" means that this constitutional
"right to counsel attaches only at or after the time that adversary
judicial proceedings have been initiated against [an accused]. . .
."
"It is this point . . . that marks the commencement of the
'criminal prosecutions' to which alone the explicit guarantees of
the Sixth Amendment are applicable." Kirby v. Illinois, 406 U. S. 682 , 406 U. S. 688 , 406 U. S. 690 (plurality opinion). Since the photographic identification in the
present case occurred after the accused had been indicted, and thus
clearly after adversary judicial proceedings had been initiated,
the only question is whether that procedure was such a "critical
stage" that the Constitution required the presence of counsel.
In United States v. Wade, supra, the Court determined
that a pretrial proceeding is a "critical stage" if
"the presence of . . . counsel is necessary to preserve the
defendant's . . . right meaningfully to cross-examine the witnesses
against him and to have effective assistance of counsel at the
trial itself."
388 U.S. at 388 U. S. 227 .
Pretrial proceedings are "critical," then, if the presence of
counsel is essential "to protect the fairness of the trial itself." Schneckloth v. Bustamonte, 412 U.
S. 218 , 412 U. S. 239 ; cf. Coleman v. Alabama, 399 U. S. 1 , 399 U. S. 27 -28
(STEWART, J., dissenting).
The Court held in Wade that a post-indictment, pretrial
lineup at which the accused was exhibited to identifying witnesses
was such a critical stage, because of the substantial possibility
that the accused's right to a fair trial would otherwise be
irretrievably lost. The hazard of unfair suggestive influence at a
lineup, which, because of the nature of the proceeding, could
seldom be reconstructed at trial, left little doubt, the Court
thought,
"that for Wade, the post-indictment lineup was a critical stage
of the prosecution at which he was 'as much entitled to such aid
[of counsel] . . . as at the trial itself.'"
388 U.S. at 388 U. S.
237 . Page 413 U. S. 323 The Court stressed in Wade that the danger of mistaken
identification at trial was appreciably heightened by the "degree
of suggestion inherent in the manner in which the prosecution
presents the suspect to witnesses for pretrial identification." Id. at 388 U. S. 228 .
There are numerous and subtle possibilities for such improper
suggestion in the dynamic context of a lineup. Judge Wilkey,
dissenting in the present case, accurately described a lineup
as:
"a little drama, stretching over an appreciable span of time.
The accused is there in the flesh, three-dimensional, and always
full-length. Further, he isn't merely there, he acts. He walks on
stage, he blinks in the glare of lights, he turns and twists, often
muttering asides to those sharing the spotlight. He can be required
to utter significant words, to turn a profile or back, to walk back
and forth, to doff one costume and don another. All the while, the
potentially identifying witness is watching, a prosecuting attorney
and a police detective at his elbow, ready to record the witness'
every word and reaction."
149 U.S.App.D.C. 1, 17, 461 F.2d 92, 108.
With no attorney for the accused present at this "little drama,"
defense counsel at trial could seldom convincingly discredit a
witness' courtroom identification by showing it to be based on an
impermissibly suggestive lineup. In addition to the problems posed
by the fluid nature of a lineup, the Court in Wade pointed
out that neither the witnesses nor the lineup participants were
likely to be alert for suggestive influences or schooled in their
detection.
"In short, the accused's inability effectively to reconstruct at
trial any unfairness that occurred at the lineup may deprive him of
his only opportunity meaningfully to attack the credibility of the
witness' courtroom identification."
388 U.S. at 388 U. S.
231 -232. Page 413 U. S. 324 The Court held, therefore, that counsel was required at a
lineup, primarily as an observer, to ensure that defense counsel
could effectively confront the prosecution's evidence at trial.
Attuned to the possibilities of suggestive influences, a lawyer
could see any unfairness at a lineup, question the witnesses about
it at trial, and effectively reconstruct what had gone on for the
benefit of the jury or trial judge. * A photographic identification is quite different from a lineup,
for there are substantially fewer possibilities of impermissible
suggestion when photographs are used, and those unfair influences
can be readily reconstructed at trial. It is true that the
defendant's photograph may be markedly different from the other
displayed, but this unfairness can be demonstrated at trial from an
actual comparison of the photographs used or from the witness'
description of the display. Similarly, it is possible that the
photographs could be arranged in a suggestive manner, or that, by
comment or gesture, the prosecuting authorities might single out
the defendant's picture. But these are the kinds of overt influence
that a witness can easily recount, and that would serve to impeach
the identification testimony. In short, there are few possibilities
for unfair suggestiveness -- and those rather blatant and easily
reconstructed. Accordingly, an accused would not be foreclosed from
an effective cross-examination of an identification witness simply
because his counsel was Page 413 U. S. 325 not present at the photographic display. For this reason, a
photographic display cannot fairly be considered a "critical stage"
of the prosecution. As the Court of Appeals for the Third Circuit
aptly concluded:
"If . . . the identification is not in a live lineup at which
defendant may be forced to act, speak or dress in a suggestive way,
where the possibilities for suggestion are multiplied, where the
ability to reconstruct the events is minimized, and where the
effect of a positive identification is likely to be permanent, but
at a viewing of immobile photographs easily reconstructible, far
less subject to subtle suggestion, and far less indelible in its
effect when the witness is later brought face to face with the
accused, there is even less reason to denominate the procedure a
critical stage at which counsel must be present." United States ex rel. Reed v. Anderson, 461 F.2d 739,
745.
Preparing witnesses for trial by checking their identification
testimony against a photographic display is little different, in my
view, from the prosecutor's other interviews with the victim or
other witnesses before trial. See United States v.
Bennett, 409 F.2d 888, 900. While these procedures can be
improperly conducted, the possibility of irretrievable prejudice is
remote, since any unfairness that does occur can usually be flushed
out at trial through cross-examination of the prosecution
witnesses. The presence of defense counsel at such pretrial
preparatory sessions is neither appropriate nor necessary, under
our adversary system of justice,
"to preserve the defendant's basic right to a fair trial as
affected by his right meaningfully to cross-examine the witnesses
against him and to have effective assistance of counsel at the
trial itself." United States v. Wade, supra, at 388 U. S.
227 . Page 413 U. S. 326 * I do not read Wade as requiring counsel because a
lineup is a "trial-type" situation, nor do I understand that the
Court required the presence of an attorney because of the advice or
assistance he could give to his client at the lineup itself.
Rather, I had thought the reasoning of Wade was that the
right to counsel is essentially a protection for the defendant at
trial, and that counsel is necessary at a lineup in order to ensure
a meaningful confrontation and the effective assistance of counsel
at trial.
MR. JUSTICE BRENNAN, with whom MR. JUSTICE DOUGLAS and MR.
JUSTICE MARSHALL join, dissenting.
The Court holds today that a pretrial display of photographs to
the witnesses of a crime for the purpose of identifying the
accused, unlike a lineup, does not constitute a "critical stage" of
the prosecution at which the accused is constitutionally entitled
to the presence of counsel. In my view, today's decision is wholly
unsupportable in terms of such considerations as logic,
consistency, and, indeed, fairness. As a result, I must reluctantly
conclude that today's decision marks simply another [ Footnote 2/1 ] step towards the complete
evisceration of the fundamental constitutional principles
established by this Court, only six years ago, in United States
v. Wade, 388 U. S. 218 (1967); Gilbert v. California, 388 U. S. 263 (1967); and Stovall v. Denno, 388 U.
S. 293 (1967). I dissent. I On the morning of August 26, 1965, two men wearing stocking
masks robbed the American Security and Trust Co. in Washington,
D.C. The robbery lasted only about three or four minutes, and, on
the day of the crime, none of the four witnesses was able to give
the police a description of the robbers' facial characteristics.
Some five months later, on February 3, 1966, an FBI agent showed
each of the four witnesses a group of black and white mug shots of
the faces of five black males, including respondent, all of
generally the same age, height, and weight. Respondent's photograph
was included because of information received from a Government
informant charged with other crimes. [ Footnote 2/2 ] None of the witnesses Page 413 U. S. 327 was able to make a "positive" identification of respondent.
[ Footnote 2/3 ]
On April 1, 1966, an indictment was returned charging respondent
and a codefendant in five counts relating to the robbery of the
American Security and Trust Co. Trial was finally set for May 8,
1968, almost three years after the crime and more than two years
after the return of the indictment. During the entire two-year
period between indictment and trial, although one of the witnesses
expressly sought an opportunity to see respondent in person, the
Government never attempted to arrange a corporeal lineup for the
purposes of identification. Rather, less than 24 hours before
trial, the FBI agent, accompanied by the prosecutor, showed
five color photographs to the witnesses, three of whom identified
the picture of respondent.
At trial, all four witnesses made in-court identifications of
respondent, but only one of these witnesses was "positive" of her
identification. The fact that three of the witnesses had previously
identified respondent from the color photographs, and the
photographs themselves, were also admitted into evidence. The only
other evidence Page 413 U. S. 328 implicating respondent in the crime was the testimony of the
Government informant. [ Footnote
2/4 ] On the basis of this evidence, respondent was convicted on
all counts of the indictment.
On appeal, the United States Court of Appeals for the District
of Columbia Circuit, sitting en banc, reversed respondent's
conviction. 149 U.S.App.D.C. 1, 461 F.2d 92 (1972). Noting that
"the dangers of mistaken identification from uncounseled lineup
identifications . . . are applicable in large measure to
photographic, as well as corporeal, identifications, [ Footnote 2/5 ]"
the Court of Appeals reasoned that this Court's decisions in Wade, Gilbert, and Stovall compelled the
conclusion that a pretrial photographic identification, like a
lineup, is a "critical" stage of the prosecution at which the
accused is constitutionally entitled to the attendance of counsel.
Accordingly, the Court of Appeals held that respondent was denied
his Sixth Amendment right to "the Assistance of Counsel for his
defence" when his attorney was not given an opportunity to attend
the display of the color photographs on the very eve of trial.
[ Footnote 2/6 ] In my view, both the
reasoning and conclusion of the Court of Appeals were unimpeachably
correct, and I would therefore affirm.
II
In June, 1967, this Court decided a trilogy of "lineup" cases
which brought into sharp focus the problems of Page 413 U. S. 329 pretrial identification. See United States v. Wade, supra;
Gilbert v. California, supra; Stovall v. Denno, supra. In
essence, those decisions held (1) that a pretrial lineup is a
"critical stage" in the criminal process at which the accused is
constitutionally entitled to the presence of counsel; (2) that
evidence of an identification of the accused at such an uncounseled
lineup is per se inadmissible; and (3) that evidence of a
subsequent in-court identification of the accused is likewise
inadmissible unless the Government can demonstrate by clear and
convincing evidence that the in-court identification was based upon
observations of the accused independent of the prior uncounseled
lineup identification. The considerations relied upon by the Court
in reaching these conclusions are clearly applicable to
photographic, as well as corporeal, identifications. Those
considerations bear repeating here in some detail, for they touch
upon the very heart of our criminal justice system -- the right of
an accused to a fair trial, including the effective "Assistance of
Counsel for his defence."
At the outset, the Court noted that
"identification evidence is peculiarly riddled with innumerable
dangers and variable factors which might seriously, even crucially,
derogate from a fair trial." United States v. Wade, supra, at 388 U. S. 228 .
Indeed,
"[t]he vagaries of eyewitness identification are well-known; the
annals of criminal law are rife with instances of mistaken
identification." Ibid. Apart from "the dangers inherent in eyewitness
identification," id. at 388 U. S. 235 ,
such as unreliable memory or perception, the Court pointed out
that
"[a] major factor contributing to the high incidence of
miscarriage of justice from mistaken identification has been the
degree of suggestion inherent in the manner in which the
prosecution presents the suspect to witnesses for pretrial
identification." Id. at 388 U. S. 228 .
The Court recognized that the dangers of suggestion are not
necessarily due to "police Page 413 U. S. 330 procedures intentionally designed to prejudice an accused." Id. at 388 U. S. 235 .
On the contrary, "[s]uggestion can be created intentionally or
unintentionally in many subtle ways." Id. at 388 U. S. 229 .
And the
"'fact that the police themselves have, in a given case, little
or no doubt that the man put up for identification has committed
the offense . . . involves a danger that this persuasion may
communicate itself even in a doubtful case to the witness in some
way. . . .'" Id. at 388 U. S. 235 ,
quoting Williams & Hammelmann, Identification Parades-I, [1963]
Crim.L.Rev. 479, 483.
The Court also expressed concern over the possibility that a
mistaken identification at a pretrial lineup might itself be
conclusive on the question of identity, thereby resulting in the
conviction of an innocent man. The Court observed that,
"'once a witness has picked out the accused at the line-up, he
is not likely to go back on his word later on, so that in practice
the issue of identity may (in the absence of other relevant
evidence) for all practical purposes be determined there and then,
before the trial.'" United States v. Wade, supra, at 388 U. S. 229 ,
quoting Williams & Hammelmann, supra, at 482.
Moreover, "the defense can seldom reconstruct the manner and
mode of lineup identification for judge or jury at trial." United States v. Wade, supra, at 388 U. S. 230 .
For "as is the case with secret interrogations, there is serious
difficulty in depicting what transpires at lineups. . . ." Ibid. Although the accused is present at such corporeal
identifications, he is hardly in a position to detect many of the
more subtle "improper influences" that might infect the
identification. [ Footnote 2/7 ] In
addition, the Court emphasized Page 413 U. S. 331 that
"neither witnesses nor lineup participants are apt to be alert
for conditions prejudicial to the suspect. And, if they were, it
would likely be of scant benefit to the suspect since neither
witnesses nor lineup participants are likely to be schooled in the
detection of suggestive influences." Ibid. As a result,
"even though cross-examination is a precious safeguard to a fair
trial, it cannot [in this context] be viewed as an absolute
assurance of accuracy and reliability." Id. at 388 U. S.
235 .
With these considerations in mind, the Court reasoned that
"the accused's inability effectively to reconstruct at trial any
unfairness that occurred at the lineup may deprive him of his only
opportunity meaningfully to attack the credibility of the witness'
courtroom identification." Id. at 388 U. S.
231 -232. And
"[i]nsofar as the accused's conviction may rest on a courtroom
identification in fact, the fruit of a suspect pretrial
identification which the accused is helpless to subject to
effective scrutiny at trial, the accused is deprived of that right
of cross-examination which is an essential safeguard to his right
to confront the witnesses against him." Id. at 388 U. S. 235 .
Thus, noting that "presence of counsel [at the lineup] can often
avert prejudice and assure a meaningful confrontation at trial,"
the Court concluded that a pretrial corporeal identification is "a
critical stage of the prosecution at which [the accused is] as
much entitled to such aid [of counsel] . . . as at the trial
itself.'" Id. at 388 U. S. 236 , 388 U. S. 237 ,
quoting Powell v. Alabama, 287 U. S.
45 , 287 U. S. 57 (1932). Page 413 U. S. 332 III As the Court of Appeals recognized,
"the dangers of mistaken identification . . . set forth in Wade are applicable in large measure to photographic, as
well as corporeal, identifications."
149 U.S.App.D.C. at 9, 461 F.2d at 100. To the extent that
misidentification may be attributable to a witness' faulty memory
or perception, or inadequate opportunity for detailed observation
during the crime, the risks are obviously as great at a
photographic display as at a lineup. [ Footnote 2/8 ] But
"[b]ecause of the inherent limitations of photography, which
presents its subject in two dimensions, rather than the three
dimensions of reality, . . . a photographic identification, even
when properly obtained, is clearly inferior to a properly obtained
corporeal identification."
P. Wall, Eye-Witness Identification in Criminal Cases 70 (1965).
Indeed, noting "the hazards of initial identification by
photograph," we have expressly recognized that "a corporeal
identification . . . is normally more accurate" than a photographic
identification. Simmons v. United States, 390 U.
S. 377 , 390 U. S. 384 , 390 U. S. 386 n. 6 (1968). [ Footnote 2/9 ] Thus,
in this sense, at Page 413 U. S. 333 least, the dangers of misidentification are even greater at a
photographic display than at a lineup.
Moreover, as in the lineup situation, the possibilities for
impermissible suggestion in the context of a photographic display
are manifold. See id. at 390 U. S. 383 .
Such suggestion, intentional or unintentional, may derive from
three possible sources. First, the photographs themselves might
tend to suggest which of the pictures is that of the suspect. For
example, differences in age, pose, or other physical
characteristics of the persons represented, and variations in the
mounting, background, lighting, or markings of the photograph all
might have the effect of singling out the accused. [ Footnote 2/10 ]
Second, impermissible suggestion may inhere in the manner in
which the photographs are displayed to the witness. The danger of
misidentification is, of course,
"increased if the police display to the witness . . . the
pictures of several persons among which the photograph of a single
such individual recurs or is in some way emphasized." Ibid. And, if the photographs are arranged in an
asymmetrical pattern, or if they are displayed in a time sequence
that tends to emphasize a particular photograph,
"any identification of the photograph which stands out from the
rest is no more reliable than an identification of a single
photograph, exhibited alone."
P. Wall, supra, at 81.
Third, gestures or comments of the prosecutor at the time of the
display may lead an otherwise uncertain Page 413 U. S. 334 witness to select the "correct" photograph. For example, the
prosecutor might "indicate to the witness that [he has] other
evidence that one of the persons pictured committed the crime,"
[ Footnote 2/11 ] and might even
point to a particular photograph and ask whether the person
pictured "looks familiar." More subtly, the prosecutor's
inflection, facial expressions, physical motions, and myriad other
almost imperceptible means of communication might tend,
intentionally or unintentionally, to compromise the witness'
objectivity. Thus, as is the case with lineups,
"[i]mproper photographic identification procedures, . . . by
exerting a suggestive influence upon the witnesses, can often lead
to an erroneous identification. . . ."
P. Wall, supra, at 89. [ Footnote 2/12 ] And
"[r]egardless of how the initial misidentification comes about,
the witness Page 413 U. S. 335 thereafter is apt to retain in his memory the image of the
photograph, rather than of the person actually seen. . . ." Simmons v. United States, supra, at 390 U. S.
383 -384. [ Footnote
2/13 ] As a result, " the issue of identity may (in the
absence of other relevant evidence), for all practical purposes, be
determined there and then, before the trial.'" United States v.
Wade, supra, at 388 U. S. 229 ,
quoting Williams & Hammelmann, supra, at 482. Moreover, as with lineups, the defense can "seldom reconstruct"
at trial the mode and manner of photographic identification. It is
true, of course, that the photographs used at the pretrial display
might be preserved for examination at trial. But "it may also be
said that a photograph can preserve the record of a lineup; yet
this does not justify a lineup without counsel." 149 U.S.App.D.C.
at 9-10, 461 F.2d at 100-101. Cf. United States v. Wade,
supra, at 388 U. S. 239 and n. 30. Indeed, in reality, preservation of the photographs
affords little protection to the unrepresented accused. For,
although retention of the photographs may mitigate the dangers of
misidentification due to the suggestiveness of the photographs
themselves, it cannot in any sense reveal to defense counsel the
more subtle, and therefore more dangerous, suggestiveness that
might derive from the manner in which the photographs were
displayed or any accompanying comments or gestures. Moreover, the
accused cannot rely upon the witnesses themselves to expose these
latter sources of suggestion, for the witnesses are not "apt to be
alert for conditions prejudicial to the suspect. And if they were,
it would likely be of scant benefit to the suspect," since the
witnesses are hardly "likely to be schooled in the detection of
suggestive influences." Id. at 388 U. S.
230 . Page 413 U. S. 336 Finally, and unlike the lineup situation, the accused himself is
not even present at the photographic identification, thereby
reducing the likelihood that irregularities in the procedures will
ever come to light. Indeed, in Wade, the Government itself
observed: [ Footnote 2/14 ]
"When the defendant is present -- as he is during a lineup -- he
may personally observe the circumstances, report them to his
attorney, and (if he chooses to take the stand) testify about them
at trial. . . . [I]n the absence of an accused, on the other hand,
there is no one present to verify the fairness of the interview or
to report any irregularities. If the prosecution were tempted to
engage in 'sloppy or biased or fraudulent' conduct . . . , it would
be far more likely to do so when the accused is absent than when he
himself is being 'used.'"
Thus, the difficulties of reconstructing at trial an uncounseled
photographic display are at least equal to, and possibly greater
than, those involved in reconstructing an uncounseled lineup.
[ Footnote 2/15 ] And, as the
Government argued Page 413 U. S. 337 in Wade, in terms of the need for counsel,
"[t]here is no meaningful difference between a witness' pretrial
identification from photographs and a similar identification made
at a lineup. [ Footnote 2/16 ]"
For, in both situations
"the accused's inability effectively to reconstruct at trial any
unfairness that occurred at the [pretrial identification] may
deprive him of his only opportunity meaningfully to attack the
credibility of the witness' courtroom identification." United States v. Wade, supra, at 388 U. S.
231 -232. As Page 413 U. S. 338 a result, both photographic and corporeal identifications create
grave dangers that an innocent defendant might be convicted simply
because of his inability to expose a tainted identification. This
being so, considerations of logic, consistency, and, indeed,
fairness compel the conclusion that a pretrial photographic
identification, like a pretrial corporeal identification, is a
"critical stage of the prosecution at which [the accused is] as
much entitled to such aid [of counsel] . . . as at the trial
itself.'" Id. at 388 U. S. 237 ,
quoting Powell v. Alabama, 287 U.S. at 287 U. S.
57 . IV Ironically, the Court does not seriously challenge the
proposition that presence of counsel at a pretrial photographic
display is essential to preserve the accused's right to a fair
trial on the issue of identification. Rather, in what I can only
characterize a triumph of form over substance, the Court seeks to
justify its result by engrafting a wholly unprecedented -- and
wholly unsupportable -- limitation on the Sixth Amendment right of
"the accused . . . to have the Assistance of Counsel for his
defense." Although apparently conceding that the right to counsel
attaches not only at the trial itself, but at all "critical stages"
of the prosecution, see ante at 413 U. S.
309 -311, the Court holds today that, in order to be
deemed "critical," the particular "stage of the prosecution" under
consideration must, at the very least, involve the physical
"presence of the accused," at a "trial-like confrontation" with the
Government, at which the accused requires the "guiding hand of
counsel." According to the Court a pretrial photographic
identification does not, of course, meet these criteria.
In support of this rather crabbed view of the Sixth Amendment,
the Court cites our decisions in Coleman v. Alabama, 399 U. S. 1 (1970), Massiah v. United States, 377 U.
S. 201 (1964), White v. Maryland, 373 U. S.
59 Page 413 U. S. 339 (1963), and Hamilton v. Alabama, 368 U. S.
52 (1961). Admittedly, each of these decisions
guaranteed the assistance of counsel in pretrial proceedings at
least arguably involving the physical "presence of the accused," at
a "trial-like confrontation" with the Government, at which the
accused required the "guiding hand of counsel." [ Footnote 2/17 ] Moreover, as the Court points out,
these decisions are consistent with the view that the Sixth
Amendment "embodies a realistic recognition of the obvious truth
that the average defendant does not have the professional legal
skill to protect himself when brought before a tribunal with power
to take his life or liberty, wherein the prosecution is presented
by experienced and learned counsel." Johnson v. Zerbst, 304 U. S. 458 , 304 U. S.
462 -463 (1938). But, contrary to the Court's assumption,
this is merely one facet of the Sixth Amendment guarantee, and the
decisions relied upon by the Court represent not the boundaries of
the right to counsel, but mere applications of a far broader and
more reasoned understanding of the Sixth Amendment than that
espoused today.
The fundamental premise underlying all of this Court's decisions
holding the right to counsel applicable at "critical" pretrial
proceedings, is that a "stage" of the prosecution must be deemed
"critical" for the purposes of the Sixth Amendment if it is one at
which the presence of counsel is necessary "to protect the fairness
of the trial itself. " Schneckloth v. Bustamonte, 412 U. S. 218 , 412 U. S. 239 (1973) (emphasis added). Thus, in Hamilton v. Alabama, Page 413 U. S. 340 supra, for example, we made clear that an arraignment
under Alabama law is a "critical stage" of the prosecution not only
because the accused a such an arraignment requires "the guiding
hand of counsel," but, more broadly, because "[w]hat happens there
may affect the whole trial." Id. at 368 U. S. 54 .
Indeed, to exclude counsel from a pretrial proceeding at which his
presence might be necessary to assure the fairness of the
subsequent trial would, in practical effect, render the Sixth
Amendment guarantee virtually meaningless, for it would "deny a
defendant effective representation by counsel at the only stage
when legal aid and advice would help him.'" Massiah v. United
States, supra, at 377 U. S. 204 ,
quoting Spano v. New York, 360 U.
S. 315 , 360 U. S. 326 (1959) (DOUGLAS, J., concurring); see Escobedo v.
Illinois, 378 U. S. 478 , 378 U. S.
484 -485 (1964). This established conception of the Sixth
Amendment guarantee is, of course, in no sense dependent upon the
physical "presence of the accused," at a "trial-like confrontation"
with the Government, at which the accused requires the "guiding
hand of counsel." On the contrary, in Powell v. Alabama, 287 U. S. 45 (1932), the seminal decision in this area, we explicitly held the
right to counsel applicable at a stage of the pretrial proceedings
involving none of the three criteria set forth by the Court today.
In Powell, the defendants in a state felony prosecution
were not appointed counsel until the very eve of trial. This Court
held, in no uncertain terms, that such an appointment could not
satisfy the demands of the Sixth Amendment, for "`[i]t is vain . .
. to guarantee [the accused] counsel without giving the latter any
opportunity to acquaint himself with the facts or law of the
case.'" Id. at 287 U. S. 59 . In
other words, Powell made clear that, in order to preserve
the accused's right to a fair trial and to "effective and
substantial" [ Footnote 2/18 ]
assistance Page 413 U. S. 341 of counsel at that trial, the Sixth Amendment guarantee
necessarily encompasses a reasonable period of time before trial
during which counsel might prepare the defense. Yet it can hardly
be said that this preparatory period of research and investigation
involves the physical "presence of the accused," at a "trial-like
confrontation" with the Government, at which the accused requires
the "guiding hand of counsel."
Moreover, despite the Court's efforts to rewrite Wade so as to suggest a precedential basis for its own analysis,
[ Footnote 2/19 ] the rationale of Wade lends no support whatever to today's decision. In Wade, after concluding that compelled participation in a
lineup does not violate the accused's right against
self-incrimination, [ Footnote
2/20 ] the Court addressed the argument
"that the assistance of counsel at the lineup was indispensable
to protect Wade's most basic right as a criminal defendant -- his
right to a fair trial at which the witnesses against him might be
meaningfully cross-examined."
388 U.S. at 388 U. S.
223 -224. The Court then surveyed the history of the
Sixth Amendment, and specifically concluded that that Amendment
guarantees "counsel's assistance whenever necessary to
assure a meaningful defence.'" Id. at 388 U. S. 225 (emphasis added). Page 413 U. S. 342 Then, after examining this Court's prior decisions concerning
the applicability of the counsel guarantee, [ Footnote 2/21 ] the Court stressed once again that a
pretrial proceeding is a "critical stage" of the prosecution if
"the presence of his counsel is necessary to preserve the
defendant's basic right to a fair trial as affected by his right
meaningfully to cross-examine the witnesses against him and to have
effective assistance of counsel at the trial itself." Id. at 388 U. S.
227 .
The Court next addressed the Government's contention that a
lineup is "a mere preparatory step in the gathering of the
prosecution's evidence, not different -- for Sixth Amendment
purposes -- from various other preparatory steps, such as
systematized or scientific analyzing of the accused's fingerprints,
blood sample, clothing, hair, and the like." Id. at 388 U. S. 227 .
If the Court in Wade had even the remotest intention of
embracing the wooden interpretation of the Sixth Amendment ascribed
to it today, it could have rejected the Government's contention
simply by pointing out the obvious fact that such "systematized or
scientific analyzing" does not in any sense involve the physical
"presence of the accused," at a "trial-like confrontation" with the
Government, at which the accused requires the "guiding hand of
counsel." But the Court offered not even the slightest hint of
such Page 413 U. S. 343 an approach. Instead, the Court reasoned that, in light of the
scientific nature of such analyses,
"the accused has the opportunity for a meaningful confrontation
of the Government's case at trial through the ordinary processes of
cross-examination of the Government's expert witnesses and the
presentation of the evidence of his own experts. The denial of a
right to have his counsel present at such analyses does not,
therefore, violate the Sixth Amendment; they are not critical
stages, since there is minimal risk that his counsel's absence at
such stages might derogate from his right to a fair
trial. " Id. at 388 U. S.
227 -228 (emphasis added).
Finally, after discussing the dangers of misidentification
arising out of lineup procedures and the difficulty of
reconstructing the lineup at trial, the Court noted that,
"[i]nsofar as the accused's conviction may rest on a courtroom
identification in fact, the fruit of a suspect pretrial
identification which the accused is helpless to subject to
effective scrutiny at trial, the accused is deprived of that right
of cross-examination which is an essential safeguard to his right
to confront the witnesses against him." Id. at 388 U. S. 235 .
The Court therefore concluded that
"[s]ince it appears that there is grave potential for prejudice,
intentional or not, in the pretrial lineup, which may not be
capable of reconstruction at trial, and since presence of counsel
itself can often avert prejudice and assure a meaningful
confrontation at trial, there can be little doubt that, for Wade,
the post-indictment lineup was a critical stage of the prosecution
at which he was 'as much entitled to such aid [of counsel] . . . as
at the trial itself.'" Id. at 388 U. S.
236 -237.
Thus, contrary to the suggestion of the Court, the conclusion in Wade that a pretrial lineup is a "critical stage" of the
prosecution did not in any sense turn on Page 413 U. S. 344 the fact that a lineup involves the physical "presence of the
accused" at a "trial-like confrontation" with the Government. And
that conclusion most certainly did not turn on the notion that
presence of counsel was necessary so that counsel could offer legal
advice or "guidance" to the accused at the lineup. On the contrary, Wade envisioned counsel's function at the lineup to be
primarily that of a trained observer, able to detect the existence
of any suggestive influences and capable of understanding the legal
implications of the events that transpire. Having witnessed the
proceedings, counsel would then be in a position effectively to
reconstruct at trial any unfairness that occurred at the lineup,
thereby preserving the accused's fundamental right to a fair trial
on the issue of identification.
There is something ironic about the Court's conclusion today
that a pretrial lineup identification is a "critical stage" of the
prosecution because counsel's presence can help to compensate for
the accused's deficiencies as an observer, but that a pretrial
photographic identification is not a "critical stage" of the
prosecution because the accused is not able to observe at all. In
my view, there simply is no meaningful difference, in terms of the
need for attendance of counsel, between corporeal and photographic
identifications. And applying established and well-reasoned Sixth
Amendment principles, I can only conclude that a pretrial
photographic display, like a pretrial lineup, is a "critical stage"
of the prosecution at which the accused is constitutionally
entitled to the presence of counsel.
[ Footnote 2/1 ] See Kirby v. Illinois, 406 U.
S. 682 (1972).
[ Footnote 2/2 ]
At the time of respondent's trial, the informant, one Clarence
McFarland, was serving a sentence for bank robbery. According to
the Court of Appeals,
"McFarland had been before the grand jury with regard to five
separate offenses, in addition to his bank robbery, and had not
been indicted on any of them, including one in which he had
confessed guilt. The Assistant United States Attorney had arranged
to have McFarland transferred from the D.C. Jail to a local jail in
Rockville, Maryland, and in addition had helped McFarland's wife
move from Southeast Washington to an apartment near the parochial
school that McFarland's children were due to attend. 149
U.S.App.D.C. 1, 6 n. 7, 461 F.2d 92, 97 n. 7 (1972). The Assistant
United States Attorney also testified that he 'had indicated he
would testify before the parole board in McFarland's behalf.' Id. at 6, 461 F.2d at 97."
[ Footnote 2/3 ]
Respondent does not contend that he was denied his Sixth
Amendment right to counsel at the pre-indictment display of the
black and white photographs. Tr. of Oral Arg. 21-22; Brief for
Respondent 32 n. 21.
[ Footnote 2/4 ]
As the Court of Appeals noted, this testimony was of at least
questionable credibility. See 413
U.S. 300 fn2/2|>n. 2, supra. [ Footnote 2/5 ]
149 U.S.App.D.C. at 9, 461 F.2d at 100.
[ Footnote 2/6 ]
The Court of Appeals also noted "that there are at the very
least strong elements of suggestiveness in this color photo
confrontation," and that
"it is hard to see how the Government can be held to have shown,
by clear and convincing evidence, that these color photographs did
not affect the in-court identification made one day later." Id. at 7, 14 n. 20, 461 F.2d at 98, 105 n. 20.
[ Footnote 2/7 ]
The Court pointed out that
"[i]mproper influences may go undetected by a suspect, guilty or
not, who experiences the emotional tension which we might expect in
one being confronted with potential accusers. Even when he does
observe abuse, if he has a criminal record he may be reluctant to
take the stand and open up the admission of prior convictions.
Moreover, any protestations by the suspect of the fairness of the
lineup made at trial are likely to be in vain; the jury's choice is
between the accused's unsupported version and that of the police
officers present." United States v. Wade, 388 U.
S. 218 , 388 U. S.
230 -231 (1967).
[ Footnote 2/8 ]
Thus,
"[a] witness may have obtained only a brief glimpse of a
criminal, or may have seen him under poor conditions. Even if the
police subsequently follow the most correct photographic
identification procedures . . . , there is some danger that the
witness may make an incorrect identification." Simmons v. United States, 390 U.
S. 377 , 390 U. S. 383 (1968).
[ Footnote 2/9 ] See also Sobel, Assailing the Impermissible Suggestion:
Evolving Limitations on the Abuse of Pre-Trial Criminal
Identification Methods, 38 Brooklyn L.Rev. 261, 264, 296 (1971);
Williams, Identification Parades, [1955] Crim.L.Rev. 525, 531;
Comment, Photographic Identification: The Hidden Persuader, 56 Iowa
L.Rev. 408, 419 (1970); Note, Pretrial Photographic Identification
-- A "Critical Stage" of Criminal Proceedings?, 21 Syracuse L.Rev.
1235, 1241 (1970). Indeed, recognizing the superiority of corporeal
to photographic identifications, English courts have long held
that, once the accused is in custody, pre-lineup photographic
identification is "indefensible" and grounds for quashing the
conviction. Rex v. Haslam, 19 Crim.App. Rep. 59, 60
(1925); Rex v. Goss, 17 Crim.App. Rep. 196, 197 (1923). See also P. Wall, Eye-Witness Identification in Criminal
Cases 71 (1965).
[ Footnote 2/10 ] See, e.g., Comment, supra, 413
U.S. 300 fn2/9|>n. 9, at 410-411; Note, Criminal Procedure --
Photo-Identification -- Stovall Prospectivity Rule Invoked
to Avoid Extension of Right to Counsel, 43 N.Y.U.L.Rev. 1019, 1021
(1968).
[ Footnote 2/11 ] Simmons v. United States, supra, at 390 U. S.
383 .
[ Footnote 2/12 ]
The Court maintains that "the ethical responsibility of the
prosecutor" is, in itself, a sufficient "safeguard" against
impermissible suggestion at a photographic display. See
ante at 413 U. S. 320 .
The same argument might, of course, be made with respect to
lineups. Moreover, it is clear that the "prosecutor" is not always
present at such pretrial displays. Indeed, in this very case, one
of the four eyewitnesses was shown the color photographs on the
morning of trial by an agent of the FBI, not in the presence of the
"prosecutor." See 149 U.S.App.D.C. at 5, 461 F.2d at 96.
And even though "the ethical responsibility of the prosecutor"
might be an adequate "safeguard" against intentional suggestion, it can hardly be doubted that a "prosecutor" is, after
all, only human. His behavior may be fraught with wholly unintentional and indeed unconscious nuances that might
effectively suggest the "proper" response. See P. Wall, supra, 413
U.S. 300 fn2/9|>n. 9, at 2645; Napley, Problems of Effecting
the Presentation of the Case for a Defendant, 66 Col.L.Rev. 94, 999
(1966); Williams & Hammelmann, Identification Parades -- I,
[1963] Crim.L.Rev. 479, 483. See also United States v. Wade,
supra, at 388 U. S. 229 , 388 U. S. 235 , 288 U. S. 236 .
And, of course, as Wade itself makes clear, unlike other
forms of unintentional prosecutorial "manipulation," even
unintentional suggestiveness at an identification procedure
involves serious risks of "freezing" the witness' mistaken
identification, and creates almost insurmountable obstacles to
reconstruction at trial.
[ Footnote 2/13 ] See also P. Wall, supra, 413
U.S. 300 fn2/9|>n. 9, at 68; Napley, supra, 413
U.S. 300 fn2/12|>n. 12, at 999; Williams & Hammelmann, supra, 413
U.S. 300 fn2/12|>n. 12, at 484; Comment, supra, 413
U.S. 300 fn2/9|>n 9, at 411-413; Note, supra, 413
U.S. 300 fn2/10|>n. 10, at 1023.
[ Footnote 2/14 ]
Brief for United States 24-25 in United States v. Wade, No. 334, O.T. 1966.
[ Footnote 2/15 ]
The Court's assertion, ante at 413 U. S.
317 -319 and n. 10, that these difficulties of
reconstruction are somehow minimized because the defense can
"duplicate" a photographic identification reflects a complete
misunderstanding of the issues in this case. Aside from the fact
that lineups can also be "duplicated," the Court's assertion is
wholly inconsistent with the underlying premises of both Wade and Gilbert. For, unlike the Court today,
the Court in both of those decisions recognized a critical
difference between "systematized or scientific analyzing of the
accused's fingerprints, blood sample, clothing, hair, and the
like," on the one hand, and eyewitness identification, on the
other. United States v. Wade, supra, at 388 U. S. 227 ; Gilbert v. California, 388 U. S. 263 , 388 U. S. 267 (1967). In essence, the Court noted in Wade and Gilbert that, in the former situations, the accused can
preserve his right to a fair trial simply by "duplicating" the
tests of the Government, thereby enabling him to expose any errors
in the Government's analysis. Such "duplication" is possible,
however, only because the accused's tests can be made independently
of those of the Government -- that is, any errors in the
Government's analyses cannot affect the reliability of the
accused's tests. That simply is not the case, however, with respect
to eyewitness identifications, whether corporeal or photographic.
Due to the "freezing effect" recognized in Wade, once
suggestion has tainted the identification, its mark is virtually
indelible. For once a witness has made a mistaken identification,
" he is not likely to go back on his word later on.'" United
States v. Wade, supra, at 388 U. S. 229 .
As a result, any effort of the accused to "duplicate" the initial
photographic display will almost necessarily lead to a
reaffirmation of the initial misidentification. The Court's related assertion, that "equality of access" to the
results of a Government-conducted photographic display "remove[s]
any inequality in the adversary process," ante at 413 U. S. 319 ,
is similarly flawed. For due to the possibilities for suggestion,
intentional or unintentional, the so-called "equality of access"
is, in reality, skewed sharply in favor of the prosecution.
[ Footnote 2/16 ]
Brief for United States 7, in United States v. Wade,
supra. The Court seems to suggest that, under no
circumstances, would it be willing "to go so far as to extend the
right [to counsel] to a portion of the prosecutor's trial
preparation interviews with witnesses." Ante at 413 U. S. 317 .
This suggestion illustrates once again the Court's readiness in
this area to ignore "real world" considerations for the sake of
"mere formalism." Kirby v. Illinois, 406 U.S. at 406 U. S. 699 (BRENNAN, J., dissenting). Moreover, this suggestion demonstrates
the Court's failure to appreciate the essential differences,
outlined persuasively by the Court of Appeals, between "the
prosecutor's trial preparation interviews with witnesses" and
pretrial identification procedures. See 149 U.S.App.D.C.
at 10, 461 F.2d at 101.
[ Footnote 2/17 ] Coleman, White, and Hamilton, guaranteed the
assistance of counsel at preliminary hearings and arraignments. Massiah held that incriminating statements of a defendant
should have been excluded from evidence when it appeared that they
were overheard by federal agents who, without notice to the
defendant's lawyer, arranged a meeting between the defendant and an
accomplice turned informant. Thus, it is at least questionable
whether Massiah involved a "trial-like confrontation" with
the Government.
[ Footnote 2/18 ]
287 U.S. at 287 U. S.
53 .
[ Footnote 2/19 ] See ante at 413 U. S.
313 -316. In an effort to justify its contention that Wade itself in some way supports the Court's wooden
analysis of the counsel guarantee, the Court points to the
so-called "careful limitation of the Court's language [in Wade] to confrontations.'" Ante at 413 U. S. 315 .
But Wade involved a lineup which is, of course, a
"confrontation." Thus, it is neither surprising nor significant
that the Court interchangeably used such terms as "lineup,"
"confrontation" and "pretrial identification" as descriptive of the
facts. Indeed, the Wade dissenters recognized that Wade logically applies not only to lineups, but "to any
other techniques employed to produce an identification. . . ." United States v. Wade, supra, at 388 U. S. 251 (WHITE, J., concurring and dissenting). [ Footnote 2/20 ] See United States v. Wade, supra, at 388 U. S.
221 -223.
[ Footnote 2/21 ] See id. at 388 U. S.
225 -227. The Court's quotation of Escobedo v.
Illinois, 378 U. S. 478 (1964), is particularly instructive:
""The rule sought by the State here, however, would make the
trial no more than an appeal from the interrogation; and the right to use counsel at the formal trial [would be] a very
hollow thing [if], for all practical purposes, the conviction is
already assured by pretrial examination.' . . . `One can imagine a
cynical prosecutor saying: "Let them have the most illustrious
counsel, now. They can't escape the noose. There is nothing that
counsel can do for them at the trial."'"" United States v. Wade, supra, at 388 U. S. 226 ,
quoting Escobedo v. Illinois, supra, at 378 U. S.
487 -488. | In United States v. Ash, the Supreme Court considered whether the Sixth Amendment grants an accused individual the right to have an attorney present when the government conducts a post-indictment photographic identification procedure. The Court held that the Sixth Amendment does not provide such a right, as a pretrial event only constitutes a "critical stage" when the accused requires legal aid or help in meeting their adversary. In this case, the accused was not present at the photographic display and did not assert a right to be present, so there was no possibility of being misled or overpowered without counsel. This decision reversed the Court of Appeals' ruling and remanded the case. |
Criminal Trials & Prosecutions | Maine v. Moulton | https://supreme.justia.com/cases/federal/us/474/159/ | U.S. Supreme Court Maine v. Moulton, 474
U.S. 159 (1985) Maine v. Moulton No. 84-786 Argued October 8,
1985 Decided December 10,
1985 474
U.S. 159 CERTIORARI TO THE SUPREME JUDICIAL
COURT OF MAINE Syllabus Respondent, represented by retained counsel, pleaded not guilty
in a Maine Superior Court to charges of theft by receiving of
automotive vehicles and parts. Respondent's codefendant Colson
informed the police that he had received anonymous threatening
telephone calls regarding the pending charges, and indicated that
he wished to talk to the police about the charges. Before meeting
with the police, Colson met with respondent to plan for the
upcoming trial, and, according to Colson, respondent suggested the
possibility of killing a State's witness. Thereafter, Colson and
his lawyer met with police officers, and Colson confessed to his
participation with respondent in committing the crimes for which
they had been indicted and agreed to testify against respondent and
cooperate in the prosecution of respondent on the pending charges
if no further charges were brought against Colson. Colson also
consented to have a recording device placed on his telephone, and
agreed to record any anonymous threats or any calls from
respondent. Having learned from recorded telephone calls that
Colson and respondent were going to meet to plan defense strategy
for the upcoming trial, the police obtained Colson's consent to be
equipped with a body wire transmitter to record the meeting.
Although Colson was instructed not to attempt to question
respondent at the meeting, his remarks in fact caused respondent to
make incriminating statements. The trial court denied respondent's
pretrial motion to suppress the recorded statements he made to
Colson as having been obtained in violation of respondent's right
to the assistance of counsel under the Sixth and Fourteenth
Amendments on the ground that the recordings were made for other
reasons. Some of respondent's recorded incriminating statements
made at the meeting with Colson were admitted in evidence, and
respondent was convicted of some of the charges. The Supreme
Judicial Court of Maine reversed and remanded for a new trial. Held: Respondent's Sixth Amendment right to the
assistance of counsel was violated by the admission at trial of
incriminating statements made by him to Colson after indictment and
at the meeting of the two to plan defense strategy for the upcoming
trial. Pp. 474 U. S.
168 -180.
(a) The assistance of counsel is necessary to safeguard the
other procedural safeguards provided to the accused by the criminal
justice process. Accordingly, the right to the assistance of
counsel is not limited to Page 474 U. S. 160 participation in a trial; to deprive a person of counsel during
the period prior to trial may be more damaging than denial of
counsel during the trial itself. Whatever else it may mean, the
right to counsel means at least that a person is entitled to the
help of a lawyer at or after the time that judicial proceedings
have been initiated against him. Pp. 474 U. S.
168 -170.
(b) Once the right to counsel has attached and been asserted,
the State must honor it. At the very least, the prosecutor and
police have an affirmative obligation not to act in a manner that
circumvents and thereby dilutes the protection afforded by the
right to counsel. Spano v. New York, 360 U.
S. 315 ; Massiah v. United States, 377 U.
S. 201 ; United States v. Henry, 447 U.
S. 264 . 474 U. S. 170-174.
(c) The State misreads Massiah, supra, and Henry,
supra, in contending that the decisive fact in those cases was
that the police set up the confrontation between the accused and a
police agent at which incriminating statements were elicited, and
that, thus, respondent's Sixth Amendment rights were not violated
here because, he rather than Colson, initiated the recorded
conversations. The Sixth Amendment guarantees the accused, at least
after the initiation of formal charges, the right to rely on
counsel as a "medium" between him and the State. Knowing
exploitation by the State of an opportunity to confront the accused
without counsel being present is as much a breach of the State's
obligation not to circumvent the right to the assistance of counsel
as is the intentional creation of such an opportunity. Pp. 474 U. S.
174 -176.
(d) In this case, the State clearly violated respondent's Sixth
Amendment right when it arranged to record conversations between
respondent and its undercover informant, Colson. When the police
requested that Colson wear a body wire transmitter to the meeting
with respondent, the police knew that respondent would make
statements that he had a constitutional right not to make to their
agent prior to consulting with counsel. By concealing the fact that
Colson was an agent of the State, the police denied respondent the
opportunity to consult with counsel, and thus denied him the
assistance of counsel guaranteed by the Sixth Amendment. Pp. 474 U. S.
176 -177.
(e) There is no merit to the argument that the incriminating
statements obtained by the police should not be suppressed because
the police had other, legitimate reasons for listening to
respondent's conversations with Colson, namely, to investigate
respondent's alleged plan to kill the State's witness and to insure
Colson's safety. This same argument was rejected in Massiah,
supra, where the Court held that to allow the admission of
evidence obtained from the accused in violation of his Sixth
Amendment rights whenever the police assert the need to investigate
other crimes to justify their surveillance invites abuse by law
enforcement personnel in the form of fabricated investigations and
risks the Page 474 U. S. 161 evisceration of the Sixth Amendment right. Evidence obtained
that is relevant to crimes as to which the Sixth Amendment right
has not yet attached may be admissible at a trial on those charges.
Pp. 474 U. S.
178 -180. 481 A.2d
155 , affirmed.
BRENNAN, J., delivered the opinion of the Court, in which
MARSHALL,BLACKMUN, POWELL, and STEVENS, JJ., joined. BURGER, C.J.,
filed a dissenting opinion, in which WHITE and REHNQUIST JJ.,
joined, and in Parts I and III of which O'CONNOR, J., joined, post, p. 474 U. S.
181 .
JUSTICE BRENNAN delivered the opinion of the Court.
The question presented in this case is whether respondent's
Sixth Amendment right to the assistance of counsel was violated by
the admission at trial of incriminating statements made by him to
his codefendant, a secret government informant, after indictment
and at a meeting of the two to plan defense strategy for the
upcoming trial. I On the night of January 15, 1981, police officers in Belfast,
Maine, responded to a fire call in the vicinity of the Belfast
Dodge automobile dealership. Arriving at the scene, the officers
discovered a burning Chevrolet dump truck which they recognized as
a vehicle that had been reported stolen. [ Footnote 1 ] Page 474 U. S. 162 After examining the burning truck, the officers searched a
building located on the Belfast Dodge property. This building was
not part of the dealership, but was leased to respondent Perley
Moulton and his codefendant Gary Colson, who were using the space
to restore and sell old Ford Mustangs. Inside, the officers
discovered evidence of several recent automobile and
automobile-related thefts.
On April 7, 1981, a Waldo County grand jury returned indictments
charging Moulton and Colson with four counts of theft by receiving
in violation of Me.Rev.Stat.Ann., Tit.17-A, § 359 (1983).
Specifically, the indictments alleged that Moulton and Colson
received, retained, or disposed of a 1978 Ford pickup truck, a 1978
Chevrolet dump truck, a 1970 Ford Mustang automobile, and assorted
Ford Motor Company automotive parts knowing these to be stolen and
intending to deprive the owners of possession. On April 9, Moulton
and Colson, represented by retained counsel, appeared before the
Maine Superior Court for Waldo County and entered pleas of not
guilty. Both were enlarged on bail pending trial. Numerous
proceedings, unnecessary to detail here, occurred during the
ensuing year and a half.
On November 4, 1982, Colson complained by telephone to Robert
Keating, Chief of the Belfast Police Department, that he had
received anonymous threatening telephone calls regarding the
charges pending against him and Moulton, and indicated that he
wished to talk to the police about the charges. Keating told Colson
to speak with his lawyer and to call back.
On November 6, Colson met with Moulton at a Belfast restaurant
to plan for their upcoming trial. According to Colson, Moulton
suggested the possibility of killing Gary Elwell, a State's
witness, and they discussed how to commit the murder.
On November 9 and 10, Colson, accompanied by his lawyer, met
with Police Chief Keating and State Police Detective Rexford
Kelley. At these meetings, Colson gave full Page 474 U. S. 163 confessions of his participation with Moulton in committing the
crimes for which they had been indicted. In addition, Colson
admitted that he and Moulton had not merely received stolen
automotive parts, but also had broken into the local Ford
dealership to steal the parts. Colson also stated that he and
Moulton had set fire to the dump truck and had committed other
thefts. The officers offered Colson a deal: no further charges
would be brought against him if he would testify against Moulton
and otherwise cooperate in the prosecution of Moulton on the
pending charges. Colson agreed to cooperate. [ Footnote 2 ]
Colson also discussed with Keating and Kelley the anonymous
threats he had received and Moulton's inchoate plan to kill Gary
Elwell. Keating requested, and Colson consented, to have a
recording device placed on Colson's telephone. Colson was
instructed to turn the recording device on whenever he received a
telephone call, but to turn it off immediately unless it was a
threat from the anonymous caller or a call from Moulton.
The recording device was on Colson's telephone for over a month.
Although he received no threats, Colson spoke to Moulton three
times during this period, and the tapes of these calls were turned
over to the police. The first conversation, on November 22,
concerned primarily personal matters. The only reference to the
pending criminal charges was Colson's question whether Moulton had
"heard anything from the lawyer," and Moulton's response that he
had not, but that he had "come up with a method" that he "ha[d] to
work out the details on," and that "[s]ome day [he'd] like to get
together and talk to [Colson] about it." Moulton, then Page 474 U. S. 164 living in New Hampshire, said that he was planning to visit
Belfast around Christmas.
The second telephone conversation, on December 2, was prompted
by Moulton's receipt of copies of statements of three of the
State's witnesses, including Elwell; Colson had not yet received
copies of the statements. Most of their talk (on Moulton's side
particularly) was about the statements of Elwell and Elwell's
brother, which accused Moulton and Colson of being guilty of the
pending charges and which Moulton complained were an attempt to
frame him and Colson. After reading Colson a statement by Elwell
that he had received a threatening phone call, Moulton commented
"[t]his is a big joke, man." [ Footnote 3 ] When Colson jokingly suggested that they flee
to Acapulco, Moulton vehemently rejected the suggestion, stating:
"No, I'm gonna stay here and I'm gonna fight it, man. I'm gonna
fight it, man. I ain't gonna get framed for nothing." Colson
assented to this, and suggested, "we'll have to get together
sometime. . . ." Moulton reminded Colson that he would be visiting
at Christmas, and the conversation ended without Moulton's having
said anything that incriminated him.
The third telephone conversation, which took place on December
14, was similar to the second one. Most of the conversation
concerned the pending charges, but Moulton said nothing
inculpatory, and continued to insist that he and Colson were being
framed. Moulton asked Colson to set aside an entire day so that the
two of them could meet and plan their defense. They agreed to meet
on Sunday, December 26.
After learning from the telephone recordings about the meeting
planned for December 26, the police obtained Colson's consent to be
equipped with a body wire transmitter to record what was said at
the meeting. Chief Keating later testified that he did this for
Colson's safety in case Moulton Page 474 U. S. 165 realized that Colson was cooperating with the police, and to
record any further conversation concerning threats to witnesses.
Keating also testified that he was aware that Moulton and Colson
were meeting to discuss the charges for which Moulton was already
under indictment. Colson was instructed "not to attempt to question
Perley Moulton, just be himself in his conversation. . . ."
The December 26 meeting, as was to be expected from the recorded
telephone conversations, consisted of a prolonged discussion of the
pending charges -- what actually had occurred, what the State's
evidence would show, and what Moulton and Colson should do to
obtain a verdict of acquittal. The idea of eliminating witnesses
was briefly mentioned early in the conversation. After a short
discussion, encouraged by Colson, [ Footnote 4 ] Moulton concluded that he did not think the
plan would work. The remainder of the lengthy meeting was spent
discussing the case. Moulton and Colson decided to create false
alibis as their defense at trial. Because they sought to conform
these alibis as closely as possible to what really happened, much
of their discussion involved recounting the crimes. Although Colson
had described what had happened in detail when he confessed to the
police a month earlier, he now frequently professed to be unable to
recall the Page 474 U. S. 166 events. Apologizing for his poor memory, he repeatedly asked
Moulton to remind him about the details of what had happened, and
this technique caused Moulton to make numerous incriminating
statements. [ Footnote 5 ] Nor
were all of Colson's memory lapses related to events that required
discussion to fabricate convincing alibis. Colson also "reminisced"
about events surrounding the various thefts, and this technique too
elicited additional incriminating statements from Moulton. For
example, Colson asked Moulton how many locks they had drilled to
steal a truck, a fact obviously not relevant to developing an
alibi. Similarly, Colson questioned Moulton about whether it was
the Mustang or the pickup truck that did not have a heater. Later,
Colson jokingly drew forth admissions from Moulton concerning the
dumping of a stolen truck into a pond after it had been scavenged
for parts, and the dumping of a load of potatoes from another
stolen truck onto the road. Each of these statements was later
admitted into evidence against Moulton at trial.
Moulton filed a pretrial motion to suppress recorded statements
he made to Colson in the three telephone conversations and at the
December 26 meeting, arguing, inter alia, that the
statements were obtained in violation of the Sixth and Fourteenth
Amendments. After a hearing, the trial court denied the motion. The
trial court found that the recordings were made
"in order to gather information concerning the anonymous threats
that Mr. Colson had been Page 474 U. S. 167 receiving, to protect Mr. Colson, and to gather information
concerning defendant Moulton's plans to kill Gary Elwell."
Meanwhile, after Colson's role as an informant had been revealed
to Moulton, the State had the pending indictments dismissed and
obtained seven new indictments against Moulton. These indictments
realleged the pending charges and charged Moulton in addition with
burglary, arson, and three more thefts. Moulton pleaded guilty to
the charges contained in two of these indictments, and the trial
court dismissed two more for improper venue. Moulton waived his
right to a jury and proceeded to trial on the remaining three
indictments, which covered the subjects of the original indictments
and charged him with burglary, arson, and theft. At the trial, the
State did not offer into evidence anything from the recorded
telephone conversations, but did offer portions of the tapes of the
December 26 meeting, principally those involving direct discussion
of the thefts for which Moulton was originally indicted. The State
did not offer the portion of the meeting during which Moulton and
Colson discussed the possibility of killing witnesses, and offered
only one portion of the discussion about developing false
testimony. At the conclusion of the trial, the court dismissed one
more count of theft for improper venue and found Moulton not guilty
of the arson charge. The court found Moulton guilty, however, of
burglary and theft in connection with the Ford pickup truck, the
Chevrolet dump truck, and the Ford automotive parts.
Moulton appealed these convictions on the ground that the
admission into evidence of his statements to Colson violated his
Sixth Amendment right to the assistance of counsel. The State filed
a cross-appeal objecting to the dismissal of charges for improper
venue. The Supreme Judicial Court of Maine granted both appeals and
remanded for a new trial. 481 A.2d
155 (1984). Regarding the admission of Moulton's recorded
statements to Colson, the court agreed that there was "ample
evidence" to support the trial court's finding that Page 474 U. S. 168 the police wired Colson for legitimate purposes, but held
that
"[r]eference to the State's legitimate motive may be relevant
to, but cannot wholly refute, the alleged infringement of Moulton's
right to counsel." Id. at 160. The court held that the State cannot use
against Moulton at trial recordings of conversations where the
State "knew, or should have known" that Moulton would make
incriminating statements regarding crimes as to which charges were
already pending. Pointing to Moulton's close relationship with
Colson, the fact that the purpose of their meeting was to discuss
the pending charges, and the fact that, at the time of the meeting,
Colson was "fully cooperating with the police, and no longer stood
in the same adversarial position as did Moulton," the court
held:
"When the police recommended the use of the body wire to Colson
they intentionally created a situation that they knew, or should
have known, was likely to result in Moulton's making incriminating
statements during his meeting with Colson. The police's valid
purpose in investigating threats against witnesses does not
immunize the recordings of Moulton's incriminating statements from
constitutional attack. Those statements may be admissible in the
investigation or prosecution of charges for which, at the time the
recordings were made, adversary proceedings had not yet commenced.
But as to the charges for which Moulton's right to counsel had
already attached, his incriminating statements should have been
ruled inadmissible at trial, given the circumstances in which they
were acquired." Id. at 161. We granted the State's petition for
certiorari. 469 U.S. 1206. We affirm. II A The right to the assistance of counsel guaranteed by the Sixth
and Fourteenth Amendments is indispensable to the fair
administration of our adversarial system of criminal justice.
[ Footnote 6 ] Page 474 U. S. 169 Embodying "a realistic recognition of the obvious truth that the
average defendant does not have the professional legal skill to
protect himself," Johnson v. Zerbst, 304 U.
S. 458 , 304 U. S.
462 -463 (1938), the right to counsel safeguards the
other rights deemed essential for the fair prosecution of a
criminal proceeding. Justice Sutherland's oft-quoted explanation in Powell v. Alabama, 287 U. S. 45 (1932), bears repetition here:
"The right to be heard would be, in many cases, of little avail
if it did not comprehend the right to be heard by counsel. Even the
intelligent and educated layman has small and sometimes no skill in
the science of law. If charged with crime, he is incapable,
generally, of determining for himself whether the indictment is
good or bad. He is unfamiliar with the rules of evidence. Left
without the aid of counsel, he may be put on trial without a proper
charge, and convicted upon incompetent evidence, or evidence
irrelevant to the issue or otherwise inadmissible. He lacks both
the skill and knowledge adequately to prepare his defense, even
though he have a perfect one. He requires the guiding hand of
counsel at every stage of the proceedings against him." Id. Page 474 U. S. 170 at 287 U. S. 68 -69
(quoted in Gideon v. Wainwright, 372 U.
S. 335 , 372 U. S.
344 -345 (1963)).
As indicated in the last sentence of this paragraph, the Court
has also recognized that the assistance of counsel cannot be
limited to participation in a trial; to deprive a person of counsel
during the period prior to trial may be more damaging than denial
of counsel during the trial itself. Recognizing that the right to
the assistance of counsel is shaped by the need for the assistance
of counsel, we have found that the right attaches at earlier,
"critical" stages in the criminal justice process "where the
results might well settle the accused's fate and reduce the trial
itself to a mere formality." United States v. Wade, 388 U. S. 218 , 388 U. S. 224 (1967) (quoted in United States v. Gouveia, 467 U.
S. 180 , 467 U. S. 189 (1984)). See, e.g., Coleman v. Alabama, 399 U. S.
1 (1970); Hamilton v. Alabama, 368 U. S.
52 (1961); White v. Maryland, 373 U. S.
59 (1963); Escobedo v. Illinois, 378 U.
S. 478 (1964); Kirby v. Illinois, 406 U.
S. 682 (1972). And,
"[w]hatever else it may mean, the right to counsel granted by
the Sixth and Fourteenth Amendments means at least that a person is
entitled to the help of a lawyer at or after the time that judicial
proceedings have been initiated against him. . . ." Brewer v. Williams, 430 U. S. 387 , 430 U. S. 398 (1977). This is because, after the initiation of adversary criminal
proceedings,
"'the government has committed itself to prosecute, and . . .
the adverse positions of government and defendant have solidified.
It is then that a defendant finds himself faced with the
prosecutorial forces of organized society, and immersed in the
intricacies of substantive and procedural criminal law.'" Goveia, supra, at 467 U. S. 189 (quoting Kirby v. Illinois, supra, at 406 U. S.
689 ). B Once the right to counsel has attached and been asserted, the
State must, of course, honor it. [ Footnote 7 ] This means more than Page 474 U. S. 171 simply that the State cannot prevent the accused from obtaining
the assistance of counsel. The Sixth Amendment also imposes on the
State an affirmative obligation to respect and preserve the
accused's choice to seek this assistance. We have on several
occasions been called upon to clarify the scope of the State's
obligation in this regard, and have made clear that, at the very
least, the prosecutor and police have an affirmative obligation not
to act in a manner that circumvents and thereby dilutes the
protection afforded by the right to counsel. In Spano v. New
York, 360 U. S. 315 (1959), the defendant, who had already been indicted, was
coercively interrogated by police until the early hours of the
morning despite his repeated requests to see his lawyer. A
unanimous Court reversed his conviction on the ground that the
confession obtained by this interrogation was involuntary, and
therefore should not have been admitted into evidence at trial.
Four Justices, in two concurring opinions, stated that they would
also have reached this result on the ground that Spano's Sixth
Amendment right to the assistance of counsel was violated. These
Justices reasoned that to permit police to "produce the vital
evidence in the form of a confession which is useful or necessary
to obtain a conviction" in the absence of counsel, after the right
to counsel has attached, is to deny the accused "effective
representation by counsel at the only stage when legal aid and
advice would help him." Id. at 360 U. S.
325 -326 (Douglas, J., concurring, joined by Black and
BRENNAN, JJ.); see also id. at 360 U. S.
326 -327 (Stewart, J., concurring, joined by Douglas and
BRENNAN, JJ.). As Justice Douglas succinctly put the point,
"what use is a defendant's right to effective counsel at every
stage of a criminal case if, while he is held awaiting trial, he
can be questioned in the absence of counsel until he
confesses?" Id. at 360 U. S.
326 . Page 474 U. S. 172 The position of the concurring Justices in Spano was
adopted by the Court in Massiah v. United States, 377 U. S. 201 (1964). Massiah was indicted, along with a man named Colson,
[ Footnote 8 ] for conspiracy to
possess and to distribute cocaine. Massiah retained a lawyer,
pleaded not guilty, and was released on bail. Colson, meanwhile,
decided to cooperate with Government agents in their continuing
investigation of the narcotics activity in which Massiah and others
were thought to be engaged. Colson permitted a Government agent to
install a radio transmitter under the front seat of his automobile.
Massiah held a lengthy conversation with Colson in this automobile
while a Government agent listened over the radio. Massiah made
several incriminating statements, and these were brought before the
jury through the testimony of the Government agent. We reversed
Massiah's conviction on the ground that the incriminating
statements were obtained in violation of Massiah's rights under the
Sixth Amendment. The Court stressed the fact that the interview
took place after indictment, at a time when Massiah was clearly
entitled to the assistance of counsel. Relying on Justice Douglas'
Spano concurrence, the Court concluded that the need for, and
consequently the right to, the assistance of counsel applied
equally in this extrajudicial setting as at the trial itself. 377
U.S. at 377 U. S. 204 .
[ Footnote 9 ] Consequently, the
Court held: Page 474 U. S. 173 "[Massiah] was denied the basic protections of [the right to the
assistance of counsel] when there was used against him at trial
evidence of his own incriminating words, which federal agents had
deliberately elicited from him after he had been indicted and in
the absence of his counsel." Id. at 377 U. S.
206 .
We applied this principle most recently in United States v.
Henry, 447 U. S. 264 (1980). Henry was arrested and indicted for bank robbery. Counsel
was appointed, and Henry was held in jail pending trial. Nichols,
an inmate at the same jail and a paid informant for the Federal
Bureau of Investigation, told a Government agent that he was housed
in the same cellblock as several federal prisoners, including
Henry. The agent told Nichols to pay attention to statements made
by these prisoners, but expressly instructed Nichols not to
initiate any conversations and not to question Henry regarding the
bank robbery. Nichols and Henry subsequently engaged in some
conversations during which Henry told Nichols about the robbery.
Nichols testified about these conversations at Henry's trial, and
Henry was convicted. This Court reversed, finding that the
Government had " deliberately elicited' incriminating statements
from Henry within the meaning of Massiah." Id. at 447 U. S. 270 .
Several facts were emphasized in THE CHIEF JUSTICE's opinion for
the Court: that Nichols was acting as an informant for the
Government, and therefore had an incentive to produce useful
information; that Henry was unaware of Nichols' role as a
Government informant; and, finally, that Henry and Nichols were
incarcerated together at the time the conversations took place.
With respect to this last fact, the Court reasoned that "confinement may bring into play subtle influences that will
make [an individual] particularly susceptible to the ploys of
undercover Government agents,"
influences that were facilitated by Nichols' "apparent status as
a person sharing a common plight." Id. at 447 U. S. 274 .
Considering Nichols' Page 474 U. S. 174 conversations with Henry in light of these circumstances, the
Court concluded that Nichols "deliberately used his position to
secure incriminating information from Henry when counsel was not
present," in violation of the Sixth Amendment. Id. at 447 U. S.
270 -271. The Government argued that it should not be
held responsible for Nichols' conduct, because its agent had
instructed Nichols not to question Henry and had not intended that
Nichols take affirmative steps to obtain incriminating statements.
We rejected this argument, finding that, under the circumstances,
the agent "must have known" that Nichols would take affirmative
steps to secure incriminating information. Id. at 447 U. S. 271 .
Consequently, the Court held,
"[b]y intentionally creating a situation likely to induce Henry
to make incriminating statements without the assistance of counsel,
the Government violated Henry's Sixth Amendment right to
counsel." Id. at 447 U. S.
274 . C The State contends that the decisive fact in Massiah and Henry was that the police set up the confrontation
between the accused and a police agent at which incriminating
statements were elicited. Supported by the United States as amicus curiae, the State maintains that the Sixth
Amendment is violated only when police intentionally take this or
some equivalent step. Because Moulton, rather than Colson,
initiated the recorded telephone conversations and requested the
December 26 meeting, the State concludes that Moulton's Sixth
Amendment rights were not violated here. In the first place, the
identity of the party who instigated the meeting at which the
Government obtained incriminating statements was not decisive, or
even important, to our decisions in Massiah or Henry. Thus, while in Massiah it may have been
the Government agent who was responsible for setting up the meeting
with the defendant, [ Footnote
10 ] one discovers Page 474 U. S. 175 this only by looking to the opinions of the Court of Appeals. It
is not mentioned in this Court's opinion, since the issue of who
set up the meeting with whom was not pertinent to our disposition.
Moreover, four years after Massiah, the Court summarily
reversed a conviction where the defendant requested the meeting and
initiated and led the conversation in which incriminating
statements were made to an undercover informant. Beatty v.
United States, 389 U. S. 45 (1967)
(per curiam). In that case, the Solicitor General made the same
argument that he and the State make today, see Brief in
Opposition, Beatty v. United States, O.T. 1967, No. 338,
pp. 5-8; we rejected this argument in an opinion that simply cited Massiah. [ Footnote
11 ] Finally, in Henry, we deemed it
"irrelevant that, in Massiah, the agent had to arrange
the meeting between Massiah and his codefendant, while here the
agents were fortunate enough to have an undercover informant
already in close proximity to the accused."
447 U.S. at 447 U. S. 272 ,
n. 10. Page 474 U. S. 176 Beyond this, the State's attempt to limit our holdings in Massiah and Henry fundamentally misunderstands
the nature of the right we recognized in those cases. The Sixth
Amendment guarantees the accused, at least after the initiation of
formal charges, the right to rely on counsel as a "medium" between
him and the State. As noted above, this guarantee includes the
State's affirmative obligation not to act in a manner that
circumvents the protections accorded the accused by invoking this
right. The determination whether particular action by state agents
violates the accused's right to the assistance of counsel must be
made in light of this obligation. Thus, the Sixth Amendment is not
violated whenever -- by luck or happenstance -- the State obtains
incriminating statements from the accused after the right to
counsel has attached. See Henry, 447 U.S. at 447 U. S. 276 (POWELL, J., concurring). However, knowing exploitation by the
State of an opportunity to confront the accused without counsel's
being present is as much a breach of the State's obligation not to
circumvent the right to the assistance of counsel as is the
intentional creation of such an opportunity. Accordingly, the Sixth
Amendment is violated when the State obtains incriminating
statements by knowingly circumventing the accused's right to have
counsel present in a confrontation between the accused and a state
agent. [ Footnote 12 ] III Applying this principle to the case at hand, it is clear that
the State violated Moulton's Sixth Amendment right when it arranged
to record conversations between Moulton and its undercover
informant, Colson. It was the police who suggested to Colson that
he record his telephone conversations with Moulton. Having learned
from these recordings that Page 474 U. S. 177 Moulton and Colson were going to meet, the police asked Colson
to let them put a body wire transmitter on him to record what was
said. Police Chief Keating admitted that, when they made this
request, the police knew -- as they must have known from the
recorded telephone conversations -- that Moulton and Colson were
meeting for the express purpose of discussing the pending charges
and planning a defense for the trial. [ Footnote 13 ] The police thus knew that Moulton would
make statements that he had a constitutional right not to make to
their agent prior to consulting with counsel. As in Henry, the fact that the police were "fortunate enough to have an
undercover informant already in close proximity to the accused"
does not excuse their conduct under these circumstances. 447 U.S.
at 447 U. S. 272 ,
n. 10. By concealing the fact that Colson was an agent of the
State, the police denied Moulton the opportunity to consult with
counsel, and thus denied him the assistance of counsel guaranteed
by the Sixth Amendment. [ Footnote 14 ] Page 474 U. S. 178 IV The Solicitor General argues that the incriminating statements
obtained by the Maine police nevertheless should not be suppressed,
because the police had other, legitimate reasons for listening to
Moulton's conversations with Colson, namely, to investigate
Moulton's alleged plan to kill Gary Elwell and to insure Colson's
safety. In Massiah, the Government also contended that
incriminating statements obtained as a result of its deliberate
efforts should not be excluded because law enforcement agents had
"the right, if not indeed the duty, to continue their investigation
of [Massiah] and his alleged criminal associates. . . ." 377 U.S.
at 377 U. S. 206 .
There, as here, the Government argued that this circumstance
justified its surveillance and cured any improper acts or purposes.
We rejected this argument, and held: Page 474 U. S. 179 "We do not question that, in this case, as in many cases, it was
entirely proper to continue an investigation of the suspected
criminal activities of the defendant and his alleged confederates,
even though the defendant had already been indicted. All that we
hold is that the defendant's own incriminating statements, obtained
by federal agents under the circumstances here disclosed, could not
constitutionally be used by the prosecution as evidence against him
at his trial." Id. at 377 U. S. 207 (emphasis omitted).
We reaffirm this holding, which states a sensible solution to a
difficult problem. The police have an interest in the thorough
investigation of crimes for which formal charges have already been
filed. They also have an interest in investigating new or
additional crimes. Investigations of either type of crime may
require surveillance of individuals already under indictment.
Moreover, law enforcement officials investigating an individual
suspected of committing one crime and formally charged with having
committed another crime obviously seek to discover evidence useful
at a trial of either crime. [ Footnote 15 ] In seeking evidence pertaining to pending
charges, Page 474 U. S. 180 however, the Government's investigative powers are limited by
the Sixth Amendment rights of the accused. To allow the admission
of evidence obtained from the accused in violation of his Sixth
Amendment rights whenever the police assert an alternative,
legitimate reason for their surveillance invites abuse by law
enforcement personnel in the form of fabricated investigations and
risks the evisceration of the Sixth Amendment right recognized in Massiah. On the other hand, to exclude evidence pertaining
to charges as to which the Sixth Amendment right to counsel had not
attached at the time the evidence was obtained, simply because
other charges were pending at that time, would unnecessarily
frustrate the public's interest in the investigation of criminal
activities. Consequently, incriminating statements pertaining to
pending charges are inadmissible at the trial of those charges,
notwithstanding the fact that the police were also investigating
other crimes, if, in obtaining this evidence, the State violated
the Sixth Amendment by knowingly circumventing the accused's right
to the assistance of counsel. [ Footnote 16 ] Because we hold that the Maine police
knowingly circumvented Moulton's right to have counsel present at a
confrontation between Moulton and a police agent, the fact that the
police had additional reasons for recording Moulton's meeting with
Colson is irrelevant. The decision of the Supreme Judicial Court of
Maine is affirmed. It is so ordered. Page 474 U. S. 181 [ Footnote 1 ]
Indeed, in pursuing an anonymous tip received earlier that day
that the stolen truck could be found at Belfast Dodge, one of the
officers had conducted a consent search of the main building of the
dealership facility.
[ Footnote 2 ]
Seven months after the conclusion of Moulton's trial, Colson
pleaded guilty to two counts of theft. The prosecutor recommended
that Colson be sentenced to 2 years' imprisonment, all but 15 days
to be suspended, and placed on probation for 2 years. Colson also
agreed to make restitution up to $2,000 during the probationary
period. The trial court accepted this recommendation and sentenced
Colson accordingly.
[ Footnote 3 ]
Colson testified that he never told Moulton about the
threatening calls that he had received.
[ Footnote 4 ]
The exchange went as follows:
"[Moulton:] You know I thought of a way to eliminate them.
Remember we were talking about it before?"
"[Colson:] Yes, you thought of a way?"
"[Moulton:] Yeah, but . . . I don't think we ought to go for
it."
"[Colson:] Is it foolproof?"
"[Moulton:] No."
"[Colson:] Is it, is it fairly foolproof?"
"[Moulton:] I like it. I think its just for the. . . ."
"[Colson:] Well let me [hear it]."
Moulton explained that he had considered using air rifles to
shoot poisoned darts and the conversation then turned to joking
about a magazine that instructed readers how to build bombs to kill
large numbers of people. Exh. S-4, Tr. of Dec. 26 Meeting
18-19.
[ Footnote 5 ]
Colson began doing this immediately after Moulton vetoed the
plan to eliminate witnesses. Colson indicated that he did not have
copies of all the discovery materials, and Moulton went outside to
his car to get his copies. While Moulton was gone, Colson sighed
heavily and whispered "[o]h boy, I just hope I can make it through
this" into the microphone. Then, when Moulton returned moments
later, Colson immediately stated, slowly and deliberately:
"I want you to help me with some dates. One date I cannot
remember Caps [Moulton's nickname], just can't remember, I know it
was in December, what night did we break into Lothrop Ford? What
date?" Id. at 23.
[ Footnote 6 ]
Justice Black explained in Gideon v. Wainwright, 372 U. S. 335 (1963):
"[R]eason and reflection require us to recognize that, in our
adversary system of criminal justice, any person haled into court .
. . cannot be assured a fair trial unless counsel is provided for
him. This seems to us to be an obvious truth. Governments, both
state and federal, quite properly spend vast sums of money to
establish machinery to try defendants accused of crime. Lawyers to
prosecute are everywhere deemed essential to protect the public's
interest in an orderly society. Similarly, there are few defendants
charged with crime, few indeed, who fail to hire the best lawyers
they can get to prepare and present their defenses. That government
hires lawyers to prosecute and defendants who have the money hire
lawyers to defend are the strongest indications of the widespread
belief that lawyers in criminal courts are necessities, not
luxuries. The right of one charged with crime to counsel may not be
deemed fundamental and essential to fair trials in some countries,
but it is in ours." Id. at 372 U. S.
344 .
[ Footnote 7 ] Cf. Brewer v. Williams, 430 U.
S. 387 (1977):
"[T]he lawyer is the essential medium through which the demands
and commitments of the sovereign are communicated to the citizen.
If, in the long run, we are seriously concerned about the
individual's effective representation by counsel, the State cannot
be permitted to dishonor its promise to this lawyer." Id. at 430 U. S. 415 (STEVENS, J., concurring) (footnote omitted).
[ Footnote 8 ]
The parties have taken pains to assure us that Massiah's friend
Colson and Moulton's friend Colson are unrelated.
[ Footnote 9 ]
Justice Stewart noted that this view of the right to counsel "no
more than reflects a constitutional principle established as long
ago as Powell v. Alabama, " where the Court noted that
"'during perhaps the most critical period of the proceedings . .
. that is to say, from the time of their arraignment until the
beginning of their trial, when consultation, thorough-going
investigation and preparation [are] vitally important, the
defendants [are] as much entitled to such aid [of counsel] . . . as
at the trial itself.'" Massiah, 377 U.S. at 377 U. S. 205 (quoting Powell v. Alabama, 287 U. S.
45 , 287 U. S. 57 (1932)).
[ Footnote 10 ]
It is not clear whether the informant asked to meet with Massiah
or vice versa. Both the opinion for the Second Circuit and the
dissent state only that, on the instructions of a Government agent,
Colson invited Massiah into his car to discuss their case; neither
opinion establishes who requested the meeting in the first place. See United States v. Massiah, 307 F.2d 62, 66 (1962); id. at 72 (Hays, J., dissenting). It is quite plausible
that Massiah asked to see Colson, who then proposed meeting in his
car. In fact, there is nothing in the record in Massiah to
support even the assertion of the Court of Appeals that Colson,
rather than Massiah, suggested meeting in Colson's car, although
the inference is logical enough. See App. to Brief for
United States in Massiah v. United States, O.T. 1963,
No.199, pp. 125a-175a (testimony of Agent Murphy).
[ Footnote 11 ]
In his amicus brief for the United States in this case,
the Solicitor General suggests that Beatty did not survive Brewer v. Williams, 430 U. S. 387 (1977), which, he contends, modified Massiah to require
affirmative interrogation by the Government. Brief for United
States as Amicus Curiae 17, n. 12. That argument, however,
was expressly rejected when the Solicitor General made it in Henry. See 447 U.S. at 447 U. S. 271 ("While affirmative interrogation, absent waiver, would certainly
satisfy Massiah, we are not persuaded, as the Government
contends, that Brewer v. Williams . . . modified Massiah's deliberately elicited' test"). Cf.
also Brief for United States in United States v.
Henry, O.T. 1979, No. 121, p 2, n. 12. [ Footnote 12 ]
Direct proof of the State's knowledge will seldom be available
to the accused. However, as Henry makes clear, proof that
the State "must have known" that its agent was likely to obtain
incriminating statements from the accused in the absence of counsel
suffices to establish a Sixth Amendment violation. See 447
U.S. at 447 U. S.
271 .
[ Footnote 13 ]
Because Moulton thought of Colson only as his codefendant,
Colson's engaging Moulton in active conversation about their
upcoming trial was certain to elicit statements that Moulton would
not intentionally reveal -- and had a constitutional right not to
reveal -- to persons known to be police agents. Under these
circumstances, Colson's merely participating in this conversation
was "the functional equivalent of interrogation." Henry, 447 U.S. at 447 U. S. 277 (POWELL, J., concurring). In addition, the tapes disclose, and the
Supreme Judicial Court of Maine found, that Colson
"frequently pressed Moulton for details of various thefts, and,
in so doing, elicited much incriminating information that the State
later used at trial."
481 A.2d at 161. Thus, as in Henry, supra, at 447 U. S. 271 ,
n. 9, we need not reach the situation where the "listening post"
cannot or does not participate in active conversation and prompt
particular replies.
[ Footnote 14 ]
The State argues that it took steps to prevent Colson from
inducing Moulton to make incriminating admissions by instructing
Colson to "be himself," "act normal," and "not interrogate"
Moulton. Tr. of Hearing on Motion to Suppress 42, 51, 56. In Henry, we rejected this same argument, although the
likelihood that the accused would talk about the pending charges to
a cellmate was less than here, where the accused invited his
codefendant to discuss the upcoming trial, and although the
instructions to the agent were far more explicit. See 447
U.S. at 447 U. S. 268 , 447 U. S. 271 .
More importantly, under the circumstances of this case, the
instructions given to Colson were necessarily inadequate. The Sixth
Amendment protects the right of the accused not to be confronted by
an agent of the State regarding matters as to which the right to
counsel has attached without counsel's being present. This right
was violated as soon as the State's agent engaged Moulton in
conversation about the charges pending against him. Because these
charges were the only subject to be discussed at Colson's December
26 meeting with Moulton, a Sixth Amendment violation was inevitable
once Colson agreed to this meeting with Moulton. In any event, we
reject the State's suggestion that these instructions were designed
to protect Moulton's constitutional rights. The instructions were
obviously motivated by the police's concern that Colson, who had
never before served as an undercover agent, might behave
unnaturally or ask too many questions, thereby tipping Moulton off
to the fact that Colson was cooperating with the police. Thus,
rather than explain to Colson that actively questioning Moulton
might taint any evidence obtained, the police simply told Colson to
"be himself," and to "act normal." Tr. of Hearing on Motion to
Suppress 42, 51, 56. In addition, the instructions were not limited
to questions concerning the pending charges, the only matters as to
which active questioning might create problems. On the contrary,
according to Chief Keating, Colson was instructed that he could
engage Moulton in a conversation, but should not try to draw him
out on "elimination of witnesses or anything." Id. at
51.
[ Footnote 15 ]
In his brief, the Solicitor General assumes that the only claim
made by the Government and answered by the Court in Massiah was that the Government was engaged in a
continuing investigation of crimes as to which charges were already
pending. He concedes that this was an inadequate justification
which
"had the flavor of a post hoc rationalization of
conduct that, at its inception, in fact had as a primary purpose
the obtaining of evidence for use at trial on the pending
charges."
Brief for United States as Amicus Curiae 23-24. So
saying, he asks us to distinguish from that justification the
justification that law enforcement officials are investigating
"separate" crimes. In Massiah, however, the Government's
assertion was that it needed to continue its investigation in order
to discover the identities of Massiah's intended buyer and of
others who were importing narcotics, as well as to find additional
evidence of Massiah's crimes. Brief for United States in Massiah v. United States, O.T. 1963, No.199, pp. 26-27.
The Court in Massiah was thus faced with the very same
argument made by the Solicitor General in this case. Even were the
Solicitor General's characterization of the issue posed in Massiah correct, however, we would not draw the
distinction he asks us to make. The likelihood of post hoc rationalizing is the same whether police claim to be investigating
other examples of the same crime or some allegedly "separate"
crime. We take what we feel is a more realistic view of police
investigations, and instead accept that dual purposes may exist
whenever police have more than one reason to investigate
someone.
[ Footnote 16 ]
Incriminating statements pertaining to other crimes, as to which
the Sixth Amendment right has not yet attached, are, of course,
admissible at a trial of those offenses.
CHIEF JUSTICE BURGER, with whom JUSTICE WHITE and JUSTICE
REHNQUIST join, and with whom JUSTICE O'CONNOR joins as to Parts I
and III, dissenting.
Today the Court holds that the Sixth Amendment prohibits the use
at trial of postindictment statements made to a government
informant, even where those statements were recorded as part of a
good faith investigation of entirely separate crimes. Nothing
whatever in the Constitution or our prior opinions supports this
bizarre result, which creates a new "right" only for those possibly
habitual offenders who persist in criminal activity even while
under indictment for other crimes. I dissent, and would
reverse. I Before reaching the legal issues, it is important that the
factual basis on which the State acted here be clearly understood.
Since the Court's opinion glosses over some of the more relevant
facts, I review them here briefly. After respondent and a
codefendant, Gary Colson, were indicted on several felony counts of
theft by receiving stolen goods, Colson telephoned Belfast Police
Chief Robert Keating to arrange a meeting. At that meeting, on
November 4, 1982, Colson told Chief Keating that he had been
receiving "threatening phone calls" and that "it had gone too far."
In this conversation, Colson indicated his desire to tell Chief
Keating about the circumstances giving rise to the indictment; but
Chief Keating appropriately cautioned him to consult with an
attorney before saying more. Two days later, Colson and respondent
met. Respondent spoke of "[g]etting rid of a couple of witnesses,"
including Gary Elwell, a key prosecution witness in the upcoming
trial of Colson and respondent. Respondent had formulated a general
plan for the murder; Colson's role was pick up a car to be used in
that endeavor. On November 9 and 10, Colson met with Chief Keating
and Detective Rex Kelley of the Maine State Police at the
office Page 474 U. S. 182 of Colson's attorney. At these meetings, Colson revealed to the
police respondent's plan to kill Elwell. Keating was aware that
several witnesses connected with the case had received threats. One
witness, Duke Ducaster, had been threatened personally by
respondent. Another witness, Herman Peasley, "had been told . . .
that a cup of acid could be thrown in his face" if he talked to the
police. Colson then consented to having the police place a
recording device on his home telephone. Keating testified that he
placed the device on the telephone because respondent was to call
Colson back when plans to eliminate Elwell had been finalized, and
because Colson himself had been receiving anonymous threatening
telephone calls. Three telephone calls initiated by respondent were
subsequently recorded. In the first, on November 22, 1982,
respondent, in an apparent reference to the plan to do away with
Elwell, told Colson that he had "come up with a method," and that
he wanted to get together with Colson to talk about it after he had
"work[ed] out the details on it." In the second recorded
conversation, respondent reviewed with Colson the extent of the
evidence against them and made several incriminating statements. In
the last of the recorded conversations, respondent again
incriminated himself [ Footnote 2/1 ]
and Page 474 U. S. 183 referred to statements by witnesses that they had been
threatened. Finally, respondent told Colson that he wanted to meet
to "review the whole plan." Chief Keating and Detective Kelley then
arranged for Colson to wear a body recorder/transmitter during this
meeting. Both officers testified that the recorder was intended to
protect Colson's safety, since respondent might have learned that
Colson was cooperating with the police, as well as to record any
information concerning threats to other witnesses. Colson himself
testified that his understanding of the reasons for using the
recorder were "number 1 . . . my safety" and "number 2 . . . for
any other plans to do away with any of the witnesses." When asked
if there was a "number 3," Colson testified "no." The police
instructed Colson "to act like himself, converse normally, and
avoid trying to draw information out of Moulton." During the
meeting with Colson, respondent, without any prompting, brought up
the possibility of killing Gary Elwell, by means of an air gun with
hollow-tipped darts or explosives. [ Footnote 2/2 ] Respondent also suggested developing false
testimony Page 474 U. S. 184 for presentation at trial. These portions of the transcript were
not admitted into evidence at trial. In addition, there was direct
discussion of the thefts for which respondent had been indicted;
these portions of the transcript were admitted. The trial court
refused to suppress these portions, since the State had recorded
the conversations
"for legitimate purposes not related to the gathering of
evidence concerning the crime for which [respondent] had been
indicted -- i.e., in order to gather information concerning
the anonymous threats that Mr. Colson had been receiving, to
protect Mr. Colson, and to gather information concerning
[respondent's] plans to kill Gary Elwell."
The Maine Supreme Court, in a careful opinion, found "ample
evidence" to support this factual finding. II The Court today concludes that
"[t]o allow the admission of evidence obtained from an accused
in violation of his Sixth Amendment rights whenever the police
assert an alternative, legitimate reason for their surveillance . .
. risks the evisceration of the Sixth Amendment right recognized in Massiah. " Ante at 474 U. S. 180 .
With all deference, I am bound to state that this conclusion turns
the Sixth Amendment on its head by first positing a constitutional
violation and then asking whether "alternative, legitimate reasons"
for the police surveillance are sufficient to justify that
constitutional violation. Page 474 U. S. 185 As I see it, if "alternative, legitimate reasons" motivated the
surveillance, then no Sixth Amendment violation has occurred.
Indeed, if the police had failed to take the steps they took here,
knowing that Colson was endangering his life by talking to them, in
my view, they would be subject to censure. Analysis of this issue
must begin with Hoffa v. United States, 385 U.
S. 293 (1966), not cited in the Court's opinion. In Hoffa, the Court held that postindictment statements
obtained by a Government informant "relat[ing] to the commission of
a quite separate offense," id. at 385 U. S. 308 ,
were properly admitted at a subsequent trial for the separate
crime. Other courts have also held that Massiah, viewed in
light of the later-decided Hoffa case, does not prohibit
the introduction of incriminating statements obtained in good faith
by the Government even after an indictment at a trial involving an
offense different from that covered by the indictment. See,
e.g., Mealer v. Jones, 741 F.2d 1451, 1455 (CA2 1984), cert. denied, 471 U.S. 1006 (1985); United States v.
Lisenby, 716 F.2d 1355, 1357-1359 (CA11 1983) (en banc).
Applying Hoffa to the facts of this case, it is clear that
the statements obtained by Colson could have been introduced
against respondent at a subsequent trial for crimes apart from
those for which respondent had already been indicted, such as
conspiracy to commit murder or to obstruct justice. The majority
concedes as much:
"Incriminating statements pertaining to other crimes, as to
which the Sixth Amendment right has not yet attached, are, of
course, admissible at a trial of those offenses." Ante at 474 U. S. 180 ,
n. 16. It follows from this that the State engaged in no
impermissible conduct in its investigation of respondent based on
Colson's revelations. By recording conversations between respondent
and Colson, Chief Keating and Detective Kelley succeeded in
obtaining evidence that the Court's opinion concedes could have
been used to convict respondent of further crimes. In fact, this
record shows clearly that, based on the recordings, the State Page 474 U. S. 186 was able to obtain additional indictments against respondent for
burglary, arson, and three more thefts. The Court's opinion notes
that respondent pleaded guilty to several of the additional
indictments secured as a result of pursuing Colson's leads. Ante at 474 U. S.
167 .
Courts ought to applaud the kind of careful and diligent efforts
of the police shown by this record. Indeed, the Court's opinion
does not suggest that the police should have -- or could have --
conducted their investigation in any other way. Yet, inexplicably,
the Court holds that the highly probative and reliable evidence
produced by this wholly legitimate investigation must be excluded
from respondent's trial for theft. The anomaly of this position,
then, is that the evidence at issue in this case should have been
excluded from respondent's theft trial even though the same
evidence could have been introduced against respondent
himself at a trial for separate crimes. Far from being "a
sensible solution to a difficult problem," ante at 474 U. S. 179 ,
as the Court modestly suggests, it is a judicial aberration
conferring a windfall benefit to those who are the subject of
criminal investigations for one set of crimes while already under
indictment for another. I can think of no reason to turn the Sixth
Amendment into a "magic cloak," United States v. DeWolf, 696 F.2d 1, 3 (CA1 1982), to protect criminals who engage in
multiple offenses that are the subject of separate police
investigations. We have held that no Sixth Amendment violation
occurs unless the State "deliberately elicit[s]" comments from the
defendant. See Massiah v. United States, 377 U.
S. 201 , 377 U. S. 206 (1964); United States v. Henry, 447 U.
S. 264 , 447 U. S. 270 (1980). As the foregoing amply demonstrates, however, a finding of
"deliberate elicitation" is not the end of the inquiry. In using
the phrase "deliberate elicitation," we surely must have intended
to denote elicitation for the purpose of using such statements
against the defendant in connection with charges for which the
Sixth Amendment right to counsel had attached. Here the State
indeed set out to elicit information Page 474 U. S. 187 from a defendant, but it was an investigation with respect to
crimes other than those for which the defendant then stood
indicted. As two courts found, the State recorded the conversations
" for legitimate purposes not related to the gathering of
evidence concerning the crime for which [respondent] had been
indicted.'" 481 A.2d
155 , 160 (Me.1984) (quoting trial court). No prior holding of
this Court recognizes a Sixth Amendment violation in such
circumstances. As one court has put it, the Sixth
Amendment "speaks only to the situation where, in the absence of retained
counsel, statements are deliberately elicited from a defendant in
connection with a crime for which he has already been
indicted." United States v. Hinton, 543 F.2d 1002, 1015 (CA2), cert. denied sub nom. Carter v. United States, 429 U.S.
980 (1976). [ Footnote 2/3 ] Thus, in United States v. Henry, supra, at 447 U. S. 275 ,
n. 14, we quoted Disciplinary Rule 7-104(A)(1) of the American Bar
Association's Code of Professional Responsibility, which provides
that
"'a lawyer shall not . . . [c]ommunicate or cause another to
communicate on the subject of the representation with
a Page 474 U. S. 188 party he knows to be represented by a lawyer in that
matter.'"
(Emphasis added.) Our reference in Henry to this rule
illustrates that we have framed the Sixth Amendment issue in terms
of whether the State deliberately circumvented counsel with regard
to the "subject of representation." But where, as here, the
incriminating statements are gathered for "an alternative,
legitimate reason," ante at 474 U. S. 180 ,
wholly apart from the pending charges, no such deliberate
circumvention exists. The Court's opinion seems to rest on the
notion that the evidence here is excludable because "the State must have known' that its agent was likely to obtain
incriminating statements from the accused," ante at 474 U. S. 176 ,
n. 12, with respect to the crimes for which he was already
indicted. But the inquiry mandated by our holdings is whether the
State recorded the statements not merely in spite of, but because of that consequence. Cf. Wayte v. United
States, 470 U. S. 598 (1985). If the State is not seeking to elicit information with
respect to the crime for which the defendant is already indicted,
it cannot rationally be said that the State has "planned an
impermissible interference with the right to the assistance of
counsel." Henry, supra, at 447 U. S. 275 .
This case is a particularly inappropriate one for invoking the
right to counsel. The right to counsel recognized in Massiah was designed to preserve the integrity of the
trial. See 377 U.S. at 377 U. S. 204 .
Here respondent was under investigation because of his plans to
obstruct justice by killing an essential witness. There is no right
to consult an attorney for advice on committing crimes. See
United States v. Merritts, 527 F.2d 713, 716 (CA7 1975).
Indeed, any attorney who undertook to offer such advice would
undoubtedly be subject to sanction. Disciplinary Rule 7-102(A)(7)
of the Code of Professional Responsibility, for example, states "a
lawyer shall not . . . [c]ounsel or assist his client in conduct
that the lawyer knows to be illegal or fraudulent." Thus, there is
no warrant for vindicating respondent's right to consult
counsel. Page 474 U. S. 189 An observation of this Court in connection with the
attorney-client evidentiary privilege bears mention here:
"The privilege takes flight if the relation is abused. A client
who consults an attorney for advice that will serve him in the
commission of a fraud will have no help from the law. He must let
the truth be told." Clark v. United States, 289 U. S.
1 , 289 U. S. 15 (1933). I would let the truth be told in this case rather than
exclude evidence that was the product of this police investigation
into activities designed to thwart the judicial process.
Even though the Massiah rule is inapplicable to
situations where the government is gathering information related to
a separate crime, police misconduct need not be countenanced.
Accordingly, evidence obtained through a separate crimes
investigation should be admitted only
"so long as investigating officers show no bad faith and do not
institute the investigation of the separate offense as a pretext
for avoiding the dictates of Massiah. " United States v. Darwin, 757 F.2d 1193, 1199 (CA11
1985). Here, the careful actions of Chief Keating and Detective
Kelley steered well clear of these prohibitions.
Until today, the clearly prevailing view in the federal and
state courts was that Massiah and its successors did not
protect a defendant from the introduction of postindictment
statements deliberately elicited when the police undertook an
investigation of separate crimes. [ Footnote 2/4 ] As two leading commentators have
observed: Page 474 U. S. 190 "Even before [Brewer v.] Williams, [ 430 U.S.
387 (1977),] it was generally accepted that the right to
counsel did not bar contact with the defendant concerning other
offenses, particularly if the offenses were clearly unrelated
and it did not appear the charge was simply a pretext to gain
custody in order to facilitate the investigation. The more recent
cases recognize that [ Massiah and its progeny do] not
confer upon charged defendants immunity from investigation
concerning other crimes. This is especially true when the offense
under investigation is a new or ongoing one, such as illegal
efforts to thwart the forthcoming prosecution."
1 W. LaFave & J. Israel, Criminal Procedure § 6.4, p. 470
(1984) (emphasis added) (footnotes omitted). Rather than expand Massiah beyond boundaries currently recognized, I would
take note of the observation that " Massiah certainly is
the decision in which Sixth Amendment protections have been
extended to their outermost point." Henry, 447 U.S. at 447 U. S. 282 (BLACKMUN, J., dissenting). I would not expand them more and well
beyond the limits of precedent and logic. III Even if I were prepared to join the Court in this enlargement of
the protections of the Sixth Amendment, I would have serious doubts
about also extending the reach of the exclusionary rule to cover
this case.
"Cases involving Sixth Amendment deprivations are subject to the
general rule that Page 474 U. S. 191 remedies should be tailored to the injury suffered from the
constitutional violation, and should not unnecessarily infringe on
competing interests." United States v. Morrison, 449 U.
S. 361 , 449 U. S. 364 (1981). Application of the exclusionary rule here makes little
sense, as demonstrated by "weighing the costs and benefits of
preventing the use in the prosecution's case in chief of inherently
trustworthy tangible evidence." United States v. Leon, 468 U. S. 897 , 468 U. S. 907 (1984). With respect to the costs, applying the rule to cases where
the State deliberately elicits statements from a defendant in the
course of investigating a separate crime excludes evidence that is
"typically reliable and often the most probative information
bearing on the guilt or innocence of the defendant." Stone v.
Powell, 428 U. S. 465 , 428 U. S. 490 (1976). Moreover, because of the trustworthy nature of the
evidence, its admission will not threaten "the fairness of a trial
or . . . the integrity of the factfinding process." Brewer v.
Williams, 430 U. S. 387 , 430 U. S. 414 (1977) (POWELL, J., concurring). Hence, application of the rule to
cases like this one "deflects the truthfinding process," "often
frees the guilty," and may well "generat[e] disrespect for the law
and [the] administration of justice." Stone v. Powell,
supra, at 428 U. S.
490 -491. Against these costs, applying the rule here
appears to create precious little in the way of offsetting
"benefits." Like searches in violation of the Fourth Amendment, the
"wrong" that the Court condemns was "fully accomplished" by the
elicitation of comments from the defendant and "the exclusionary
rule is neither intended nor able to cure the invasion of the
defendant's rights which he has already suffered." Leon,
supra, at 468 U. S. 906 (internal quotation omitted). The application of the exclusionary
rule here must therefore be premised on deterrence of certain types
of conduct by the police. We have explained, however, that
"[t]he deterrent purpose of the exclusionary rule necessarily
assumes that the police have engaged in willful, or at the very
least negligent, conduct which has deprived the defendant of
some Page 474 U. S. 192 right." United States v. Peltier, 422 U.
S. 531 , 422 U. S. 539 (1975). Here the trial court found that the State obtained
statements from respondent "for legitimate purposes not related to
the gathering of evidence concerning the crime for which
[respondent] had been indicted." Since the State was not trying to
build its theft case against respondent in obtaining the evidence,
excluding the evidence from the theft trial will not affect police
behavior at all. The exclusion of evidence "cannot be expected, and
should not be applied, to deter objectively reasonable law
enforcement activity." Leon, supra, at 468 U. S. 919 .
Indeed, as noted above, it is impossible to identify any police
"misconduct" to deter in this case. In fact, if anything, actions
by the police of the type at issue here should be encouraged. The
diligent investigation of the police in this case may have saved
the lives of several potential witnesses, and certainly led to the
prosecution and conviction of respondent for additional serious
crimes. It seems, then, that the Sixth Amendment claims at issue
here "closely parallel claims under the Fourth Amendment," Brewer, supra, at 430 U. S. 414 (POWELL, J., concurring), where we have
found the exclusionary rule to be inapplicable by weighing the
costs and benefits of its applications. See, e.g., United
States v. Leon, supra (exclusionary rule inapplicable where
officers rely in good faith on defective search warrant issued by
neutral magistrate); Stone v. Powell, supra (where full
opportunity to litigate Fourth Amendment issues has been afforded,
such issues may not be raised in a state habeas petition). If
anything, the argument for admission of the evidence here is even
stronger because "[t]his is not a case where . . . the
constable . . . blundered.'" United States v. Henry,
supra, at 447 U. S.
274 -275 (quoting People v. DeFore, 242 N.Y. 13,
21, 150 N.E. 585, 587 (1926) (Cardozo, J.)). Because the Court
today significantly and unjustifiably departs from our prior
holdings, I respectfully dissent. [ Footnote 2/1 ]
Contrary to the Court's assertion that "the conversation ended
without Moulton's having said anything that incriminated him," ante at 474 U. S. 164 ,
Moulton and Colson in fact rehearsed a fabricated story that they
planned to use at trial:
"[Moulton:] The parts I bought. I never denied that. I did buy
those. . . ."
"[Colson:] The [M]ustang . . . same here."
"[Moulton:] And the [M]ustang, we bought that?"
"[Colson:] Yeah."
"[Moulton:] Ok. It's just a coincidence that ah, they happened
to be . . . [h]ot or whatever. . . . You've got a bill of sale for
the Mustang. I got a bill of sale for parts. So, you know, what the
hell? What can they say?"
Exh. S-3, Tr. of Dec. 14 Conversation 4-5.
[ Footnote 2/2 ]
After a break in the conversation, respondent took a deep sigh
and said:
"[Moulton:] You know, I thought of a way to eliminate them.
Remember we were talking about it before?"
"[Colson:] Yes, you thought of a way?"
"[Moulton:] Yeah, but, ah, I don't think we ought to go for it.
. . ."
"[Colson:] Well, let me [hear it]."
"[Moulton:] Well you know those air guns. . . . They make little
darts for those little feather-back darts that you can put in there
--you've seen 'em. Those little darts, those little things about
that long. I [was] thinking just hollow the tip out like a needle
and just put . . . little . . . holes on the side, and you fill it
with a lethal injection and the shooting impact would shoot all the
stuff out of it into . . . the individuals body [and] poison
[th]em. There would be no noise."
"[Colson:] Jesus. . . ."
"[Moulton:] That's the only thing that runs through my brain . .
. you have a puncture wound, probably take about 20 or 30 minutes
to kick off, yeah, and the other problem is the poison, where . . .
are you going to get some poison? Small bottles."
"[Colson:] What was that stuff you told me about once?"
"[Moulton:] Calcium chlorine . . . , yeah, something like that,
just a small drop will make you look like you have a heart attack
and . . . you'd never, never, find it unless you were looking . . .
exactly for that drug. . . . Stops your heart."
Exh. S-4, Tr. of Dec. 26 Meeting 18-20. Moulton then discussed
an alternative scheme for doing away with witnesses, based on
making explosives pursuant to directions contained in a magazine
that one of his "best friends" was sending. Moulton described him
as having belonged to "a motorcycle gang," and also suggested
ominously that he had "[p]robably snuffed one or two people." Id. at 21.
[ Footnote 2/3 ]
The Court's opinion seems to read Massiah as if it
definitively addresses situations where the police are
investigating a separate crime. This reading is belied by the Massiah Court's statement of its own holding:
"We do not question that, in this case, as in many cases, it was
entirely proper to continue an investigation of the suspected
criminal activities of the defendant and his alleged confederates,
even though the defendant had already been indicted. All that we
hold is that the defendant's own incriminating statements, obtained
by federal agents under the circumstances here disclosed, could not constitutionally be used by the prosecution as evidence
against him at his trial." Massiah v. United States, 377 U.
S. 201 , 377 U. S. 207 (1964) (first emphasis added). The reference to the "circumstances
here disclosed" must be to the fact that the Government, far from
pursuing a good faith investigation of different crimes, had
"instructed the informant to engage [Massiah] in conversation
relating to the crimes [for which he had already been indicted]." United States v. Henry, 447 U. S. 264 , 447 U. S. 276 (1980) (POWELL, J., concurring); Brief for Petitioner in Massiah v. United States, O.T. 1963 No.199 P. 4.
[ Footnote 2/4 ] See United States v. DeWolf, 696 F.2d 1, 3 (CA1 1982); Grieco v. Meachum, 533 F.2d 713, 717-718 (CA1 1976), cert. denied sub nom. Cassesso v. Meachum, 429 U.S. 858
(1976); United States v. Hinton, 543 F.2d 1002, 1015
(CA2), cert. denied sub nom. Carter v. United States, 429
U.S. 980 (1976); United States v. Merritts, 527 F.2d 713,
716 (CA7 1975); United States v. Taxe, 540 F.2d 961,
968-969 (CA9 1976), cert. denied, 429 U.S. 1040 (1977); United States v. Darwin, 757 F.2d 1193, 1200 (CA11 1985); Crawford v. State, 377
So. 2d 145 , 156 (Ala.Crim.App.), aff'd, 377 So. 2d
159 (Ala. 1979), vacated and remanded, 448 U.S. 904
(1980); Deskins v. Commonwealth, 512
S.W.2d 520 , 526 (Ky.1974), cert. denied, 419 U.S. 1122
(1975); Hall v. State, 47 Md.App. 590, 596, 425 A.2d 227 , 231 (1981), aff'd, 292 Md. 683, 441 A.2d
708 (1982); People v. Mealer, 57 N.Y.2d 214, 218, 441
N.E.2d 1080, 1082 (1982); People v. Costello, 101
App.Div.2d 244, 247, 476 N.Y.S.2d 210, 212 (1984); Hummel v.
Commonwealth, 219 Va. 252, 257, 247 S.E.2d 385, 388 (1978), cert. denied, 440 U.S. 935 (1979). Cf. United States
v. Moschiano, 695 F.2d 236, 243 (CA7 1982), cert.
denied, 464 U.S. 831 (1983); United States v. Boffa, 89 F.R.D. 523 (Del. 1981). But see Mealer v. Jones, 741
F.2d 1451, 1455 (CA2 1984), cert. denied, 471 U.S. 1006
(1985); State v. Ortiz, 131 Ariz. 195, 202, 639 P.2d 1020 ,
1028 (1981), cert. denied, 456 U.S. 984 (1982). | Here is a summary of the Supreme Court case Maine v. Moulton (1985):
The Supreme Court ruled that the defendant's Sixth Amendment right to counsel was violated when the police obtained incriminating statements from a meeting between the defendant and their codefendant, who was cooperating with the police. The codefendant consented to recording the meeting, which was supposed to be about planning defense strategy for the upcoming trial. However, the codefendant's remarks led the defendant to make incriminating statements, which were later used as evidence against them at trial. The Court held that the right to counsel is not limited to participation in a trial and that depriving a person of counsel during the pre-trial period can be more damaging. As a result, the Court reversed the conviction and remanded the case for a new trial. |
Criminal Trials & Prosecutions | Nix v. Whiteside | https://supreme.justia.com/cases/federal/us/475/157/ | U.S. Supreme Court Nix v. Whiteside, 475
U.S. 157 (1986) Nix v. Whiteside No. 84-1321 Argued November 5,
1985 Decided February 26,
1986 475
U.S. 157 CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE EIGHTH CIRCUIT Syllabus In preparing for his Iowa state court trial on a murder charge,
respondent consistently told his attorney that, although he had not
actually seen a gun in the victim's hand when he stabbed the
victim, he was convinced that the victim had a gun. Respondent's
companions who were present during the stabbing told counsel that
they had not seen a gun, and no gun was found. Counsel advised
respondent that the existence of a gun was not necessary to
establish a claim of self-defense, and that only a reasonable
belief that the victim had a gun nearby was necessary, even though
no gun was actually present. However, during preparation for direct
examination shortly before trial, respondent for the first time
told counsel that he had seen "something metallic" in the victim's
hand. When asked about this, respondent said: "If I don't say I saw
a gun, I'm dead." On respondent's insisting that he would testify
that he saw "something metallic," counsel told him that, if he
testified falsely, it would be counsel's duty to advise the court
that he felt respondent was committing perjury, and that counsel
probably would be allowed to impeach that testimony and would seek
to withdraw from representation if respondent insisted on
committing perjury. Respondent ultimately testified as originally
contemplated, admitting on cross-examination that he had not
actually seen a gun in the victim's hand. After the jury found
respondent guilty, respondent moved for a new trial, claiming that
he had been deprived of a fair trial by counsel's admonitions not
to state that he saw a gun or "something metallic." The court
denied the motion after a hearing, and the Iowa Supreme Court
affirmed the conviction, holding that counsel's actions were not
only permissible, but were required under Iowa law. Respondent then
sought federal habeas corpus relief, alleging that he had been
denied effective assistance of counsel by his attorney's refusal to
allow him to testify as he proposed. The District Court denied
relief, but the Court of Appeals reversed, concluding that an
intent to commit perjury, communicated to counsel, does not alter a
defendant's right to effective assistance of counsel, and that
counsel's threatened violation of his client's confidences violated
the "effective representation" standards set forth in Strickland v. Washington, 466 U.
S. 668 . Page 475 U. S. 158 Held: The Sixth Amendment right of a criminal defendant
to assistance of counsel is not violated when an attorney refuses
to cooperate with the defendant in presenting perjured testimony at
his trial. Pp. 475 U. S.
164 -176.
(a) Strickland v. Washington, supra, held that, to
obtain relief by way of federal habeas corpus on a claim of a
deprivation of effective assistance of counsel under the Sixth
Amendment, the movant must establish both serious attorney error
and prejudice. The Sixth Amendment inquiry is into whether the
attorney's conduct was "reasonably effective." A court must be
careful not to narrow the wide range of attorney conduct acceptable
under the Sixth Amendment so restrictively as to constitutionalize
particular standards of professional conduct, and thereby intrude
into a state's proper authority to define and apply the standards
of professional conduct applicable to those it admits to practice
in its courts. Pp. 475 U. S.
164 -166.
(b) Counsel's conduct here fell within the wide range of
professional responses to threatened client perjury acceptable
under the Sixth Amendment. Counsel's duty of loyalty to, and
advocacy of, the defendant's cause is limited to legitimate, lawful
conduct compatible with the very nature of a trial as a search for
truth. Although counsel must take all reasonable lawful means to
attain his client's objectives, counsel is precluded from taking
steps or in any way assisting the client in presenting false
evidence or otherwise violating the law. Moreover, accepted norms
require that a lawyer disclose his client's perjury and frauds upon
the court. Iowa's Code also expressly permits withdrawal from
representation as an appropriate response of an attorney when the
client threatens to commit perjury. Pp. 475 U. S.
166 -171.
(c) The Court of Appeals' holding is not supported by the
record, since counsel's action, at most, deprived respondent of his
contemplated perjury. Whatever the scope of a constitutional right
to testify, it is elementary that such a right does not extend to
testifying falsely, and the right to counsel includes no right to
have a lawyer who will cooperate with planned perjury. There was no
breach of professional duty in counsel's admonition to respondent
that he would disclose respondent's perjury to the court. Pp. 475 U. S.
171 -175.
(d) As a matter of law, counsel's conduct here cannot establish
the prejudice required for relief under the Strickland inquiry. The "conflict of interests" involved was one imposed on
the attorney by the client's proposal to commit the crime of
fabricating testimony. This is not the kind of conflict of interest
that would render the representation constitutionally infirm. Pp. 475 U. S.
175 -176.
744 F.2d 1323, reversed. Page 475 U. S. 159 BURGER, C.J., delivered the opinion of the Court, in which
WHITE, POWELL, REHNQUIST, and O'CONNOR, JJ., joined. BRENNAN, J.,
filed an opinion concurring in the judgment, post, p. 475 U. S. 176 .
BLACKMUN, J., filed an opinion concurring in the judgment, in which
BRENNAN, MARSHALL, and STEVENS, JJ., joined, post, p. 475 U. S. 177 .
STEVENS, J., filed an opinion concurring in the judgment, post, p. 475 U. S.
190 .
CHIEF JUSTICE BURGER delivered the opinion of the Court.
We granted certiorari to decide whether the Sixth Amendment
right of a criminal defendant to assistance of counsel is violated
when an attorney refuses to cooperate with the defendant in
presenting perjured testimony at his trial. [ Footnote 1 ] Page 475 U. S. 160 I A Whiteside was convicted of second-degree murder by a jury
verdict which was affirmed by the Iowa courts. The killing took
place on February 8, 1977, in Cedar Rapids, Iowa. Whiteside and two
others went to one Calvin Love's apartment late that night, seeking
marihuana. Love was in bed when Whiteside and his companions
arrived; an argument between Whiteside and Love over the marihuana
ensued. At one point, Love directed his girlfriend to get his
"piece," and at another point got up, then returned to his bed.
According to Whiteside's testimony, Love then started to reach
under his pillow and moved toward Whiteside. Whiteside stabbed Love
in the chest, inflicting a fatal wound.
Whiteside was charged with murder, and when counsel was
appointed, he objected to the lawyer initially appointed, claiming
that he felt uncomfortable with a lawyer who had formerly been a
prosecutor. Gary L. Robinson was then appointed, and immediately
began an investigation. Whiteside gave him a statement that he had
stabbed Love as the latter "was pulling a pistol from underneath
the pillow on the bed." Upon questioning by Robinson, however,
Whiteside indicated that he had not actually seen a gun, but that
he was convinced that Love had a gun. No pistol was found on the
premises; shortly after the police search following the stabbing,
which had revealed no weapon, the victim's family had removed all
of the victim's possessions from the apartment. Robinson
interviewed Whiteside's companions who were present during the
stabbing, and none had seen a gun during the incident. Robinson
advised Whiteside that the existence of a gun was not necessary to
establish the claim of self-defense, and that only a reasonable
belief that the victim had a gun nearby was necessary, even though
no gun was actually present.
Until shortly before trial, Whiteside consistently stated to
Robinson that he had not actually seen a gun, but that he was Page 475 U. S. 161 convinced that Love had a gun in his hand. About a week before
trial, during preparation for direct examination, Whiteside for the
first time told Robinson and his associate Donna Paulsen that he
had seen something "metallic" in Love's hand. When asked about
this, Whiteside responded:
"[I]n Howard Cook's case, there was a gun. If I don't say I saw
a gun, I'm dead."
Robinson told Whiteside that such testimony would be perjury,
and repeated that it was not necessary to prove that a gun was
available, but only that Whiteside reasonably believed that he was
in danger. On Whiteside's insisting that he would testify that he
saw "something metallic," Robinson told him, according to
Robinson's testimony:
"[W]e could not allow him to [testify falsely], because that
would be perjury, and, as officers of the court, we would be
suborning perjury if we allowed him to do it; . . . I advised him
that, if he did do that, it would be my duty to advise the Court of
what he was doing, and that I felt he was committing perjury; also,
that I probably would be allowed to attempt to impeach that
particular testimony."
App. to Pet. for Cert. A-85. Robinson also indicated he would
seek to withdraw from the representation if Whiteside insisted on
committing perjury. [ Footnote
2 ]
Whiteside testified in his own defense at trial, and stated that
he "knew" that Love had a gun, and that he believed Love was
reaching for a gun, and he had acted swiftly in self-defense. On
cross-examination, he admitted that he had not Page 475 U. S. 162 actually seen a gun in Love's hand. Robinson presented evidence
that Love had been seen with a sawed-off shotgun on other
occasions, that the police search of the apartment may have been
careless, and that the victim's family had removed everything from
the apartment shortly after the crime. Robinson presented this
evidence to show a basis for Whiteside's asserted fear that Love
had a gun.
The jury returned a verdict of second-degree murder, and
Whiteside moved for a new trial, claiming that he had been deprived
of a fair trial by Robinson's admonitions not to state that he saw
a gun or "something metallic." The trial court held a hearing,
heard testimony by Whiteside and Robinson, and denied the motion.
The trial court made specific findings that the facts were as
related by Robinson.
The Supreme Court of Iowa affirmed respondent's conviction. State v. Whiteside, 272 N.W.2d 468 (1978). That court held that the right to have counsel present all
appropriate defenses does not extend to using perjury, and that an
attorney's duty to a client does not extend to assisting a client
in committing perjury. Relying on DR 7-102(A)(4) of the Iowa Code
of Professional Responsibility for Lawyers, which expressly
prohibits an attorney from using perjured testimony, and Iowa Code
§ 721.2 (now Iowa Code § 720.3 (1985)), which criminalizes
subornation of perjury, the Iowa court concluded that not only were
Robinson's actions permissible, but were required. The court
commended "both Mr. Robinson and Ms. Paulsen for the high ethical
manner in which this matter was handled." B Whiteside then petitioned for a writ of habeas corpus in the
United States District Court for the Southern District of Iowa. In
that petition, Whiteside alleged that he had been denied effective
assistance of counsel and of his right to present a defense by
Robinson's refusal to allow him to testify as he had proposed. The
District Court denied the writ. Accepting the state trial court's
factual finding that Page 475 U. S. 163 Whiteside's intended testimony would have been perjurious, it
concluded that there could be no grounds for habeas relief, since
there is no constitutional right to present a perjured defense.
The United States Court of Appeals for the Eighth Circuit
reversed and directed that the writ of habeas corpus be granted. Whiteside v. Scurr, 744 F.2d 1323 (1984). The Court of
Appeals accepted the findings of the trial judge, affirmed by the
Iowa Supreme Court, that trial counsel believed with good cause
that Whiteside would testify falsely, and acknowledged that, under Harris v. New York, 401 U. S. 222 (1971), a criminal defendant's privilege to testify in his own
behalf does not include a right to commit perjury. Nevertheless,
the court reasoned that an intent to commit perjury, communicated
to counsel, does not alter a defendant's right to effective
assistance of counsel, and that Robinson's admonition to Whiteside
that he would inform the court of Whiteside's perjury constituted a
threat to violate the attorney's duty to preserve client
confidences. [ Footnote 3 ]
According to the Court of Appeals, this threatened violation of
client confidences breached the standards of effective
representation set down in Strickland v. Washington, 466 U. S. 668 (1984). The court also concluded that Strickland's prejudice requirement was satisfied by an implication of prejudice
from the conflict between Robinson's duty of loyalty to his client
and his ethical duties. A petition for rehearing en banc was
denied, with Judges Gibson, Ross, Fagg, and Bowman dissenting. Whiteside v. Scurr, 750 F.2d 713 (1984). We granted
certiorari, 471 U.S. 1014 (1985), and we reverse. Page 475 U. S. 164 II A The right of an accused to testify in his defense is of
relatively recent origin. Until the latter part of the preceding
century, criminal defendants in this country, as at common law,
were considered to be disqualified from giving sworn testimony at
their own trial by reason of their interest as a party to the case. See, e.g., Ferguson v. Georgia, 365 U.
S. 570 (1961); R. Morris, Studies in the History of
American Law 59-60 (2d ed.1959). Iowa was among the states that
adhered to this rule of disqualification. State v. Laffer, 38 Iowa 422 (1874).
By the end of the 19th century, however, the disqualification
was finally abolished by statute in most states and in the federal
courts. Act of Mar. 16, 1878, ch. 37, 20 Stat. 30-31; see Thayer, A Chapter of Legal History in Massachusetts, 9 Harv.L.Rev.
1, 12 (1895). Although this Court has never explicitly held that a
criminal defendant has a due process right to testify in his own
behalf, cases in several Circuits have so held, and the right has
long been assumed. See, e.g., United States v. Curtis, 742
F.2d. 1070, 1076 (CA7 1984); United States v. Bifield, 702
F.2d 342, 349 (CA2), cert. denied, 461 U.S. 931 (1983). We
have also suggested that such a right exists as a corollary to the
Fifth Amendment privilege against compelled testimony, see
Harris v. New York, supra, at 401 U. S. 225 . See also Ferguson, 365 U.S. at 365 U. S.
598 -601 (concurring opinion of Frankfurter, J.); id. at 365 U. S.
601 -603 (concurring opinion of Clark, J.). B In Strickland v. Washington, we held that, to obtain
relief by way of federal habeas corpus on a claim of a deprivation
of effective assistance of counsel under the Sixth Amendment, the
movant must establish both serious attorney error and prejudice. To
show such error, it must be established that the assistance
rendered by counsel was constitutionally deficient Page 475 U. S. 165 in that "counsel made errors so serious that counsel was not
functioning as counsel' guaranteed the defendant by the Sixth
Amendment." Strickland, 466 U.S. at 466 U. S. 687 .
To show prejudice, it must be established that the claimed lapses
in counsel's performance rendered the trial unfair so as to
"undermine confidence in the outcome" of the trial. Id. at 466 U. S.
694 . In Strickland, we acknowledged that the Sixth Amendment
does not require any particular response by counsel to a problem
that may arise. Rather, the Sixth Amendment inquiry is into whether
the attorney's conduct was "reasonably effective." To counteract
the natural tendency to fault an unsuccessful defense, a court
reviewing a claim of ineffective assistance must "indulge a strong
presumption that counsel's conduct falls within the wide range of
reasonable professional assistance." Id. at 466 U. S. 689 .
In giving shape to the perimeters of this range of reasonable
professional assistance, Strickland mandates that
"[p]revailing norms of practice, as reflected in American Bar
Association Standards and the like, . . . are guides to determining
what is reasonable, but they are only guides." Id. at 466 U. S.
688 .
Under the Strickland standard, breach of an ethical
standard does not necessarily make out a denial of the Sixth
Amendment guarantee of assistance of counsel. When examining
attorney conduct, a court must be careful not to narrow the wide
range of conduct acceptable under the Sixth Amendment so
restrictively as to constitutionalize particular standards of
professional conduct, and thereby intrude into the state's proper
authority to define and apply the standards of professional conduct
applicable to those it admits to practice in its courts. In some
future case challenging attorney conduct in the course of a state
court trial, we may need to define with greater precision the
weight to be given to recognized canons of ethics, the standards
established by the state in statutes or professional codes, and the
Sixth Amendment, Page 475 U. S. 166 in defining the proper scope and limits on that conduct. Here,
we need not face that question, since virtually all of the sources
speak with one voice. C We turn next to the question presented: the definition of the
range of "reasonable professional" responses to a criminal
defendant client who informs counsel that he will perjure himself
on the stand. We must determine whether, in this setting,
Robinson's conduct fell within the wide range of professional
responses to threatened client perjury acceptable under the Sixth
Amendment.
In Strickland, we recognized counsel's duty of loyalty
and his "overarching duty to advocate the defendant's cause." Ibid. Plainly, that duty is limited to legitimate, lawful
conduct compatible with the very nature of a trial as a search for
truth. Although counsel must take all reasonable lawful means to
attain the objectives of the client, counsel is precluded from
taking steps or in any way assisting the client in presenting false
evidence or otherwise violating the law. This principle has
consistently been recognized in most unequivocal terms by
expositors of the norms of professional conduct since the first
Canons of Professional Ethics were adopted by the American Bar
Association in 1908. The 1908 Canon 32 provided:
"No client, corporate or individual, however powerful, nor any
cause, civil or political, however important, is entitled to
receive, nor should any lawyer render, any service or advice
involving disloyalty to the law whose ministers we are, or
disrespect of the judicial office, which we are bound to uphold, or
corruption of any person or persons exercising a public office or
private trust, or deception or betrayal of the public. . . . He
must . . . observe and advise his client to observe the statute
law. . . . " Page 475 U. S. 167 Of course, this Canon did no more than articulate centuries of
accepted standards of conduct. Similarly, Canon 37, adopted in
1928, explicitly acknowledges, as an exception to the attorney's
duty of confidentiality, a client's announced intention to commit a
crime:
"The announced intention of a client to commit a crime is not
included within the confidences which [the attorney] is bound to
respect."
These principles have been carried through to contemporary
codifications [ Footnote 4 ] of
an attorney's professional responsibility. Disciplinary Rule 7-102
of the Model Code of Professional Responsibility (1980), entitled
"Representing a Client Within the Bounds of the Law," provides:
"(A) In his representation of a client, a lawyer shall not:"
" * * * *" (4) Knowingly use perjured testimony or false evidence.
" * * * *" (7) Counsel or assist his client in conduct that the lawyer
knows to be illegal or fraudulent. Page 475 U. S. 168 This provision has been adopted by Iowa, and is binding on all
lawyers who appear in its courts. See Iowa Code of
Professional Responsibility for Lawyers (1985). The more recent
Model Rules of Professional Conduct (1983) similarly admonish
attorneys to obey all laws in the course of representing a
client:
" RULE 1.2 Scope of Representation"
" * * * *" "(d) A lawyer shall not counsel a client to engage, or assist a
client, in conduct that the lawyer knows is criminal or fraudulent.
. . ."
Both the Model Code of Professional Responsibility and the Model
Rules of Professional Conduct also adopt the specific exception
from the attorney-client privilege for disclosure of perjury that
his client intends to commit or has committed. DR 4-101(C)(3)
(intention of client to commit a crime); Rule 3.3 (lawyer has duty
to disclose falsity of evidence even if disclosure compromises
client confidences). Indeed, both the Model Code and the Model
Rules do not merely authorize disclosure by counsel of
client perjury; they require such disclosure. See Rule 3.3(a)(4); DR 7-102(B)(1); Committee on Professional
Ethics and Conduct of Iowa State Bar Assn. v.
Crary, 245 N.W.2d 298 (Iowa 1976).
These standards confirm that the legal profession has accepted
that an attorney's ethical duty to advance the interests of his
client is limited by an equally solemn duty to comply with the law
and standards of professional conduct; it specifically ensures that
the client may not use false evidence. [ Footnote 5 ] This special duty of an attorney to prevent
and disclose Page 475 U. S. 169 frauds upon the court derives from the recognition that perjury
is as much a crime as tampering with witnesses or jurors by way of
promises and threats, and undermines the administration of justice. See 1 W. Burdick, Law of Crime §§ 293, 300, 318-336
(1946).
The offense of perjury was a crime recognized at common law, id. at p. 476, and has been made a felony in most states
by statute, including Iowa. Iowa Code § 720.2 (1985). See
generally 4 C. Torcia, Wharton's Criminal Law § 631 (14th
ed.1981). An attorney who aids false testimony by questioning a
witness when perjurious responses can be anticipated risks
prosecution for subornation of perjury under Iowa Code § 720.3
(1985).
It is universally agreed that, at a minimum, the attorney's
first duty when confronted with a proposal for perjurious testimony
is to attempt to dissuade the client from the unlawful course of
conduct. Model Rules of Professional Conduct, Rule 3.3, Comment;
Wolfram, Client Perjury, 50 S. Cal.L.Rev. 809, 846 (1977). A
statement directly in point is found in the commentary to the Model
Rules of Professional Conduct under the heading "False
Evidence":
"When false evidence is offered by the client, however, a
conflict may arise between the lawyer's duty to keep the client's
revelations confidential and the duty of candor to the court. Upon
ascertaining that material evidence is false, the lawyer should
seek to persuade the client that the evidence should not be
offered or, if it has been offered, that its false character
should immediately be disclosed."
Model Rules of Professional Conduct, Rule 3.3, Comment (1983)
(emphasis added). Page 475 U. S. 170 The commentary thus also suggests that an attorney's revelation
of his client's perjury to the court is a professionally
responsible and acceptable response to the conduct of a client who
has actually given perjured testimony. Similarly, the Model Rules
and the commentary, as well as the Code of Professional
Responsibility adopted in Iowa, expressly permit withdrawal from
representation as an appropriate response of an attorney when the
client threatens to commit perjury. Model Rules of Professional
Conduct, Rule 1.16(a)(1), Rule 1.6, Comment (1983); Code of
Professional Responsibility, DR 2-110(B), (C) (1980). Withdrawal of
counsel when this situation arises at trial gives rise to many
difficult questions including possible mistrial and claims of
double jeopardy. [ Footnote
6 ]
The essence of the brief amicus of the American Bar
Association reviewing practices long accepted by ethical
lawyers Page 475 U. S. 171 is that under no circumstance may a lawyer either advocate or
passively tolerate a client's giving false testimony. This, of
course, is consistent with the governance of trial conduct in what
we have long called "a search for truth." The suggestion sometimes
made that "a lawyer must believe his client, not judge him," in no
sense means a lawyer can honorably be a party to or in any way give
aid to presenting known perjury. D Considering Robinson's representation of respondent in light of
these accepted norms of professional conduct, we discern no failure
to adhere to reasonable professional standards that would in any
sense make out a deprivation of the Sixth Amendment right to
counsel. Whether Robinson's conduct is seen as a successful attempt
to dissuade his client from committing the crime of perjury, or
whether seen as a "threat" to withdraw from representation and
disclose the illegal scheme, Robinson's representation of Whiteside
falls well within accepted standards of professional conduct and
the range of reasonable professional conduct acceptable under Strickland. The Court of Appeals assumed for the purpose of the decision
that Whiteside would have given false testimony had counsel not
intervened; its opinion denying a rehearing en banc states:
"[W]e presume that appellant would have testified falsely."
" * * * *" ". . . Counsel's actions prevented [Whiteside] from testifying
falsely. We hold that counsel's action deprived appellant of due
process and effective assistance of counsel."
" * * * *" "Counsel's actions also impermissibly compromised appellant's
right to testify in his own defense by conditioning continued
representation by counsel and confidentiality Page 475 U. S. 172 upon appellant's restricted testimony."
750 F.2d at 714-715. While purporting to follow Iowa's highest
court "on all questions of state law," 744 F.2d at 1330, the Court
of Appeals reached its conclusions on the basis of federal
constitutional due process and right to counsel.
The Court of Appeals' holding that Robinson's "action deprived
[Whiteside] of due process and effective assistance of counsel" is
not supported by the record, since Robinson's action, at most,
deprived Whiteside of his contemplated perjury. Nothing counsel did
in any way undermined Whiteside's claim that he believed the victim
was reaching for a gun. Similarly, the record gives no support for
holding that Robinson's action
"also impermissibly compromised [Whiteside's] right to testify
in his own defense by conditioning continued representation . . .
and confidentiality upon [Whiteside's] restricted testimony."
The record in fact shows the contrary: (a) that Whiteside did
testify, and (b) he was "restricted" or restrained only from
testifying falsely and was aided by Robinson in developing the
basis for the fear that Love was reaching for a gun. Robinson
divulged no client communications until he was compelled to do so
in response to Whiteside's post-trial challenge to the quality of
his performance. We see this as a case in which the attorney
successfully dissuaded the client from committing the crime of
perjury.
Paradoxically, even while accepting the conclusion of the Iowa
trial court that Whiteside's proposed testimony would have been a
criminal act, the Court of Appeals held that Robinson's efforts to
persuade Whiteside not to commit that crime were improper, first,
as forcing an impermissible choice between the right to counsel and
the right to testify; and, second, as compromising client
confidences because of Robinson's threat to disclose the
contemplated perjury. [ Footnote
7 ] Page 475 U. S. 173 Whatever the scope of a constitutional right to testify, it is
elementary that such a right does not extend to testifying falsely. In Harris v. New York, we assumed the
right of an accused to testify "in his own defense, or to refuse to
do so" and went on to hold:
"[T]hat privilege cannot be construed to include the right to
commit perjury. See United States v. Knox, 396 U. S. 77 (1969); cf. Dennis v. United States, 384 U. S.
855 (1966). Having voluntarily taken the stand,
petitioner was under an obligation to speak truthfully. . . ."
401 U.S. at 401 U. S. 225 .
In Harris, we held the defendant could be impeached by
prior contrary statements which had been ruled inadmissible under Miranda v. Arizona, 384 U. S. 436 (1966). Harris and other cases make it crystal clear that
there is no right whatever -- constitutional or otherwise -- for a
defendant to use false evidence. See also United States v.
Havens, 446 U. S. 620 , 446 U. S.
626 -627 (1980).
The paucity of authority on the subject of any such "right" may
be explained by the fact that such a notion has never been
responsibly advanced; the right to counsel includes no right to
have a lawyer who will cooperate with planned perjury. A lawyer who
would so cooperate would be at risk of prosecution for suborning
perjury, and disciplinary proceedings, including suspension or
disbarment.
Robinson's admonitions to his client can in no sense be said to
have forced respondent into an impermissible choice
between his right to counsel and his right to testify as he
proposed, for there was no permissible choice to testify
falsely. For defense counsel to take steps to persuade a criminal
defendant to testify truthfully, or to withdraw, deprives the
defendant of neither his right to counsel nor the right to Page 475 U. S. 174 testify truthfully. In United States v. Havens, supra, we made clear that "when defendants testify, they must testify
truthfully or suffer the consequences." Id. at 446 U. S. 626 .
When an accused proposes to resort to perjury or to produce false
evidence, one consequence is the risk of withdrawal of counsel.
On this record, the accused enjoyed continued representation
within the bounds of reasonable professional conduct, and did in
fact exercise his right to testify; at most, he was denied the
right to have the assistance of counsel in the presentation of
false testimony. Similarly, we can discern no breach of
professional duty in Robinson's admonition to respondent that he
would disclose respondent's perjury to the court. The crime of
perjury in this setting is indistinguishable in substance from the
crime of threatening or tampering with a witness or a juror. A
defendant who informed his counsel that he was arranging to bribe
or threaten witnesses or members of the jury would have no "right"
to insist on counsel's assistance or silence. Counsel would not be
limited to advising against that conduct. An attorney's duty of
confidentiality, which totally covers the client's admission of
guilt, does not extend to a client's announced plans to engage in
future criminal conduct. See Clark v. United States, 289 U. S. 1 , 289 U. S. 15 (1933). In short, the responsibility of an ethical lawyer, as an
officer of the court and a key component of a system of justice,
dedicated to a search for truth, is essentially the same whether
the client announces an intention to bribe or threaten witnesses or
jurors or to commit or procure perjury. No system of justice worthy
of the name can tolerate a lesser standard.
The rule adopted by the Court of Appeals, which seemingly would
require an attorney to remain silent while his client committed
perjury, is wholly incompatible with the established standards of
ethical conduct and the laws of Iowa, and contrary to professional
standards promulgated by that State. The position advocated by
petitioner, on the contrary, Page 475 U. S. 175 is wholly consistent with the Iowa standards of professional
conduct and law, with the overwhelming majority of courts,
[ Footnote 8 ] and with codes of
professional ethics. Since there has been no breach of any
recognized professional duty, it follows that there can be no
deprivation of the right to assistance of counsel under the Strickland standard. E We hold that, as a matter of law, counsel's conduct complained
of here cannot establish the prejudice required for relief under
the second strand of the Strickland inquiry. Although a
defendant need not establish that the attorney's deficient
performance more likely than not altered the outcome in order to
establish prejudice under Strickland, a defendant must
show that "there is a reasonable probability that, but for
counsel's unprofessional errors, the result of the proceeding would
have been different." 466 U.S. at 466 U. S. 694 .
According to Strickland, "[a] reasonable probability is a
probability sufficient to undermine confidence in the outcome." Ibid. The Strickland Court noted that the
"benchmark" of an ineffective assistance claim is the fairness of
the adversary proceeding, and that, in judging prejudice and the
likelihood of a different outcome, "[a] defendant has no
entitlement to the luck of a lawless decisionmaker." Id. at 466 U. S.
695 .
Whether he was persuaded or compelled to desist from perjury,
Whiteside has no valid claim that confidence in the result of his
trial has been diminished by his desisting from the contemplated
perjury. Even if we were to assume that Page 475 U. S. 176 the jury might have believed his perjury, it does not follow
that Whiteside was prejudiced.
In his attempt to evade the prejudice requirement of Strickland, Whiteside relies on cases involving
conflicting loyalties of counsel. In Cuyler v. Sullivan, 446 U. S. 335 (1980), we held that a defendant could obtain relief without
pointing to a specific prejudicial default on the part of his
counsel, provided it is established that the attorney was "actively
represent[ing] conflicting interests." Id. at 446 U. S. 350 .
Here, there was indeed a "conflict," but of a quite different
kind; it was one imposed on the attorney by the client's proposal
to commit the crime of fabricating testimony without which, as he
put it, "I'm dead." This is not remotely the kind of conflict of
interests dealt with in Cuyler v. Sullivan. Even in that
case, we did not suggest that all multiple representations
necessarily resulted in an active conflict rendering the
representation constitutionally infirm. If a "conflict" between a
client's proposal and counsel's ethical obligation gives rise to a
presumption that counsel's assistance was prejudicially
ineffective, every guilty criminal's conviction would be suspect if
the defendant had sought to obtain an acquittal by illegal means.
Can anyone doubt what practices and problems would be spawned by
such a rule, and what volumes of litigation it would generate?
Whiteside's attorney treated Whiteside's proposed perjury in
accord with professional standards, and since Whiteside's truthful
testimony could not have prejudiced the result of his trial, the
Court of Appeals was in error to direct the issuance of a writ of
habeas corpus, and must be reversed. Reversed. [ Footnote 1 ]
Although courts universally condemn an attorney's assisting in
presenting perjury, Courts of Appeals have taken varying approaches
on how to deal with a client's insistence on presenting perjured
testimony. The Seventh Circuit, for example, has held that an
attorney's refusal to call the defendant as a witness did not
render the conviction constitutionally infirm where the refusal to
call the defendant was based on the attorney's belief that the
defendant would commit perjury. United States v. Curtis, 742 F.2d 1070 (1984). The Third Circuit found a violation of the
Sixth Amendment where the attorney could not state any basis for
her belief that defendant's proposed alibi testimony was perjured. United States ex rel. Wilcox v. Johnson, 555 F.2d 115
(1977). See also Lowery v. Cardwell, 575 F.2d 727 (CA9
1978) (withdrawal request in the middle of a bench trial,
immediately following defendant's testimony).
[ Footnote 2 ]
Whiteside's version of the events at this pretrial meeting is
considerably more cryptic:
"Q. And as you went over the questions, did the two of you come
into conflict with regard to whether or not there was a
weapon?"
"A. I couldn't -- I couldn't say a conflict. But I got the
impression at one time that maybe, if I didn't go along with --
with what was happening, that it was no gun being involved, maybe
that he will pull out of my trial."
App. to Pet. for Cert. A-70.
[ Footnote 3 ]
The Court of Appeals agreed with the District Court's finding
that respondent properly exhausted his claims in state court.
Although respondent had pressed his claim before the Supreme Court
of Iowa as a denial of his due process right to a fair trial, and
not as a denial of his Sixth Amendment right to counsel, the Court
of Appeals accepted the District Court's conclusion that the Sixth
Amendment claim was exhausted, since further proceedings would be
futile.
[ Footnote 4 ]
There currently exist two different codifications of uniform
standards of professional conduct. The Model Code of Professional
Responsibility was originally adopted by the American Bar
Association in 1969, and was subsequently adopted (in many cases
with modification) by nearly every state. The more recent Model
Rules of Professional Conduct were adopted by the American Bar
Association in 1983. Since their promulgation by the American Bar
Association, the Model Rules have been adopted by 11 States:
Arizona, Arkansas, Delaware, Minnesota, Missouri, Montana, Nevada,
New Hampshire, New Jersey, North Carolina, and Washington. See 1 ABA/BNA Lawyers' Manual on Professional Conduct 334
(1984-1986) (New Jersey); id. at 446 (Arizona); id. at 855 (Montana, Minnesota); id. at 924
(Missouri); id. at 961 (Delaware, Washington); id. at 1026 (North Carolina); id. at 1127
(Arkansas); 2 id. at 14 (1986) (New Hampshire, Nevada).
Iowa is one of the States that adopted a form of the Model Code of
Professional Responsibility, but has yet to adopt the Model Rules. See Iowa Code of Professional Responsibility for Lawyers
(1985).
[ Footnote 5 ]
The brief of amicus American Bar Association, which
supports petitioner, makes this point, referring to the history of
codes of professional conduct which it has promulgated. The
preamble to the most current version of the ethical standards
recognizes the difficult choices that may confront an attorney who
is sensitive to his concurrent duties to his client and to the
legal system:
"Within the framework of these Rules, many difficult issues of
professional discretion can arise. Such issues must be resolved
through the exercise of sensitive professional and moral judgment
guided by the basic principles underlying the Rules."
Preamble, Model Rules of Professional Conduct, p. 10 (1983).
[ Footnote 6 ]
In the evolution of the contemporary standards promulgated by
the American Bar Association, an early draft reflects a compromise
suggesting that, when the disclosure of intended perjury is made
during the course of trial, when withdrawal of counsel would raise
difficult questions of a mistrial holding, counsel had the option
to let the defendant take the stand but decline to affirmatively
assist the presentation of perjury by traditional direct
examination. Instead, counsel would stand mute while the defendant
undertook to present the false version in narrative form in his own
words, unaided by any direct examination. This conduct was thought
to be a signal at least to the presiding judge that the attorney
considered the testimony to be false and was seeking to
disassociate himself from that course. Additionally, counsel would
not be permitted to discuss the known false testimony in closing
arguments. See ABA Standards for Criminal Justice,
Proposed Standard 4-7.7 (2d ed.1980). Most courts treating the
subject rejected this approach and insisted on a more rigorous
standard, see, e.g., United States v. Curtis, 742 F.2d
1070 (CA7 1984); McKissick v. United States, 379 F.2d 754
(CA5 1967); Dodd v. Florida Bar, 118 So. 2d
17 , 19 (Fla.1960). The Eighth Circuit in this case and the
Ninth Circuit have expressed approval of the "free narrative"
standards. Whiteside v. Scurr, 744 F.2d 1323, 1331 (CA8
1984); Lowery v. Cardwell, 575 F.2d 727 (CA9 1978).
The Rule finally promulgated in the current Model Rules of
Professional Conduct rejects any participation or passive role
whatever by counsel in allowing perjury to be presented without
challenge.
[ Footnote 7 ]
The Court of Appeals also determined that Robinson's efforts to
persuade Whiteside to testify truthfully constituted an
impermissible threat to testify against his own client. We find no
support for a threat to testify against Whiteside while he was
acting as counsel. The record reflects testimony by Robinson that
he had admonished Whiteside that, if he withdrew he "probably would
be allowed to attempt to impeach that particular testimony," if
Whiteside testified falsely. The trial court accepted this version
of the conversation as true.
[ Footnote 8 ] See United States v. Curtis, 742 F.2d 1070 (CA7 1984); Committee on Professional Ethics v. Crary, 245 N.W.2d 298 (Iowa 1976); State v. Robinson, 290 N.C. 56, 224 S.E.2d
174 (1976); Thornton v. United States, 357
A.2d 429 (D.C.1976); State v. Henderson, 205 Kan. 231, 468 P.2d 136 (1970); McKissick v. United States, 379 F.2d 754 (CA5
1967); In re King, 7 Utah 2d 258, 322 P.2d 1095 (1958); In re Carroll, 244
S.W.2d 474 (Ky.1951); Hinds v. State
Bar, 19 Cal. 2d 87 ,
119 P.2d 134 (1941). Contra, Whiteside v. Scurr, 744 F.2d
1323 (CA8 1984) (case below); Lowery v. Cardwell, 575 F.2d
727 (CA9 1978).
JUSTICE BRENNAN, concurring in the judgment.
This Court has no constitutional authority to establish rules of
ethical conduct for lawyers practicing in the state courts. Nor
does the Court enjoy any statutory grant of jurisdiction over legal
ethics. Page 475 U. S. 177 Accordingly, it is not surprising that the Court emphasizes that
it
"must be careful not to narrow the wide range of conduct
acceptable under the Sixth Amendment so restrictively as to
constitutionalize particular standards of professional conduct and
thereby intrude into the state's proper authority to define and
apply the standards of professional conduct applicable to those it
admits to practice in its courts." Ante at 475 U. S. 165 .
I read this as saying in another way that the Court cannot tell the States or the lawyers in the States how to behave in their
courts unless and until federal rights are violated.
Unfortunately, the Court seems unable to resist the temptation
of sharing with the legal community its vision of ethical conduct.
But let there be no mistake: the Court's essay regarding what
constitutes the correct response to a criminal client's suggestion
that he will perjure himself is pure discourse without force of
law. As JUSTICE BLACKMUN observes, that issue is a thorny
one, post at 475 U. S.
177 -178, but it is not an issue presented by this case.
Lawyers, judges, bar associations, students, and others should
understand that the problem has not now been "decided."
I join JUSTICE BLACKMUN's concurrence because I agree that
respondent has failed to prove the kind of prejudice necessary to
make out a claim under Strickland v. Washington, 466 U. S. 668 (1984).
JUSTICE BLACKMUN, with whom JUSTICE BRENNAN, JUSTICE MARSHALL,
and JUSTICE STEVENS join, concurring in the judgment.
How a defense attorney ought to act when faced with a client who
intends to commit perjury at trial has long been a controversial
issue. [ Footnote 2/1 ] But I do not
believe that a federal Page 475 U. S. 178 habeas corpus case challenging a state criminal conviction is an
appropriate vehicle for attempting to resolve this thorny problem.
When a defendant argues that he was denied effective assistance of
counsel because his lawyer dissuaded him from committing perjury,
the only question properly presented to this Court is whether the
lawyer's actions deprived the defendant of the fair trial which the
Sixth Amendment is meant to guarantee. Since I believe that the
respondent in this case suffered no injury justifying federal
habeas relief, I concur in the Court's judgment. I On February 7, 1977, Emmanual Charles Whiteside stabbed Calvin
Love to death. At trial, Whiteside claimed self-defense. On direct
examination, he testified that Love's bedroom, where the stabbing
had occurred, was "[v]ery much dark," App. 48, and that he had
stabbed Love during an argument because he believed that Love was
about to attack him with a weapon:
"Q. Did you think that Calvin had a gun?"
"A. Most definitely I thought that."
"Q. Why did you think that?"
"A. Because of Calvin's reputation, his brother's reputation,
because of the prior conversation that Calvin and I had, I didn't
have no other choice but to think he had a gun. And when he told
his girl friend to give him his piece, I couldn't retreat." Id. at 50. Whiteside's testimony was consistent with
that of other witnesses who testified that the room was dark, and
that Love Page 475 U. S. 179 had asked his girlfriend to get his "piece" (which they all
believed referred to a weapon). See, e.g., id. at 17-18,
20, 36-37, and 42-45. No gun, however, was ever found.
Whiteside, who had been charged with first-degree murder, was
convicted of second-degree murder, and sentenced to 40 years'
imprisonment. He moved for a new trial, contending that his
court-appointed attorneys, Gary Robinson and Donna Paulsen, had
improperly coerced his testimony. Whiteside now claimed that he had
been a gun, but had been prevented from testifying to this
fact.
At an evidentiary hearing on this motion, Whiteside testified
that he had told Robinson at their first meeting that he had seen a
weapon in Love's hand. Some weeks later, Robinson informed
Whiteside that the weapon could not be found and, according to
Whiteside, told him to say only that he thought he had seen a gun,
rather than that he in fact had seen one. Whiteside
"got the impression at one time that maybe if I didn't go along
with -- with what was happening, that it was no gun being involved,
maybe that he will pull out of my trial."
App. to Pet. for Cert. A70.
Robinson's testimony contradicted Whiteside's. According to
Robinson, Whiteside did not initially claim to have seen a gun, but
rather claimed only that he was convinced Love had had one. Roughly
a week before the trial, however, in the course of reviewing
Whiteside's testimony, Whiteside "made reference to seeing
something metallic'. . . . I don't think he ever did say a
gun." Id. at A85: "And at the end, Donna asked him about that, because that was
the first time it had ever been mentioned either to her or to
myself. His response to that was, 'in Howard Cook's case, there was
a gun. If I don't say I saw a gun, I'm dead.' I explained to him at
that time that it was not necessary that the gun be physically
present for self-defense, one; two, that to say that would be
perjury on his part, because he had never at any time indicated
that there was a gun . . . ; three, that we could not allow Page 475 U. S. 180 him to do that . . . ; four, I advised him that, if he did do
that, it would be my duty to advise the Court of what he was doing
. . . ; also, that I probably would be allowed to attempt to
impeach that particular testimony. I told him that there was no
need for him to lie about what had happened, that he had a good and
valid defense on the facts as he had related them to us, and we
felt we could present a good self-defense case on the facts he had
stated to us." Ibid. Robinson acknowledged that Whiteside's claim of self-defense
would have been stronger had the gun been found, but explained
that, at trial, "we tried to create a gun," through testimony from
people who had seen Love carrying a gun on other occasions, through
a stipulation that Love had been convicted of possession of a
weapon, and through suggestions made during cross-examination of
the State's witnesses that the initial police search had been too
cursory to discover the weapon, and that Love's girlfriend had
removed it from the apartment prior to a second, more thorough,
search. Id. at A87-A88.
The trial court rejected Whiteside's motion for a new trial,
"find[ing] the facts to be as testified to by Ms. Paulsen and Mr.
Robinson." App. 57. The Iowa Supreme Court affirmed. State v.
Whiteside, 272 N.W.2d 468 (1978).
Whiteside then sought federal habeas relief in the United States
District Court for the Southern District of Iowa. The parties
agreed to rest on the record made in the state court proceedings.
Chief Judge Stuart held that the trial judge's factual finding that
Whiteside would have committed perjury had he testified at trial
actually to having seen a gun was fairly supported by the record,
and thus entitled to a presumption of correctness. See 28
U.S.C. § 2254(d). Since Whiteside had no constitutional right to
perjure himself, he had been denied neither a fair trial nor
effective assistance of counsel. App. to Pet. for Cert. A41. Page 475 U. S. 181 The Court of Appeals for the Eighth Circuit reversed. Whiteside v. Scurr, 744 F.2d 1323 (1984). The court
recognized that the issue before it was not whether Robinson had
behaved ethically, [ Footnote 2/2 ]
but rather whether Whiteside had been deprived of effective
assistance of counsel. Id. at 1330. In the Court of
Appeals' view, Robinson had breached the obligations of
confidentiality and zealous advocacy imposed on defense counsel by
the Sixth Amendment. In addition, the Court of Appeals concluded
that Robinson's actions impermissibly compromised Whiteside's
constitutional right to testify in his own behalf by conditioning
continued representation and confidentiality on Whiteside's
limiting his testimony.
The court recognized that, under Strickland v.
Washington, 466 U. S. 668 (1984), a defendant must normally demonstrate both that his
attorney's behavior was professionally unreasonable and that he was
prejudiced by his attorney's unprofessional behavior. But it noted
that Strickland v. Washington had recognized a "limited"
presumption of prejudice when counsel is burdened by an actual
conflict of interest that adversely affects his performance, see id. at 466 U. S. 692 ,
quoting Cuyler v. Sullivan, 446 U.
S. 335 , 446 U. S. 348 , 446 U. S. 350 (1980). Here, Whiteside had shown that Robinson's obligations under
the Iowa Code of Professional Responsibility conflicted with his
client's wishes, and his threat to testify against Whiteside had
adversely affected Whiteside by "undermin[ing] the fundamental Page 475 U. S. 182 trust between lawyer and client" necessary for effective
representation. 744 F.2d at 1330.
Petitioner's motion for rehearing en banc was denied by a vote
of 5 to 4. Whiteside v. Scurr, 750 F.2d 713 (CA8 1984). In
dissent, Judge John R. Gibson, joined by Judges Ross, Fagg, and
Bowman, argued that Whiteside had failed to show cognizable
prejudice. Cuyler v. Sullivan was inapposite, both because
finding a conflict of interest required making the untenable
assumption that Whiteside possessed the right to testify falsely
and because Robinson's threat had had no adverse effect on the
trial, since Whiteside testified fully in his defense. Moreover,
the result of the proceeding should not have been different had
Whiteside been permitted to testify as he wished.
A separate dissent by Judge Fagg, joined by Judges Ross, John R.
Gibson, and Bowman, addressed the performance prong of Strickland. Robinson's admonition to Whiteside to testify
truthfully simply could not be viewed as creating a conflict of
interest; Robinson presented a full and zealous defense at trial;
and, although Robinson's warning to Whiteside may have been
"strident," 750 F.2d at 718, he had communicated with his client in
a manner the client understood. II A The District Court found that the trial judge's statement that
"I find the facts to be as testified to by Ms. Paulsen and Mr.
Robinson" was a factual finding that Whiteside "would have perjured
himself if he had testified at trial that he actually saw a gun in
his victim's hand." App. to Pet. for Cert. A42. This factual
finding by the state court is entitled to a presumption of
correctness under 28 U.S.C. § 2254(d), which Whiteside has not
overcome.
Respondent has never attempted to rebut the presumption by
claiming that the factfinding procedure employed by Iowa in
considering new trial motions in any sense deprived him of Page 475 U. S. 183 a full and fair hearing or failed to provide a sufficient basis
for denying his motion. [ Footnote
2/3 ] Although respondent's argument to this Court in large part
assumes that the precluded testimony would have been false, see Brief for Respondent 10-11, he contends, first, that
the record does not fairly support the conclusion that he intended
to perjure himself because he claimed in his first written
statement that Love had been pulling a pistol from under a pillow
at the time of the stabbing, see App. 55, and, second,
that whether Robinson had sufficient knowledge to conclude he was
going to commit perjury was a mixed question of law and fact to
which the presumption of correctness does not apply.
Neither contention overcomes the presumption of correctness due
the state court's finding. First, the trial judge's implicit
decision not to credit the written statement is fairly supported by
Robinson's testimony that the written statement had not been
prepared by Whiteside alone, and that, from the time of their
initial meeting until the week before trial, Whiteside never again
claimed to have seen a gun. See App. to Pet. for Cert.
A78-A79. Second, the finding properly accorded a presumption of
correctness by the courts below was that Whiteside's "proposed
testimony would [have Page 475 U. S. 184 been] deliberately untruthful." State v. Whiteside, 272
N.W.2d at 471. The lower courts did not purport to presume the
correctness of the Iowa Supreme Court's holding concerning the
mixed question respondent identifies -- whether Robinson's response
to Whiteside's proposed testimony deprived Whiteside of effective
representation. B The Court approaches this case as if the
performance-and-prejudice standard requires us in every case to
determine "the perimeters of [the] range of reasonable professional
assistance," ante at 475 U. S. 165 ,
but Strickland v. Washington explicitly contemplates a
different course:
"Although we have discussed the performance component of an
ineffectiveness claim prior to the prejudice component, there is no
reason for a court deciding an ineffective assistance claim to
approach the inquiry in the same order, or even to address both
components of the inquiry if the defendant makes an insufficient
showing on one. In particular, a court need not determine whether
counsel's performance was deficient before examining the prejudice
suffered by the defendant as a result of the alleged deficiencies.
. . . If it is easier to dispose of an ineffectiveness claim on the
ground of lack of sufficient prejudice, which we expect will often
be so, that course should be followed."
466 U.S. at 466 U. S. 697 . See also Hill v. Lockhart, 474 U. S.
52 , 474 U. S. 60 (1985). In this case, respondent has failed to show any legally
cognizable prejudice. Nor, as is discussed below, is this a case in
which prejudice should be presumed.
The touchstone of a claim of prejudice is an allegation that
counsel's behavior did something "to deprive the defendant of a
fair trial, a trial whose result is reliable." Strickland v.
Washington, 466 U.S. at 466 U. S. 687 .
The only effect Robinson's threat had on Whiteside's trial is that
Whiteside did not Page 475 U. S. 185 testify, falsely, that he saw a gun in Love's hand. [ Footnote 2/4 ] Thus, this Court must ask
whether its confidence in the outcome of Whiteside's trial is in
any way undermined by the knowledge that he refrained from
presenting false testimony. See id. at 466 U. S.
694 .
This Court long ago noted:
"All perjured relevant testimony is at war with justice, since
it may produce a judgment not resting on truth. Therefore it cannot
be denied that it tends to defeat the sole ultimate objective of a
trial." In re Michael, 326 U. S. 224 , 326 U. S. 227 (1945). When the Court has been faced with a claim by a defendant
concerning prosecutorial use of such evidence, it has
"consistently held that a conviction obtained by the knowing use
of perjured testimony is fundamentally unfair, and must be set
aside if there is any reasonable likelihood that the false
testimony could have affected the judgment of the jury"
(footnote omitted). United States v. Agurs, 427 U. S. 97 , 427 U. S. 103 (1976). See also e.g., Napue v. Illinois, 360 U.
S. 264 , 360 U. S. 269 (1959); Pyle v. Kansas, 317 U. S. 213 , 317 U. S. 216 (1942); Mooney v. Holohan, 294 U.
S. 103 , 294 U. S. 112 (1935). Similarly, the Court has viewed a defendant's use of such
testimony as so antithetical to our system of justice that it has
permitted the prosecution to introduce otherwise inadmissible
evidence to combat it. See, e.g., United States v. Havens, 446 U. S. 620 , 446 U. S.
626 -627 (1980); Oregon v. Hass, 420 U.
S. 714 , 420 U. S.
720 -723 (1975); Harris v. New York, 401 U. S. 222 , 401 U. S.
225 -226 (1971); Walder v. United States, 347 U. S. 62 , 347 U. S. 65 (1954). The proposition that presenting false evidence could
contribute to (or that withholding such evidence could detract
from) the reliability of a criminal trial is simply untenable. Page 475 U. S. 186 It is no doubt true that juries sometimes have acquitted
defendants who should have been convicted, and sometimes have based
their decisions to acquit on the testimony of defendants who lied
on the witness stand. It is also true that the Double Jeopardy
Clause bars the reprosecution of such acquitted defendants,
although on occasion they can be prosecuted for perjury. See,
e.g., United States v. Williams, 341 U. S.
58 , 341 U. S. 63 -65
(1951). But the privilege every criminal defendant has to testify
in his own defense "cannot be construed to include the right to
commit perjury." Harris v. New York, 401 U.S. at 401 U. S. 225 .
[ Footnote 2/5 ] To the extent that
Whiteside's claim rests on the assertion that he would have been
acquitted had he been able to testify falsely, Whiteside claims a
right the law simply does not recognize. "A defendant has no
entitlement to the luck of a lawless decisionmaker, even if a
lawless decision cannot be reviewed." Strickland v.
Washington, 466 U.S. at 466 U. S. 695 .
Since Whiteside was deprived of neither a fair trial nor any of the
specific constitutional Page 475 U. S. 187 rights designed to guarantee a fair trial, he has suffered no
prejudice.
The Court of Appeals erred in concluding that prejudice should
have been presumed. Strickland v. Washington found such a
presumption appropriate in a case where an attorney labored under
" an actual conflict of interest [that] adversely affected his .
. . performance,'" id. at 466 U. S. 692 ,
quoting Cuyler v. Sullivan, 446 U.S. at 446 U. S. 348 .
In this case, however, no actual conflict existed. I have already
discussed why Whiteside had no right to Robinson's help in
presenting perjured testimony. Moreover, Whiteside has identified
no right to insist that Robinson keep confidential a plan to commit
perjury. See Committee on Professional Ethics and Conduct of
Iowa State Bar Assn. v. Crary, 245 N.W.2d
298 , 306 (Iowa 1976). The prior cases where this Court has
reversed convictions involved conflicts that infringed a
defendant's legitimate interest in vigorous protection of his
constitutional rights. See, e.g., Wood v. Georgia, 450 U. S. 261 , 450 U. S.
268 -271 (1981) (defense attorney paid by defendants'
employer might have pursued employer's interest in litigating a
test case rather than obtaining leniency for his clients by
cooperating with prosecution); Glasser v. United States, 315 U. S. 60 , 315 U. S. 72 -75
(1942) (defense attorney who simultaneously represented two
defendants failed to object to certain potentially inadmissible
evidence or to cross-examine a prosecution witness in an apparent
attempt to minimize one codefendant's guilt). Here, Whiteside had
no legitimate interest that conflicted with Robinson's obligations
not to suborn perjury and to adhere to the Iowa Code of
Professional Responsibility. In addition, the lawyer's interest in not presenting perjured
testimony was entirely consistent with Whiteside's best interest.
If Whiteside had lied on the stand, he would have risked a future
perjury prosecution. Moreover, his testimony would have been
contradicted by the testimony of other eyewitnesses and by the fact
that no gun was ever found. In light of that impeachment, the jury
might have Page 475 U. S. 188 concluded that Whiteside lied as well about his lack of
premeditation, and thus might have convicted him of first-degree
murder. And if the judge believed that Whiteside had lied, he could
have taken Whiteside's perjury into account in setting the
sentence. United States v. Grayson, 438 U. S.
41 , 438 U. S. 52 -54
(1978). [ Footnote 2/6 ] In the face
of these dangers, an attorney could reasonably conclude that
dissuading his client from committing perjury was in the client's
best interest, and comported with standards of professional
responsibility. [ Footnote 2/7 ] In
short, Whiteside failed to show the kind of conflict that poses a
danger to the values of zealous and loyal representation embodied
in the Sixth Amendment. A presumption of prejudice is therefore
unwarranted. C In light of respondent's failure to show any cognizable
prejudice, I see no need to "grade counsel's performance." Strickland v. Washington, 466 U.S. at 466 U. S. 697 .
The only federal issue in this case is whether Robinson's behavior
deprived Whiteside of the effective assistance of counsel; it is
not whether Robinson's behavior conformed to any particular code of
legal ethics.
Whether an attorney's response to what he sees as a client's
plan to commit perjury violates a defendant's Sixth Amendment
rights may depend on many factors: how certain the attorney is that
the proposed testimony is false, the stage Page 475 U. S. 189 of the proceedings at which the attorney discovers the plan, or
the ways in which the attorney may be able to dissuade his client,
to name just three. The complex interaction of factors, which is
likely to vary from case to case, makes inappropriate a blanket
rule that defense attorneys must reveal, or threaten to reveal, a
client's anticipated perjury to the court. Except in the rarest of
cases, attorneys who adopt "the role of the judge or jury to
determine the facts," United States ex rel. Wilcox v.
Johnson, 565 F.2d 115, 122 (CA3 1977), pose a danger of
depriving their clients of the zealous and loyal advocacy required
by the Sixth Amendment. [ Footnote
2/8 ]
I therefore am troubled by the Court's implicit adoption of a
set of standards of professional responsibility for attorneys in
state criminal proceedings. See ante at 475 U. S.
168 -171. The States, of course, do have a compelling
interest in the integrity of their criminal trials that can justify
regulating the length to which an attorney may go in seeking his
client's acquittal. But the American Bar Association's implicit
suggestion in its brief amicus curiae that the Court find
that the Association's Model Rules of Professional Conduct should
govern an attorney's responsibilities is addressed to the wrong
audience. It is for the States to decide how attorneys should
conduct themselves in state criminal proceedings, and Page 475 U. S. 190 this Court's responsibility extends only to ensuring that the
restrictions a State enacts do not infringe a defendant's federal
constitutional rights. Thus, I would follow the suggestion made in
the joint brief amici curiae filed by 37 States at the
certiorari stage that we allow the States to maintain their
"differing approaches" to a complex ethical question. Brief for
State of Indiana et al. as Amici Curiae 5. The
signal merit of asking first whether a defendant has shown any
adverse prejudicial effect before inquiring into his attorney's
performance is that it avoids unnecessary federal interference in a
State's regulation of its bar. Because I conclude that the
respondent in this case failed to show such an effect, I join the
Court's judgment that he is not entitled to federal habeas
relief.
[ Footnote 2/1 ] See, e.g., Callan & David, Professional
Responsibility and the Duty of Confidentiality: Disclosure of
Client Misconduct in an Adversary System, 29 Rutgers L.Rev. 332
(1976); Rieger, Client Perjury: A Proposed Resolution of the
Constitutional and Ethical Issues, 70 Minn.L.Rev. 121 (1985); compare, e.g., Freedman, Professional Responsibility of
the Criminal Defense Lawyer: The Three Hardest Questions, 64
Mich.L.Rev. 1469 (1966), and ABA Standards for Criminal Justice,
Proposed Standard 4-7.7 (2d ed.1980) (approved by the Standing
Committee on Association Standards for Criminal Justice, but not
yet submitted to the House of Delegates), with Noonan, The
Purposes of Advocacy and the Limits of Confidentiality, 64
Mich.L.Rev. 1486 (1966), and ABA Model Rules of Professional
Conduct, Rule 3.3 and comment, at 66-67 (1983).
[ Footnote 2/2 ]
The court stated:
"That question is governed solely by the Iowa Code of
Professional Responsibility, as it was in effect at the time of the
trial in this case, and as it has been authoritatively interpreted
by the Supreme Court of Iowa. The Supreme Court of Iowa is the last
word on all questions of state law, and the Code of Professional
Responsibility is a species of state law."
744 F.2d at 1330. Thus, the court declined to address the
question whether Robinson's actions were either compelled or
condoned by Iowa law.
[ Footnote 2/3 ]
Whiteside's motion for a new trial rested on his recantation of
his testimony at trial. As a matter of Iowa law, when a trial judge
is faced with a motion for a new trial based on a witness'
recantation of his trial testimony, the judge must decide whether
the recantation is believable:
"The trial court is not required to believe the recantation, but
must make its decision on the basis of the whole trial and the
matters presented on the hearing on the motion. Premised thereon,
if it believes the [post-conviction] statements . . . are false,
and is not reasonably well satisfied that the testimony given by
the witness on the trial was false, it should deny the motion, and
it is not at liberty to shift upon the shoulders of another jury
the responsibility to seek out the truth of that matter." State v. Compiano, 261 Iowa 509, 517, 154 N.W.2d 845 ,
849 (1967). See also, e.g., State v.
Taylor, 287 N.W.2d 576 ,
578 (Iowa 1980); State v. McGhee, 280 N.W.2d 436 ,
442 (Iowa 1979), cert. denied, 444 U.S. 1039 (1980); cf. United States v. Johnson, 327 U.
S. 106 , 327 U. S.
110 -111 (1946).
[ Footnote 2/4 ]
This is not to say that a lawyer's threat to reveal his client's
confidences may never have other effects on a defendant's trial. Cf. United States ex rel. Wilcox v. Johnson, 666 F.2d 116
(CA3 1977) (finding a violation of Sixth Amendment when an
attorney's threat to reveal client's purported perjury caused
defendant not to take the stand at all).
[ Footnote 2/5 ]
Whiteside was not deprived of the right to testify in his own
defense, since no suggestion has been made that Whiteside's
testimony was restricted in any way beyond the fact that he did not
claim, falsely, to have seen a gun in Love's hand.
I must confess that I am somewhat puzzled by the Court's
implicit suggestion that whether a defendant has a constitutional
right to testify in his own defense remains an open question. Ante at 475 U. S. 164 .
It is true that, in Ferguson v. Georgia, 365 U.
S. 570 (1961), the Court expressly declined to address
the question of a defendant's constitutional right to testify, but
that was because the case did not properly raise the issue. Id. at 365 U. S. 572 ,
n. 1. Since then, the Court repeatedly has referred to the
existence of such a right. See, e.g., Jones v. Barnes, 463 U. S. 745 , 463 U. S. 751 (1983) (the defendant has the "ultimate authority to make certain
fundamental decisions regarding the case, [such as] . . . whether
to . . . testify in his or her own behalf"); Brooks v.
Tennessee, 406 U. S. 605 , 406 U. S. 612 (1972) ("Whether the defendant is to testify is an important
tactical decision as well as a matter of constitutional right"); Harris v. New York. I cannot imagine that, if we were
presented with a state statute that prohibited a defendant from
testifying at his own trial, we would not rule that it violates
both the Sixth and Fourteenth Amendments, as well as, perhaps, the
Fifth.
[ Footnote 2/6 ]
In fact, the State apparently asked the trial court to impose a
sentence of 75 years, see Tr. 4 (Aug. 26, 1977), but the
judge sentenced Whiteside to 40 years' imprisonment instead.
[ Footnote 2/7 ]
This is not to say that an attorney's ethical obligations will
never conflict with a defendant's right to effective assistance.
For example, an attorney who has previously represented one of the
State's witnesses has a continuing obligation to that former client
not to reveal confidential information received during the course
of the prior representation. That continuing duty could conflict
with his obligation to his present client, the defendant, to
cross-examine the State's witnesses zealously. See Lowenthal, Successive Representation by Criminal Lawyers, 93 Yale
L.J. 1 (1983).
[ Footnote 2/8 ]
A comparison of this case with Wilcox is illustrative.
Here, Robinson testified in detail to the factors that led him to
conclude that respondent's assertion he had seen a gun was false. See, e.g., Tr. 38-39, 43, 59 (July 29, 1977). The Iowa
Supreme Court found "good cause" and "strong support" for
Robinson's conclusion. State v. Whiteside, 272 N.W.2d 468 ,
471 (1978). Moreover, Robinson gave credence to those parts of
Whiteside's account which, although he found them implausible and
unsubstantiated, were not clearly false. See Tr. 52-53
(July 29, 1977). By contrast, in Wilcox, where defense
counsel actually informed the judge that she believed her client
intended to lie and where her threat to withdraw in the middle of
the trial led the defendant not to take the stand at all, the Court
of Appeals found "no evidence on the record of this case indicating
that Mr. Wilcox intended to perjure himself," and characterized
counsel's beliefs as "private conjectures about the guilt or
innocence of [her] client." 555 F.2d at 122.
JUSTICE STEVENS, concurring in the judgment.
Justice Holmes taught us that a word is but the skin of a living
thought. A "fact" may also have a life of its own. From the
perspective of an appellate judge, after a case has been tried and
the evidence has been sifted by another judge, a particular fact
may be as clear and certain as a piece of crystal or a small
diamond. A trial lawyer, however, must often deal with mixtures of
sand and clay. Even a pebble that seems clear enough at first
glance may take on a different hue in a handful of gravel.
As we view this case, it appears perfectly clear that respondent
intended to commit perjury, that his lawyer knew it, and that the
lawyer had a duty -- both to the court and to his client, for
perjured testimony can ruin an otherwise meritorious case -- to
take extreme measures to prevent the perjury from occurring. The
lawyer was successful and, from our unanimous and remote
perspective, it is now pellucidly clear that the client suffered no
"legally cognizable prejudice."
Nevertheless, beneath the surface of this case, there are areas
of uncertainty that cannot be resolved today. A lawyer's certainty
that a change in his client's recollection is a Page 475 U. S. 191 harbinger of intended perjury -- as well as judicial review of
such apparent certainty -- should be tempered by the realization
that, after reflection, the most honest witness may recall (or
sincerely believe he recalls) details that he previously
overlooked. Similarly, the post-trial review of a lawyer's pretrial
threat to expose perjury that had not yet been committed -- and,
indeed, may have been prevented by the threat -- is by no means the
same as review of the way in which such a threat may actually have
been carried out. Thus, one can be convinced -- as I am -- that
this lawyer's actions were a proper way to provide his client with
effective representation without confronting the much more
difficult questions of what a lawyer must, should, or may do after
his client has given testimony that the lawyer does not believe.
The answer to such questions may well be colored by the particular
circumstances attending the actual event and its aftermath.
Because JUSTICE BLACKMUN has preserved such questions for
another day, and because I do not understand him to imply any
adverse criticism of this lawyer's representation of his client, I
join his opinion concurring in the judgment. | In Nix v. Whiteside, the United States Supreme Court held that a criminal defendant's Sixth Amendment right to assistance of counsel is not violated when their attorney refuses to cooperate with them in presenting perjured testimony at trial. The Court found that an attorney's refusal to present perjured testimony is not a violation of the defendant's rights and does not constitute ineffective assistance of counsel.
In this case, the defendant, Whiteside, intended to testify that he saw "something metallic" in the victim's hand during the stabbing, even though he had previously stated that he had not seen a gun. Whiteside's attorney advised him against committing perjury and threatened to impeach his testimony and withdraw from the case if he insisted on doing so. Whiteside ultimately testified truthfully, but argued on appeal that his attorney's actions deprived him of a fair trial.
The Court's decision affirmed that an attorney's primary duty is to the court and upholding the law, and that presenting false testimony would violate this duty. The Court also emphasized the potential harm of perjured testimony to a defendant's case and the importance of an attorney's duty to prevent it.
Justice Stevens concurred in the judgment, acknowledging the potential complexities and uncertainties in similar cases, particularly regarding an attorney's actions after a client has given potentially perjured testimony. |
Criminal Trials & Prosecutions | Faretta v. California | https://supreme.justia.com/cases/federal/us/422/806/ | U.S. Supreme Court Faretta v. California, 422
U.S. 806 (1975) Faretta v. California No. 73-5772 Argued November 19,
1974 Decided June 30, 1975 422
U.S. 806 CERTIORARI TO THE COURT OF APPEAL
OF CALIFORNIA, SECOND APPELLATE
DISTRICT Syllabus The Sixth Amendment as made applicable to the States by the
Fourteenth guarantees that a defendant in a state criminal trial
has an independent constitutional right of self-representation and
that he may proceed to defend himself without counsel when he
voluntarily and intelligently elects to do so, and, in this case,
the state courts erred in forcing petitioner against his will to
accept a state-appointed public defender and in denying his request
to conduct his own defense. Pp. 422 U. S.
812 -836.
Vacated and remanded.
STEWART, J., delivered the opinion of the Court, in which
DOUGLAS, BRENNAN, WHITE, MARSHALL, and POWELL, JJ., joined. BURGER,
C.J., filed a dissenting opinion, in which BLACKMUN and REHNQUIST,
JJ., joined, post, p. 422 U. S. 836 .
BLACKMUN, J., filed a dissenting opinion, in which BURGER, C.J.,
and REHNQUIST, J., joined, post, p. 422 U. S.
846 . Page 422 U. S. 807 MR. JUSTICE STEWART delivered the opinion of the Court.
The Sixth and Fourteenth Amendments of our Constitution
guarantee that a person brought to trial in any state or federal
court must be afforded the right to the assistance of counsel
before he can be validly convicted and punished by imprisonment.
This clear constitutional rule has emerged from a series of cases
decided here over the last 50 years. [ Footnote 1 ] The question before us now is whether a
defendant in a state criminal trial has a constitutional right to
proceed without counsel when he voluntarily and
intelligently elects to do so. Stated another way, the question is
whether a State may constitutionally hale a person into its
criminal courts and there force a lawyer upon him, even when he
insists that he wants to conduct his own defense. It is not an easy
question, but we have concluded that a State may not
constitutionally do so. I Anthony Faretta was charged with grand theft in an information
filed in the Superior Court of Los Angeles County, Cal. At the
arraignment, the Superior Court Judge assigned to preside at the
trial appointed the public defender to represent Faretta. Well
before the date of trial, however, Faretta requested that he be
permitted to represent himself. Questioning by the judge revealed
that Faretta had once represented himself in a criminal
prosecution, that he had a high school education, and that he did
not want to be represented by the public defender because he
believed that that office was "very loaded down with . . . a heavy
case load." The judge Page 422 U. S. 808 responded that he believed Faretta was "making a mistake," and
emphasized that, in further proceedings, Faretta would receive no
special favors. [ Footnote 2 ]
Nevertheless, after establishing that Faretta wanted to represent
himself and did not want a lawyer, the judge, in a "preliminary
ruling," accepted Faretta's waiver of the assistance of counsel.
The judge indicated, however, that he might reverse this ruling if
it later appeared that Faretta was unable adequately to represent
himself.
Several weeks thereafter, but still prior to trial, the judge sua sponte held a hearing to inquire into Faretta's
ability to conduct his own defense, and questioned him specifically
about both the hearsay rule and the state law governing the
challenge of potential jurors. [ Footnote 3 ] After consideration Page 422 U. S. 809 of Faretta's answers and observation of his demeanor, the judge
ruled that Faretta had not made an intelligent and knowing waiver
of his right to the assistance Page 422 U. S. 810 of counsel, and also ruled that Faretta had no constitutional
right to conduct his own defense. [ Footnote 4 ] The judge, accordingly, reversed his earlier
ruling permitting self-representation, and again appointed the
public defender to represent Faretta. Faretta's subsequent request
for leave to act as co-counsel was rejected, as were his efforts to
make certain motions on his own behalf. [ Footnote 5 ] Throughout Page 422 U. S. 811 the subsequent trial, the judge required that Faretta's defense
be conducted only through the appointed lawyer from the public
defender's office. At the conclusion of the trial, the Jury found
Faretta guilty as charged, and the judge sentenced him to
prison.
The California Court of Appeal, relying upon a then-recent
California Supreme Court decision that had expressly decided the
issue, [ Footnote 6 ] affirmed
the trial judge's ruling that Faretta had no federal or state
constitutional right Page 422 U. S. 812 to represent himself. [ Footnote
7 ] Accordingly, the appellate court affirmed Faretta's
conviction. A petition for rehearing was denied without opinion,
and the California Supreme Court denied review. [ Footnote 8 ] We granted certiorari. 415 U.S.
975. II In the federal courts, the right of self-representation has been
protected by statute since the beginnings of our Nation. Section 35
of the Judiciary Act of 1789, 1 Stat. 73, 92, enacted by the First
Congress and signed by President Washington one day before the
Sixth Amendment Page 422 U. S. 813 was proposed, provided that,
"in all the courts of the United States, the parties may plead
and manage their own causes personally or by the assistance of . .
. counsel. . . ."
The right is currently codified in 28 U.S.C. § 1654.
With few exceptions, each of the several States also accords a
defendant the right to represent himself in any criminal case.
[ Footnote 9 ] The Constitutions
of 36 States explicitly confer that right. [ Footnote 10 ] Moreover, many state courts
have Page 422 U. S. 814 expressed the view that the right is also supported by the
Constitution of the United States. [ Footnote 11 ]
This Court has more than once indicated the same view. In Adams v. United States ex rel. McCann, 317 U.
S. 269 , 317 U. S. 279 ,
the Court recognized that the Sixth Amendment right to the
assistance of counsel implicitly embodies a "correlative right to
dispense with a lawyer's help." The defendant in that case,
indicted for federal mail fraud violations, insisted on conducting
his own defense without benefit of counsel. He also requested a
bench trial and signed a waiver of his right to trial by jury. The
prosecution consented to the waiver of a jury, and the waiver was
accepted by the court. The defendant was convicted, but the Court
of Appeals reversed the conviction on the ground that a person
accused of a felony could not competently waive his right to trial
by jury except upon the advice of a lawyer. This Court reversed,
and reinstated the conviction, holding that
"an accused, in the exercise of a free and intelligent choice,
and with the considered approval of the court, may waive trial by
jury, and so likewise may he competently and intelligently waive
his Constitutional right to assistance of counsel." Id. at 317 U. S.
275 .
The Adams case does not, of course, necessarily resolve
the issue before us. It held only that "the Constitution Page 422 U. S. 815 does not force a lawyer upon a defendant." Id. at 317 U. S. 279 .
[ Footnote 12 ] Whether the
Constitution forbids a State from forcing a lawyer upon a defendant
is a different question. But the Court in Adams did
recognize, albeit in dictum, an affirmative right of
self-representation:
"The right to assistance of counsel and the correlative
right to dispense with a lawyer's help are not legal
formalisms. They rest on considerations that go to the substance of
an accused's position before the law. . . ."
. . . What were contrived as protections for the accused should
not be turned into fetters. . . . To deny an accused a choice of
procedure in circumstances in which he, though a layman, is as
capable as any lawyer of making an intelligent choice, is to impair
the worth of great Constitutional safeguards by treating them as
empty verbalisms.
". . . When the administration of the criminal law . . . is
hedged about, as it is, by the Constitutional safeguards for the
protection of an accused, to deny him in the exercise of his free
choice the right to dispense with some of these safeguards . . . is
to imprison a man in his privileges, and call it the
Constitution." Id. at 317 U. S.
279 -280 (emphasis added). In other settings as well, the
Court has indicated that Page 422 U. S. 816 a defendant has a constitutionally protected right to represent
himself in a criminal trial. For example, in Snyder v.
Massachusetts, 291 U. S. 97 , the
Court held that the Confrontation Clause of the Sixth Amendment
gives the accused a right to be present at all stages of the
proceedings where fundamental fairness might be thwarted by his
absence. This right to "presence" was based upon the premise that
the
"defense may be made easier if the accused is permitted to be
present at the examination of jurors or the summing up of counsel, for it will be in his power, if present, to give advice or
suggestion or even to supersede his lawyers altogether and
conduct the trial himself. " Id. at 291 U. S. 106 (emphasis added). And in Price v. Johnston, 334 U.
S. 266 , the Court, in holding that a convicted person
had no absolute right to argue his own appeal, said this holding
was in "sharp contrast" to his "recognized privilege of conducting
his own defense at the trial." Id. at 334 U. S.
285 .
The United States Courts of Appeals have repeatedly held that
the right of self-representation is protected by the Bill of
Rights. In United States v. Plattner, 330 F.2d 271, the
Court of Appeals for the Second Circuit emphasized that the Sixth
Amendment grants the accused the rights of confrontation of
compulsory process for witnesses in his favor, and of assistance of
counsel as minimum procedural requirements in federal criminal
prosecutions. The right to the assistance of counsel, the court
concluded, was intended to supplement the other rights of the
defendant, and not to impair "the absolute and primary right to
conduct one's own defense in propria persona. " Id. at 274. The court found support for its decision in
the language of the 1789 federal statute; in the statutes and rules
governing criminal procedure, see 28 U.S.C. § 1654, and
Fed.Rule Crim.Proc. 44; in the many state constitutions that
expressly guarantee self-representation; Page 422 U. S. 817 and in this Court's recognition of the right in Adams and Price. On these grounds, the Court of Appeals held
that implicit in the Fifth Amendment's guarantee of due process of
law, and implicit also in the Sixth Amendment's guarantee of a
right to the assistance of counsel, is "the right of the accused
personally to manage and conduct his own defense in a criminal
case." 330 F.2d at 274. See also United States ex rel.
Maldonado v. Denno, 348 F.2d 12, 15 (CA2); MacKenna v.
Ellis, 263 F.2d 35, 41 (CA5); United States v.
Sternman, 415 F.2d 1165, 1169-1170 (CA6); Lowe v. United
States, 418 F.2d 100, 103 (CA7); United States v.
Warner, 428 F.2d 730, 733 (CA8); Haslam v. United
States, 431 F.2d 362, 365 (CA9); compare United States v.
Dougherty, 154 U.S.App.D.C. 76, 86, 473 F.2d 1113, 1123
(intimating right is constitutional but finding it unnecessary to
reach issue) with Brown v. United States, 105 U.S.App.D.C.
77, 79-80, 264 F.2d 363, 365-366 (plurality opinion stating right
is no more than statutory in nature).
This Court's past recognition of the right of
self-representation, the federal court authority holding the right
to be of constitutional dimension, and the state constitutions
pointing to the right's fundamental nature form a consensus not
easily ignored. "[T]he mere fact that a path is a beaten one," Mr.
Justice Jackson once observed, "is a persuasive reason for
following it." [ Footnote 13 ]
We confront here a nearly universal conviction, on the part of our
people, as well as our courts, that forcing a lawyer upon an
unwilling defendant is contrary to his basic right to defend
himself if he truly wants to do so. Page 422 U. S. 818 III This consensus is soundly premised. The right of
self-representation finds support in the structure of the Sixth
Amendment, as well as in the English and colonial jurisprudence
from which the Amendment emerged. A The Sixth Amendment includes a compact statement of the rights
necessary to a full defense:
"In all criminal prosecutions, the accused shall enjoy the right
. . . to be informed of the nature and cause of the accusation; to
be confronted with the witnesses against him; to have compulsory
process for obtaining witnesses in his favor, and to have the
Assistance of Counsel for his defence."
Because these rights are basic to our adversary system of
criminal justice, they are part of the "due process of law" that is
guaranteed by the Fourteenth Amendment to defendants in the
criminal courts of the States. [ Footnote 14 ] The rights to notice, confrontation, and
compulsory process, when taken together, guarantee that a criminal
charge may be answered in a manner now considered fundamental to
the fair administration of American justice -- through the calling
and interrogation of favorable witnesses, the cross-examination of
adverse witnesses, and the orderly introduction of evidence. In
short, the Amendment constitutionalizes the right in an adversary
criminal trial to make a defense as we know it. See California
v. Green, 399 U. S. 149 , 399 U. S. 176 (Harlan, J., concurring). Page 422 U. S. 819 The Sixth Amendment does not provide merely that a defense shall
be made for the accused; it grants to the accused personally the
right to make his defense. It is the accused, not counsel, who must
be "informed of the nature and cause of the accusation," who must
be "confronted with the witnesses against him," and who must be
accorded "compulsory process for obtaining witnesses in his favor."
Although not stated in the Amendment in so many words, the right to
self-representation -- to make one's own defense personally -- is
thus necessarily implied by the structure of the Amendment.
[ Footnote 15 ] The right to
defend Page 422 U. S. 820 is given directly to the accused; for it is he who suffers the
consequences if the defense fails.
The counsel provision supplements this design. It speaks of the
"assistance" of counsel, and an assistant, however expert, is still
an assistant. The language and spirit of the Sixth Amendment
contemplate that counsel, like the other defense tools guaranteed
by the Amendment, shall be an aid to a willing defendant -- not an
organ of the State interposed between an unwilling defendant and
his right to defend himself personally. To thrust counsel upon the
accused, against his considered wish, thus violates the logic of
the Amendment. In such a case, counsel is not an assistant, but a
master, [ Footnote 16 ] and
the right to make a defense is stripped of the personal character
upon which the Amendment insists. It is true that, when a defendant
chooses to have a lawyer manage and present his case, law and
tradition may allocate to the counsel the power to make binding
decisions of trial strategy in many areas. Cf. Henry v.
Mississippi, 379 U. S. 443 , 379 U. S. 451 ; Brookhart v. Janis, 384 U. S. 1 , 384 U. S. 7 ; Fay v. Noia, 372 U. S. 391 , 372 U. S. 439 .
This allocation can only be justified, however, by the defendant's
consent, at the Page 422 U. S. 821 outset, to accept counsel as his representative. An unwanted
counsel "represents" the defendant only through a tenuous and
unacceptable legal fiction. Unless the accused has acquiesced in
such representation, the defense presented is not the defense
guaranteed him by the Constitution, for, in a very real sense, it
is not his defense. B The Sixth Amendment, when naturally read, thus implies a right
of self-representation. This reading is reinforced by the
Amendment's roots in English legal history.
In the long history of British criminal jurisprudence, there was
only one tribunal that ever adopted a practice of forcing counsel
upon an unwilling defendant in a criminal proceeding. The tribunal
was the Star Chamber. That curious institution, which flourished in
the late 16th and early 17th centuries, was of mixed executive and
Judicial character, and characteristically departed from common law
traditions. For those reasons, and because it specialized in trying
"political" offenses, the Star Chamber has, for centuries,
symbolized disregard of basic individual rights. [ Footnote 17 ] The Star Chamber not merely
allowed, but required, defendants to have counsel. The defendant's
answer to an indictment was not accepted unless it was signed by
counsel. When counsel refused to sign the answer, for whatever
reason, the defendant was Page 422 U. S. 822 considered to have confessed. [ Footnote 18 ] Stephen commented on this procedure:
"There is something specially repugnant to justice in using
rules of practice in such a manner as Page 422 U. S. 823 to debar a prisoner from defending himself, especially when the
professed object of the rules so used is to provide for his
defence."
1 J. Stephen, A History of the Criminal Law of England 341-342
(1883). The Star Chamber was swept away in 1641 by the
revolutionary fervor of the Long Parliament. The notion of
obligatory counsel disappeared with it.
By the common law of that time, it was not representation by
counsel, but self-representation, that was the practice in
prosecutions for serious crime. At one time, every litigant was
required to "appear before the court in his own person and conduct
his own cause in his own words." [ Footnote 19 ] While a right to counsel developed early in
civil cases and in cases of misdemeanor, a prohibition against the
assistance of counsel continued for centuries in prosecutions for
felony or treason. [ Footnote
20 ] Thus, in the 16th and 17th centuries, the accused felon or
traitor stood alone, with neither counsel nor the benefit of other
rights -- to notice, confrontation, and compulsory process -- that
we now associate with a genuinely fair adversary proceeding. The
trial was merely a "long argument between the prisoner and the Page 422 U. S. 824 counsel for the Crown." [ Footnote 21 ] As harsh as this now seems, at least
"the prisoner was allowed to make what statements he liked. . .
. Obviously, this public oral trial presented many more
opportunities to a prisoner than the secret enquiry based on
written depositions, which, on the continent, had taken the place
of a trial. [ Footnote
22 ]"
With the Treason Act of 1695, there began a long and important
era of reform in English criminal procedure. The 1695 statute
granted to the accused traitor the rights to a copy of the
indictment, to have his witnesses testify under oath, and "to make
. . . full Defence, by Counsel learned in the Law." [ Footnote 23 ] It also provided for court
appointment of counsel, but only if the accused so
desired. [ Footnote
24 ] Page 422 U. S. 825 Thus, as new rights developed, the accused retained his
established right "to make what statements he liked." [ Footnote 25 ] The right to counsel
was viewed as guaranteeing a choice between representation by
counsel and the traditional practice of self-representation. The
ban on counsel in felony cases, which had been substantially eroded
in the courts, [ Footnote 26 ]
was finally eliminated by statute in 1836. [ Footnote 27 ] In more recent years, Parliament
has provided for court appointment of counsel in serious criminal
cases, but only at the accused's request. [ Footnote 28 ] At no point in this process of
reform in England was counsel ever forced upon the Page 422 U. S. 826 defendant. The common law rule, succinctly stated in R. v.
Woodward, [1944] K.B. 118, 119, [1944] 1 All E.R. 159 160, has
evidently always been that "no person charged with a criminal
offence can have counsel forced upon him against his will."
[ Footnote 29 ] See 3
Halsbury's Laws of England � 1141, pp. 624-625 (4th ed.1973); R. v. Maybury, 11 L.T.R. (n.s.) 566 (Q.B. 1865). C In the American Colonies, the insistence upon a right of
self-representation was, if anything, more fervent than in
England.
The colonists brought with them an appreciation of the virtues
of self-reliance and a traditional distrust of lawyers. When the
Colonies were first settled,
"the lawyer was synonymous with the cringing Attorneys-General
and Solicitors-General of the Crown, and the arbitrary Justices of
the King's Court, all bent on the conviction of those who opposed
the King's prerogatives, and twisting the law to secure
convictions. [ Footnote
30 ]"
This prejudice gained strength in the Colonies, where
"distrust Page 422 U. S. 827 of lawyers became an institution." [ Footnote 31 ] Several Colonies prohibited pleading for
hire in the 17th century. [ Footnote 32 ] The prejudice persisted into the 18th
century, as "the lower classes came to identify lawyers with the
upper class." [ Footnote 33 ]
The years of Revolution and Confederation saw an upsurge of
anti-lawyer sentiment, a "sudden revival, after the War of the
Revolution, of the old dislike and distrust of lawyers as a class."
[ Footnote 34 ] In the heat of
these sentiments, the Constitution was forged.
This is not to say that the Colonies were slow to recognize the
value of counsel in criminal cases. Colonial judges soon departed
from ancient English practice and allowed accused felons the aid of
counsel for their defense. [ Footnote 35 ] At the same time, however, the basic right
of Page 422 U. S. 828 self-representation was never questioned. We have found no
instance where a colonial court required a defendant in a criminal
case to accept as his representative an unwanted lawyer. Indeed,
even where counsel was permitted, the general practice continued to
be self-representation. [ Footnote 36 ]
The right of self-representation was guaranteed in many colonial
charters and declarations of rights. These early documents
establish that the "right to counsel" meant to the colonists a
right to choose between pleading through a lawyer and representing
oneself. [ Footnote 37 ] After
the Page 422 U. S. 829 Declaration of Independence, the right of self-representation,
along with other rights basic to the making of a defense, entered
the new state constitutions in wholesale fashion. [ Footnote 38 ] The right to counsel was
clearly thought to Page 422 U. S. 830 supplement the primary right of the accused to defend himself,
[ Footnote 39 ] utilizing his
personal rights to notice, confrontation, and compulsory process.
And when the Colonies or newly independent States provided by
statute, rather than by constitution, for court appointment of
counsel in criminal cases, they also meticulously preserved the
right of the accused to defend himself personally. [ Footnote 40 ] Page 422 U. S. 831 The recognition of the right of self-representation was not
limited to the state lawmakers. As we have noted, § 35 of the
Judiciary Act of 1789, signed one day before the Sixth Amendment
was proposed, guaranteed in the federal courts the right of all
parties to "plead and manage their own causes personally or by the
assistance of . . . counsel." 1 Stat. 92. See 28 U.S.C. §
1654. At the time James Madison drafted the Sixth Amendment, some
state constitutions guaranteed an accused the right to be heard "by
himself" and by counsel; others provided that an accused was to be
"allowed" counsel. [ Footnote
41 ] The various state proposals for the Bill of Rights had
similar variations in terminology. [ Footnote 42 ] Page 422 U. S. 832 In each case, however, the counsel provision was embedded in a
package of defense rights granted personally to the accused. There
is no indication that the differences in phrasing about "counsel"
reflected any differences of principle about self-representation.
No State or Colony had ever forced counsel upon an accused; no
spokesman had ever suggested that such a practice would be
tolerable, much less advisable. If anyone had thought that the
Sixth Amendment, as drafted, failed to protect the long-respected
right of self-representation, there would undoubtedly have been
some debate or comment on the issue. But there was none.
In sum, there is no evidence that the colonists and the Framers
ever doubted the right of self-representation, or imagined that
this right might be considered inferior to the right of assistance
of counsel. To the contrary, the colonists and the Framers, as well
as their English ancestors, always conceived of the right to
counsel as an "assistance" for the accused, to be used, at his
option, in defending himself. The Framers selected in the Sixth
Amendment a form of words that necessarily implies the right of
self-representation. That conclusion is supported by centuries of
consistent history. IV There can be no blinking the fact that the right of an accused
to conduct his own defense seems to cut against the grain of this
Court's decisions holding that the Constitution requires that no
accused can be convicted and imprisoned unless he has been accorded
the right to the assistance of counsel. See Powell v.
Alabama, 287 U. S. 45 ; Johnson v. Zerbst, 304 U. S. 458 ; Gideon v. Wainwright, 372 U. S. 335 ; Argersinger v. Hamlin, 407 U. S. 25 . For
it is surely true that the basic thesis of those decisions is that
the help of a lawyer is essential to assure Page 422 U. S. 833 the defendant a fair trial. [ Footnote 43 ] And a strong argument can surely be made
that the whole thrust of those decisions must inevitably lead to
the conclusion that a State may constitutionally impose a lawyer
upon even an unwilling defendant.
But it is one thing to hold that every defendant, rich or poor,
has the right to the assistance of counsel, and quite another to
say that a State may compel a defendant to accept a lawyer he does
not want. The value of state-appointed counsel was not
unappreciated by the Founders, [ Footnote 44 ] yet the notion of compulsory counsel was
utterly foreign to them. And whatever else may be said of those who
wrote the Bill of Rights, surely there can be no Page 422 U. S. 834 doubt that they understood the inestimable worth of free choice.
[ Footnote 45 ]
It is undeniable that, in most criminal prosecutions, defendants
could better defend with counsel's guidance than by their own
unskilled efforts. But where the defendant will not voluntarily
accept representation by counsel, the potential advantage of a
lawyer's training and experience can be realized, if at all, only
imperfectly. To force a lawyer on a defendant can only lead him to
believe that the law contrives against him. Moreover, it is not
inconceivable that, in some rare instances, the defendant might, in
fact, present his case more effectively by conducting his own
defense. Personal liberties are not rooted in the law of averages.
The right to defend is personal. The defendant, and not his lawyer
or the State, will bear the personal consequences of a conviction.
It is the defendant, therefore, who must be free personally to
decide whether, in his particular case, counsel is to his
advantage. And although he may conduct his own defense ultimately
to his own detriment, his choice must be honored out of "that
respect for the individual which is the lifeblood of the law." Illinois v. Allen, 397 U. S. 337 , 397 U. S.
350 -351 (BRENNAN, J., concurring). [ Footnote 46 ] Page 422 U. S. 835 V When an accused manages his own defense, he relinquishes, as a
purely factual matter, many of the traditional benefits associated
with the right to counsel. For this reason, in order to represent
himself, the accused must "knowingly and intelligently" forgo those
relinquished benefits. Johnson v. Zerbst, 304 U.S. at 304 U. S.
464 -465. Cf. Von Moltke v. Gillies, 332 U. S. 708 , 332 U. S.
723 -724 (plurality opinion of Black, J.). Although a
defendant need not himself have the skill and experience of a
lawyer in order competently and intelligently to choose
self-representation, he should be made aware of the dangers and
disadvantages of self-representation, so that the record will
establish that "he knows what he is doing and his choice is made
with eyes open." Adams v. United States ex rel. McCann, 317 U.S. at 317 U. S.
279 .
Here, weeks before trial, Faretta clearly and unequivocally
declared to the trial judge that he wanted to represent himself and
did not want counsel. The record affirmatively shows that Faretta
was literate, competent, and understanding, and that he was
voluntarily exercising his informed free will. The trial judge had
warned Faretta that he thought it was a mistake not to accept Page 422 U. S. 836 the assistance of counsel, and that Faretta would be required to
follow all the "ground rules" of trial procedure. [ Footnote 47 ] We need make no assessment of
how well or poorly Faretta had mastered the intricacies of the
hearsay rule and the California code provisions that govern
challenges of potential jurors on voir dire. [ Footnote 48 ] For his technical legal
knowledge, as such, was not relevant to an assessment of his
knowing exercise of the right to defend himself.
In forcing Faretta, under these circumstances, to accept against
his will a state-appointed public defender, the California courts
deprived him of his constitutional right to conduct his own
defense. Accordingly, the judgment before us is vacated, and the
case is remanded for further proceedings not inconsistent with this
opinion. It is so ordered. [ Footnote 1 ] See, e.g., Powell v. Alabama, 287 U. S.
45 ; Johnson v. Zerbst, 304 U.
S. 458 ; Betts v. Brady, 316 U.
S. 455 ; Gideon v. Wainwright, 372 U.
S. 335 ; Argersinger v. Hamlin, 407 U. S.
25 .
[ Footnote 2 ]
The judge informed Faretta:
"You are going to follow the procedure. You are going to have to
ask the questions right. If there is an objection to the form of
the question and it is properly taken, it is going to be sustained.
We are going to treat you like a gentleman. We are going to respect
you. We are going to give you every chance, but you are going to
play with the same ground rules that anybody plays. And you don't
know those ground rules. You wouldn't know those ground rules any
more than any other lawyer will know those ground rules until he
gets out and tries a lot of cases. And you haven't done it."
[ Footnote 3 ]
The colloquy was as follows:
"THE COURT: In the Faretta matter, I brought you back down here
to do some reconsideration as to whether or not you should continue
to represent yourself."
"How have you been getting along on your research?"
"THE DEFENDANT: Not bad, your Honor."
"Last night, I put in the mail a 995 motion, and it should be
with the Clerk within the next day or two."
"THE COURT: Have you been preparing yourself for the intricacies
of the trial of the matter?"
"THE DEFENDANT: Well, your Honor, I was hoping that the case
could possibly be disposed of on the 995."
"Mrs. Ayers informed me yesterday that it was the Court's policy
to hear the pretrial motions at the time of trial. If possible,
your Honor, I would like a date set as soon as the Court deems
adequate after they receive the motion, sometime before trial."
"THE COURT: Let's see how you have been doing on your
research."
"How many exceptions are there to the hearsay rule?"
"THE DEFENDANT: Well, the hearsay rule would, I guess, be called
the best evidence rule, your Honor. And there are several
exceptions in case law, but in actual statutory law, I don't feel
there is none."
"THE COURT: What are the challenges to the jury for cause?"
"THE DEFENDANT: Well, there is twelve peremptory challenges.
"
"THE COURT: And how many for cause?"
"THE DEFENDANT: Well, as many as the Court deems valid."
"THE COURT: And what are they? What are the grounds for
challenging a juror for cause?"
"THE DEFENDANT: Well. numerous grounds to challenge a witness --
I mean, a juror, your Honor, one being the juror is perhaps
suffered, was a victim of the same type of offense, might be
prejudiced toward the defendant. Any substantial ground that might
make the juror prejudice[d] toward the defendant."
"THE COURT: Anything else?"
"THE DEFENDANT: Well, a relative perhaps of the victim."
"THE COURT: Have you taken a look at that code section to see
what it is?"
"THE DEFENDANT: Challenge a juror?"
"THE COURT: Yes. ,"
"THE DEFENDANT: Yes, your Honor. I have done -- "
"THE COURT: What is the code section?"
"THE DEFENDANT: On voir diring a jury, your Honor?"
"THE COURT: Yes."
"THE DEFENDANT: I am not aware of the section right
off-hand."
"THE COURT: What code is it in?"
"THE DEFENDANT: Well, the research I have done on challenging
would be in Witkins Jurisprudence."
"THE COURT: Have you looked at any of the codes to see where
these various things are taken up?"
"THE DEFENDANT: No, your Honor, I haven't."
"THE COURT: Have you looked in any of the California Codes with
reference to trial procedure?"
"THE DEFENDANT: Yes, your Honor."
"THE COURT: What codes?"
"THE DEFENDANT: I have done extensive research in the Penal
Code, your Honor, and the Civil Code."
"THE COURT: If you have done extensive research into it, then
tell me about it."
"THE DEFENDANT: On empaneling a jury, your Honor?"
"THE COURT: Yes."
"THE DEFENDANT: Well, the District Attorney and the defendant,
defense counsel, has both the right to 12 peremptory challenges of
a jury. These 12 challenges are undisputable. Any reason that the
defense or prosecution should feel that a juror would be inadequate
to try the case or to rule on a case, they may then discharge that
juror."
"But if there is a valid challenge due to grounds of prejudice
or some other grounds, that these aren't considered in the 12
peremptory challenges. There are numerous, and the defendant, the
defense and the prosecution both have the right to make any inquiry
to the jury as to their feelings toward the case."
[ Footnote 4 ]
The judge concluded:
"[T]aking into consideration the recent case of People
versus Sharp, where the defendant apparently does not have a
constitutional right to represent himself, the Court finds that the
ends of justice and requirements of due process require that the
prior order permitting the defendant to represent himself in pro per should be and is hereby revoked. That privilege is
terminated."
[ Footnote 5 ]
Faretta also urged without success that he was entitled to
counsel of his choice, and three times moved for the appointment of
a lawyer other than the public defender. These motions, too, were
denied.
[ Footnote 6 ] People v. Sharp, 7 Cal. 3d 448 ,
499 P.2d 489.
When Sharp was tried, the California Constitution expressly
provided that the accused in a criminal prosecution had the right
"to appear and defend, in person and with counsel." Cal.Const.,
Art. 1, § 13. In an earlier decision, the California Supreme Court
had held that this language meant that the accused had the right to
appear by himself or with counsel. People v.
Mattson, 51 Cal. 2d
777 , 336 P.2d 937. This view was rejected in Sharp, the California Supreme Court there holding that the defendant in a
criminal prosecution has no right under the State or the Federal
Constitution to represent himself at trial. See generally Y. Kamisar, W. LaFave & J. Israel, Modern Criminal Procedure
57-60 (4th ed.1974); Note, 10 Calif.Western L.Rev.196 (1973); Note,
24 Hastings L.J. 431 (1973); Comment, 64 J.Crim.L. 240 (1973).
Although immaterial to the court's decision, shortly before Sharp was decided on appeal, the California Constitution
had been amended to delete the right of self-representation from
Art. 1, § 13, and to empower the legislature expressly "to require
the defendant in a felony case to have the assistance of counsel."
The new statutes, on their face, require counsel only in capital
cases. See Cal.Penal Code §§ 686(2), 686.1, 859, 987 (1970
and Supp. 1975). In other than capital cases, the accused retains,
by statutory terms, a right "to appear and defend in person and
with counsel." § 686(2). However, this language tracks the old
language of Art. 1, § 13, of the California Constitution, and, in
construing the constitutional language in Sharp to exclude
any right of self-representation under former Art. 1, § 13, of the
State Constitution, the California Supreme Court also stated that §
686(2) does not provide any right of self-representation.
[ Footnote 7 ]
The Court of Appeal also held that the trial court had not
"abused its discretion in concluding that Faretta had not made a
knowing and intelligent waiver of his right to be represented by
counsel,"
since "Faretta did not appear aware of the possible consequences
of waiving the opportunity for skilled and experienced
representation at trial."
[ Footnote 8 ]
The California courts' conclusion that Faretta had no
constitutional right to represent himself was made in the context
of the following not unusual rules of California criminal
procedure: an indigent criminal defendant has no right to appointed
counsel of his choice. See Drumgo v. Superior
Court, 8 Cal. 3d 930 ,
506 P.2d 1007; People v. Miller, 7 Cal. 3d 562 ,
574, 498 P.2d 1089, 1097; People v. Massie, 66 Cal. 2d
899 , 910, 428 P.2d 869, 876-877; People v.
Taylor, 259 Cal. App.
2d 448 , 450-451, 66 Cal. Rptr. 514, 515-517. The appointed
counsel manages the lawsuit, and has the final say in all but a few
matters of trial strategy. See, e.g., People v.
Williams, 2 Cal. 3d 894 ,
905, 471 P.2d 1008, 1015; People v. Foster, 67 Cal. 2d
604 , 606-607, 432 P.2d 976, 977-978; People v.
Monk, 56 Cal. 2d
288 , 299, 363 P.2d 865, 870-871; see generally Rhay v.
Browder, 342 F.2d 345, 349 (CA9). A California conviction will
not be reversed on grounds of ineffective assistance of counsel
except in the extreme case where the quality of representation was
so poor as to render the trial a "farce or a sham." People v.
Ibarra, 60 Cal. 2d
460 , 386 P.2d 487; see People v. Miller, supra at 573,
498 P.2d at 1096-1097; People v. Floyd, 1 Cal. 3d 694 ,
709, 464 P.2d 64, 73; People v. Hill, 70 Cal. 2d
678 , 689, 452 P.2d 329, 334; People v.
Reeves, 64 Cal. 2d
766 , 774, 415 P.2d 35, 39.
[ Footnote 9 ] See, e.g., Mackreth v. Wilson, 31 Ala.App. 191, 15 So.
2d 112; Cappetta v. State, 204 So. 2d 913
(Fla.Dist.Ct.App.); Lockard v. State, 92 Idaho 813, 451
P.2d 1014; People v. Nelson, 47 Ill. 2d
570 , 268 N.E.2d 2 ; Blanton v. State, 229 Ind. 701, 98 N.E.2d
186 ; Westberry v. State, 254 A.2d
44 (Me.); Allen v. Commonwealth, 324 Mass. 558, 87
N.E.2d 192; People v. Haddad, 306 Mich. 556, 11 N.W.2d
240; State v. McGhee, 184 Neb. 352, 167 N.W.2d
765 ; Zasada v. State, 19 N.J.Super. 589, 89 A.2d 45 ; People v. McLaughlin, 291 N.Y. 480, 53
N.E.2d 356; State v. Pritchard, 227 N.C. 168, 41 S.E.2d
287; State v. Hollman, 232 S.C. 489, 102 S.E.2d
873 ; State v. Thomlinson, 78 S.D. 235, 100 N.W.2d
121 ; State v. Penderville, 2 Utah 2d 281, 272 P.2d 195 ; State v. Woodall, 5 Wash. App. 901, 491 P.2d 680. See
generally Annot., 77 A.L.R.2d 1233 (1961); 5 R. Anderson,
Wharton's Criminal Law and Procedure § 2016 (1957).
[ Footnote 10 ]
Some States grant the accused the right to be heard, or to
defend, in person and by counsel: Ariz.Const., Art. 2, § 24;
Ark.Const., Art. 2, § 10; Colo.Const., Art. 2, § 16; Conn.Const.,
Art. 1, § 8; Del.Const., Art. 1, § 7; Idaho Const., Art. 1, § 13;
Ill.Const., Art. 1, § 8; Ind.Const., Art. 1, § 13; Ky.Const. Bill
of Rights, § 11; Mo.Const., Art. 1, § 18(a); Mont.Const., Art. 3, §
16; Nev.Const., Art. 1, § 8; N.H.Const., pt. 1, Art. 15;
N.M.Const., Art. 2, § 14; N.Y.Const., Art. 1, § 6; N.D.Const., Art.
1, § 13; Ohio Const., Art. 1, § 10; Okla.Const., Art. 2, § 20;
Ore.Const., Art. 1, § 11; Pa.Const., Art. 1, § 9; S.D.Const., Art.
6, § 7; Tenn.Const., Art. 1, § 9; Utah Const., Art. 1, § 12;
Vt.Const., c. 1, Art. 10; Wis.Const., Art. 1, § 7; see La.Const.,
Art. 1, § 9.
Others grant the right to defend in person or by counsel:
Kan.Const.Bill of Rights, § 10; Mass.Const., pt. 1, Art. 12;
Neb.Const., Art. 1, § 11; Wash.Const., Art. 1, § 22.
Still others provide the accused the right to defend either by
himself, by counsel, or both: Ala.Const., Art. 1, § 6; Fla.Const.,
Art. 1, § 16; Me.Const., Art. 1, § 6; Miss.Const., Art. 3, § 26;
S.C.Const., Art. 1 , § 14; Tex.Const., Art . 1 , § 10.
[ Footnote 11 ] See, e.g., Lockard v. State, supra; People v. Nelson, supra;
Blanton v. State, supra; Zasada v. State, supra; People v.
McLaughlin, supra; State v. Mems, 281 N.C. 658, 190 S.E.2d
164 ; State v. Verna, 9 Ore.App. 620, 498 P.2d
793 .
[ Footnote 12 ]
The holding of Adams was reaffirmed in a different
context in Carter v. Illinois, 329 U.
S. 173 , 329 U. S.
174 -175, where the Court again adverted to the right of
self-representation:
"Neither the historic conception of Due Process nor the vitality
it derives from progressive standards of justice denies a person the right to defend himself or to confess guilt. Under
appropriate circumstances, the Constitution requires that counsel
be tendered; it does not require that, under all circumstances,
counsel be forced upon a defendant."
(Emphasis added.) See also Moore v. Michigan, 355 U.
S. 155 , 355 U. S.
161 .
[ Footnote 13 ]
Jackson, Full Faith and Credit -- The Lawyer's Clause of the
Constitution, 45 Col.L.Rev. 1, 26 (1945).
[ Footnote 14 ] Gideon v. Wainwright, 372 U. S. 335 , and Argersinger v. Hamlin, 407 U. S. 25 (right
to counsel); Pointer v. Texas, 380 U.
S. 400 (right of confrontation); Washington v.
Texas, 388 U. S. 14 (right
to compulsory process). See also In re Oliver, 333 U. S. 257 , 333 U. S.
273 .
[ Footnote 15 ]
This Court has often recognized the constitutional stature of
rights that, though not literally expressed in the document, are
essential to due process of law in a fair adversary process. It is
now accepted, for example, that an accused has a right to be
present at all stages of the trial where his absence might
frustrate the fairness of the proceedings, Snyder v.
Massachusetts, 291 U. S. 97 ; to
testify on his own behalf, see Harris v. New York, 401 U. S. 222 , 401 U. S. 225 ; Brooks v. Tennessee, 406 U. S. 605 , 406 U. S. 612 ; cf. Ferguson v. Georgia, 365 U. S. 570 ; and
to be convicted only if his guilt is proved beyond a reasonable
doubt, In re Winship, 397 U. S. 358 ; Mullaney v. Wilbur, 421 U. S. 684 .
The inference of rights is not, of course, a mechanical
exercise. In Singer v. United States, 380 U. S.
24 , the Court held that an accused has no right to a
bench trial, despite his capacity to waive his right to a jury
trial. In so holding, the Court stated that "[t]he ability to waive
a constitutional right does not ordinarily carry with it the right
to insist upon the opposite of that right." Id. at 380 U. S. 34 -35.
But that statement was made only after the Court had
concluded that the Constitution does not affirmatively protect any
right to be tried by a judge. Recognizing that an implied right
must arise independently from the design and history of the
constitutional text, the Court searched for, but could not find,
any "indication that the colonists considered the ability to waive
a jury trial to be of equal importance to the right to demand one." Id. at 380 U. S. 26 .
Instead, the Court could locate only "isolated instances" of a
right to trial by judge, and concluded that these were "clear
departures from the common law." Ibid. We follow the approach of Singer here. Our concern is
with an independent right of self-representation. We do
not suggest that this right arises mechanically from a defendant's
power to waive the right to the assistance of counsel. See
supra at 422 U. S.
814 -815. On the contrary, the right must be
independently found in the structure and history of the
constitutional text.
[ Footnote 16 ]
Such a result would sever the concept of counsel from its
historic roots. The first lawyers were personal friends of the
litigant, brought into court by him so that he might "take counsel' with them" before pleading. 1 F. Pollock & F.
Maitland, The History of English Law 211 (2d ed.1909). Similarly,
the first "attorneys" were personal agents, often lacking any
professional training, who were appointed by those litigants who
had secured royal permission to carry on their affairs through a
representative, rather than personally. Id. at
212-213. [ Footnote 17 ]
"The court of star chamber was an efficient, somewhat arbitrary
arm of royal power. It was at the height of its career in the days
of the Tudor and Stuart kings. Star chamber stood for swiftness and
power; it was not a competitor of the common law so much as a
limitation on it -- a reminder that high state policy could not
safely be entrusted to a system so chancy as English law. . .
."
L. Friedman, A History of American Law 23 (1973). See
generally 5 W. Holdsworth, A History of English Law 155-214
(1927).
[ Footnote 18 ]
"The proceedings before the Star Chamber began by a Bill
'engrossed in parchment and filed with the clerk of the court.' It
must, like the other pleadings, be signed by counsel. . . .
However, counsel were obliged to be careful what they signed. If
they put their hands to merely frivolous pleas, or otherwise
misbehaved themselves in the conduct of their cases, they were
liable to rebuke, suspension, a fine, or imprisonment."
Holdsworth, supra, n 17, at 178-179. Counsel, therefore, had to be cautious
that any pleadings they signed would not unduly offend the Crown. See 1 J. Stephen, A History of the Criminal Law of England
340-341 (1883).
This presented not merely a hypothetical risk for the accused.
Stephen gives the following account of a criminal libel trial in
the Star Chamber:
"In 1632, William Prynne was informed against for his book
called Histrio Mastiz. Prynne's answer was, amongst other
things, that his book had been licensed, and one of the counsel,
Mr. Holbourn, apologised, not without good cause, for his style. .
. . His trial was, like the other Star Chamber proceedings,
perfectly decent and quiet, but the sentence can be described only
as monstrous. He was sentenced to be disbarred and deprived of his
university degrees; to stand twice in the pillory, and to have one
ear cut off each time; to be fined �5,000; and to be perpetually
imprisoned, without books, pen, ink, or paper. . . ."
"Five years after this, in 1637, Prynne, Bastwick, and Burton,
were tried for libel, and were all sentenced to the same punishment
as Prynne had received in 1632, Prynne being branded on the cheeks
instead of losing his ears."
"The procedure in this case appears to me to have been as harsh
as the sentence was severe, though I do not think it has been so
much noticed. . . . Star Chamber defendants were not only allowed
counsel, but were required to get their answers signed by counsel.
The effect of this rule, and probably its object, was that no
defence could be put before the Court which counsel would not take
the responsibility of signing -- a responsibility which, at that
time, was extremely serious. If counsel would not sign the
defendant's answer, he was taken to have confessed the information.
Prynne's answer was of such a character that one of the counsel
assigned to him refused to sign it at all, and the other did not
sign it till after the proper time. Bastwick could get no one to
sign his answer. Burton's answer was signed by counsel, but was set
aside as impertinent. Upon the whole, the case was taken to be
admitted by all the three, and judgment was passed on them
accordingly. . . ."
Stephen, supra, at 340-341.
That Prynne's defense was foreclosed by the refusal of assigned
counsel to endorse his answer is all the more shocking when it is
realized that Prynne was himself a lawyer. I. Brant, The Bill of
Rights 106 (1965). On the operation of the Star Chamber generally, see Barnes, Star Chamber Mythology, 5 Am.J.Legal Hist.
1-11 (1961), and Barnes, Due Process and Slow Process in the Late
Elizabethan -- Early Stuart Star Chamber, 6 Am.J.Legal Hist.
221-249, 315-346 (1962).
[ Footnote 19 ]
Pollock & Maitland, supra, n 16, at 211.
[ Footnote 20 ] Ibid. See also Stephen, supra, n 18, at 341.
[ Footnote 21 ] Id. at 326.
The trial would begin with accusations by counsel for the Crown.
The prisoner usually asked, and was granted, the privilege of
answering separately each matter alleged against him:
"[T]he trial became a series of excited altercations between the
prisoner and the different counsel opposed to him. Every statement
of counsel operated as a question to the prisoner, . . . the
prisoner either admitting or denying or explaining what was alleged
against him. The result was that . . . the examination of the
prisoner . . . was the very essence of the trial, and his answers
regulated the production of the evidence. . . . As the argument
proceeded, the counsel [for the Crown] would frequently allege
matters which the prisoner denied and called upon them to prove.
The proof was usually given by reading depositions, confessions of
accomplices, letters, and the like. . . . When the matter had been
fully inquired into . . . , the presiding judge 'repeated,' or
summed up to the jury, the matters alleged against the prisoner and
the answers given by him, and the jury gave their verdict." Id. at 325-326.
[ Footnote 22 ]
Holdsworth, supra, n 17, at 195-196.
[ Footnote 23 ]
7 Will. 3, c. 3, § 1. The right to call witnesses under oath was
extended to felony cases by statute in 1701. 1 Anne, Stat. 2, c. 9,
§ 3.
[ Footnote 24 ]
The statute provided, in pertinent part, that the accused
"shall be received and admitted to make his and their full
Defence, by Counsel learned in the Law, and to make any Proof that
he or they can produce by lawful Witness or Witnesses, who shall
then be upon Oath, for his and their just Defence in that Behalf;
and in case any Person or Persons so accused or indicted shall
desire Counsel, the Court before whom such Person or Persons shall
be tried, or some Judge of that Court, shall and is hereby
authorized and required immediately, upon his or their Request, to
assign to such Person and Persons such and so many Counsel, not
exceeding Two, as the Person or Persons shall desire, to whom such
Counsel shall have free Access at all seasonable Hours, any Law or
Usage to the contrary notwithstanding."
[ Footnote 25 ]
Holdsworth, supra, n 17, at 195.
[ Footnote 26 ]
In Mary Blandy's 1752 murder trial, for example, the court
declared that counsel for the defendant could not only speak on
points of law raised by the defense, but could also examine defense
witnesses and cross-examine those of the Crown. 18 How.St.Tr. 1117.
Later in that century, judges often allowed counsel for the accused
"to instruct him what questions to ask, or even to ask questions
for him, with respect to matters of fact . . . [or] law." 4 W.
Blackstone, Commentaries *355-356.
[ Footnote 27 ]
6 & 7 Will. 4, c. 114, § 1. The statute provided, in
pertinent part, that the accused
"shall be admitted, after the Close of the Case for the
Prosecution, to make full Answer and Defence thereto by Counsel
learned in the Law, or by Attorney in Courts where Attornies
practise as Counsel."
[ Footnote 28 ] See, e.g., Poor Prisoners' Defence Act, 1903, 3 Edw. 7,
c. 38, § 1; Poor Prisoners' Defense Act, 1930, 20 & 21 Geo. 5,
c. 32; Legal Aid and Advice Act, 1949, 12 & 13 Geo. 6, c.
51.
[ Footnote 29 ]
Counsel had been appointed for the defendant Woodward, but
withdrew shortly before trial. When the trial court appointed a
substitute counsel, the defendant objected: "I would rather not
have legal aid. I would rather conduct the case myself." The trial
court insisted, however, that the defendant proceed to trial with
counsel, and a conviction resulted. On appeal, the Crown did not
even attempt to deny a basic right of self-representation, but
argued only that the right had been waived when the accused
accepted the first counsel. The Court of Appeal rejected this
argument:
"The prisoner, right at the beginning [of the trial], said that
he wished to defend himself . . . , and he was refused what we
think was his right to make his own case to the jury instead of
having it made for him by counsel."
This, the court held, was an "injustice to the prisoner," and,
"although there was a good deal of evidence against the prisoner,"
the court quashed the conviction.
[ Footnote 30 ]
C. Warren, A History of the American Bar 7 (1911).
[ Footnote 31 ]
D. Boorstin, The Americans; The Colonial Experience 197
(1958).
[ Footnote 32 ]
For example, the Massachusetts Body of Liberties (1641) in Art.
26 provided:
"Every man that findeth himselfe unfit to plead his owne cause
in any Court shall have Libertie to imploy any man against whom the
Court doth not except, to helpe him, Provided he give him noe fee
or reward for his paines. . . ."
Pleading for hire was also prohibited in 17th century Virginia,
Connecticut, and the Carolinas. Friedman, supra, n 17, at 81.
[ Footnote 33 ] Id. at 82
[ Footnote 34 ]
Warren, supra, n. 30, at 212.
[ Footnote 35 ]
For example, Zephaniah Swift, in one of the first American
colonial treatises on law, made clear that a right to counsel was
recognized in Connecticut. He wrote:
"We have never admitted that cruel and illiberal principle of
the common law of England that, when a man is on trial for his
life, he shall be refused counsel and denied those means of defence
which are allowed when the most trifling pittance of property is in
question. The flimsy pretence that the court are to be counsel for
the prisoner will only heighten our indignation at the practice,
for it is apparent to the least consideration that a court can
never furnish a person accused of a crime with the advice, and
assistance necessary to make his defence. . . ."
"Our ancestors, when they first enacted their laws respecting
crimes, influenced by the illiberal principles which they had
imbibed in their native country, denied counsel to prisoners to
plead for them to anything but points of law. It is manifest that
there is as much necessity for counsel to investigate matters of
fact, as points of law, if truth is to be discovered."
2 Z. Swift, A System of the Laws of the State of Connecticut
398-399 (1796).
Similarly, colonial Virginia at first based its court
proceedings on English judicial customs, but, "[b]y the middle of
the eighteenth century, the defendant was permitted advice of
counsel if he could afford such services." H. Rankin, Criminal
Trial Proceedings in the General Court of Colonial Virginia 67, 89
(1965).
[ Footnote 36 ] See, e.g., id. at 89-90.
[ Footnote 37 ] See, e.g., the Massachusetts Body of Liberties, Art. 26
(1641), supra, n 32.
Similarly, the Concessions and Agreements of West New Jersey, in
1677, provided, for all cases, civil and criminal,
"that no person or persons shall be compelled to fee any
attorney or councillor to plead his cause, but that all persons
have free liberty to plead his own cause, if he please."
The Pennsylvania Frame of Government of 1682, perhaps "the most
influential of the Colonial documents protecting individual
rights," 1 B. Schwartz, The Bill of Rights: A Documentary History
130 (1971) (hereinafter Schwartz), provided:
"That, in all courts, all persons of all persuasions may freely
appear in their own way, and according to their own manner, and
there personally plead their own cause themselves; or, if unable,
by their friends. . . ."
That provision was no doubt inspired by William Penn's belief
that an accused should go free if he could personally persuade a
jury that it would be unjust to convict him. In England, 12 years
earlier, Penn, after preaching a sermon in the street, had been
indicted and tried for disturbing the peace. Penn conceded that he
was "unacquainted with the formality of the law," but requested
that he be given a fair hearing and the "liberty of making my
defence." The request was granted, Penn represented himself, and,
although the judges jailed him for contempt, the jury acquitted him
of the charge. "The People's Ancient and Just Liberties Asserted,
in the Trial of William Penn and William Mead, 1670," reproduced in
1 Schwartz 144, 147. See The Trial of William Penn, 6
How.St.Tr. 951 (1670), cited in Illinois v. Allen, 397 U. S. 337 , 397 U. S. 353 (opinion of DOUGLAS, J.).
[ Footnote 38 ]
Article IX of the Pennsylvania Declaration of Rights, in 1776,
guaranteed "[t]hat, in all prosecutions for criminal offences, a
man hath a right to be heard by himself and his council. . . ." The
Vermont Declaration of Rights (Art. X) in 1777 protected the right
of self-representation with virtually identical language. The
Georgia Constitution (Art. LVIII), in 1777, declared that its
provisions barring the unauthorized practice of law were "not
intended to exclude any person from that inherent privilege of
every freeman, the liberty to plead his own cause." In 1780, the
Massachusetts Declaration of Rights, Art. XII, provided that the
accused had a right to be heard "by himself, or his counsel at his
election." The New Hampshire Bill of Rights (Art. XV), in 1783,
affirmed the right of the accused "to be fully heard in his defence
by himself, and counsel." In 1792, the Delaware Constitution (Art.
I, § 7) preserved the right in language modeled after Art. IX of
the Pennsylvania Declaration of Rights. Similarly, in 1798, Georgia
included in its Constitution (Art. III, § 8) a provision that
protected the right of the accused to defend "by himself or
counsel, or both." Other state constitutions did not express in
literal terms a right of self-representation, but those documents
granted all defense rights to the accused personally, and phrased
the right of counsel in such fashion as to imply the existence of
the antecedent liberty. See Del. Declaration of Rights, §
14 (1776) (right "to be allowed counsel"); Md.Declaration of
Rights, Art. XIX (1776) (right "to be allowed counsel");
N.J.Const., Art. XVI (1776) (criminals to have "same privileges of
. . . counsel, as their prosecutors"); N.Y.Const., Art. XXXIV
(1777) ("shall be allowed counsel").
[ Footnote 39 ]
The Founders believed that self-representation was a basic right
of a free people. Underlying this belief was not only the
anti-lawyer sentiment of the populace, but also the "natural law"
thinking that characterized the Revolution's spokesmen. See P. Kauper, The Higher Law and the Rights of Man in a
Revolutionary Society, a lecture in the American Enterprise
Institute for Public Policy Research series on the American
Revolution, Nov. 7, 1973, extracted in 18 U. of Mich.Law School Law
Quadrangle Notes, No. 2, p. 9 (1974). For example, Thomas Paine,
arguing in support of the 1776 Pennsylvania Declaration of Rights,
said:
"Either party . . . has a natural right to plead his own cause;
this right is consistent with safety; therefore it is retained; but
the parties may not be able, . . . therefore, the civil right of
pleading by proxy, that is, by a council, is an appendage to the
natural right [of self-representation]. . . ."
Thomas Paine on a Bill of Rights, 1777, reprinted in 1 Schwartz
316.
[ Footnote 40 ]
Statutes providing for appointment of counsel on request of the
accused were enacted by Delaware in 1719, 1 Laws of the State of
Delaware, 1700-1797, p. 66 (Adams 1797); by Pennsylvania in 1718, 3
Stats. at Large of Pennsylvania 199 (Busch 1896); and by South
Carolina in 1731, Laws of the Province of South Carolina 518-519
(Trott 1736). Appointment was also the practice in Connecticut in
the latter part of the 18th century; appointment apparently was
sometimes made even when the accused failed to request counsel, if
he appeared in need of a lawyer, but there is no indication
appointment was ever made over the objection of the accused. See Swift, supra, n 35, at 392. Free-choice appointment remained the rule as the new
Republic emerged. See the 1791 statute of New Hampshire,
Laws of New Hampshire 247 (Melcher 1792), and the 1795 statute of
New Jersey, § 2, Acts of the Nineteenth General Assembly of the
State of New Jersey 1012.
[ Footnote 41 ] See counsel provisions in n 38, supra. [ Footnote 42 ]
In ratifying the Constitution, three States urged that a right
to counsel provision be added by way of amendment. Virginia and
North Carolina proposed virtually identical packages of a
defendant's rights, each including the provision that an accused be
"allowed" counsel. 2 Schwartz 841, 967. The package proposed by New
York provided that the accused "ought to . . . have . . . the
assistance of Council for his defense." Id. at 913. The
idea of proposing amendments upon ratification had begun with the
Pennsylvania dissenters from ratification, whose proposed package
of a defendant's rights provided for the accused's "right . . . to
be heard by himself and his counsel." Id. at 664-665. It
can be seen that Madison's precise formulation -- "the right . . .
to have the Assistance of Counsel for his defence" -- varied in
phrasing from each of the proposals.
"The available debates on the various proposals throw no light
on the significance or the interpretation which Congress attributed
to the right to counsel."
W. Beaney, The Right to Counsel in American Courts 23
(1955).
[ Footnote 43 ]
As stated by Mr. Justice Sutherland in Powell v.
Alabama, 287 U. S. 45 :
"Even the intelligent and educated layman has small, and
sometimes no, skill in the science of law. If charged with crime,
he is incapable, generally, of determining for himself whether the
indictment is good or bad. He is unfamiliar with the rules of
evidence. Left without the aid of counsel, he may be put on trial
without a proper charge and convicted upon incompetent evidence, or
evidence irrelevant to the issue or otherwise inadmissible. He
lacks both the skill and knowledge adequately to prepare his
defense, even though he have a perfect one. He requires the guiding
hand of counsel at every step in the proceedings against him.
Without it, though he be not guilty, he faces the danger of
conviction because he does not know how to establish his innocence.
If that be true of men of intelligence, how much more true is it of
the ignorant and illiterate, or those of feeble intellect. If in
any case, civil or criminal, a state or federal court were
arbitrarily to refuse to hear a party by counsel, employed by and
appearing for him, it reasonably may not be doubted that such a
refusal would be a denial of a hearing, and, therefore, of due
process in the constitutional sense." Id. at 287 U. S.
69 .
[ Footnote 44 ] See n 38, supra, for colonial appointment statutes that predate the
Sixth Amendment. Federal law provided for appointment of counsel in
capital cases at the request of the accused as early as 1790, 1
Stat. 118.
[ Footnote 45 ] See, e.g., U.S.Const., Amdt. 1. Freedom of choice is
not a stranger to the constitutional design of procedural
protections for a defendant in a criminal proceeding. For example,
"[e]very criminal defendant is privileged to testify in his own
defense, or to refuse to do so." Harris v. New York, 401 U. S. 222 , 401 U. S. 225 . See Brooks v. Tennessee, 406 U. S. 605 , 406 U. S. 612 ; Ferguson v. Georgia, 365 U. S. 570 . Cf. Brown v. United States, 356 U.
S. 148 .
[ Footnote 46 ]
We are told that many criminal defendants representing
themselves may use the courtroom for deliberate disruption of their
trials. But the right of self-representation has been recognized
from our beginnings by federal law and by most of the States, and
no such result has thereby occurred. Moreover, the trial judge may
terminate self-representation by a defendant who deliberately
engages in serious and obstructionist misconduct. See Illinois
v. Allen, 397 U. S. 337 . Of
course, a State may -- even over objection by the accused --
appoint a "standby counsel" to aid the accused if and when the
accused requests help, and to be available to represent the accused
in the event that termination of the defendant's
self-representation is necessary. See United States v.
Dougherty, 154 U.S.App.D.C. 76, 87-89, 473 F.2d 1113,
1124-1126.
The right of self-representation is not a license to abuse the
dignity of the courtroom. Neither is it a license not to comply
with relevant rules of procedural and substantive law. Thus,
whatever else may or may not be open to him on appeal, a defendant
who elects to represent himself cannot thereafter complain that the
quality of his own defense amounted to a denial of "effective
assistance of counsel."
[ Footnote 47 ] See n 2, supra. [ Footnote 48 ] See n 3, supra. MR. CHIEF JUSTICE BURGER, with whom MR. JUSTICE BLACKMUN and MR.
JUSTICE REHNQUIST join, dissenting.
This case, like Herring v. New York, post, p. 422 U. S. 853 ,
announced today, is another example of the judicial tendency to
constitutionalize what is thought "good." That effort fails on its
own terms here, because there is nothing desirable or useful in
permitting every accused person, even the most uneducated and
inexperienced, to insist upon conducting his own defense to
criminal charges. [ Footnote 2/1 ]
Moreover, there is no constitutional basis for Page 422 U. S. 837 the Court's holding, and it can only add to the problems of an
already malfunctioning criminal justice system. I therefore
dissent. I The most striking feature of the Court's opinion is that it
devotes so little discussion to the matter which it concedes is the
core of the decision, that is, discerning an independent basis in
the Constitution for the supposed right to represent oneself in a
criminal trial. [ Footnote 2/2 ] See ante at 422 U. S.
818 -821, and n. 15. Its ultimate assertion that such a
right is tucked between the lines of the Sixth Amendment is
contradicted by the Amendment's language and its consistent
judicial interpretation.
As the Court seems to recognize, ante at 422 U. S. 820 ,
the conclusion that the rights guaranteed by the Sixth Amendment
are "personal" to an accused reflects nothing more than the obvious
fact that it is he who is on trial, and therefore has need of a
defense. [ Footnote 2/3 ] But neither
that nearly Page 422 U. S. 838 trivial proposition nor the language of the Amendment, which
speaks in uniformly mandatory terms, leads to the further
conclusion that the right to counsel is merely supplementary and
may be dispensed with at the whim of the accused. Rather, this
Court's decisions have consistently included the right to counsel
as an integral part of the bundle making up the larger "right to a
defense as we know it." For example, in In re Oliver, 333 U. S. 257 (1948), the Court reversed a summary contempt conviction at the
hands of a "one-man grand jury," and had this to say:
"We . . . hold that failure to afford the petitioner a
reasonable opportunity to defend himself against the charge of
false and evasive swearing was a denial of due process of law. A
person's right to reasonable notice of a charge against him, and an
opportunity to be heard in his defense -- a right to his day in
court -- are basic in our system of jurisprudence, and these rights
include, as a minimum, a right to examine the witnesses against
him, to offer testimony, and to be represented by counsel." Id. at 333 U. S. 273 . See also Argersinger v. Hamlin, 407 U. S.
25 , 407 U. S. 27 -33
(1972); Gideon v. Wainwright, 372 U.
S. 335 , 372 U. S. 344 (1963).
The reason for this hardly requires explanation. The fact of the
matter is that, in all but an extraordinarily small number of
cases, an accused will lose whatever defense he may have if he
undertakes to conduct the trial himself. The Court's opinion in Powell v. Alabama, 287 U. S. 45 (1932), puts the point eloquently:
"Even the intelligent and educated layman has small, and
sometimes no, skill in the science of law. If charged with crime,
he is incapable, generally, of determining for himself whether the
indictment is good or bad. He is unfamiliar with the rules of
evidence. Left without the aid of counsel he may Page 422 U. S. 839 be put on trial without a proper charge, and convicted upon
incompetent evidence, or evidence irrelevant to the issue or
otherwise inadmissible. He lacks both the skill and knowledge
adequately to prepare his defense, even though he have a perfect
one. He requires the guiding hand of counsel at every step in the
proceedings against him. Without it, though he be not guilty, he
faces the danger of conviction because he does not know how to
establish his innocence. If that be true of men of intelligence,
how much more true is it of the ignorant and illiterate, or those
of feeble intellect." Id. at 287 U. S.
69 .
Obviously, these considerations do not vary depending upon
whether the accused actively desires to be represented by counsel
or wishes to proceed pro se. Nor is it accurate to
suggest, as the Court seems to later in its opinion, that the
quality of his representation at trial is a matter with which only
the accused is legitimately concerned. See ante at 422 U. S. 834 .
Although we have adopted an adversary system of criminal justice, see Gideon v. Wainwright, supra, the prosecution is more
than an ordinary litigant, and the trial judge is not simply an
automaton who insures that technical rules are adhered to. Both are
charged with the duty of insuring that justice, in the broadest
sense of that term, is achieved in every criminal trial. See
Brady v. Maryland, 373 U. S. 83 , 373 U. S. 87 ,
and n. 2 (1963); Berger v. United States, 295 U. S.
78 , 295 U. S. 88 (1935). That goal is ill-served, and the integrity of and public
confidence in the system are undermined, when an easy conviction is
obtained due to the defendant's ill-advised decision to waive
counsel. The damage thus inflicted is not mitigated by the lame
explanation that the defendant simply availed himself of the
"freedom" "to go to jail under his own banner. . . ." United
States ex rel. Page 422 U. S. 840 Maldonado v. Denno, 348 F.2d 12, 15 (CA2 1965). The
system of criminal justice should not be available as an instrument
of self-destruction.
In short, both the "spirit and the logic" of the Sixth Amendment
are that every person accused of crime shall receive the fullest
possible defense; in the vast majority of cases, this command can
be honored only by means of the expressly guaranteed right to
counsel, and the trial judge is in the best position to determine
whether the accused is capable of conducting his defense. True
freedom of choice and society's interest in seeing that justice is
achieved can be vindicated only if the trial court retains
discretion to reject any attempted waiver of counsel and insist
that the accused be tried according to the Constitution. This
discretion is as critical an element of basic fairness as a trial
judge's discretion to decline to accept a plea of guilty. See
Santobello v. New York, 404 U. S. 257 , 404 U. S. 262 (1971). II The Court's attempt to support its result by collecting dicta
from prior decisions is no more persuasive than its analysis of the
Sixth Amendment. Considered in context, the cases upon which the
Court relies to "beat its path" either lead it nowhere or point in
precisely the opposite direction.
In Adams v. United States ex rel. McCann, 317 U.
S. 269 (1942), and Carter v. Illinois, 329 U. S. 173 (1946), the defendants had competently waived counsel, but later
sought to renounce actions taken by them while proceeding pro
se. In both cases, this Court upheld the convictions, holding
that neither an uncounseled waiver of jury trial nor an uncounseled
guilty plea is inherently defective under the Constitution. The
language which the Court so carefully excises from those opinions
relates not to an affirmative right of self-representation, but
to Page 422 U. S. 841 the consequences of waiver. [ Footnote 2/4 ] In Adams, for example, Mr.
Justice Frankfurter was careful to point out that his reference to
a defendant's "correlative right to dispense with a lawyer's help"
meant only that "[h]e may waive his Constitutional right to
assistance of counsel . . . ," 317 U.S. at 317 U. S. 279 . See United States v. Warner, 428 F.2d 730, 733 (CA8 1970).
But, as the Court recognizes, the power to waive a constitutional
right does not carry with it the right to insist upon its opposite. Singer v. United States, 380 U. S. 24 , 380 U. S. 34 -35
(1965).
Similarly, in Carter, the Court's opinion observed that
the Constitution "does not require that, under all
circumstances, counsel be forced upon a defendant," citing Adams, 329 U.S. at 329 U. S.
174 -175 (emphasis added). I, for one, find this
statement impossible to square with the Court's present holding
that an accused is absolutely entitled to dispense with a lawyer's
help under all conditions. Thus, although Adams and Carter support the Court's conclusion that a defendant who
represents himself may not thereafter disaffirm his deliberate
trial decisions, see ante at 422 U. S.
834 -835, n. 46, they provide it no comfort regarding the
primary issue in this case. [ Footnote
2/5 ] Page 422 U. S. 842 Far more nearly in point is Price v. Johnston, 334 U. S. 266 (1948), where this Court held that, although the courts of appeals
possess the power to command that a prisoner be produced to argue
his own appeal, the exercise of that power is a matter of sound
judicial discretion. An examination of the whole of the Court's
reasoning on this point is instructive:
"The discretionary nature of the power in question grows out of
the fact that a prisoner has no absolute right to argue his own
appeal, or even to be present at the proceedings in an appellate
court. The absence of that right is in sharp contrast to his
constitutional prerogative of being present in person at each
significant stage of a felony prosecution, and to his recognized
privilege of conducting his own defense at the trial. Lawful
incarceration brings about the necessary withdrawal or limitation
of many privileges and rights, a retraction justified by the
considerations underlying our penal system. Among those so limited
is the otherwise unqualified right given by § 272 of the Judicial
Code, 28 U.S.C. § 394 [now § 1654], to parties in all the courts of
the United States to 'plead and manage their own causes
personally.'" Id. at 334 U. S.
285 -286 (citations omitted). It barely requires emphasis
that this passage contrasts the "constitutional prerogative" to be
present at trial with the "recognized privilege" of
self-representation, and strongly implies that the latter arises
only from the federal statute. It is difficult to imagine a
position less consistent with Price v. Johnston than that
taken by the Court today. Page 422 U. S. 843 The Court of Appeals cases relied upon by the Court are likewise
dubious authority for its views. Only one of those cases, United States v. Plattner, 330 F.2d 271 (CA2 1964), even
attempted a reasoned analysis of the issue, and the decision in
that case was largely based upon the misreading of Adams and Price which the Court perpetuates in its opinion
today. See 330 F.2d at 275. In every other case cited ante at 422 U. S. 817 ,
the Courts of Appeals assumed that the right of self-representation
was constitutionally based, but found that the right had not been
violated and affirmed the conviction under review. It is highly
questionable whether such holdings would even establish the law of
the Circuits from which they came.
In short, what the Court represents as a well traveled road is,
in reality, a constitutional trail which it is blazing for the
first time today, one that has not even been hinted at in our
previous decisions. Far from an interpretation of the Sixth
Amendment, it is a perversion of the provision to which we gave
full meaning in Gideon v. Wainwright and Argersinger
v. Hamlin. III Like MR. JUSTICE BLACKMUN, I hesitate to participate in the
Court's attempt to use history to take it where legal analysis
cannot. Piecing together shreds of English legal history and early
state constitutional and statutory provisions, without a full
elaboration of the context in which they occurred or any evidence
that they were relied upon by the drafters of our Federal
Constitution, creates more questions than it answers, and hardly
provides the firm foundation upon which the creation of new
constitutional rights should rest. We are well reminded that this
Court once employed an exhaustive analysis of English and colonial
practices regarding the Page 422 U. S. 844 right to counsel to justify the conclusion that it was
fundamental to a fair trial and, less than 10 years later, used
essentially the same material to conclude that it was not. Compare Powell v. Alabama, 287 U.S. at 287 U. S. 60 -65, with Betts v. Brady, 316 U. S. 455 , 316 U. S.
465 -471 (1942).
As if to illustrate this point, the single historical fact cited
by the Court which would appear truly relevant to ascertaining the
meaning of the Sixth Amendment proves too much. As the Court points
out, ante at 422 U. S. 831 ,
§ 35 of the Judiciary Act of 1789 provided a statutory right to
self-representation in federal criminal trials. The text of the
Sixth Amendment, which expressly provides only for a right to
counsel, was proposed the day after the Judiciary Act was signed.
It can hardly be suggested that the Members of the Congress of
1789, then few in number, were unfamiliar with the Amendment's
carefully structured language, which had been under discussion
since the 1787 Constitutional Convention. And it would be most
remarkable to suggest, had the right to conduct one's own defense
been considered so critical as to require constitutional
protection, that it would have been left to implication. Rather,
under traditional canons of construction, inclusion of the right in
the Judiciary Act and its omission from the constitutional
amendment drafted at the same time by many of the same men,
supports the conclusion that the omission was intentional.
There is no way to reconcile the idea that the Sixth Amendment
impliedly guaranteed the right of an accused to conduct his own
defense with the contemporaneous action of the Congress in passing
a statute explicitly giving that right. If the Sixth Amendment
created a right to self-representation, it was unnecessary for
Congress to enact any statute on the subject at all. Page 422 U. S. 845 In this case, therefore, history ought to lead judges to
conclude that the Constitution leaves to the judgment of
legislatures, and the flexible process of statutory amendment, the
question whether criminal defendants should be permitted to conduct
their trials pro se. See Betts v. Brady, supra. And the fact that we have not hinted at a contrary view for 185
years is surely entitled to some weight in the scales. [ Footnote 2/6 ] Cf. Jackman v. Rosenbaum
Co., 260 U. S. 22 , 260 U. S. 31 (1922). IV Society has the right to expect that, when courts find new
rights implied in the Constitution, their potential effect upon the
resources of our criminal justice system will be considered.
However, such considerations are conspicuously absent from the
Court's opinion in this case.
It hardly needs repeating that courts at all levels are already
handicapped by the unsupplied demand for competent advocates, with
the result that it often takes far longer to complete a given case
than experienced counsel would require. If we were to assume that
there will be widespread exercise of the newly discovered
constitutional right to self-representation, it would almost
certainly follow that there will be added congestion in the courts,
and that the quality of justice will suffer. Moreover, the Court
blandly assumes that, once an accused has elected to defend
himself, he will be bound by his choice, and not be heard to
complain of it later. Ante at 422 U. S.
834 -835, n. 46. This assumption ignores the role of
appellate review, for the reported cases are replete with instances
of a convicted defendant being relieved of a Page 422 U. S. 846 deliberate decision even when made with the advice of
counsel. See Silber v. United States, 370 U.
S. 717 (1962). It is totally unrealistic, therefore, to
suggest that an accused will always be held to the consequences of
a decision to conduct his own defense. Unless, as may be the case,
most persons accused of crime have more wit than to insist upon the
dubious benefit that the Court confers today, we can expect that
many expensive and good faith prosecutions will be nullified on
appeal for reasons that trial courts are now deprived of the power
to prevent. [ Footnote 2/7 ]
[ Footnote 2/1 ]
Absent a statute giving a right to self-representation, I
believe that trial courts should have discretion under the
Constitution to insist upon representation by counsel if the
interests of justice so require. However, I would note that the
record does not support the Court's characterization of this case
as one in which that occurred. Although he requested, and initially
was granted, permission to proceed pro se, petitioner has
expressed no dissatisfaction with the lawyer who represented him,
and has not alleged that his defense was impaired, or that his
lawyer refused to honor his suggestions regarding how the trial
should be conducted. In other words, to use the Court's phrase,
petitioner has never contended that " his defense" was not
fully presented. Instances of overbearing or ineffective counsel
can be dealt with without contriving broad constitutional rules of
dubious validity.
[ Footnote 2/2 ]
The Court deliberately, and, in my view, properly, declines to
characterize this case as one in which the defendant was denied a
fair trial. See Herring v. New York, post at 422 U. S. 871 (REHNQUIST, J., dissenting).
[ Footnote 2/3 ]
The Court's attempt to derive support for its position from the
fact that the Sixth Amendment speaks in terms of the "Assistance of
Counsel" requires little comment. It is most curious to suggest
that an accused who exercises his right to "assistance" has thereby
impliedly consented to subject himself to a "master." Ante at 422 U. S. 820 .
And counsel's responsibility to his client and role in the
litigation do not vary depending upon whether the accused would
have preferred to represent himself.
[ Footnote 2/4 ]
Indeed, the portion of the Court's quotation which warns against
turning constitutional protections into "fetters" refers to the
right to trial by jury, not the right to counsel. See Adams v.
United States ex rel. McCann, 317 U.
S. 269 , 317 U. S. 279 (1942). This Court has, of course, squarely held that there is no
constitutional right to dispense with a jury. Singer v. United
States, 380 U. S. 24 (1965).
[ Footnote 2/5 ]
No more relevant is Snyder v. Massachusetts, 291 U. S. 97 (1934). The reference in that case to an accused's "power . . . to
supersede his lawyers" simply helped explain why his defense might
"be made easier" if he were "permitted to be present at the
examination of jurors or the summing up of counsel. . . ." Id. at 291 U. S. 106 .
Mr. Justice Cardozo's opinion for the Court made plain that this
right was rooted in considerations of fundamental fairness, and was
to be distinguished from those conferred by the Confrontation
Clause. See id. at 291 U. S. 107 .
The Court's present reliance on the Snyder dicta is
therefore misplaced. See 422
U.S. 806 fn2/2|>n.2, supra. [ Footnote 2/6 ]
The fact that Congress has retained a statutory right to
self-representation suggests that it has also assumed that the
Sixth Amendment does not guarantee such a right. See 28
U.S.C. § 1654.
[ Footnote 2/7 ]
Some of the damage we can anticipate from a defendant's
ill-advised insistence on conducting his own defense may be
mitigated by appointing a qualified lawyer to sit in the case as
the traditional "friend of the court." The Court does not foreclose
this option. See ante at 422 U. S.
834 -835, n. 46.
MR. JUSTICE BLACKMUN, with whom THE CHIEF JUSTICE and MR.
JUSTICE REHNQUIST join, dissenting.
Today, the Court holds that the Sixth Amendment guarantees to
every defendant in a state criminal trial the right to proceed
without counsel whenever he elects to do so. I find no textual
support for this conclusion in the language of the Sixth Amendment.
I find the historical evidence relied upon by the Court to be
unpersuasive, especially in light of the recent history of criminal
procedure. Finally, I fear that the right to self-representation
constitutionalized today frequently will cause procedural confusion
without advancing any significant strategic interest of the
defendant. I therefore dissent. I The starting point, of course, is the language of the Sixth
Amendment:
"In all criminal prosecutions, the accused shall enjoy Page 422 U. S. 847 the right to a speedy and public trial, by an impartial jury of
the State and district wherein the crime shall have been committed,
which district shall have been previously ascertained by law, and
to be informed of the nature and cause of the accusation; to be
confronted with the witnesses against him; to have compulsory
process for obtaining witnesses in his favor, and to have the
Assistance of Counsel for his defence."
It is self-evident that the Amendment makes no direct reference
to self-representation. Indeed, the Court concedes that the right
to self-representation is "not stated in the Amendment in so many
words." Ante at 422 U. S.
819 .
It could be argued that the right to assistance of counsel
necessarily carries with it the right to waive assistance of
counsel. The Court recognizes, however, ante at 422 U. S.
819 -820, n. 15, that it has squarely rejected any
mechanical interpretation of the Bill of Rights. Mr. Chief Justice
Warren, speaking for a unanimous Court in Singer v. United
States, 380 U. S. 24 , 380 U. S. 34 -35
(1965), stated: "The ability to waive a constitutional right does
not ordinarily carry with it the right to insist upon the opposite
of that right."
Where, then, in the Sixth Amendment does one find this right to
self-representation? According to the Court, it is "necessarily
implied by the structure of the Amendment." Ante at 422 U. S. 819 .
The Court's chain of inferences is delicate, and deserves scrutiny.
The Court starts with the proposition that the Sixth Amendment is
"a compact statement of the rights necessary to a full defense." Ante at 422 U. S. 818 .
From this proposition, the Court concludes that the Sixth Amendment
"constitutionalizes the right in an adversary criminal trial to
make a defense as we know it." Ibid. Up to this point, at
least as a general proposition, the Court's reasoning is
unexceptionable. Page 422 U. S. 848 The Court, however, then concludes that, because the specific
rights in the Sixth Amendment are personal to the accused, the
accused must have a right to exercise those rights personally.
Stated somewhat more succinctly, the Court reasons that, because
the accused has a personal right to "a defense as we know it," he
necessarily has a right to make that defense personally. I
disagree. Although I believe the specific guarantees of the Sixth
Amendment are personal to the accused, I do not agree that the
Sixth Amendment guarantees any particular procedural method of
asserting those rights. If an accused has enjoyed a speedy trial by
an impartial jury in which he was informed of the nature of the
accusation, confronted with the witnesses against him, afforded the
power of compulsory process, and represented effectively by
competent counsel, I do not see that the Sixth Amendment requires
more.
The Court suggests that thrusting counsel upon the accused
against his considered wish violates the logic of the Sixth
Amendment because counsel is to be an assistant, not a master. The
Court seeks to support its conclusion by historical analogy to the
notorious procedures of the Star Chamber. The potential for
exaggerated analogy, however, is markedly diminished when one
recalls that petitioner is seeking an absolute right to
self-representation. This is not a case where defense counsel,
against the wishes of the defendant or with inadequate
consultation, has adopted a trial strategy that significantly
affects one of the accused's constitutional rights. For such
overbearing conduct by counsel, there is a remedy. Brookhart v.
Janis, 384 U. S. 1 (1966); Fay v. Noia, 372 U. S. 391 , 372 U. S. 439 (1963). Nor is this a case where distrust, animosity, or other
personal differences between the accused and his would-be counsel
have rendered effective representation unlikely or impossible. Page 422 U. S. 849 See Brown v. Craven, 424 F.2d 1166, 1169-1170 (CA9
1970). See also Anders v. California, 386 U.
S. 738 (1967). Nor is this even a case where a defendant
has been forced, against his wishes, to expend his personal
resources to pay for counsel for his defense. See generally
Fuller v. Oregon, 417 U. S. 40 (1974); James v. Strange, 407 U.
S. 128 (1972). Instead, the Court holds that any
defendant in any criminal proceeding may insist on representing
himself regardless of how complex the trial is likely to be and
regardless of how frivolous the defendant's motivations may be. I
cannot agree that there is anything in the Due Process Clause or
the Sixth Amendment that requires the States to subordinate the
solemn business of conducting a criminal prosecution to the
whimsical -- albeit voluntary -- caprice of every accused who
wishes to use his trial as a vehicle for personal or political
self-gratification.
The Court seems to suggest that, so long as the accused is
willing to pay the consequences of his folly, there is no reason
for not allowing a defendant the right to self-representation. Ante at 422 U. S. 834 . See also United States ex rel. Maldonado v. Denno, 348
F.2d 12, 15 (CA2 1965) ("[E]ven in cases where the accused is
harming himself by insisting on conducting his own defense, respect
for individual autonomy requires that he be allowed to go to jail
under his own banner if he so desires. . . ."). That view ignores
the established principle that the interest of the State in a
criminal prosecution "is not that it shall win a case, but that
justice shall be done." Berger v. United States, 295 U. S. 78 , 295 U. S. 88 (1935). See also Singer v. United States, 380 U.S. at 380 U. S. 37 .
For my part, I do not believe that any amount of pro se pleading can cure the injury to society of an unjust result, but I
do believe that a just result should prove to be an effective balm
for almost any frustrated pro se defendant. Page 422 U. S. 850 II The Court argues that its conclusion is supported by the
historical evidence on self-representation. It is true that
self-representation was common, if not required, in 18th century
English and American prosecutions. The Court points with special
emphasis to the guarantees of self-representation in colonial
charters, early state constitutions, and § 35 of the first
Judiciary Act as evidence contemporaneous with the Bill of Rights
of widespread recognition of a right to self-representation.
I do not participate in the Court's reliance on the historical
evidence. To begin with, the historical evidence seems to me to be
inconclusive in revealing the original understanding of the
language of the Sixth Amendment. At the time the Amendment was
first proposed, both the right to self-representation and the right
to assistance of counsel in federal prosecutions were guaranteed by
statute. The Sixth Amendment expressly constitutionalized the right
to assistance of counsel, but remained conspicuously silent on any
right of self-representation. The Court believes that this silence
of the Sixth Amendment as to the latter right is evidence of the
Framers' belief that the right was so obvious and fundamental that
it did not need to be included "in so many words" in order to be
protected by the Amendment. I believe it is at least equally
plausible to conclude that the Amendment's silence as to the right
of self-representation indicates that the Framers simply did not
have the subject in mind when they drafted the language.
The paucity of historical support for the Court's position
becomes far more profound when one examines it against the
background of two developments in the more recent history of
criminal procedure. First, until the middle of the 19th century,
the defendant in a criminal proceeding in this country was almost
always disqualified Page 422 U. S. 851 from testifying as a witness because of his "interest" in the
outcome. See generally Ferguson v. Georgia, 365 U.
S. 570 (1961). Thus, the ability to defend "in person"
was frequently the defendant's only chance to present his side of
the case to the judge or jury. See, e.g., Wilson v. State, 50 Tenn. 232 (1871). Such Draconian rules of evidence, of course,
are now a relic of the past, because virtually every State has
passed a statute abrogating the common law rule of
disqualification. See Ferguson v. Georgia, 365 U.S. at 365 U. S.
575 -577, 365 U. S. 596 .
With the abolition of the common law disqualification, the right to
appear "in person" as well as by counsel lost most, if not all, of
its original importance. See Grano, The Right to Counsel:
Collateral Issues Affecting Due Process, 54 Minn.L.Rev. 1175,
1192-1194 (1970).
The second historical development is this Court's elaboration of
the right to counsel. The road the Court has traveled from Powell v. Alabama, 287 U. S. 45 (1932), to Argersinger v. Hamlin, 407 U. S.
25 (1972), need not be recounted here. For our purposes,
it is sufficient to recall that, from start to finish, the
development of the right to counsel has been based on the premise
that representation by counsel is essential to ensure a fair trial.
The Court concedes this, and acknowledges that
"a strong argument can surely be made that the whole thrust of
those decisions must inevitably lead to the conclusion that a State
may constitutionally impose a lawyer upon even an unwilling
defendant." Ante at 422 U. S. 833 .
Nevertheless, the Court concludes that self-representation must be
allowed despite the obvious dangers of unjust convictions in order
to protect the individual defendant's right of free choice. As I
have already indicated, I cannot agree to such a drastic
curtailment of the interest of the State in seeing that justice is
done in a real and objective sense. Page 422 U. S. 852 III In conclusion, I note briefly the procedural problems that, I
suspect, today's decision will visit upon trial courts in the
future. Although the Court indicates that a pro se defendant necessarily waives any claim he might otherwise make of
ineffective assistance of counsel, ante at 422 U. S.
834 -835, n. 46, the opinion leaves open a host of other
procedural questions. Must every defendant be advised of his right
to proceed pro se? If so, when must that notice be given? Since the
right to assistance of counsel and the right to self-representation
are mutually exclusive, how is the waiver of each right to be
measured? If a defendant has elected to exercise his right to
proceed pro se, does he still have a constitutional right
to assistance of standby counsel? How soon in the criminal
proceeding must a defendant decide between proceeding by counsel or pro se? Must he be allowed to switch in mid-trial? May a
violation of the right to self-representation ever be harmless
error? Must the trial court treat the pro se defendant
differently than it would professional counsel? I assume that many
of these questions will be answered with finality in due course.
Many of them, however, such as the standards of waiver and the
treatment of the pro se defendant, will haunt the trial of
every defendant who elects to exercise his right to
self-representation. The procedural problems spawned by an absolute
right to self-representation will far outweigh whatever tactical
advantage the defendant may feel he has gained by electing to
represent himself.
If there is any truth to the old proverb that "one who is his
own lawyer has a fool for a client," the Court by its opinion today
now bestows a constitutional right on one to make a fool of
himself. | The Supreme Court ruled that a defendant in a state criminal trial has the constitutional right to represent themselves without a lawyer if they voluntarily and intelligently choose to do so. The court decided that states cannot force a lawyer upon a defendant who wishes to conduct their own defense. |
Criminal Trials & Prosecutions | Brewer v. Williams | https://supreme.justia.com/cases/federal/us/430/387/ | U.S. Supreme Court Brewer v. Williams, 430
U.S. 387 (1977) Brewer v. Williams No. 74-1263 Argued October 4,
1976 Decided March 23,
1977 430
U.S. 387 CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE EIGHTH
CIRCUIT Syllabus Respondent was arrested, arraigned, and committed to jail in
Davenport, Iowa, for abducting a 10-year-old girl in Des Moines,
Iowa. Both his Des Moines lawyer and his lawyer at the Davenport
arraignment advised respondent not to make any statements until
after consulting with the Des Moines lawyer upon being returned to
Des Moines, and the police officers who were to accompany
respondent on the automobile drive back to Des Moines agreed not to
question him during the trip. During the trip, respondent expressed
no willingness to be interrogated in the absence of an attorney,
but instead stated several times that he would tell the whole story
after seeing his Des Moines lawyer. However, one of the police
officers, who knew that respondent was a former mental patient and
was deeply religious, sought to obtain incriminating remarks from
respondent by stating to him during the drive that he felt they
should stop and locate the girl's body because her parents were
entitled to a Christian burial for the girl, who was taken away
from them on Christmas Eve. Respondent eventually made several
incriminating statements in the course of the trip, and finally
directed the police to the girl's body. Respondent was tried and
convicted of murder, over his objections to the admission of
evidence relating to or resulting from any statements he made
during the automobile ride, and the Iowa Supreme Court affirmed,
holding, as did the trial court, that respondent had waived his
constitutional right to the assistance of counsel. Respondent then
petitioned for habeas corpus in Federal District Court, which held
that the evidence in question had been wrongly admitted at
respondent's trial on the ground, inter alia, that he had
been denied his constitutional right to the assistance of counsel,
and further ruled that he had not waived that right. The Court of
Appeals affirmed. Petitioner warden claims that the District Court,
in making its findings of fact, disregarded 28 U.S.C. § 2254(d),
which provides that, subject to certain exceptions, federal habeas
corpus courts shall accept as correct the factual determinations
made by state courts. Held: 1. The District Court correctly applied 28 U.S.C. § 2254(d) in
its Page 430 U. S. 388 resolution of the disputed evidentiary facts where it appears
that it made no findings of fact in conflict with those of the Iowa
courts, and that its additional findings of fact based upon its
examination of the state court record were conscientiously and
carefully explained, and were approved by the Court of Appeals as
being supported by the record. Pp. 395-397.
2. Respondent was deprived of his constitutional right to
assistance of counsel. Pp. 430 U. S. 397 -401.
(a) The right to counsel granted by the Sixth and Fourteenth
Amendments means at least that a person is entitled to a lawyer's
help at or after the time that judicial proceedings have been
initiated against him, and here there is no doubt that judicial
proceedings had been initiated against respondent before the
automobile trip started, since a warrant had been issued for his
arrest, he had been arraigned, and had been committed to jail. Pp. 430 U. S.
398 -399.
(b) An individual against whom adversary proceedings have
commenced has a right to legal representation when the government
interrogates him, Massiah v. United States, 377 U.
S. 201 , and since here the police officer's "Christian
burial speech" was tantamount to interrogation, respondent was
entitled to the assistance of counsel at the time he made the
incriminating statements. Pp. 430 U. S.
399 -401.
3. The circumstances of record provide, when viewed in light of
respondent's assertions of his right to counsel, no reasonable
basis for finding that respondent waived his right to the
assistance of counsel, the record falling far short of sustaining
the State's burden to prove "an intentional relinquishment or
abandonment of a known right or privilege," Johnson v.
Zerbst, 304 U. S. 458 , 304 U. S. 464 .
Pp. 430 U. S.
401 -406.
509 F.2d 227, affirmed.
STEWART, J., delivered the opinion of the Court, in which
BRENNAN, MARSHALL, POWELL, and STEVENS, JJ., joined. MARSHALL, J., post, p. 430 U. S. 406 ,
POWELL, J., post, p. 430 U. S. 409 ,
and STEVENS, J., post, p. 430 U. S. 414 ,
filed concurring opinions. BURGER, C.J., filed a dissenting
opinion, post, p. 430 U. S. 415 . WHITE, J., filed a dissenting opinion, in
which BLACKMUN and REHNQUIST, JJ., joined, post, p. 430 U. S. 429 .
BLACKMUN, J., filed a dissenting opinion, in which WHITE and
REHNQUIST, JJ., joined, post, p. 430 U. S.
438 . Page 430 U. S. 389 MR. JUSTICE STEWART delivered the opinion of the Court.
An Iowa trial jury found the respondent, Robert Williams, guilty
of murder. The judgment of conviction was affirmed in the Iowa
Supreme Court by a closely divided vote. In a subsequent habeas
corpus proceeding, a Federal District Page 430 U. S. 390 Court ruled that, under the United States Constitution, Williams
is entitled to a new trial, and a divided Court of Appeals for the
Eighth Circuit agreed. The question before us is whether the
District Court and the Court of Appeals were wrong. I On the afternoon of December 24, 1968, a 10-year-old girl named
Pamela Powers went with her family to the YMCA in Des Moines, Iowa,
to watch a wrestling tournament in which her brother was
participating. When she failed to return from a trip to the
washroom, a search for her began. The search was unsuccessful.
Robert Williams, who had recently escaped from a mental
hospital, was a resident of the YMCA. Soon after the girl's
disappearance, Williams was seen in the YMCA lobby carrying some
clothing and a large bundle wrapped in a blanket. He obtained help
from a 14-year-old boy in opening the street door of the YMCA and
the door to his automobile parked outside. When Williams placed the
bundle in the front seat of his car, the boy "saw two legs in it
and they were skinny and white." Before anyone could see what was
in the bundle, Williams drove away. His abandoned car was found the
following day in Davenport, Iowa, roughly 160 miles east of Des
Moines. A warrant was then issued in Des Moines for his arrest on a
charge of abduction.
On the morning of December 26, a Des Moines lawyer named Henry
McKnight went to the Des Moines police station and informed the
officers present that he had just received a long-distance call
from Williams, and that he had advised Williams to turn himself in
to the Davenport police. Williams did surrender that morning to the
police in Davenport, and they booked him on the charge specified in
the arrest warrant and gave him the warnings required by Miranda v. Arizona, 384 U. S. 436 . The
Davenport police then telephoned Page 430 U. S. 391 their counterparts in Des Moines to inform them that Williams
had surrendered. McKnight, the lawyer, was still at the Des Moines
police headquarters, and Williams conversed with McKnight on the
telephone. In the presence of the Des Moines chief of police and a
police detective named Leaming, McKnight advised Williams that Des
Moines police officers would be driving to Davenport to pick him
up, that the officers would not interrogate him or mistreat him,
and that Williams was not to talk to the officers about Pamela
Powers until after consulting with McKnight upon his return to Des
Moines. As a result of these conversations, it was agreed between
McKnight and the Des Moines police officials that Detective Leaming
and a fellow officer would drive to Davenport to pick up Williams,
that they would bring him directly back to Des Moines, and that
they would not question him during the trip.
In the meantime, Williams was arraigned before a judge in
Davenport on the outstanding arrest warrant. The judge advised him
of his Miranda rights and committed him to jail. Before
leaving the courtroom, Williams conferred with a lawyer named
Kelly, who advised him not to make any statements until consulting
with McKnight back in Des Moines.
Detective Leaming and his fellow officer arrived in Davenport
about noon to pick up Williams and return him to Des Moines. Soon
after their arrival, they met with Williams and Kelly, who, they
understood, was acting as Williams' lawyer. Detective Leaming
repeated the Miranda warnings, and told Williams:
"[W]e both know that you're being represented here by Mr. Kelly
and you're being represented by Mr. McKnight in Des Moines, and . .
. I want you to remember this because we'll be visiting between
here and Des Moines."
Williams then conferred again with Kelly alone, and, after this
conference, Kelly reiterated to Detective Leaming that Page 430 U. S. 392 Williams was not to be questioned about the disappearance of
Pamela Powers until after he had consulted with McKnight back in
Des Moines. When Leaming expressed some reservations, Kelly firmly
stated that the agreement with McKnight was to be carried out --
that there was to be no interrogation of Williams during the
automobile journey to Des Moines. Kelly was denied permission to
ride in the police car back to Des Moines with Williams and the two
officers.
The two detectives, with Williams in their charge, then set out
on the 160-mile drive. At no time during the trip did Williams
express a willingness to be interrogated in the absence of an
attorney. Instead, he stated several times that "[w]hen I get to
Des Moines and see Mr. McKnight, I am going to tell you the whole
story." Detective Leaming knew that Williams was a former mental
patient, and knew also that he was deeply religious.
The detective and his prisoner soon embarked on a wide-ranging
conversation covering a variety of topics, including the subject of
religion. Then, not long after leaving Davenport and reaching the
interstate highway, Detective Leaming delivered what has been
referred to in the briefs and oral arguments as the "Christian
burial speech." Addressing Williams as "Reverend," the detective
said:
"I want to give you something to think about while we're
traveling down the road. . . . Number one, I want you to observe
the weather conditions, it's raining, it's sleeting, it's freezing,
driving is very treacherous, visibility is poor, it's going to be
dark early this evening. They are predicting several inches of snow
for tonight, and I feel that you yourself are the only person that
knows where this little girl's body is, that you yourself have only
been there once, and if you get a snow on top of it you yourself
may be unable to find it. And, since we will be going right past
the area on the way into Page 430 U. S. 393 Des Moines, I felt that we could stop and locate the body, that
the parents of this little girl should be entitled to a Christian
burial for the little girl who was snatched away from them on
Christmas [E]ve and murdered. And I feel we should stop and locate
it on the way in, rather than waiting until morning and trying to
come back out after a snow storm, and possibly not being able to
find it at all."
Williams asked Detective Leaming why he thought their route to
Des Moines would be taking them past the girl's body, and Leaming
responded that he knew the body was in the area of Mitchellville --
a town they would be passing on the way to Des Moines. [ Footnote 1 ] Leaming then stated: "I do
not want you to answer me. I don't want to discuss it any further.
Just think about it as we're riding down the road."
As the car approached Grinnell, a town approximately 100 miles
west of Davenport, Williams asked whether the police had found the
victim's shoes. When Detective Leaming replied that he was unsure,
Williams directed the officers to a service station where he said
he had left the shoes; a search for them proved unsuccessful. As
they continued towards Des Moines, Williams asked whether the
police had found the blanket, and directed the officers to a rest
area where he said he had disposed of the blanket. Nothing was
found. The car continued towards Des Moines, and as it approached
Mitchellville, Williams said that he would show the officers where
the body was. He then directed the police to the body of Pamela
Powers.
Williams was indicted for first-degree murder. Before trial, his
counsel moved to suppress all evidence relating to or resulting
from any statements Williams had made during the automobile ride
from Davenport to Des Moines. After Page 430 U. S. 394 an evidentiary hearing, the trial judge denied the motion. He
found that
"an agreement was made between defense counsel and the police
officials to the effect that the Defendant was not to be questioned
on the return trip to Des Moines,"
and that the evidence in question had been elicited from
Williams during "a critical stage in the proceedings requiring the
presence of counsel on his request." The judge ruled, however, that
Williams had "waived his right to have an attorney present during
the giving of such information." [ Footnote 2 ]
The evidence in question was introduced over counsel's
continuing objection at the subsequent trial. The jury found
Williams guilty of murder, and the judgment of conviction was
affirmed by the Iowa Supreme Court, a bare majority of whose
members agreed with the trial court that Williams had "waived his
right to the presence of his counsel" on the automobile ride from
Davenport to Des Moines. State v. Williams, 182 N.W.2d 396 ,
402. The four dissenting justices expressed the view that,
"when counsel and police have agreed defendant is not to be
questioned until counsel is present and defendant has been advised
not to talk and repeatedly has stated he will tell the whole story
after he talks with counsel, the state should be required to make a
stronger showing of intentional voluntary waiver than was made
here." Id. at 408.
Williams then petitioned for a writ of habeas corpus in the
United States District Court for the Southern District of Iowa.
Counsel for the State and for Williams stipulated that "the case
would be submitted on the record of facts and proceedings in the
trial court, without taking of further testimony." The District
Court made findings of fact as summarized above, and concluded as a
matter of law that the evidence in question had been wrongly
admitted at Page 430 U. S. 395 Williams' trial. This conclusion was based on three alternative
and independent grounds: (1) that Williams had been denied his
constitutional right to the assistance of counsel; (2) that he had
been denied the constitutional protections defined by this Court's
decisions in Escobedo v. Illinois, 378 U.
S. 478 , and Miranda v. Arizona, 384 U.
S. 436 ; and (3) that, in any event, his
self-incriminatory statements on the automobile trip from Davenport
to Des Moines had been involuntarily made. Further, the District
Court ruled that there had been no waiver by Williams of the
constitutional protections in question. 375 F.
Supp. 170 .
The Court of Appeals for the Eighth Circuit, with one judge
dissenting, affirmed this judgment, 509 F.2d 227, and denied a
petition for rehearing en banc. We granted certiorari to consider
the constitutional issues presented. 423 U.S. 1031. A Before turning to those issues, we must consider the
petitioner's threshold claim that the District Court disregarded
the provisions of 28 U.S.C. § 2254(d) in making its findings of
fact in this case. That statute, which codifies most of the
criteria set out in Townsend v. Sain, 372 U.
S. 293 , provides that, subject to enumerated exceptions,
federal habeas corpus courts shall accept as correct the factual
determinations made by the courts of the States. [ Footnote 3 ] Page 430 U. S. 396 We conclude that there was no disregard of § 2254(d) in this
case. Although either of the parties might well have requested an
evidentiary hearing in the federal habeas corpus proceedings, Townsend v. Sain, supra, at 372 U. S. 322 ,
they both instead voluntarily agreed in advance that the federal
court should decide the case on the record made in the courts of
the State. In so proceeding, the District Court made no Page 430 U. S. 397 findings of fact in conflict with those of the Iowa courts. The
District Court did make some additional findings of fact based upon
its examination of the state court record, among them the findings
that Kelly, the Davenport lawyer, had requested permission to ride
in the police car from Davenport to Des Moines, and that Detective
Leaming had refused this request. But the additional findings were
conscientiously and carefully explained by the District Court, 375
F. Supp. at 175-176, and were reviewed and approved by the Court of
Appeals, which expressly held that "the District Court correctly
applied 28 U.S.C. § 2254 in its resolution of the disputed
evidentiary facts, and that the facts as found by the District
Court had substantial basis in the record," 509 F.2d at 231. The
strictures of 28 U.S.C. § 2254(d) require no more. [ Footnote 4 ] B As stated above, the District Court based its judgment in this
case on three independent grounds. The Court of Appeals appears to
have affirmed the judgment on two of those grounds. [ Footnote 5 ] We have concluded that only one
of them need be considered here.
Specifically, there is no need to review in this case the
doctrine of Miranda v. Arizona, a doctrine designed to
secure the constitutional privilege against compulsory
self-incrimination, Michigan v. Tucker, 417 U.
S. 433 , 417 U. S.
438 -439. It is equally unnecessary to evaluate the
ruling of the District Court that Williams' self-incriminating
statements were, indeed, involuntarily made. Cf. Spano v. New
York, 360 U. S. 315 . For
it is clear that the judgment before us must, in any event, be
affirmed upon the ground that Williams was deprived Page 430 U. S. 398 of a different constitutional right -- the right to the
assistance of counsel.
This right, guaranteed by the Sixth and Fourteenth Amendments,
is indispensable to the fair administration of our adversary system
of criminal justice. Its vital need at the pretrial stage has
perhaps nowhere been more succinctly explained than in Mr. Justice
Sutherland's memorable words for the Court 44 years ago in Powell v. Alabama, 287 U. S. 45 , 287 U. S.
57 :
"[D]uring perhaps the most critical period of the proceedings
against these defendants, that is to say, from the time of their
arraignment until the beginning of their trial, when consultation,
thorough-going investigation, and preparation were vitally
important, the defendants did not have the aid of counsel in any
real sense, although they were as much entitled to such aid during
that period as at the trial itself."
There has occasionally been a difference of opinion within the
Court as to the peripheral scope of this constitutional right. See Kirby v. Illinois, 406 U. S. 682 ; Coleman v. Alabama, 399 U. S. 1 . But its
basic contours, which are identical in state and federal contexts, Gideon v. Wainwright, 372 U. S. 335 ; Argersinger v. Hamlin, 407 U. S. 25 , are
too well established to require extensive elaboration here.
Whatever else it may mean, the right to counsel granted by the
Sixth and Fourteenth Amendments means at least that person is
entitled to the help of a lawyer at or after the time that judicial
proceedings have been initiated against him -- "whether by way of
formal charge, preliminary hearing, indictment, information, or
arraignment." Kirby v. Illinois, supra at 406 U. S. 689 . See Powell v. Alabama, supra; Johnson v. Zerbst, 304 U. S. 458 ; Hamilton v. Alabama, 368 U. S. 52 ; Gideon v. Wainwright, supra; White v. Maryland, 373 U. S. 59 ; Massiah v. United States, 377 U.
S. 201 ; United Page 430 U. S. 399 States v. Wade, 388.U.S. 218; Gilbert v.
California, 388 U. S. 263 ; Coleman v. Alabama, supra. There can be no doubt in the present case that judicial
proceedings had been initiated against Williams before the start of
the automobile ride from Davenport to Des Moines. A warrant had
been issued for his arrest, he had been arraigned on that warrant
before a judge in a Davenport courtroom, and he had been committed
by the court to confinement in jail. The State does not contend
otherwise.
There can be no serious doubt, either, that Detective Leaming
deliberately and designedly set out to elicit information from
Williams just as surely as -- and perhaps more effectively than --
if he had formally interrogated him. Detective Leaming was fully
aware before departing for Des Moines that Williams was being
represented in Davenport by Kelly and in Des Moines by McKnight.
Yet he purposely sought during Williams' isolation from his lawyers
to obtain as much incriminating information as possible. Indeed,
Detective Leaming conceded as much when he testified at Williams'
trial:
"Q. In fact, Captain, whether he was a mental patient or not,
you were trying to get all the information you could before he got
to his lawyer, weren't you?"
"A. I was sure hoping to find out where that little girl was,
yes, sir."
" * * * *" "Q. Well, I'll put it this way: You was [ sic ] hoping to
get all the information you could before Williams got back to
McKnight, weren't you?"
"A. Yes, sir. [ Footnote 6 ]
" Page 430 U. S. 400 The state courts clearly proceeded upon the hypothesis that
detective Leaming's "Christian burial speech" had been tantamount
to interrogation. Both courts recognized that Williams had been
entitled to the assistance of counsel at the time he made the
incriminating statements. [ Footnote
7 ] Yet no such constitutional protection would have come into
play if there had been no interrogation.
The circumstances of this case are thus constitutionally
indistinguishable from those presented in Massiah v. United
States, supra. The petitioner in that case was indicted for
violating the federal narcotics law. He retained a lawyer, pleaded
not guilty, and was released on bail. While he was free on bail a
federal agent succeeded by surreptitious means in listening to
incriminating statements made by him. Evidence of these statements
was introduced against the petitioner at his trial, and he was
convicted. This Court reversed the conviction, holding
"that the petitioner was denied the basic protections of that
guarantee [the right to counsel] when there was used against him at
his trial evidence of his own incriminating words, which federal
agents had deliberately elicited from him after he had been
indicted and in the absence of his counsel."
377 U.S. at 377 U. S.
206 .
That the incriminating statements were elicited surreptitiously
in the Massiah case, and otherwise here, is
constitutionally irrelevant. See ibid.; McLeod v. Ohio, 381 U. S. 356 ; United States v. Crisp, 435 F.2d 354, 358 (CA7); Page 430 U. S. 401 United States ex rel. O'Connor v. New Jersey, 405 F.2d
632, 636 (CA3); Hancock v. White, 378 F.2d 479 (CA1).
Rather, the clear rule of Massiah is that, once adversary
proceedings have commenced against an individual, he has a right to
legal representation when the government interrogates him.
[ Footnote 8 ] It thus requires
no wooden or technical application of the Massiah doctrine
to conclude that Williams was entitled to the assistance of counsel
guaranteed to him by the Sixth and Fourteenth Amendments. III The Iowa courts recognized that Williams had been denied the
constitutional right to the assistance of counsel. [ Footnote 9 ] They held, however, that he had
waived that right during the course of the automobile trip from
Davenport to Des Moines. The state trial court explained its
determination of waiver as follows:
"The time element involved on the trip, the general
circumstances of it, and, more importantly, the absence on the
Defendant's part of any assertion of his right or desire not to
give information absent the presence of his attorney, are the main
foundations for the Court's conclusion that he voluntarily waived
such right. " Page 430 U. S. 402 In its lengthy opinion affirming this determination, the Iowa
Supreme Court applied "the "totality of circumstances" test for a
showing of waiver of constitutionally protected rights in the
absence of an express waiver," and concluded that
"evidence of the time element involved on the trip, the general
circumstances of it, and the absence of any request or expressed
desire for the aid of counsel before or at the time of giving
information were sufficient to sustain a conclusion that defendant
did waive his constitutional rights as alleged."
182 N.W.2d at 401, 402.
In the federal habeas corpus proceeding, the District Court,
believing that the issue of waiver was not one of fact, but of
federal law, held that the Iowa courts had "applied the wrong
constitutional standards" in ruling that Williams had waived the
protections that were his under the Constitution. 375 F. Supp. at
182. The court held
"that it is the government which bears a heavy burden .
. . but that is the burden which explicitly was placed on
[Williams] by the state courts." Ibid. (emphasis in original). After carefully reviewing
the evidence, the District Court concluded:
"[U]nder the proper standards for determining waiver, there
simply is no evidence to support a waiver. . . . [T]here is no
affirmative indication . . . that [Williams] did waive his rights.
. . . [T]he state courts' emphasis on the absence of a demand for
counsel was not only legally inappropriate, but factually
unsupportable, as well, since Detective Leaming himself testified
that [Williams], on several occasions during the trip, indicated
that he would talk after he saw Mr. McKnight. Both these
statements and Mr. Kelly's statement to Detective Leaming that
[Williams] would talk only after seeing Mr. McKnight in Des Moines
certainly were assertions of [Williams'] 'right or desire not to
give information absent the presence of his attorney. . . .'
Moreover, the statements were obtained only after Detective Page 430 U. S. 403 Leaming's use of psychology on a person whom he knew to be
deeply religious and an escapee from a mental hospital -- with the
specific intent to elicit incriminating statements. In the face of
this evidence, the State has produced no affirmative evidence
whatsoever to support its claim of waiver, and, a
fortiori, it cannot be said that the State has met its 'heavy
burden' of showing a knowing and intelligent waiver of . . . Sixth
Amendment rights." Id. at 182-183 (emphasis in original; footnote
omitted).
The Court of Appeals approved the reasoning of the District
Court:
"A review of the record here . . . discloses no facts to support
the conclusion of the state court that [Williams] had waived his
constitutional rights other than that [he] had made incriminating
statements. . . . The District Court here properly concluded that
an incorrect constitutional standard had been applied by the state
court in determining the issue of waiver. . . ."
" * * * *" "[T]his court recently held that an accused can voluntarily,
knowingly and intelligently waive his right to have counsel present
at an interrogation after counsel has been appointed. . . . The
prosecution, however, has the weighty obligation to show that the
waiver was knowingly and intelligently made. We quite agree with
Judge Hanson that the state here failed to so show."
509 F.2d at 233.
The District Court and the Court of Appeals were correct in the
view that the question of waiver was not a question of historical
fact, but one which, in the words of Mr. Justice Frankfurter,
requires "application of constitutional principles to the facts as
found. . . ." Brown v. Allen, 344 U.
S. 443 , Page 430 U. S. 404 344 U. S. 507 (separate opinion). See Townsend v. Sain, 372 U.S. at 372 U. S. 309 n. 6, 318; Brookhart v. Janis, 384 U. S.
1 , 384 U. S. 4 .
The District Court and the Court of Appeals were also correct in
their understanding of the proper standard to be applied in
determining the question of waiver as a matter of federal
constitutional law -- that it was incumbent upon the State to prove
"an intentional relinquishment or abandonment of a known right or
privilege." Johnson v. Zerbst, 304 U.S. at 304 U. S. 464 .
That standard has been reiterated in many cases. We have said that
the right to counsel does not depend upon a request by the
defendant, Carnley v. Cochran, 369 U.
S. 506 , 369 U. S. 513 ; cf. Miranda v. Arizona, 384 U.S. at 384 U. S. 471 ,
and that courts indulge in every reasonable presumption against
waiver, e.g., Brookhart v. Janis, supra at 384 U. S. 4 ; Glasser v. United States, 315 U. S.
60 , 315 U. S. 70 .
This strict standard applies equally to an alleged waiver of the
right to counsel whether at trial or at a critical stage of
pretrial proceedings. Schneckloth v. Bustamonte, 412 U. S. 218 , 412 U. S.
238 -240; United States v. Wade, 388 U.S. at 388 U. S.
237 .
We conclude, finally, that the Court of Appeals was correct in
holding that, judged by these standards, the record in this case
falls far short of sustaining petitioner's burden. It is true that
Williams had been informed of and appeared to understand his right
to counsel. But waiver requires not merely comprehension, but
relinquishment, and Williams' consistent reliance upon the advice
of counsel in dealing with the authorities refutes any suggestion
that he waived that right. He consulted McKnight by long-distance
telephone before turning himself in. He spoke with McKnight by
telephone again shortly after being booked. After he was arraigned,
Williams sought out and obtained legal advice from Kelly. Williams
again consulted with Kelly after Detective Leaming and his fellow
officer arrived in Davenport. Throughout, Williams was advised not
to make any statements before seeing McKnight in Des Moines, and
was Page 430 U. S. 405 assured that the police had agreed not to question him. His
statements while in the car that he would tell the whole story
after seeing McKnight in Des Moines were the clearest expressions
by Williams himself that he desired the presence of an attorney
before any interrogation took place. But even before making these
statements, Williams had effectively asserted his right to counsel
by having secured attorneys at both ends of the automobile trip,
both of whom, acting as his agents, had made clear to the police
that no interrogation was to occur during the journey. Williams
knew of that agreement and, particularly in view of his consistent
reliance on counsel, there is no basis for concluding that he
disavowed it. [ Footnote
10 ]
Despite Williams' express and implicit assertions of his right
to counsel, Detective Leaming proceeded to elicit incriminating
statements from Williams. Leaming did not preface this effort by
telling Williams that he had a right to the presence of a lawyer,
and made no effort at all to ascertain whether Williams wished to
relinquish that right. The circumstances of record in this case
thus provide no reasonable basis for finding that Williams waived
his right to the assistance of counsel.
The Court of Appeals did not hold, nor do we, that, under the
circumstances of this case, Williams could not, without
notice to counsel, have waived his rights under the Sixth and Page 430 U. S. 406 Fourteenth Amendments. [ Footnote 11 ] It only held, as do we, that he did not. IV The crime of which Williams was convicted was senseless and
brutal, calling for swift and energetic action by the police to
apprehend the perpetrator and gather evidence with which he could
be convicted. No mission of law enforcement officials is more
important. Yet "[d]isinterested zeal for the public good does not
assure either wisdom or right in the methods it pursues." Haley
v. Ohio, 332 U. S. 596 , 332 U. S. 605 (Frankfurter, J., concurring in judgment). Although we do not
lightly affirm the issuance of a writ of habeas corpus in this
case, so clear a violation of the Sixth and Fourteenth Amendments
as here occurred cannot be condoned. The pressures on state
executive and judicial officers charged with the administration of
the criminal law are great, especially when the crime is murder and
the victim a small child. But it is precisely the predictability of
those pressures that makes imperative a resolute loyalty to the
guarantees that the Constitution extends to us all.
The judgment of the Court of Appeals is affirmed. [ Footnote 12 ] It is so ordered. [ Footnote 13 ]
[ Footnote 1 ]
The fact of the matter, of course, was that Detective Leaming
possessed no such knowledge.
[ Footnote 2 ]
The opinion of the trial court denying Williams' motion to
suppress is unreported.
[ Footnote 3 ]
Title 28 U.S.C. § 2254(d) provides:
"(d) In any proceeding instituted in a Federal court by an
application for a writ of habeas corpus by a person in custody
pursuant to the judgment of a State court, a determination after a
hearing on the merits of a factual issue, made by a State court of
competent jurisdiction in a proceeding to which the applicant for
the writ and the State or an officer or agent thereof were parties,
evidenced by a written finding, written opinion, or other reliable
and adequate written indicia, shall be presumed to be correct,
unless the applicant shall establish or it shall otherwise appear,
or the respondent shall admit -- "
"(1) that the merits of the factual dispute were not resolved in
the State court hearing;"
"(2) that the factfinding procedure employed by the State court
was not adequate to afford a full and fair hearing;"
"(3) that the material facts were not adequately developed at
the State court hearing;"
"(4) that the State court lacked jurisdiction of the subject
matter or over the person of the applicant in the State court
proceeding;"
"(5) that the applicant was an indigent and the State court, in
deprivation of his constitutional right, failed to appoint counsel
to represent him in the State court proceeding;"
"(6) that the applicant did not receive a full, fair, and
adequate hearing in the State court proceeding; or"
"(7) that the applicant was otherwise denied due process of law
in the State court proceeding;"
"(8) or unless that part of the record of the State court
proceeding in which the determination of such factual issue was
made, pertinent to a determination of the sufficiency of the
evidence to support such factual determination, is produced as
provided for hereinafter, and the Federal court on a consideration
of such part of the record as a whole concludes that such factual
determination is not fairly supported by the record:"
"And in an evidentiary hearing in the proceeding in the Federal
court, when due proof of such factual determination has been made,
unless the existence of one or more of the circumstances
respectively set forth in paragraphs numbered (1) to (7),
inclusive, is shown by the applicant, otherwise appears, or is
admitted by the respondent, or unless the court concludes pursuant
to the provisions of paragraph numbered (8) that the record in the
State court proceeding, considered as a whole, does not fairly
support such factual determination, the burden shall rest upon the
applicant to establish by convincing evidence that the factual
determination by the State court was erroneous."
[ Footnote 4 ]
Whether Williams waived his constitutional rights was not, of
course, a question of fact, but an issue of federal law. See discussion infra at 430 U. S.
401 -404.
[ Footnote 5 ]
The Court of Appeals did not address the District Court's ruling
that Williams' statements had been made involuntarily.
[ Footnote 6 ]
Counsel for petitioner, in the course of oral argument in this
Court, acknowledged that the "Christian burial speech" was
tantamount to interrogation:
"Q: But isn't the point, really, Mr. Attorney General, what you
indicated earlier, and that is that the officer wanted to elicit
information from Williams -- "
"A: Yes, sir."
"Q: -- by whatever techniques he used, I would suppose a lawyer
would consider that he were pursuing interrogation."
"A: It is, but it was very brief."
Tr. of Oral Arg. 17.
[ Footnote 7 ]
The Iowa trial court expressly acknowledged Williams' "right to
have an attorney present during the giving of such information." See supra at 430 U. S. 394 .
The Iowa Supreme Court also expressly acknowledged Williams' "right
to the presence of his counsel." See ibid. [ Footnote 8 ]
The only other significant factual difference between the
present case and Massiah is that here the police had
agreed that they would not interrogate Williams in the absence of
his counsel. This circumstance plainly provides petitioner with no
argument for distinguishing away the protection afforded by Massiah. It is argued that this agreement may not have been an
enforceable one. But we do not deal here with notions of offer,
acceptance, consideration, or other concepts of the law of
contracts. We deal with constitutional law. And every court that
has looked at this case has found an "agreement" in the sense of a
commitment made by the Des Moines police officers that Williams
would not be questioned about Pamela Powers in the absence of his
counsel.
[ Footnote 9 ] See n 7, supra. [ Footnote 10 ] Cf. Michigan v. Mosley, 423 U. S.
96 , 423 U. S. 110 n. 2 (WHITE, J., concurring in result):
"[T]he reasons to keep the lines of communication between the
authorities and the accused open when the accused has chosen to
make his own decisions are not present when he indicates instead
that he wishes legal advice with respect thereto. The authorities
may then communicate with him through an attorney. More to the
point, the accused having expressed his own view that he is not
competent to deal with the authorities without legal advice, a
later decision at the authorities' insistence to make a statement
without counsel's presence may properly be viewed with
skepticism."
[ Footnote 11 ] Compare, e.g., United States v. Springer, 460 F.2d
1344, 1350 (CA7); Wilson v. United States, 398 F.2d 331
(CA5); Coughlan v. United States, 391 F.2d 371 (CA9), with, e.g., United States v. Thomas, 474 F.2d 110, 112
(CA10); United States v. Springer, supra at 1354-1355
(Stevens, J., dissenting); United States ex rel. Magoon v.
Reincke, 416 F.2d 69 (CA2), aff'g 304 F.
Supp. 1014 (Conn.). Cf. United States v. Pheaster, 544
F.2d 353 (CA9).
[ Footnote 12 ]
The District Court stated that its decision
"does not touch upon the issue of what evidence, if any, beyond
the incriminating statements themselves must be excluded as 'fruit
of the poisonous tree.'" 375 F.
Supp. 170 , 185. We, too, have no occasion to address this
issue, and, in the present posture of the case, there is no basis
for the view of our dissenting Brethren, post at 430 U. S. 430 (WHITE, J.); post at 430 U. S. 441 (BLACKMUN, J.), that any attempt to retry the respondent would
probably be futile. While neither Williams' incriminating
statements themselves nor any testimony describing his having led
the police to the victim's body can constitutionally be admitted
into evidence, evidence of where the body was found and of its
condition might well be admissible on the theory that the body
would have been discovered in any event, even had incriminating
statements not been elicited from Williams. Cf. Killough v.
United States, 119 U.S. App. D.C. 10, 336 F.2d 929. In the
event that a retrial is instituted, it will be for the state courts
in the first instance to determine whether particular items of
evidence may be admitted.
[ Footnote 13 ]
The Court of Appeals suspended the issuance of the writ of
habeas corpus for 60 days to allow an opportunity for a new trial,
and further suspended its issuance pending disposition of the
petition for a writ of certiorari in this Court. In affirming the
judgment of the Court of Appeals, we further suspend the issuance
of the writ of release from custody for 60 days from this date to
allow the State of Iowa an opportunity to initiate a new trial, and
judgment will be entered accordingly.
MR JUSTICE MARSHALL, concurring.
I concur wholeheartedly in my Brother STEWART's opinion for the
Court, but add these words in light of the dissenting Page 430 U. S. 407 opinions filed today. The dissenters have, I believe, lost sight
of the fundamental constitutional backbone of our criminal law.
They seem to think that Detective Leaming's actions were perfectly
proper, indeed laudable, examples of "good police work." In my
view, good police work is something far different from catching the
criminal at any price. It is equally important that the police, as
guardians of the law, fulfill their responsibility to obey its
commands scrupulously. For, "in the end, life and liberty can be as
much endangered from illegal methods used to convict those thought
to be criminals as from the actual criminals themselves." Spano
v. New York, 360 U. S. 315 , 360 U. S.
320 -321 (1959).
In this case, there can be no doubt that Detective Leaming
consciously and knowingly set out to violate Williams' Sixth
Amendment right to counsel and his Fifth Amendment privilege
against self-incrimination, as Leaming himself understood those
rights. Leaming knew that Williams had been advised Page 430 U. S. 408 by two lawyers not to make any statements to police until he
conferred in Des Moines with his attorney there, Mr. McKnight.
Leaming surely understood, because he had overheard McKnight tell
Williams as much, that the location of the body would be revealed
to police. Undoubtedly Leaming realized the way in which that
information would be conveyed to the police: McKnight would learn
it from his client, and then he would lead police to the body.
Williams would thereby be protected by the attorney-client
privilege from incriminating himself by directly demonstrating his
knowledge of the body's location, and the unfortunate Powers child
could be given a "Christian burial."
Of course, this scenario would accomplish all that Leaming
sought from his investigation except that it would not produce
incriminating statements or actions from Williams. Accordingly,
Leaming undertook his charade to pry such evidence from Williams.
After invoking the no-passengers rule to prevent attorney Kelly
from accompanying the prisoner, Leaming had Williams at his mercy:
during the three- or four-hour trip, he could do anything he wished
to elicit a confession. The detective demonstrated once again "that
the efficiency of the rack and the thumbscrew can be matched, given
the proper subject, by more sophisticated modes of persuasion.'" Blackburn v. Alabama, 361 U.
S. 199 , 361 U. S. 206 (1960). Leaming knowingly isolated Williams from the protection of his
lawyers, and, during that period, he intentionally "persuaded" him
to give incriminating evidence. It is this intentional police
misconduct -- not good police practice -- that the Court rightly
condemns. The heinous nature of the crime is no excuse, as the
dissenters would have it, for condoning knowing and intentional
police transgression of the constitutional rights of a defendant.
If Williams is to go free -- and, given the ingenuity of Iowa
prosecutors on retrial or in a civil commitment proceeding, I doubt
very much that there is any chance a dangerous criminal will be
loosed on the streets, the Page 430 U. S. 409 bloodcurdling cries of the dissents notwithstanding -- it will
hardly be because he deserves it. It will be because Detective
Leaming, knowing full well that he risked reversal of Williams'
conviction, intentionally denied Williams the right of every
American under the Sixth Amendment to have the protective shield of
a lawyer between himself and the awesome power of the State.
I think it appropriate here to recall not Mr. Justice Cardozo's
opinion in People v. Defore, 242 N.Y. 13, 150 N.E. 585
(126), see opinion of THE CHIEF JUSTICE, post at 430 U. S. 416 ,
and n. 1, but rather the closing words of Mr. Justice Brandeis'
great dissent in Olmstead v. United States, 277 U.
S. 438 , 277 U. S. 471 , 277 U. S. 485 (1928):
"In a government of laws, existence of the government will be
imperiled if it fails to observe the law scrupulously. Our
Government is the potent, the omnipresent teacher. For good or for
ill, it teaches the whole people by its example. Crime is
contagious. If the Government becomes a lawbreaker, it breeds
contempt for law; it invites every man to become a law unto
himself; it invites anarchy. To declare that, in the administration
of the criminal law, the end justifies the means -- to declare that
the Government may commit crimes in order to secure the conviction
of a private criminal -- would bring terrible retribution. Against
that pernicious doctrine this Court should resolutely set its
face."
MR. JUSTICE POWELL, concurring.
As the dissenting opinion of THE CHIEF JUSTICE sharply
illustrates, resolution of the issues in this case turns primarily
on one's perception of the facts. There is little difference of
opinion, among the several courts and numerous judges who have
reviewed the case, as to the relevant constitutional principles:
(i) Williams had the right to assistance of counsel; Page 430 U. S. 410 (ii) once that right attached (it is conceded that it had in
this case), the State could not properly interrogate Williams in
the absence of counsel unless he voluntarily and knowingly waived
the right; and (iii) the burden was on the State to show that
Williams in fact had waived the right before the police
interrogated him.
The critical factual issue is whether there had been a voluntary
waiver, and this turns in large part upon whether there was
interrogation. As my dissenting Brothers view the facts so
differently from my own perception of them, I will repeat briefly
the background, setting, and factual predicate to the incriminating
statements by Williams even though the opinion of the Court sets
forth all of this quite accurately. I Prior to the automobile trip from Davenport to Des Moines,
Williams had been arrested, booked, and carefully given Miranda warnings. It is settled constitutional doctrine
that he then had the right to the assistance of counsel. His
exercise of this right was evidenced uniquely in this case.
Williams had consulted counsel prior to his arrest, and surrendered
to the police on advice of counsel. At all times thereafter,
Williams, to the knowledge of the police, had two attorneys:
McKnight, whom Williams consulted initially and who awaited his
arrival in Des Moines, and Kelly, who had represented Williams in
Davenport where he surrendered. Significantly, the recognition by
the police of the status of counsel was evidenced by the express
agreement between McKnight and the appropriate police officials
that the officers who would drive Williams to Des Moines would not
interrogate him in the absence of counsel.
The incriminating statements were made by Williams during the
long ride while in the custody of two police officers, and in the
absence of his retained counsel. The dissent of THE Page 430 U. S. 411 CHIEF JUSTICE concludes that, prior to these statements,
Williams had "made a valid waiver" of his right to have counsel
present. Post at 430 U. S. 417 .
This view disregards the record evidence clearly indicating that
the police engaged in interrogation of Williams. For example, the
District Court noted:
"According to Detective Leaming's own testimony, the specific
purpose of this conversation [which was initiated by Leaming and
which preceded Williams' confession] was to obtain statements and
information from [Williams] concerning the missing girl." 375 F.
Supp. 170 , 174. In support of that finding, the District Court
quoted extensively from Leaming's testimony, including the
following:
"Q. In fact, Captain, whether [Williams] was a mental patient or
not, you were trying to get all the information you could before he
got to his lawyer, weren't you?"
"A. I was sure hoping to find out where that little girl was,
yes, sir."
" * * * *" "Q. Well, I'll put it this way: You were hoping to get all the
information you could before Williams got back to McKnight, weren't
you?"
"A. Yes, sir." Ibid. After finding, upon a full review of the facts,
that there had been "interrogation," the District Court addressed
the ultimate issue of "waiver," and concluded not only that the
State had failed to carry its burden, but also that
"there is nothing in the record to indicate that [Williams]
waived his Fifth and Sixth Amendment rights except the
fact that statements eventually were obtained." Id. at 182. (Emphasis in original.) The Court of
Appeals stated affirmatively that "the facts Page 430 U. S. 412 as found by the District Court had substantial basis in the
record." 509 F.2d 227, 231. [ Footnote
2/1 ]
I join the opinion of the Court which also finds that the
efforts of Detective Leaming "to elicit information from Williams,"
as conceded by counsel for petitioner at oral argument, ante at 430 U. S. 400 n. 6, were a skillful and effective form of interrogation.
Moreover, the entire setting was conducive to the psychological
coercion that was successfully exploited. Williams was known by the
police to be a young man with quixotic religious convictions and a
history of mental disorders. The date was the day after Christmas,
the weather was ominous, and the setting appropriate for Detective
Leaming's talk of snow concealing the body and preventing a
"Christian burial." Williams was alone in the automobile with two
police officers for several hours. It is clear from the record, as
both of the federal courts below found, that there was no evidence
of a knowing and voluntary waiver of the right to have counsel
present beyond the fact that Williams ultimately confessed. It is
settled law that an inferred waiver of a constitutional right is
disfavored. Estelle v. Williams, 425 U.
S. 501 , 425 U. S. 515 (1976) (POWELL, J., concurring). I find no basis in the record of
this case -- or in the dissenting opinions Page 430 U. S. 413 -- for disagreeing with the conclusion of the District Court
that "the State has produced no affirmative evidence whatsoever to
support its claim of waiver." 375 F. Supp. at 183.
The dissenting opinion of THE CHIEF JUSTICE states that the
Court's holding today "conclusively presumes a suspect is legally
incompetent to change his mind and tell the truth until an attorney
is present." Post at 430 U. S. 419 .
I find no justification for this view. On the contrary, the opinion
of the Court is explicitly clear that the right to assistance of
counsel may be waived, after it has attached, without notice to or
consultation with counsel. Ante at 430 U. S.
405 -406. We would have such a case here if petitioner
had proved that the police officers refrained from coercion and
interrogation, as they had agreed, and that Williams freely, on his
own initiative, had confessed the crime. II In discussing the exclusionary rule, the dissenting opinion of
THE CHIEF JUSTICE refers to Stone v. Powell, 428 U.
S. 465 (1976), decided last Term. In that case, we held
that a federal court need not apply the exclusionary rule on habeas
corpus review of a Fourth Amendment claim absent a showing that the
state prisoner was denied an opportunity for a full and fair
litigation of that claim at trial and on direct review.
This case also involves review on habeas corpus of a state
conviction, and the decisions that the Court today affirms held
that Williams' incriminating statements should have been excluded.
[ Footnote 2/2 ] As Stone was decided subsequently to these Page 430 U. S. 414 decisions, the courts below had no occasion to consider whether
the principle enunciated in Stone may have been applicable
in this case. That question has not been presented in the briefs or
arguments submitted to us, [ Footnote
2/3 ] and we therefore have no occasion to consider the possible
applicability of Stone. The applicability of the rationale
of Stone in the Fifth and Sixth Amendment context raises a
number of unresolved issues. Many Fifth and Sixth Amendment claims
arise in the context of challenges to the fairness of a trial or to
the integrity of the factfinding process. In contrast, Fourth
Amendment claims uniformly involve evidence that is "typically
reliable and often the most probative information bearing on the
guilt or innocence of the defendant." Stone v. Powell,
supra, at 428 U. S. 490 .
Whether the rationale of Stone should be applied to those
Fifth and Sixth Amendment claims or classes of claims that more
closely parallel claims under the Fourth Amendment is a question as
to which I intimate no view, and which should be resolved only
after the implications of such a ruling have been fully
explored.
[ Footnote 2/1 ]
Before concluding that the police had engaged in interrogation,
the District Court summarized the factual background:
"Detective Leaming obtained statements from Petitioner in the
absence of counsel (1) after making, and then breaking, an
agreement with Mr. McKnight that Petitioner would not be questioned
until he arrived in Des Moines and saw Mr. McKnight; (2) after
being told by both Mr. McKnight and Mr. Kelly that Petitioner was
not to be questioned until he reached Des Moines; (3) after
refusing to allow Mr. Kelly, whom Detective Leaming himself
regarded as Petitioner's co-counsel, to ride to Des Moines with
Petitioner; and (4) after being told by Petitioner that he would
talk after he reached Des Moines and Mr. McKnight. By violating or
ignoring these several, clear indications that Petitioner was to
have counsel during interrogation, Detective Leaming deprived
Petitioner of his right to counsel in a way similar to, if not more
objectionable than, that utilized against the defendant in Massiah [v. United States, 377 U. S.
201 (1964)]."
375 F. Supp. at 177 (footnote omitted).
[ Footnote 2/2 ]
I tend generally to share the view that the per se application of an exclusionary rule has little to commend it except
ease of application. All too often, applying the rule in this
fashion results in freeing the guilty without any offsetting
enhancement of the rights of all citizens. Moreover, rigid
adherence to the exclusionary rule in many circumstances imposes
greater cost on the legitimate demands of law enforcement than can
be justified by the rule's deterrent purposes. Schneckloth v.
Bustamonte, 412 U. S. 218 , 412 U. S. 267 (1973) (POWELL, J., concurring). I therefore have indicated, at
least with respect to Fourth Amendment violations, that a
distinction should be made between flagrant violations by the
police, on the one hand, and technical, trivial, or inadvertent
violations, on the other. Brown v. Illinois, 422 U.
S. 590 , 422 U. S.
610 -612 (1975) (concurring opinion). Here, we have a
Sixth Amendment case and also one in which the police deliberately
took advantage of an inherently coercive setting in the absence of
counsel, contrary to their express agreement. Police are to be
commended for diligent efforts to ascertain the truth, but the
police conduct in this case plainly violated respondent's
constitutional rights.
[ Footnote 2/3 ]
The Stone issue was not mentioned in any of the briefs,
including petitioner's reply brief filed September 29, 1976 -- some
three months after our decision in Stone was announced.
The possible relevance of Stone was raised by a question
from the bench during oral argument. This prompted brief comments
by counsel for both parties. Tr. of Oral Arg., 26-27, 49-50. But in
no meaningful sense can the issue be viewed as having been "argued"
in this case.
MR. JUSTICE STEVENS, concurring.
MR. JUSTICE STEWART, in his opinion for the Court which I join,
MR. JUSTICE POWELL, and MR. JUSTICE MARSHALL have Page 430 U. S. 415 accurately explained the reasons why the law requires the result
we reach today. Nevertheless, the strong language in the dissenting
opinions prompts me to add this brief comment about the Court's
function in a case such as this.
Nothing that we write, no matter how well reasoned or forcefully
expressed, can bring back the victim of this tragedy or undo the
consequences of the official neglect which led to the respondent's
escape from a state mental institution. The emotional aspects of
the case make it difficult to decide dispassionately, but do.not
qualify our obligation to apply the law with an eye to the future
as well as with concern for the result in the particular case
before us.
Underlying the surface issues in this case is the question
whether a fugitive from justice can rely on his lawyer's advice
given in connection with a decision to surrender voluntarily. The
defendant placed his trust in an experienced Iowa trial lawyer,
who, in turn, trusted the Iowa law enforcement authorities to honor
a commitment made during negotiations which led to the apprehension
of a potentially dangerous person. Under any analysis, this was a
critical stage of the proceeding in which the participation of an
independent professional was of vital importance to the accused and
to society. At this stage -- as in countless others in which the
law profoundly affects the life of the individual -- the lawyer is
the essential medium through which the demands and commitments of
the sovereign are communicated to the citizen. If, in the long run,
we are seriously concerned about the individual's effective
representation by counsel, the State cannot be permitted to
dishonor its promise to this lawyer. * * The importance of this point is emphasized by the State's
refusal to permit counsel to accompany his client on the trip from
Davenport to Des Moines.
MR. CHIEF JUSTICE BURGER, dissenting.
The result in this case ought to be intolerable in any society
which purports to call itself an organized society. It
continues Page 430 U. S. 416 the Court -- by the narrowest margin -- on the much-criticized
course of punishing the public for the mistakes and misdeeds of law
enforcement officers, instead of punishing the officer directly, if
in fact he is guilty of wrongdoing. It mechanically and blindly
keeps reliable evidence from juries whether the claimed
constitutional violation involves gross police misconduct or honest
human error.
Williams is guilty of the savage murder of a small child; no
member of the Court contends he is not. While in custody, and after
no fewer than five warnings of his rights to silence and to
counsel, he led police to the concealed body of his victim. The
Court concedes Williams was not threatened or coerced, and that he
spoke and acted voluntarily and with full awareness of his
constitutional rights. In the face of all this, the Court now holds
that, because Williams was prompted by the detective's statement --
not interrogation, but a statement -- the jury must not be told how
the police found the body.
Today's holding fulfills Judge (later Mr. Justice) Cardozo's
grim prophecy that someday some court might carry the exclusionary
rule to the absurd extent that its operative effect would exclude
evidence relating to the body of a murder victim because of the
means by which it was found. [ Footnote
3/1 ] In so ruling, Page 430 U. S. 417 the Court regresses to playing a grisly game of "hide and seek,"
once more exalting the sporting theory of criminal justice which
has been experiencing a decline in our jurisprudence. With JUSTICES
WHITE, BLACKMUN, and REHNQUIST, I categorically reject the
remarkable notion that the police in this case were guilty of
unconstitutional misconduct, or any conduct justifying the bizarre
result reached by the Court. Apart from a brief comment on the
merits, however, I wish to focus on the irrationality of applying
the increasingly discredited exclusionary rule to this case. (1) The Court Concedes Williams' Disclosures Were
Voluntary Under well settled precedents which the Court freely
acknowledges, it is very clear that Williams had made a valid
waiver of his Fifth Amendment right to silence and his Sixth
Amendment right to counsel when he led police to the child's body.
Indeed, even under the Court's analysis, I do not understand how a
contrary conclusion is possible.
The Court purports to apply as the appropriate constitutional
waiver standard the familiar "intentional relinquishment or
abandonment of a known right or privilege" test of Johnson v.
Zerbst, 304 U. S. 458 , 304 U. S. 464 (1938). Ante at 430 U. S. 404 .
The Court assumes, without deciding, that Williams' conduct and
statements were voluntary. It concedes, as it must, ibid., that Williams had been informed of and fully understood his
constitutional rights and the consequences of their waiver. Then,
having either assumed or found every element necessary to make out
a valid waiver under its own test, the Page 430 U. S. 418 Court reaches the astonishing conclusion that no valid waiver
has been demonstrated.
This remarkable result is compounded by the Court's failure to
define what evidentiary showing the State failed to make. Only
recently, in Schneckloth v. Bustamonte, 412 U.
S. 218 , 412 U. S. 238 n. 25 (1973), the Court analyzed the distinction between a
voluntary act and the waiver of a right; there, MR. JUSTICE STEWART
stated for the Court:
"[T]he question whether a person has acted 'voluntarily' is
quite distinct from the question whether he has 'waived' a trial
right. The former question, as we made clear in Brady v. United
States , 397 U.S. [742,] 397 U. S.
749 , can be answered only by examining all the relevant
circumstances to determine if he has been coerced. The latter
question turns on the extent of his knowledge."
Similarly, in McMann v. Richardson, 397 U.
S. 759 , 397 U. S. 766 (1970), we said that, since a guilty plea constituted a waiver of a
host of constitutional rights, "it must be an intelligent act done with sufficient awareness of the relevant circumstances
and likely consequences.'" If the Court today applied these
standards with fidelity to the Schneckloth and McMann holdings, it could not reach the result now
announced. The evidence is uncontradicted that Williams had abundant
knowledge of his right to have counsel present and of his right to
silence. Since the Court does not question his mental competence,
it boggles the mind to suggest that Williams could not understand
that leading police to the child's body would have other than the
most serious consequences. All of the elements necessary to make
out a valid waiver are shown by the record and acknowledged by the
Court; we thus are left to guess how the Court reached its
holding.
One plausible but unarticulated basis for the result reached is
that, once a suspect has asserted his right not to talk without the
presence of an attorney, it becomes legally impossible Page 430 U. S. 419 for him to waive that right until he has seen an attorney. But
constitutional rights are personal, and an otherwise valid
waiver should not be brushed aside by judges simply because an
attorney was not present. The Court's holding operates to "imprison
a man in his privileges," Adams v. United States ex rel.
McCann, 317 U. S. 269 , 317 U. S. 280 (1942); it conclusively presumes a suspect is legally incompetent
to change his mind and tell the truth until an attorney is present.
It denigrates an individual to a nonperson whose free will has
become hostage to a lawyer so that, until the lawyer consents, the
suspect is deprived of any legal right or power to decide for
himself that he wishes to make a disclosure. It denies that the
rights to counsel and silence are personal, nondelegable, and
subject to a waiver only by that individual. [ Footnote 3/2 ] The opinions in support of the Court's
judgment do not enlighten us as to why police conduct -- whether
good or bad -- should operate to suspend Williams' right to change
his mind and "tell all" at once, rather than waiting until he
reached Des Moines. [ Footnote
3/3 ]
In his concurring opinion, MR. JUSTICE POWELL suggests that the
result in this case turns on whether Detective Leaming's remarks
constituted "interrogation," as he views them, or whether they were
"statements" intended to prick the conscience of the accused. I
find it most remarkable that a murder case should turn on judicial
interpretation that a statement becomes a question simply because
it is followed by an Page 430 U. S. 420 incriminating disclosure from the suspect. The Court seems to be
saying that, since Williams said he would "tell the whole story" at
Des Moines, the police should have been content and waited; of
course, that would have been the wiser course, especially in light
of the nuances of constitutional jurisprudence applied by the
Court, but a murder case ought not turn on such tenuous
strands.
In any case, the Court assures us, ante at 430 U. S.
405 -406, this is not at all what it intends, and that a
valid waiver was possible in these circumstances, but was not quite
made. Here, of course, Williams did not confess to the murder in so
many words; it was his conduct in guiding police to the body, not
his words, which incriminated him. And the record is replete with
evidence that Williams knew precisely what he was doing when he
guided police to the body. The human urge to confess wrongdoing is,
of course, normal in all save hardened, professional criminals, as
psychiatrists and analysts have demonstrated. T. Reik, The
Compulsion to Confess (1972). (2) The Exclusionary Rule Should Not be
Applied to Non-egregious Police Conduct Even if there was no waiver, and assuming a technical violation
occurred, the Court errs gravely in mechanically applying the
exclusionary rule without considering whether that Draconian
judicial doctrine should be invoked in these circumstances, or
indeed whether any of its conceivable goals will be furthered by
its application here.
The obvious flaws of the exclusionary rule as a judicial remedy
are familiar. See Bivens v. Six Unknown Fed. Narcotics
Agents, 403 U. S. 388 , 403 U. S. 411 (1971) (BURGER, C.J., dissenting); Stone v. Powell, 428 U. S. 465 , 428 U. S.
498 -502 (1976) (BURGER, C.J., concurring); Oaks,
Studying the Exclusionary Rule in Search and Seizure, 37
U.Chi.L.Rev. 665 (1970); Williams, The Exclusionary Rule Under
Foreign Law -- England, Page 430 U. S. 421 52 J.Crim. L. 272 (1961). Today's holding interrupts what has
been a more rational perception of the constitutional and social
utility of excluding reliable evidence from the truth-seeking
process. In its Fourth Amendment context, we have now recognized
that the exclusionary rule is in no sense a personal constitutional
right, but a judicially conceived remedial device designed to
safeguard and effectuate guaranteed legal rights generally. Stone v. Powell, supra at 428 U. S. 482 ; United States v. Janis, 428 U. S. 433 , 428 U. S.
443 -447 (1976); United States v. Calandra, 414 U. S. 338 , 414 U. S.
347 -348 (1974); see Alderman v. United States, 394 U. S. 165 , 394 U. S.
174 -175 (1969). We have repeatedly emphasized that
deterrence of unconstitutional or otherwise unlawful police conduct
is the only valid justification for excluding reliable and
probative evidence from the criminal factfinding process. Stone
v. Powell, supra at 428 U. S.
485 -486; United States v. Janis, supra at 428 U. S. 446 , 428 U. S.
458 -459, n. 35; United States v. Peltier, 422 U. S. 531 , 422 U. S.
536 -539 (1975).
Accordingly, unlawfully obtained evidence is not automatically
excluded from the factfinding process in all circumstances.
[ Footnote 3/4 ] In a variety of
contexts we inquire whether application Page 430 U. S. 422 of the rule will promote its objectives sufficiently to justify
the enormous cost it imposes on society.
"As with any remedial device, the application of the rule has
been restricted to those areas where its remedial objectives are
thought most efficaciously served." United States v. Calandra, supra at 414 U. S. 348 ; accord, Stone v. Powell, supra, at 428 U. S.
486 -491; United States v. Janis, supra; Brown v.
Illinois, 422 U. S. 590 , 422 U. S. 606 , 422 U. S.
608 -609 (1975) (POWELL, J., concurring in part); United States v. Peltier, supra at 422 U. S.
538 -539. This is, of course, the familiar balancing
process applicable to cases in which important competing interests
are at stake. It is a recognition, albeit belated, that "the
policies behind the exclusionary rule are not absolute," Stone
v. Powell, supra at 428 U. S. 488 .
It acknowledges that so serious an infringement of the crucial
truth-seeking function of a criminal prosecution should be allowed
only when imperative to safeguard constitutional rights. An
important factor in this amalgam is whether the violation at issue
may properly be classed as "egregious." Brown v. Illinois,
supra at 422 U. S. 609 (POWELL, J., concurring in part). The Court understandably does not
try to characterize the police actions here as "egregious." Against
this background, it is striking that the Court fails even to
consider whether the benefits secured by application of the
exclusionary rule in this case outweigh its obvious social costs.
Perhaps the failure is due to the fact that this case arises not
under the Fourth Amendment, but under Miranda v. Arizona, 384 U. S. 436 (1966), and the Sixth Amendment right to counsel. The Court
apparently perceives the function of the exclusionary rule to be so
different in these varying contexts that it must be mechanically
and uncritically Page 430 U. S. 423 applied in all case arising outside the Fourth Amendment.
[ Footnote 3/5 ]
But this is demonstrably not the case where police conduct
collides with Miranda's procedural safeguards, rather than
with the Fifth Amendment privilege against compulsory
self-incrimination. Involuntary and coerced admissions are
suppressed because of the inherent unreliability of a confession
wrung from an unwilling suspect by threats, brutality, or other
coercion. Schneckloth v. Bustamonte, 412 U.S. at 412 U. S. 242 ; Linkletter v. Walker, 381 U. S. 618 , 381 U. S. 638 (1965); Stone v. Powell, 428 U.S. at 428 U. S.
496 -497 (BURGER, C.J., concurring); Kaufman v.
United States, 394 U. S. 217 , 394 U. S. 237 (1969) (Black, J., dissenting). We can all agree on " [t]he
abhorrence of society to the use of involuntary confessions,'" Linkletter v. Walker, supra at 381 U. S. 638 ,
and the need to preserve the integrity of the human personality and
individual free will. Ibid.; Blackburn v. Alabama, 361 U. S. 199 , 361 U. S.
206 -207 (1960). But use of Williams' disclosures and their fruits carries no
risk whatever of unreliability, for the body was found where he
said it would be found. Moreover, since the Court makes no issue of
voluntariness, no dangers are posed to individual dignity or free
will. Miranda's safeguards are premised on presumed
unreliability long associated with confessions extorted by
brutality or threats; they are not personal constitutional rights,
but are simply judicially created prophylactic measures. Michigan v. Tucker, 417 U. S. 433 (1974); Doyle Page 430 U. S. 424 v. Ohio, 426 U. S. 610 , 426 U. S. 617 (1976); Brown v. Illinois, supra at 422 U. S. 606 (POWELL, J., concurring in part).
Thus, in cases where incriminating disclosures are voluntarily
made without coercion, and hence not violative of the Fifth
Amendment, but are obtained in violation of one of the Miranda prophylaxes, suppression is no longer automatic.
Rather, we weigh the deterrent effect on unlawful police conduct,
together with the normative Fifth Amendment justifications for
suppression, against
"the strong interest under any system of justice of making
available to the trier of fact all concededly relevant and
trustworthy evidence which either party seeks to adduce. . . . We
also 'must consider society's interest in the effective prosecution
of criminals. . . .'" Michigan v. Tucker, supra at 417 U. S. 450 .
[ Footnote 3/6 ] This individualized
consideration or balancing process with respect to the exclusionary
sanction is possible in this case, as in others, because Williams'
incriminating disclosures are not infected with any element of
compulsion the Fifth Amendment forbids; nor, as noted earlier, does
this evidence pose any danger of unreliability to the factfinding
process. In short, there is no reason to exclude this evidence.
Similarly, the exclusionary rule is not uniformly implicated in
the Sixth Amendment, particularly its pretrial aspects. We have
held that
"the core purpose of the counsel guarantee was to assure
'assistance' at trial, when the accused was confronted with both
the intricacies of the law and the advocacy of the public
prosecutor." United States v. Ash, 413 U. S. 300 , 413 U. S. 309 (1973). Thus, the right to counsel is fundamentally a "trial" right
necessitated by the legal complexities of a criminal
prosecution Page 430 U. S. 425 and the need to offset, to the trier of fact, the power of the
State as prosecutor. See Schneckloth v. Bustamonte, supra at 412 U. S. 241 .
It is now thought that modern law enforcement involves pretrial
confrontations at which the defendant's fate might effectively be
sealed before the right of counsel could attach. In order to make
meaningful the defendant's opportunity to a fair trial and to
assistance of counsel at that trial -- the core purposes of the
counsel guarantee -- the Court formulated a per se rule
guaranteeing counsel at what it has characterized as "critical"
pretrial proceedings where substantial rights might be endangered. United States v. Wade, 388 U. S. 218 , 388 U. S.
224 -227 (1967); Schneckloth v. Bustamonte,
supra at 412 U. S.
238 -239.
As we have seen in the Fifth Amendment setting, violations of
prophylactic rules designed to safeguard other constitutional
guarantees and deter impermissible police conduct need not call for
the automatic suppression of evidence without regard to the
purposes served by exclusion; nor do Fourth Amendment violations
merit uncritical suppression of evidence. In other situations, we
decline to suppress eyewitness identifications which are the
products of unnecessarily suggestive lineups or photo displays
unless there is a "very substantial likelihood of irreparable
misidentification." Simmons v. United States, 390 U.
S. 377 , 390 U. S. 384 (1968). Recognizing that "[i]t is the likelihood of
misidentification which violates a defendant's right to due
process," Neil v. Biggers, 409 U.
S. 188 , 409 U. S. 198 (1972), we exclude evidence only when essential to safeguard the
integrity of the truth-seeking process. The test, in short, is the
reliability of the evidence.
So, too, in the Sixth Amendment sphere, failure to have counsel
in a pretrial setting should not lead to the "knee-Jerk"
suppression of relevant and reliable evidence. Just as even
uncounseled "critical" pretrial confrontations may often be
conducted fairly, and not in derogation of Sixth Amendment values, Stovall v. Denno, 388 U. S. 293 , 388 U. S.
298 -299 (1967), evidence Page 430 U. S. 426 obtained in such proceedings should be suppressed only when its
use would imperil the core values the Amendment was written to
protect. Having extended Sixth Amendment concepts originally
thought to relate to the trial itself to earlier periods when a
criminal investigation is focused on a suspect, application of the
drastic bar of exclusion should be approached with caution.
In any event, the fundamental purpose of the Sixth Amendment is
to safeguard the fairness of the trial and the integrity of the
factfinding process. [ Footnote 3/7 ]
In this case, where the evidence of how the child's body was found
is of unquestioned reliability, and since the Court accepts
Williams' disclosures as voluntary and uncoerced, there is no issue
either of fairness or evidentiary reliability to justify
suppression of truth. It appears suppression is mandated here for
no other reason than the Court's general impression that it may
have a beneficial effect on future police conduct; indeed, the
Court fails to say even that much in defense of its holding.
Thus, whether considered under Miranda or the Sixth
Amendment, there is no more reason to exclude the evidence in this
case than there was in Stone v. Powell; [ Footnote 3/8 ] that holding was Page 430 U. S. 427 premised on the utter reliability of evidence sought to be
suppressed, the irrelevancy of the constitutional claim to the
criminal defendant's factual guilt or innocence, and the minimal
deterrent effect of habeas corpus on police misconduct. This case,
like Stone v. Powell, comes to us by way of habeas corpus
after a fair trial and appeal in the state courts. Relevant factors
in this case are thus indistinguishable from those in Stone and from those in other Fourth Amendment cases
suggesting a balancing approach toward utilization of the
exclusionary sanction. Rather than adopting a formalistic analysis
varying with the constitutional provision invoked, [ Footnote 3/9 ] we should apply the exclusionary rule
on the basis of its benefits and costs, at least in those cases
where the police conduct at issue is far from being outrageous or
egregious.
In his opinion, MR. JUSTICE POWELL intimates that he agrees
there is little sense in applying the exclusionary sanction where
the evidence suppressed is " typically reliable, and often the
most probative information bearing on the guilt or innocence of the
defendant.'" Ante at 430 U. S. 414 .
Since he seems to concede that the evidence in question is highly
reliable and probative, his joining the Court's opinion can be
explained only by an insistence that the "question has not been
presented in the briefs or arguments submitted to us." Ibid. But petitioner has directly challenged the
applicability of the exclusionary rule to this case, Brief for
Petitioner 31-32, and has invoked principles of comity and
federalism against reversal of the conviction. Id. at
69-73. Moreover, at oral argument -- the first opportunity to do so
-- petitioner argued Page 430 U. S. 428 that our intervening decision in Stone v. Powell should
be extended to this case, just as respondent argued that it should
not. Tr. of Oral Arg. 26-27, 49-50.
At the least, if our intervening decision in Stone makes application of the exclusionary rule in this case an open
question which "should be resolved only after the implications of
such a ruling have been fully explored," the plainly proper course
is to vacate the judgment of the Court of Appeals and remand the
case for reconsideration in light of that case. Indeed, only
recently, we actually applied the intervening decision of Washington v. Davis, 426 U. S. 229 (1976), to resolve the constitutional issue in Arlington
Heights v. Metropolitan Housing Dev. Corp., 429 U.
S. 252 (1977). There, we found no difficulty in applying
the intervening holding ourselves without a remand to give the
Court of Appeals an opportunity to reconsider its holding; we
reached the correct result directly, over MR. JUSTICE WHITE's
dissent urging a remand. Today, the Court declines either to apply
the intervening case of Stone v. Powell, which MR. JUSTICE
POWELL admits may well be controlling, or to remand for
reconsideration in light of that case; this is all the more
surprising since MR. JUSTICE POWELL wrote Stone v. Powell, and today makes the fifth vote for the Court's judgment.
The bizarre result reached by the Court today recalls Mr.
Justice Black's strong dissent in Kaufman v. United
States, 394 U.S. at 394 U. S. 231 .
There, too, a defendant sought release after his conviction had
been affirmed on appeal. There, as here, the defendant's guilt was
manifest, and was not called into question by the constitutional
claims presented. This Court granted relief because it thought
reliable evidence had been unconstitutionally obtained. Mr. Justice
Black's reaction, foreshadowing our long overdue holding in Stone v. Powell, serves as a fitting conclusion to the
views I have expressed:
"It is seemingly becoming more and more difficult to gain
acceptance for the proposition that punishment of Page 430 U. S. 429 the guilty is desirable, other things being equal. One
commentator, who attempted in vain to dissuade this Court from
today's holding, thought it necessary to point out that there is 'a
strong public interest in convicting the guilty.' . . ."
". . . I would not let any criminal conviction become
invulnerable to collateral attack where there is left remaining the
probability or possibility that constitutional commands related to
the integrity of the factfinding process have been violated. In
such situations, society has failed to perform its obligation to
prove beyond a reasonable doubt that the defendant committed the
crime. But it is quite a different thing to permit collateral
attack on a conviction after a trial according to due process when
the defendant clearly is, by the proof and by his own admission,
guilty of the crime charged. . . . In collateral attacks, whether
by habeas corpus or by § 2255 proceedings, I would always require
that the convicted defendant raise the kind of constitutional claim
that casts some shadow of a doubt on his guilt. This defendant is
permitted to attack his conviction collaterally although he
conceded at the trial, and does not now deny, that he had robbed
the savings and loan association, and although the evidence makes
absolutely clear that he knew what he was doing. Thus, his guilt
being certain, surely he does not have a constitutional right to
get a new trial. I cannot possibly agree with the Court."
394 U.S. at 394 U. S.
240 -242.
Like Mr. Justice Black in Kaufman, I cannot possibly
agree with the Court.
[ Footnote 3/1 ]
"The criminal is to go free because the constable has blundered.
. . . A room is searched against the law, and the body of a
murdered man is found. . . . The privacy of the home has been
infringed, and the murderer goes free." People v. Defore, 242 N.Y. 13, 21, 23-24, 150 N.E. 585,
587, 588 (1926).
The Court protests, ante at 430 U. S. 407 n. 12, that its holding excludes only "Williams' incriminating
statements themselves [as well as] any testimony describing his
having led the police to the victim's body," thus hinting that
successful retrial of this palpably guilty felon is realistically
possible. Even if this were all, and the corpus delicti could be used to establish the fact and manner of the victim's
death, the Court's holding clearly bars all efforts to let the jury
know how the police found the body. But the Court's further -- and
remarkable -- statement that "evidence of where the body was found
and of its condition" could be admitted only "on the theory that
the body would have been discovered in any event" makes clear that
the Court is determined to keep the truth from the jurors pledged
to find the truth. If all use of the corpus delicti is to
be barred by the Court as "fruit of the poisonous tree" under Wong Sun v. United States, 371 U.
S. 471 (1963), except on the unlikely theory suggested
by the Court, the Court renders the prospects of doing justice in
this case exceedingly remote.
[ Footnote 3/2 ]
Such a paternalistic rule is particularly anomalous in the Sixth
Amendment context, where this Court has only recently discovered an
independent constitutional right of self-representation, allowing
an accused the absolute right to proceed without a lawyer at trial,
once he is aware of the consequences. Faretta v.
California, 422 U. S. 806 (1975).
[ Footnote 3/3 ]
Paradoxically, in light of the result reached, the Court
acknowledges that Williams repeatedly stated: "When I get to Des
Moines and see Mr. McKnight, I am going to tell you the whole
story." Read in context, it is plain that Williams was saying he
intended to confess. The Court then goes on to hold, in effect,
that Williams could not change his mind until he reached Des
Moines.
[ Footnote 3/4 ]
One familiar example of this Court's unwillingness to apply the
prophylactic exclusionary rule beyond its natural scope is the
requirement that evidence seized in violation of the rights of
another person may not be challenged by a defendant whose own
rights were not invaded. Alderman v. United States, 394 U. S. 165 , 394 U. S.
174 -175 (1969).
Another is the rule that the "taint" of a constitutional
violation may be vitiated by later events so that evidence which
would not have been obtained but for the constitutional violation
may yet be admissible. Wong Sun v. United States, 371 U. S. 471 (1963); see Brown v. Illinois, 422 U.
S. 590 (1975).
Both these limitations on the use of the exclusionary rule are
inconsistent with its deterrent rationale. If courts wished to
enhance the deterrent effect on law enforcement officers, all
evidence whose seizure could be traced directly to any
constitutional violation would be suppressed. It is evident that
our refusal to expand the rule in this fashion represents a
considered balancing between "the additional benefits of extending
the exclusionary rule" and "the public interest in prosecuting
those accused of crime and having them acquitted or convicted on
the basis of all the evidence which exposes the truth." Alderman v. United States, supra at 394 U. S. 175 ; see United States v. Calandra, 414 U.
S. 338 , 414 U. S. 348 (1974).
[ Footnote 3/5 ]
Indeed, if this were a Fourth Amendment case, our course would
be clear; only last Term, in Stone v. Powell, we held that
application of the exclusionary rule in federal habeas corpus has
such a minimal deterrent effect on law enforcement officials that
habeas relief should not be granted on the ground that
unconstitutionally seized evidence was introduced at trial. Since
the quantum of deterrence provided by federal habeas does not vary
with the constitutional provision at issue, it appears that the
Court sees fundamental, though unarticulated, differences in the
exclusionary sanction when it is applied in other contexts.
[ Footnote 3/6 ]
Statements obtained in violation of Miranda have long
been used for impeachment purposes. Oregon v. Hass, 420 U. S. 714 (1975); Harris v. New York, 401 U.
S. 222 (1971). See also Walder v. United
States, 347 U. S. 62 (1954).
[ Footnote 3/7 ]
Indeed, we determine whether pretrial proceedings are "critical"
by asking whether counsel is there needed to protect the fairness
of the trial. See United States v. Ash, 413 U.
S. 300 , 413 U. S. 322 (1973) (STEWART, J., concurring); Schneckloth v.
Bustamonte, 412 U. S. 218 , 412 U. S. 239 (1973). It is also clear that the danger of factual error was the
moving force behind the counsel guarantee in such cases as United States v. Wade, 388 U. S. 218 (1967) (post-indictment lineups).
[ Footnote 3/8 ]
This is a far cry from Massiah v. United States, 377 U. S. 201 (1964). Massiah's statements had no independent indicia of
reliability, as do respondent's. Moreover, Massiah was unaware that
he was being interrogated by ruse, and had not been advised of his
right to counsel.
Here, as MR. JUSTICE BLACKMUN has noted, there was no
interrogation of Williams in the sense that term was used in Massiah, Escobedo v. Illinois, 378 U.
S. 478 (1964), or Miranda. That the detective's
statement appealed to Williams' conscience is not a sufficient
reason to equate it to a police station grilling. It could well be
that merely driving on the road and passing the intersection where
he had turned off to bury the body might have produced the same
result without any suggestive comments.
[ Footnote 3/9 ]
Clearly there will be many cases where evidence obtained in
violation of "right to counsel" rules is inadmissible, either for
reasons related to the normative purposes of the Sixth Amendment or
to the deterrence of unlawful police conduct. But this is, on the
Court's facts, not such a case, and it hardly furthers reasoned
analysis to lump it into an undifferentiated conceptual category
for reasons which do not apply to it.
MR. JUSTICE WHITE, with whom MR. JUSTICE BLACKMUN and MR.
JUSTICE REHNQUIST join, dissenting.
The respondent in this case killed a 10-year-old child. The
majority sets aside his conviction, holding that certain Page 430 U. S. 430 statements of unquestioned reliability were unconstitutionally
obtained from him, and, under the circumstances, probably makes it
impossible to retry him. Because there is nothing in the
Constitution or in our previous cases which requires the Court's
action, I dissent. I The victim in this case disappeared from a YMCA building in Des
Moines, Iowa, on Christmas Eve in 1968. Respondent was seen shortly
thereafter carrying a bundle wrapped in a blanket from the YMCA to
his car. His car was found in Davenport, Iowa, 160 miles away, on
Christmas Day. A warrant was then issued for his arrest. On the day
after Christmas, respondent surrendered himself voluntarily to
local police in Davenport, where he was arraigned. The Des Moines
police, in turn, drove to Davenport, picked respondent up and drove
him back to Des Moines. During the trip back to Des Moines,
respondent made statements evidencing his knowledge of the
whereabouts of the victim's clothing and body and leading the
police to the body. The statements were, of course, made without
the presence of counsel, since no counsel was in the police car.
The issue in this case is whether respondent -- who was entitled
not to make any statements to the police without consultation with
and/or presence of counsel, [ Footnote
4/1 ] validly waived those rights.
The relevant facts are as follows. Before the Des Moines police
officers arrived in Davenport, respondent was twice advised, once
by Davenport police and once by a judge, of his right to counsel
under Miranda v.
Arizona , 384 U.S. Page 430 U. S. 431 436 (1966). Respondent had, in any event, not only retained
counsel prior to the arrival of the Des Moines police, but had
consulted with that counsel on the subject of talking to the
police. His attorney, Mr. McKnight, spoke with him from the Des
Moines police office when respondent was in the Davenport police
office. He advised respondent not to talk to the Des Moines police
officers during the trip back to Des Moines, but told him that he
was "going to have to tell the officers where she [the victim] is"
when he arrived in Des Moines. Respondent also consulted with a
lawyer in Davenport, who also advised him against talking to the
police during the ride back to Des Moines. Thus, prior to the
arrival of the Des Moines police, respondent had been effectively
informed by at least four people that he need not talk to the
police in the absence of counsel during his trip to Des Moines.
Then, when the Des Moines police arrived, one of them advised
respondent, inter alia, "that he had a right to an
attorney present during any questioning." The Des Moines police
officer asked respondent: "[D]o you fully understand that?"
Respondent said that he did. The officer then
"advised him that [the officer] wanted him to be sure to
remember what [the officer] had just told him, because it was a
long ride back to Des Moines and he and [the officer] would be
visiting."
Respondent then consulted again with the Davenport attorney, who
advised him not to make any statements to the police officers, and
so informed the officers -- directing them not to question him.
After this series of warnings by two attorneys, two sets of police
officers, and a judge, the trip to Des Moines commenced.
Sometime early in the trip, one of the officers, Detective
Leaming, said:
"I want to give you something to think about while we're
traveling down the road. . . . Number one, I want you to observe
the weather conditions, it's raining, it's sleeting, it's freezing,
driving is very treacherous, visibility Page 430 U. S. 432 is poor, it's going to be dark early this evening. They are
predicting several inches of snow for tonight, and I feel that you
yourself are the only person that knows where this little girl's
body is, that you yourself have only been there once, and if you
get a snow on top of it, you yourself may be unable to find it.
And, since we will be going right past the area on the way into Des
Moines, I feel that we could stop and locate the body, that the
parents of this little girl should be entitled to a Christian
burial for the little girl who was snatched away from them on
Christmas [E]ve and murdered. And I feel we should stop and locate
it on the way in, rather than waiting until morning and trying to
come back out after a snow storm, and possibly not being able to
find it at all."
Respondent asked Detective Leaming why he thought their route to
Des Moines would be taking them past the girl's body, and Leaming
responded that he knew the body was in the area of Mitchellville --
a town they would be passing on the way to Des Moines. Leaming then
stated: "I do not want you to answer me. I don't want to discuss it
any further. Just think about it as we're riding down the road." On
several occasions during the trip, respondent told the officers
that he would tell them the whole story when he got to Des Moines
and saw Mr. McKnight -- an indication that he knew he was entitled
to wait until his counsel was present before talking to the police.
[ Footnote 4/2 ] Page 430 U. S. 433 Some considerable time thereafter, [ Footnote 4/3 ] without any prompting on the part of any
state official so far as the record reveals, respondent asked
whether the police had found the victim's shoes. The subject of the
victim's clothing had never been broached by the police nor
suggested by anything the police had said. So far as the record
reveals, the subject was suggested to respondent solely by the fact
that the police car was then about to pass the gas station where
respondent had hidden the shoes. When the police said they were
unsure whether they had found the shoes, respondent directed them
to the gas station. When the car continued on its way to Des
Moines, responded asked whether the blanket had been found. Once
again this subject had not previously been broached. Respondent
directed the officers to a rest area where he had left the blanket.
When the car again continued, respondent said that he would direct
the officers to the victim's body, and he did so. II The strictest test of waiver which might be applied to this case
is that set forth in Johnson v. Zerbst, 304 U.
S. 458 , 304 U. S. 464 (1938), and quoted by the majority, ante at 430 U. S. 404 .
In order to show that a right has been waived under this test, the
State must prove "an intentional relinquishment or abandonment of a
known right or privilege." The majority creates no new rule
preventing an accused who has retained a lawyer from waiving his
right to the lawyer's presence during questioning. The majority
simply finds that no waiver was proved in this case. I disagree.
That respondent knew of his right not to say anything to the
officers without advice and presence of counsel is established on
this record to a moral Page 430 U. S. 434 certainty. He was advised of the right by three officials of the
State -- telling at least one that he understood the right -- and
by two lawyers. [ Footnote 4/4 ]
Finally, he further demonstrate his knowledge of the right by
informing the police that he would tell them the story in the
presence of McKnight when they arrived in Des Moines. The issue in
this case, then, is whether respondent relinquished that right
intentionally.
Respondent relinquished his right not to talk to the police
about his crime when the car approached the place where he had
hidden the victim's clothes. Men usually intend to do what they do,
and there is nothing in the record to support the proposition that
respondent's decision to talk was anything but an exercise of his
own free will. Apparently, without any prodding from the officers,
respondent -- who had earlier said that he would tell the whole
story when he arrived in Des Moines -- spontaneously changed his
mind about the timing of his disclosures when the car approached
the places where he had hidden the evidence. However, even if his
statements were influenced by Detective Leaming's above-quoted
statement, respondent's decision to talk in the absence of counsel
can hardly be viewed as the product of an overborne will. The
statement by Leaming was not coercive; it was accompanied by a
request that respondent not respond to it; and it was delivered
hours before respondent decided to make any statement. Respondent's
waiver was thus knowing and intentional.
The majority's contrary conclusion seems to rest on the fact
that respondent "asserted" his right to counsel by retaining and
consulting with one lawyer and by consulting with another. How this
supports the conclusion that respondent's later relinquishment of
his right not to talk in the Page 430 U. S. 435 absence of counsel was unintentional is a mystery. The fact that
respondent consulted with counsel on the question whether he should
talk to the police in counsel's absence makes his later decision to
talk in counsel's absence better informed and, if anything, more
intelligent.
The majority recognizes that, even after this "assertion" of his
right to counsel, it would have found that respondent waived his
right not to talk in counsel's absence if his waiver had been
express -- i.e., if the officers had asked him in the car
whether he would be willing to answer questions in counsel's
absence, and if he had answered "yes." Ante at 430 U. S. 405 .
But waiver is not a formalistic concept. Waiver is shown whenever
the facts establish that an accused knew of a right and intended to
relinquish it. Such waiver, even if not express, [ Footnote 4/5 ] was plainly shown here. The only
other conceivable Page 430 U. S. 436 basis for the majority's holding is the implicit suggestion, ante at 430 U. S.
400 -401, that the right involved in Massiah v.
United States, 377 U. S. 201 (1964), as distinguished from the right involved in Miranda v.
Arizona, 384 U. S. 436 (1966), is a right not to be asked any questions in
counsel's absence, rather than a right not to answer any
questions in counsel's absence, and that the right not to be asked questions must be waived before the
questions are asked. Such wafer-thin distinctions cannot determine
whether a guilty murderer should go free. The only conceivable
purpose for the presence of counsel during questioning is to
protect an accused from making incriminating answers. Questions, unanswered, have no significance at all. Absent coercion
[ Footnote 4/6 ] -- no matter how
the Page 430 U. S. 437 right involved is defined -- an accused is amply protected by a
rule requiring waiver before or simultaneously with the giving by
him of an answer or the making by him of a statement. III The consequence of the majority's decision is, as the majority
recognizes, extremely serious. A mentally disturbed killer whose
guilt is not in question may be released. Why? Apparently the
answer is that the majority believes that the law enforcement
officers acted in a way which involves some risk of injury to
society, and that such conduct should be deterred. However, the
officers' conduct did not, and was not likely to, jeopardize the
fairness of respondent's trial, or in any way risk the conviction
of an innocent man -- the risk against which the Sixth Amendment
guarantee of assistance of counsel is designed to protect. Powell v. Alabama, 287 U. S. 45 (1932); Johnson v. Zerbst, 304 U.
S. 458 (1938); Hamilton v. Alabama, 368 U. S. 52 (1961); Gideon v. Wainwright, 372 U.
S. 335 (1963); White v. Maryland, 373 U. S.
59 (1963); United States v. Wade, 388 U.
S. 218 (1967); Gilbert v. California, 388 U. S. 263 (1967); Coleman v. Alabama, 399 U. S.
1 Page 430 U. S. 438 (1970); and Argersinger v. Hamlin, 407 U. S.
25 (1972). But see Massiah v. United States,
supra. The police did nothing "wrong," let alone anything
"unconstitutional." To anyone not lost in the intricacies of the
prophylactic rules of Miranda v. Arizona, the result in
this case seems utterly senseless; and for the reasons stated in 430 U. S. supra, even applying those rules, as well as the rule of Massiah v. United States, supra, the statements made by
respondent were properly admitted. In light of these
considerations, the majority's protest that the result in this case
is justified by a "clear violation" of the Sixth and Fourteenth
Amendments has a distressing hollow ring. I respectfully
dissent.
[ Footnote 4/1 ]
It does not matter whether the right not to make statements in
the absence of counsel stems from Massiah v. United
States, 377 U. S. 201 (1964), or Miranda v. Arizona, 384 U.
S. 436 (1966). In either case, the question is one of
waiver. Waiver was not addressed in Massiah because there,
the statements were being made to an informant, and the defendant
had no way of knowing that he had a right not to talk to him
without counsel.
[ Footnote 4/2 ]
The record does not make it crystal clear that these statements,
or some of them, followed the above-quoted statements by Detective
Leaming. However, the record reveals that Leaming's statement was
made not long after leaving Davenport, and that respondent's
statement that he would tell the whole story when they arrived in
Des Moines was made "several times." It is reasonable to infer that
respondent's statement followed that by Leaming. During some of the
rest of the trip, respondent asked questions of the officers about
the investigation, about how they would treat him, and about a
number of subjects unrelated to the case.
[ Footnote 4/3 ]
The trip was 160 miles long, and was made in bad weather.
Leaming's statement was made shortly after leaving Davenport.
Respondent's statements about the victim's clothes were made
shortly before arriving in Mitchellville, a near suburb of Des
Moines.
[ Footnote 4/4 ]
Moreover, he in fact received advice of counsel on at least two
occasion on the question whether he should talk to the police on
the trip to Des Moines.
[ Footnote 4/5 ]
The Courts of Appeals, in administering the rule of Miranda
v. Arizona, have not required an express waiver of the rights
to silence and to counsel which an accused must be advised about
under that case. Waiver has been found where the accused is
informed of those rights, understands them, and then proceeds
voluntarily to answer questions in the absence of counsel. United States v. Marchildon, 519 F.2d 337, 343 (CA8 1975)
("Waiver depends on no form of words, written or oral. It is to be
determined from all of the surrounding circumstances. Addressing
ourselves to this issue, we held in Hughes v. Swenson, 452
F.2d 866, 867-868 (CA8 1971), that: The thrust of appellant's
claim is that a valid waiver cannot be effective absent an
expressed declaration to that effect. We are cited to no case which
supports appellant's thesis, and independent research discloses
none. To the contrary, the Fifth, Seventh, Ninth, and Tenth
Circuits have held, in effect, that, if the defendant is
effectively advised of his rights and intelligently and understandingly declines to exercise them, the waiver is
valid'"); United States v. Ganter, 436 F.2d 364, 370 (CA7
1970) ("[A]n express statement that the individual does not want a
lawyer is not required if it appears that the defendant was
effectively advised of his rights and he then intelligently and
understandingly declined to exercise them"); United States v.
James, 528 F.2d 999, 1019 (CA5 1976) ("`All that the
prosecution must show is that the defendant was effectively advised
of his rights, and that he then intelligently and understandingly
declined to exercise them'"); Blackmon v. Blackledge, 541
F.2d 1070, 1072 (CA4 1976) ("[H]e was reasonably questioned only
after having been fully informed of his rights and permitted to
make a telephone call. Under such circumstances, a suspect's
submission to questioning without objection and without requesting
a lawyer is clearly a waiver of his right to counsel, if, indeed,
he understands his rights"); United States v. Boston, 508
F.2d 1171 (CA2 1974); United States v. Johnson, 466 F.2d
1206 (CA8 1972); Mitchell v. United States, 140
U.S.App.D.C. 209, 434 F.2d 483 (1970); Bond v. United
States, 397 F.2d 162 (CA10 1968). There is absolutely no reason to require an additional question
to the already cumbersome Miranda litany just because the
majority finds another case -- Massiah v. United States --
providing exactly the same right to counsel as that involved in Miranda. In either event, the issue is, as the majority
recognizes, one of the proof necessary to establish waiver. If an
intentional relinquishment of the right to counsel under Miranda is established by proof that the accused was
informed of his right and then voluntarily answered questions in
counsel's absence, then similar proof establishes an intentional
relinquishment of the Massiah right to counsel.
[ Footnote 4/6 ]
There is a rigid prophylactic rule set forth in Miranda v.
Arizona that, once an arrestee requests presence of counsel at
questioning, questioning must cease. The rule depends on
an indication by the accused that he will be unable to
handle the decision whether or not to answer questions without
advice of counsel, see Michigan v. Mosley, 423 U. S.
96 , 423 U. S. 110 n. 2 (1975) (WHITE, J., concurring), and is inapplicable to this
case for two reasons. First, at no time did respondent indicate a desire not to be asked questions outside the presence of
his counsel -- notwithstanding the fact that he was told that he
and the officers would be "visiting in the car." The majority
concludes, although studiously avoiding reliance on Miranda, that respondent asserted his right to
counsel. This he did in some respects, but he never, himself,
asserted a right not to be questioned in the absence of counsel.
Second, as is noted in the dissenting opinion of MR. JUSTICE
BLACKMUN, respondent was not questioned. The rigid prophylactic
rule -- as the majority implicitly recognizes -- is designed solely
to prevent involuntary waivers of the right against
self-incrimination, and is not to be applied to a statement by a
law enforcement officer accompanied by a request by the officer
that the accused make no response followed by more than an hour of
silence and an apparently spontaneous statement on a subject -- the
victim's shoes -- not broached in the "speech." Under such
circumstances. there is not even a small risk that the waiver will
be involuntary.
MR. JUSTICE BLACKMUN, with whom MR. JUSTICE WHITE and MR.
JUSTICE REHNQUIST join, dissenting.
The State of Iowa, and 21 States and others, as amici
curiae, strongly urge that this Court's procedural (as
distinguished from constitutional) ruling in Miranda v.
Arizona, 384 U. S. 436 (1966), be reexamined and overruled. I, however, agree with the
Court, ante at 430 U. S. 397 ,
that this is not now the case in which that issue need be
considered.
What the Court chooses to do here, and with which I disagree, is
to hold that respondent Williams' situation was in the mold of Massiah v. United States, 377 U.
S. 201 (1964), that is, that it was dominated by a
denial to Williams of his Sixth Amendment right to counsel after
criminal proceedings had been instituted against him. The Court
rules that the Sixth Amendment was violated because Detective
Leaming "purposely sought during Williams' isolation from his
lawyers to obtain as much incriminating information as possible." Ante at 430 U. S. 399 ,
and POWELL, J., concurring, ante at 430 U. S.
410 -413. I cannot regard that as unconstitutional per se. First, the police did not deliberately seek to isolate Williams
from his lawyers so as to deprive him of the Page 430 U. S. 439 assistance of counsel., cf. Escobedo v. Illinois, 378 U. S. 478 (1964). The isolation in this case was a necessary incident of
transporting Williams to the county where the crime was committed.
[ Footnote 5/1 ]
Second, Leaming's purpose was not solely to obtain incriminating
evidence. The victim had been missing for only two days, and the
police could not be certain that she was dead. Leaming, of course,
and in accord with his duty, was "hoping to find out where that
little girl was," ante at 430 U. S. 399 ,
but such motivation does not equate with an intention to evade the
Sixth Amendment. [ Footnote 5/2 ]
Moreover, the Court seems to me to place an undue emphasis, ante at 430 U. S. 392 , 430 U. S. 400 ,
and aspersion on what it and the lower courts have chosen to call
the "Christian burial speech," and on Williams' "deeply religious"
convictions.
Third, not every attempt to elicit information should be
regarded as "tantamount to interrogation," ante at 430 U. S. 400 .
I am not persuaded that Leaming's observations and comments, made
as the police car traversed the snowy and slippery miles between
Davenport and Des Moines that winter afternoon, were an
interrogation, direct or subtle, of Williams. Contrary to this
Court's statement, ibid., the Iowa Supreme Court appears
to me to have thought and held otherwise, State v.
Williams, 182 N.W.2d 396 ,
403-405 (1970), and I agree. Williams, after all, was counseled by
lawyers, and warned by the arraigning judge in Davenport and by
the Page 430 U. S. 440 police, and yet it was he who started the travel conversations
and brought up the subject of the criminal investigation. Without
further reviewing the circumstances of the trip, I would say it is
clear there was no interrogation. In this respect, I am in full
accord with Judge Webster in his vigorous dissent, 509 F.2d 227,
234-237, and with the views implicitly indicated by Chief Judge
Gibson and Judge Stephenson, who joined him in voting for rehearing
en banc.
In summary, it seems to me that the Court is holding that Massiah is violated whenever police engage in any conduct,
in the absence of counsel, with the subjective desire to obtain
information from a suspect after arraignment. Such a rule is far
too broad. Persons in custody frequently volunteer statements in
response to stimuli other than interrogation. See, e.g., United
States v. Cook, 530 F.2d 145, 152-153 (CA7), cert.
denied, 426 U.S. 909 (1976) (defendant engaged officers in
conversation while being transported to magistrate); United
States v. Martin, 511 F.2d 148, 150-151 (CA8 1975) (agent
initiated conversation with suspect, provoking damaging admission); United States v. Menichino, 497 F.2d 935, 939-941 (CA5
1974) (incriminating statements volunteered during booking
process); Haire v. Sarver, 437 F.2d 1262 (CA8), cert.
denied, 404 U.S. 910 (1971) (statements volunteered in
response to questioning of defendant's wife). When here is no
interrogation, such statements should be admissible as long as they
are truly voluntary. [ Footnote
5/3 ]
The Massiah point thus being of no consequence, I would
vacate the judgment of the Court of Appals and remand Page 430 U. S. 441 the case for consideration of the issue of voluntariness, in the
constitutional sense, of Williams' statements, an issue the Court
of Appeals did not reach when the case was before it.
One final word: I can understand the discomfiture the Court
obviously suffers and expresses in Part IV of its opinion, ante at 430 U. S. 406 ,
and the like discomfiture expressed by Justice (now United States
District Judge) Stuart of the Iowa court in the dissent he felt
compelled to make by this Court's precedents, 182 N.W.2d at 406.
This was a brutal, tragic, and heinous crime inflicted upon a young
girl on the afternoon of the day before Christmas. With the
exclusionary rule operating as the Court effectuates it, the
decision today probably means that, as a practical matter, no new
trial will be possible at this date eight years after the crime,
and that this respondent necessarily will go free. That, of course,
is not the standard by which a case of this kind strictly is to be
judged. But, as Judge Webster in dissent below observed, 509 F.2d
at 237, placing the case in sensible and proper perspective: "The
evidence of Williams' guilt was overwhelming. No challenge is made
to the reliability of the factfinding process." I am in full
agreement with that observation.
[ Footnote 5/1 ]
Neither attorney McKnight nor attorney Kelly objected to
Williams' being returned to Des Moines, although each sought
assurance that he would not be interrogated. That "the entire
setting was conducive to . . . psychological coercion," POWELL, J.,
concurring, ante at 430 U. S. 412 ,
was more attributable to Williams' flight from Des Moines than to
any machinations of the police. Surely the police are not to be
blamed for the facts that the murder was committed on Christmas Eve
and that the weather was ominous.
[ Footnote 5/2 ]
Indeed, Williams already had promised Leaming that he would tell
"the whole story" when he reached Des Moines. Ante at 430 U. S.
392 .
[ Footnote 5/3 ]
With all deference to the Court, I do not agree that Massiah regarded it as "constitutionally irrelevant" that
the statements in that case were surreptitiously obtained, ante at 430 U. S. 400 .
The Massiah opinion quoted with approval the dissenting
Circuit Judge's statement that "Massiah was more seriously imposed
upon . . . because he did not even know that he was under
interrogation by a government agent." 377 U.S. at 377 U. S.
206 . | Here is a summary of the case:
The Supreme Court ruled that the respondent, who had been advised by lawyers not to make any statements until consulting with his attorney, was deprived of his constitutional right to assistance of counsel when a police officer made statements to elicit an incriminating response during an automobile ride, leading to the respondent making incriminating statements and eventually directing police to the victim's body. The Court affirmed the lower court's decision to grant the respondent's petition for habeas corpus, finding that the evidence obtained during the automobile ride was wrongly admitted at trial and that the respondent had not waived his right to counsel. The Court also held that the District Court correctly applied the law in resolving disputed evidentiary facts. |
Criminal Trials & Prosecutions | Scott v. Illinois | https://supreme.justia.com/cases/federal/us/440/367/ | U.S. Supreme Court Scott v. Illinois, 440
U.S. 367 (1979) Scott v. Illinois No. 77-1177 Argued December 4,
1978 Decided March 5, 1979 440
U.S. 367 CERTIORARI TO THE SUPREME COURT OF
ILLINOIS Syllabus Petitioner, an indigent, was convicted of shoplifting and was
fined $50 after a bench trial in an Illinois state court. The
applicable Illinois statute set the maximum penalty for such an
offense at a $500 fine, one year in jail, or both. Petitioner's
conviction was ultimately affirmed by the Illinois Supreme Court,
over the petitioner's contention that a line of cases culminating
in Argersinger v. Hamlin, 407 U. S.
25 , requires state provision of counsel whenever
imprisonment is an authorized penalty. Held: The Sixth and Fourteenth Amendments require that
no indigent criminal defendant be sentenced to a term of
imprisonment unless the State has afforded him the right to
assistance of appointed counsel in his defense, but do not require
a state trial court to appoint counsel for a criminal defendant,
such as petitioner, who is charged with a statutory offense for
which imprisonment upon conviction is authorized but not imposed.
Pp. 440 U. S.
369 -374.
(a) Argersinger v. Hamlin, supra, limits the
constitutional right to appointed counsel in state criminal
proceedings to a case that actually leads to imprisonment. P. 440 U. S.
373 .
(b) Even were the matter res nova, Argersinger's central premise -- that actual imprisonment is a penalty different
in kind from fines or the mere threat of imprisonment -- is
eminently sound, and warrants adoption of actual imprisonment as
the line defining the constitutional right to appointment of
counsel. P. 440 U. S.
373 . 68 Ill. 2d
269 , 369 N.E.2d
881 , affirmed.
REHNQUIST, J., delivered the opinion of the Court, in which
BURGER, C.J., and STEWART, WHITE, and POWELL, JJ., joined. POWELL,
J., filed a concurring opinion, post, p. 440 U. S. 374 .
BRENNAN, J., filed a dissenting opinion, in which MARSHALL and
STEVENS, JJ., joined, post, p. 440 U. S. 375 .
BLACKMUN, J., filed a dissenting opinion, post, p. 440 U. S.
389 . Page 440 U. S. 368 MR. JUSTICE REHNQUIST delivered the opinion of the Court. We
granted certiorari in this case to resolve a conflict among state
and lower federal courts regarding the proper application of our
decision in Argersinger v. Hamlin, 407 U. S.
25 (1972). [ Footnote
1 ] 436 U.S. 925. Petitioner Scott was convicted of theft and
fined $50 after a bench trial in the Circuit Court of Cook County,
Ill. His conviction was affirmed by the state intermediate
appellate court, and then by the Supreme Court of Illinois, over
Scott's contention that the Sixth and Fourteenth Amendments to the
United States Constitution required that Illinois provide trial
counsel to him at its expense. Petitioner Scott was convicted of
shoplifting merchandise valued at less than $150. The applicable
Illinois statute set the maximum penalty for such an offense at a
$500 fine or one year in jail, or both. [ Footnote 2 ] The petitioner argues that a line of this
Court's cases culminating in Argersinger v. Hamlin, supra, requires state provision of counsel whenever imprisonment is an
authorized penalty. Page 440 U. S. 369 The Supreme Court of Illinois rejected this contention, quoting
the following language from Argersinger: "We hold, therefore, that absent a knowing and intelligent
waiver, no person may be imprisoned for any offense, whether
classified as petty, misdemeanor, or felony, unless he was
represented by counsel at his trial."
407 U.S. at 407 U. S.
37 .
"Under the rule we announce today, every judge will know when
the trial of a misdemeanor starts that no imprisonment may be
imposed, even though local law permits it, unless the accused is
represented by counsel. He will have a measure of the seriousness
and gravity of the offense, and therefore know when to name a
lawyer to represent the accused before the trial starts." Id. at 407 U. S.
40 .
The Supreme Court of Illinois went on to state that it was "not
inclined to extend Argersinger " to the case where a
defendant is charged with a statutory offense for which
imprisonment upon conviction is authorized but not actually imposed
upon the defendant. 68 Ill. 2d
269 , 272, 369 N.E.2d
881 , 882 (1977). We agree with the Supreme Court of Illinois
that the Federal Constitution does not require a state trial court
to appoint counsel for a criminal defendant such as petitioner, and
we therefore affirm its judgment.
In his petition for certiorari, petitioner referred to the issue
in this case as "the question left open in Argersinger v.
Hamlin, 407 U. S. 25 (1972)." Pet. for Cert. 5. Whether this question was indeed "left
open" in Argersinger depends upon whether one considers
that opinion to be a point in a moving line or a holding that the
States are required to go only so far in furnishing counsel to
indigent defendants. The Supreme Court of Illinois, in quoting the
above language from Argersinger, clearly viewed the latter
as Argersinger's holding. Page 440 U. S. 370 Additional support for this proposition may be derived from the
concluding paragraph of the opinion in that case:
"The run of misdemeanors will not be affected by today's ruling.
But in those that end up in the actual deprivation of a person's
liberty, the accused will receive the benefit of 'the guiding hand
of counsel' so necessary where one's liberty is in jeopardy."
407 U.S. at 407 U. S.
40 .
Petitioner, on the other hand, refers to language in the Court's
opinion, responding to the opinion of MR. JUSTICE POWELL, which
states that the Court
"need not consider the requirements of the Sixth Amendment as
regards the right to counsel where loss of liberty is not involved
. . . for here petitioner was, in fact, sentenced to jail." Id. at 407 U. S.
37 .
There is considerable doubt that the Sixth Amendment itself, as
originally drafted by the Framers of the Bill of Rights,
contemplated any guarantee other than the right of an accused in a
criminal prosecution in a federal court to employ a lawyer to
assist in his defense. W. Beaney, The Right to Counsel in American
Courts 27-30 (1955). In Powell v. Alabama, 287 U. S.
45 (1932), the Court held that Alabama was obligated to
appoint counsel for the Scottsboro defendants, phrasing the inquiry
as
"whether the defendants were in substance denied the right of
counsel, and if so, whether such denial infringes the due process
clause of the Fourteenth Amendment." Id. at 287 U. S. 52 . It
concluded its opinion with the following language:
"The United States, by statute, and every state in the Union, by
express provision of law or by the determination of its courts,
make it the duty of the trial judge, where the accused is unable to
employ counsel, to appoint counsel for him. In most states, the
rule applies broadly to all criminal prosecutions; in others, it is
limited to the more serious crimes, and in a very limited number,
to capital cases. A rule adopted with such unanimous Page 440 U. S. 371 accord reflects, if it does not establish, the inherent right to
have counsel appointed, at least in cases like the present, and
lends convincing support to the conclusion we have reached as to
the fundamental nature of that right." Id. at 287 U. S.
73 . Betts v. Brady, 316 U. S. 455 (1942), held that not every indigent defendant accused in a state
criminal prosecution was entitled to appointment of counsel. A
determination had to be made in each individual case whether
failure to appoint counsel was a denial of fundamental fairness. Betts was, in turn, overruled in Gideon v.
Wainwright, 372 U. S. 335 (1963). In Gideon, Betts was described as holding
"that a refusal to appoint counsel for an indigent defendant
charged with a felony did not necessarily violate the Due Process
Clause of the Fourteenth Amendment. . . ."
372 U.S. at 372 U. S.
339 .
Several Terms later, the Court held, in Duncan v.
Louisiana, 391 U. S. 145 (1968), that the right to jury trial in federal court guaranteed by
the Sixth Amendment was applicable to the States by virtue of the
Fourteenth Amendment. The Court held, however:
"It is doubtless true that there is a category of petty crimes
or offenses which is not subject to the Sixth Amendment jury trial
provision, and should not be subject to the Fourteenth Amendment
jury trial requirement here applied to the States. Crimes carrying
possible penalties up to six months do not require a jury trial if
they otherwise qualify as petty offenses. . . ." Id. at 391 U. S. 159 (footnote omitted). In Baldwin v. New York, 399 U. S.
66 , 399 U. S. 69 (1970), the controlling opinion of MR. JUSTICE WHITE concluded that
"no offense can be deemed "petty" for purposes of the right to
trial by jury where imprisonment for more than six months is
authorized."
In Argersinger, the State of Florida urged that a
similar dichotomy be employed in the right-to-counsel area: any
offense punishable by less than six months in jail should not Page 440 U. S. 372 require appointment of counsel for an indigent defendant.
[ Footnote 3 ] The Argersinger Court rejected this analogy, however,
observing that "the right to trial by jury has a different
genealogy, and is brigaded with a system of trial to a judge
alone." 407 U.S. at 407 U. S.
29 .
The number of separate opinions in Gideon, Duncan,
Baldwin, and Argersinger suggests that constitutional
line drawing becomes more difficult as the reach of the
Constitution is extended further, and as efforts are made to
transpose lines from one area of Sixth Amendment jurisprudence to
another. The process of incorporation creates special difficulties,
for the state and federal contexts are often different, and
application of the same principle may have ramifications distinct
in degree and kind. The range of human conduct regulated by state
criminal laws is much broader than that of the federal criminal
laws, particularly on the "petty" offense part of the spectrum. As
a matter of constitutional adjudication, we are, therefore, less
willing to extrapolate an already extended line when, although the
general nature of the principle sought to be applied is clear, its
precise limits and their ramifications become less so. We have now,
in our decided cases, departed from the literal meaning of the
Sixth Amendment. And we cannot fall back on the common law as it
existed prior to the enactment of that Amendment, since it
perversely gave less in the way of right to counsel to accused
felons than to those accused of misdemeanors. See Powell v.
Alabama, supra at 287 U. S.
60 .
In Argersinger, the Court rejected arguments that
social cost or a lack of available lawyers militated against its
holding, in some part because it thought these arguments were
factually incorrect. 407 U.S. at 407 U. S. 37 n.
7. But they were rejected in much larger part because of the
Court's conclusion that incarceration was so severe a sanction that
it should not be imposed as a result of a criminal trial unless an
indigent Page 440 U. S. 373 defendant had been offered appointed counsel to assist in his
defense, regardless of the cost to the States implicit in such a
rule. The Court, in its opinion, repeatedly referred to trials
"where an accused is deprived of his liberty," id. at 407 U. S. 32 ,
and to "a case that actually leads to imprisonment, even for a
brief period," id. at 407 U. S. 33 .
THE CHIEF JUSTICE, in his opinion concurring in the result, also
observed that "any deprivation of liberty is a serious matter." Id. at 407 U. S.
41 .
Although the intentions of the Argersinger Court are
not unmistakably clear from its opinion, we conclude today that Argersinger did indeed delimit the constitutional right to
appointed counsel in state criminal proceedings. [ Footnote 4 ] Even were the matter res
nova, we believe that the central premise of Argersinger -- that actual imprisonment is a penalty
different in kind from fines or the mere threat of imprisonment --
is eminently sound, and warrants adoption of actual imprisonment as
the line defining the constitutional right to appointment of
counsel. Argersinger has proved reasonably workable,
whereas any extension would create confusion and impose
unpredictable, but necessarily substantial, costs on 50 quite
diverse States. [ Footnote 5 ] We
therefore hold that the Sixth Page 440 U. S. 374 and Fourteenth Amendments to the United States Constitution
require only that no indigent criminal defendant be sentenced to a
term of imprisonment unless the State has afforded him the right to
assistance of appointed counsel in his defense. The judgment of the
Supreme Court of Illinois is accordingly Affirmed. [ Footnote 1 ] Compare, e.g., Potts v. Estelle, 529 F.2d 450 (CA5
1976); State ex rel. Winnie v. Harris, 75 Wis.2d 547, 249 N.W.2d
791 (1977), with Sweeten v. Sneddon, 463 F.2d 713
(CA10 1972); Rollins v. State, 299 So. 2d 586 (Fla.), cert. denied, 419 U.S. 1009 (1974).
[ Footnote 2 ]
Ill.Rev.Stat., ch. 38, § 16-1 (1969). The penalty provision of
the statute, at the time in question, provided in relevant
part:
"A person first convicted of theft of property not from the
person and not exceeding $150 in value shall be fined not to exceed
$500 or imprisoned in a penal institution other than the
penitentiary not to exceed one year, or both. A person convicted of
such theft a second or subsequent time, or after a prior conviction
of any type of theft, shall be imprisoned in the penitentiary from
one to 5 years. . . ."
[ Footnote 3 ]
Brief for Respondent in Argersinger v. Hamlin, O.T.
1971, No. 70-5015, p. 12.
[ Footnote 4 ]
We note that the line drawn in Argersinger was with
full awareness of the various options. Both the petitioner in that
case and the Legal Aid Society of New York, as amicus
curiae, argued that the right to appointed counsel should
pertain in any case in which imprisonment was an authorized penalty
for the underlying offense. Brief for Petitioner in Argersinger
v. Hamlin, O.T. 1971, No. 70-5015, p. 4; Brief for Legal Aid
Society of New York as Amicus Curiae in Argersinger v.
Hamlin 5-11. Respondent Florida and the amici States
urged that the line be drawn as it had been in Baldwin for
purposes of the jury trial guarantee. See, e.g., Brief for
Respondent in Argersinger v. Hamlin 12. The Solicitor
General argued for .the standard that was finally adopted -- that
of actual imprisonment. Brief for United States as Amicus
Curiae in Argersinger v. Hamlin 22-24.
[ Footnote 5 ]
Unfortunately, extensive empirical work has not been done. That
which exists suggests that the requirements of Argersinger have not proved to be unduly burdensome. See, e.g., Ingraham, The Impact of Argersinger -- One Year Later, 8
Law & Soc. Rev. 615 (1974). That some Jurisdictions have had
difficulty implementing Argersinger is certainly not an
argument for extending it. S. Krantz, C Smith, D. Rossman, P. Froyd
& J. Hoffman, Right to Counsel in Criminal Cases 1-18
(1976).
MR. JUSTICE POWELL, concurring.
For the reasons stated in my opinion in Argersinger v.
Hamlin, 407 U. S. 25 , 407 U. S. 44 (1972), I do not think the rule adopted by the Court in that case
is required by the Constitution. Moreover, the drawing of a line
based on whether there is imprisonment (even for overnight) can
have the practical effect of precluding provision of counsel in
other types of cases in which conviction can have more serious
consequences. The Argersinger rule also tends to impair
the proper functioning of the criminal justice system in that trial
judges, in advance of hearing any evidence and before knowing
anything about the case except the charge, all too often will be
compelled to forgo the legislatively granted option to impose a
sentence of imprisonment upon conviction. Preserving this option by
providing counsel often will be impossible or impracticable --
particularly in congested urban courts where scores of cases are
heard in a single sitting, and in small and rural communities where
lawyers may not be available.
Despite my continuing reservations about the Argersinger rule, it was approved by the Court in the 1972
opinion and four Justices have reaffirmed it today. It is important
that this Court provide clear guidance to the hundreds of courts
across the country that confront this problem daily. Accordingly,
and mindful of stare decisis, I join the opinion of
the Page 440 U. S. 375 Court. I do so, however, with the hope that, in due time, a
majority will recognize that a more flexible rule is, consistent
with due process and will better serve the cause of justice.
MR. JUSTICE BRENNAN, with whom MR. JUSTICE MARSHALL and MR.
JUSTICE STEVENS join, dissenting.
The Sixth Amendment provides: "In all criminal prosecutions, the accused shall enjoy the right . . . to have the
Assistance of Counsel for his defence." (Emphasis supplied.) Gideon v. Wainwright, 372 U. S. 335 (1963), extended the Sixth Amendment right to counsel to the States
through the Fourteenth Amendment and held that the right includes
the right of the indigent to have counsel provided. Argersinger
v. Hamlin, 407 U. S. 25 (1972), held that the right recognized in Gideon extends
to the trial of any offense for which a convicted defendant is
likely to be incarcerated.
This case presents the question whether the right to counsel
extends to a person accused of an offense that, although punishable
by incarceration, is actually punished only by a fine. Petitioner
Aubrey Scott was charged with theft in violation of Ill.Rev.Stat.,
ch. 38, § 16-1 (1969), an offense punishable by imprisonment for up
to one year or by a fine of up to $500, or by both. About four
months before Argersinger was decided, Scott had a bench
trial, without counsel, and without notice of entitlement to retain
counsel or, if indigent, [ Footnote
2/1 ] to have counsel provided. He was found guilty as charged
and sentenced to pay a $50 fine.
The Court, in an opinion that, at best, ignores the basic
principles of prior decisions, affirms Scott's conviction
without Page 440 U. S. 376 counsel because he was sentenced only to pay a fine. In my view,
the plain wording of the Sixth Amendment and the Court's precedents
compel the conclusion that Scott's uncounseled conviction violated
the Sixth and Fourteenth Amendments, and should be reversed. I The Court's opinion intimates that the Court's precedents
ordaining the right to appointed counsel for indigent accuseds in
state criminal proceedings fail to provide a principled basis for
deciding this case. That is demonstrably not so. The principles
developed in the relevant precedents are clear and sound. The Court
simply chooses to ignore them. Gideon v. Wainwright held that, because representation
by counsel in a criminal proceeding is "fundamental and essential
to a fair trial," 372 U.S. at 372 U. S. 342 ,
the Sixth Amendment right to counsel was applicable to the States
through the Fourteenth Amendment:
"[R]eason and reflection require us to recognize that, in our
adversary system of criminal justice, any person haled into court,
who is too poor to hire a lawyer, cannot be assured a fair trial
unless counsel is provided for him. This seems to us to be an
obvious truth. Governments, both state and federal, quite properly
spend vast sums of money to establish machinery to try defendants
accused of crime. Lawyers to prosecute are everywhere deemed
essential to protect the public's interest in an orderly society.
Similarly, there are few defendants charged with crime, few indeed,
who fail to hire the best lawyers they can get to prepare and
present their defenses. That government hires lawyers to prosecute
and defendants who have the money hire lawyers to defend are the
strongest indications of the widespread belief that lawyers in
criminal courts are necessities, not luxuries. The right of one
charged with crime to counsel may not be deemed Page 440 U. S. 377 fundamental and essential to fair trials in some countries, but
it is in ours. From the very beginning, our state and national
constitutions and laws have laid great emphasis on procedural and
substantive safeguards designed to assure fair trials before
impartial tribunals in which every defendant stands equal before
the law. This noble ideal cannot be realized if the poor man
charged with crime has to face his accusers without a lawyer to
assist him." Id. at 372 U. S.
344 .
Earlier precedents had recognized that the assistance of
appointed counsel was critical not only to equalize the sides in an
adversary criminal process, [ Footnote
2/2 ] but also to give substance to other constitutional and
procedural protections afforded criminal defendants. [ Footnote 2/3 ] Gideon established
the right to appointed counsel for indigent accuseds as a
categorical Page 440 U. S. 378 requirement, making the Court's former case-by-case due process
analysis, cf. Betts v. Brady, 316 U.
S. 455 (1942), unnecessary in cases covered by its
holding. Gideon involved a felony prosecution, but that
fact was not crucial to the decision; its reasoning extended, in
the words of the Sixth Amendment, to "all criminal prosecutions."
[ Footnote 2/4 ] Argersinger v. Hamlin took a cautious approach toward
implementing the logical consequences of Gideon's rationale. The petitioner in Argersinger had been
sentenced to jail for 90 days after conviction -- at a trial
without counsel -- of carrying a concealed weapon, a Florida
offense carrying an authorized penalty of imprisonment for up to
six months and a fine of up to $1,000. The State, relying on Duncan v. Louisiana, 391 U. S. 145 (1968), and Baldwin v. New York, 399 U. S.
66 (1970), urged that the Sixth Amendment right to
counsel, like the right to jury trial, should not apply to accuseds
charged with "petty" offenses punishable by less than six months'
imprisonment. But Argersinger refused to extend the
"petty" offense limitation to the right to counsel. The Court
pointed out that the limitation was contrary to the express words
of the Sixth Amendment, which guarantee its enumerated rights "[i]n
all criminal prosecutions"; that the right to jury trial was the
only Sixth Amendment right applicable to the States that had been
held inapplicable to "petty offenses"; [ Footnote 2/5 ] that this Page 440 U. S. 379 limitation had been based on historical considerations peculiar
to the right to jury trial; [ Footnote
2/6 ] and that the right to counsel was more fundamentally
related to the fairness of criminal prosecutions than the right to
jury trial, and was, in fact, essential to the meaningful exercise
of other Sixth Amendment protections. [ Footnote 2/7 ]
Although its analysis, like that in Gideon and other
earlier cases, suggested that the Sixth Amendment right to counsel
should apply to all state criminal prosecutions, Argersinger held only that an indigent defendant is
entitled to appointed counsel, even in petty offenses punishable by
six months of incarceration or less, if he is likely to be
sentenced to incarceration for any time if convicted. The question
of the right to counsel in cases in which incarceration was
authorized but would not be imposed was expressly reserved.
[ Footnote 2/8 ] II In my view, petitioner could prevail in this case without
extending the right to counsel beyond what was assumed to exist in Argersinger. Neither party in that case questioned Page 440 U. S. 380 the existence of the right to counsel in trials involving
"nonpetty" offenses punishable by more than six months in jail.
[ Footnote 2/9 ] The question the
Court addressed was whether the right applied to some "petty"
offenses to which the right to jury trial did not extend. The
Court's reasoning in applying the right to counsel in the case
before it -- that the right to counsel is more fundamental to a
fair proceeding than the right to jury trial and that the
historical limitations on the jury trial right are irrelevant to
the right to counsel -- certainly cannot support a standard for the
right to counsel that is more restrictive than the standard for
granting a right to jury trial. As my Brother POWELL commented in
his opinion concurring in the result in Argersinger, 407
U.S. at 407 U. S.
456 :
"It is clear that, wherever the right-to-counsel line is to be
drawn, it must be drawn so that an indigent has a right to
appointed counsel in all cases in which there is a due process
right to a jury trial." Argersinger thus established a "two dimensional" test
for the right to counsel: the right attaches to any "nonpetty"
offense punishable by more than six months in jail and in addition
to any offense where actual incarceration is likely regardless of
the maximum authorized penalty. See Duke, The Right to
Appointed Counsel: Argersinger and Beyond, 12
Am.Crim.L.Rev. 601 (1975).
The offense of "theft" with which Scott was charged is certainly
not a "petty" one. It is punishable by a sentence of up to one year
in jail. Unlike many traffic or other "regulatory" offenses, it
carries the moral stigma associated with common law crimes
traditionally recognized as indicative of moral depravity.
[ Footnote 2/10 ] The State
indicated at oral argument that the Page 440 U. S. 381 services of a professional prosecutor were considered essential
to the prosecution of this offense. Tr. of Oral Arg. 39; cf.
Argersinger v. Hamlin, 407 U.S. at 407 U. S. 49 (POWELL, J., concurring in result). Likewise, nonindigent
defendants charged with this offense would be well advised to hire
the "best lawyers they can get." [ Footnote 2/11 ] Scott's right to the assistance of
appointed counsel is thus plainly mandated by the logic of the
Court's prior cases, including Argersinger itself. [ Footnote 2/12 ] III But rather than decide consonant with the assumption in regard
to nonpetty offenses that was both implicit and explicit Page 440 U. S. 382 in Argersinger, the Court today retreats to the
indefensible position that the Argersinger "actual
imprisonment" standard is the only test for determining the
boundary of the Sixth Amendment right to appointed counsel in state
misdemeanor cases, thus necessarily deciding that, in many cases
(such as this one), a defendant will have no right to appointed
counsel even when he has a constitutional right to a jury trial.
This is simply an intolerable result. Not only is the "actual
imprisonment" standard unprecedented as the exclusive test, but
also the problems inherent in its application demonstrate the
superiority of an "authorized imprisonment" standard that would
require the appointment of counsel for indigents accused of any
offense for which imprisonment for any time is authorized.
First, the "authorized imprisonment" standard more faithfully
implements the principles of the Sixth Amendment identified in Gideon. The procedural rules established by state statutes
are geared to the nature of the potential penalty for an offense,
not to the actual penalty imposed in particular cases. The
authorized penalty is also a better predictor of the stigma and
other collateral consequences that attach to conviction of an
offense. [ Footnote 2/13 ] With the
exception of Argersinger, authorized penalties have been
used consistently by this Court as the true measures of the
seriousness of offenses. See, e.g., Baldwin v. New York, 399 U.S. at 399 U. S. 68 -70; Frank v. United States, 395 U. S. 147 , 395 U. S. 149 (1969); United States v. Moreland, 258 U.
S. 433 (1922). Imprisonment is a sanction particularly
associated with criminal offenses; trials of offenses punishable by
imprisonment accordingly possess the characteristics Page 440 U. S. 383 found by Gideon to require the appointment of counsel.
By contrast, the "actual imprisonment" standard, as the Court's
opinion in this case demonstrates, denies the right to counsel in
criminal prosecutions to accuseds who suffer the severe
consequences of prosecution other than imprisonment.
Second, the "authorized imprisonment" test presents no problems
of administration. It avoids the necessity for time-consuming
consideration of the likely sentence in each individual case before
trial and the attendant problems of inaccurate predictions, unequal
treatment, and apparent and actual bias. These problems with the
"actual imprisonment" standard were suggested in my Brother
POWELL's concurrence in Argersinger, 407 U.S. at 407 U. S. 555 ,
which was echoed in scholarly criticism of that decision. [ Footnote 2/14 ] Petitioner emphasizes
these defects, arguing with considerable force that implementation
of the "actual imprisonment" standard must assuredly lead to
violations of both the Due Process and Equal Protection Clauses of
the Constitution. Brief for Petitioner 47-59.
Finally, the "authorized imprisonment" test ensures that courts
will not abrogate legislative judgments concerning the appropriate
range of penalties to be considered for each offense. Under the
"actual imprisonment" standard,
"[t]he judge will . . . be forced to decide in advance of trial
-- and without hearing the evidence -- whether he will forgo
entirely his judicial discretion to impose some sentence of
imprisonment and abandon his responsibility to consider the full
range of punishments established by the legislature. His
alternatives, assuming the availability Page 440 U. S. 384 of counsel, will be to appoint counsel and retain the discretion
vested in him by law, or to abandon this discretion in advance and
proceed without counsel." Argersinger v. Hamlin, supra, at 407 U. S. 53 (POWELL, J., concurring in result). The "authorized imprisonment"
standard, on the other hand, respects the allocation of functions
between legislatures and courts in the administration of the
criminal justice system.
The apparent reason for the Court's adoption of the "actual
imprisonment" standard for all misdemeanors is concern for the
economic burden that an "authorized imprisonment" standard might
place on the States. But, with all respect, that concern is both
irrelevant and speculative.
This Court's role in enforcing constitutional guarantees for
criminal defendants cannot be made dependent on the budgetary
decisions of state governments. A unanimous Court made that clear
in Mayer v. Chicago, 404 U. S. 189 , 404 U. S.
196 -197 (1971), in rejecting a proposed fiscal
justification for providing free transcripts for appeals only when
the appellant was subject to imprisonment:
"This argument misconceives the principle of Griffin [v.
Illinois, 351 U. S. 12 (1956)]. . . . Griffin does not represent a balance between the needs of
the accused and the interests of society; its principle is a flat
prohibition against pricing indigent defendants out of as effective
an appeal as would be available to others able to pay their own
way. The invidiousness of the discrimination that exists when
criminal procedures are made available only to those who can pay is
not erased by any differences in the sentences that may be imposed.
The State's fiscal interest is, therefore, irrelevant. [ Footnote 2/15 ]"
In any event, the extent of the alleged burden on the States is,
as the Court admits, ante at 440 U. S.
373 -374, n. 5, speculative. Although Page 440 U. S. 385 more persons are charged with misdemeanors punishable by
incarceration than are charged with felonies, a smaller percentage
of persons charged with misdemeanors qualify as indigent, and
misdemeanor cases, as a rule, require far less attorney time.
[ Footnote 2/16 ]
Furthermore, public defender systems have proved economically
feasible, and the establishment of such systems to replace
appointment of private attorneys can keep costs at acceptable
levels even when the number of cases requiring appointment of
counsel increases dramatically. [ Footnote 2/17 ] The public defender system alternative
also answers the argument that an "authorized imprisonment"
standard would clog the courts with inexperienced appointed
counsel.
Perhaps the strongest refutation of respondent's alarmist
prophecies that an "authorized imprisonment" standard would wreak
havoc on the States is that the standard has not produced that
result in the substantial number of States that already provide
counsel in all cases where imprisonment is Page 440 U. S. 386 authorized -- States that include a large majority of the
country's population and a great diversity of urban and rural
environments. [ Footnote 2/18 ]
Moreover, of those States that do not yet Page 440 U. S. 387 provide counsel in all cases where any imprisonment is
authorized, many provide counsel when periods of imprisonment
longer than 30 days, [ Footnote
2/19 ] 3 months, [ Footnote
2/20 ] or 6 months [ Footnote
2/21 ] are authorized. Page 440 U. S. 388 In fact, Scott would be entitled to appointed counsel under the
current laws of at least 33 States. [ Footnote 2/22 ]
It may well be that adoption by this Court of an "authorized
imprisonment" standard would lead state and local governments to
reexamine their criminal statutes. A state legislature or local
government might determine that it no longer desired to authorize
incarceration for certain minor offenses in light of the expense of
meeting the requirements of the Constitution. In my view, this
reexamination is long overdue. [ Footnote 2/23 ] In any Page 440 U. S. 389 event, the Court's "actual imprisonment" standard must
inevitably lead the courts to make this reexamination, which
plainly should more properly be a legislative responsibility. IV The Court's opinion turns the reasoning of Argersinger on its head. It restricts the right to counsel, perhaps the most
fundamental Sixth Amendment right, [ Footnote 2/24 ] more narrowly than the admittedly less
fundamental right to jury trial. [ Footnote 2/25 ] The abstract pretext that
"constitutional line drawing becomes more difficult as the reach
of the Constitution is extended further, and as efforts are made to
transpose lines from one area of Sixth Amendment jurisprudence to
another," ante at 440 U. S. 372 ,
cannot camouflage the anomalous result the Court reaches. Today's
decision reminds one of Mr. Justice Black's description of Betts v. Brady: "an anachronism when handed down" that
"ma[kes] an abrupt break with its own well considered precedents." Gideon v. Wainwright, 372 U.S. at 372 U. S. 345 , 372 U. S.
344 .
[ Footnote 2/1 ]
Scott was found to be indigent at the time of his initial
appeal, and an attorney was therefore appointed for him and he was
provided a free transcript of his trial for use on the appeal. The
Illinois courts and the parties have assumed his indigency at the
time of trial for purposes of this case. See 68 Ill. 2d
269 , 270-272, 369 N.E.2d
881 , 881-882 (1977); 36 Ill.App.3d 304, 307-308, 343 N.E.2d
517, 520 (1976).
[ Footnote 2/2 ]
"[The Sixth Amendment] embodies a realistic recognition of the
obvious truth that the average defendant does not have the
professional legal skill to protect himself when brought before a
tribunal with power to take his life or liberty, wherein the
prosecution is presented by experienced and learned counsel. That
which is simple, orderly and necessary to the lawyer, to the
untrained layman may appear intricate, complex and mysterious." Johnson v. Zerbst, 304 U. S. 458 , 304 U. S.
462 -463 (1938) .
[ Footnote 2/3 ]
"The right to be heard would be, in many cases, of little avail
if it did not comprehend the right to be heard by counsel. Even the
intelligent and educated layman has small and sometimes no skill in
the science of law. If charged with crime, he is incapable,
generally, of determining for himself whether the indictment is
good or bad. He is unfamiliar with the rules of evidence. Left
without the aid of counsel, he may be put on trial without a proper
charge, and convicted upon incompetent evidence, or evidence
irrelevant to the issue or otherwise inadmissible. He lacks both
the skill and knowledge adequately to prepare his defense, even
though he have a perfect one. He requires the guiding hand of
counsel at eery step in the proceedings against him. Without it,
though he be not guilty, he faces the danger of conviction because
he does not know how to establish his innocence. If that be true of
men of intelligence, how much more true is it of the ignorant and
illiterate, or those of feeble intellect." Powell v. Alabama, 287 U. S. 45 , 669
(1932).
[ Footnote 2/4 ] See Argersinger v. Hamlin, 407 U. S.
25 , 407 U. S. 31 (1972).
[ Footnote 2/5 ]
"'It is simply not arguable, nor has any court ever held, that
the trial of a petty offense may be held in secret, or without
notice to the accused of the charges, or that, in such cases, the
defendant has no right to confront his accusers or to compel the
attendance of witnesses in his own behalf.'" Id. at 407 U. S. 28 ,
quoting Junker, The Right to Counsel in Misdemeanor Cases, 43
Wash.L.Rev. 685, 705 (1968). Cf. In re Oliver, 333 U. S. 257 (1948) (right to a public trial); Pointer v. Texas, 380 U. S. 400 (1965) (right to confrontation); Klopfer v. North
Carolina, 386 U. S. 213 (1967) (right to a speedy trial); Washington v. Texas, 388 U. S. 14 (1967)
(right to compulsory process of witnesses); Groppi v.
Wisconsin, 400 U. S. 505 (1971) (right to an impartial jury).
[ Footnote 2/6 ]
"While there is historical support for limiting the 'deep
commitment' to trial by jury to 'serious criminal cases,' there is
no such support for a similar limitation on the right to assistance
of counsel. . . ."
" * * * *" "The Sixth Amendment . . . extended the right to counsel beyond
its common law dimensions. But there is nothing in the language of
the Amendment, its history, or in the decisions of this Court to
indicate that it was intended to embody a retraction of the right
in petty offenses wherein the common law previously did require
that counsel be provided." Argersinger v. Hamlin, 407 U.S. at 407 U. S. 30 (footnote and citations omitted).
[ Footnote 2/7 ] Id. at 407 U. S. 31 ; see supra at 440 U. S. 377 ,
and n. 3.
[ Footnote 2/8 ]
"MR. JUSTICE POWELL suggests that these problems [requiring the
presence of counsel to insure the accused a fair trial] are raised
even in situations where there is no prospect of imprisonment. . .
. We need not consider the requirements of the Sixth Amendment as
regards the right to counsel where loss of liberty is not involved,
however, for here petitioner was, in fact, sentenced to jail."
407 U.S. at 407 U. S.
37 .
[ Footnote 2/9 ] See, e.g., id. at 407 U. S. 27 , 407 U. S. 30 -31, 407 U. S. 36 ,
and n. 5; id. at 407 U. S. 45 ,
and n. 2, 407 U. S. 63 (POWELL, J., concurring in result).
[ Footnote 2/10 ]
Because a theft conviction implies dishonesty, it may be a basis
for impeaching petitioner's testimony in a court proceeding. People v. Stufflebean, 24 Ill.App.3d 1065, 1068-1169, 322
N.E.2d 488, 491-492 (1974). Because jurors must be of "fair
character" and "approved integrity," Ill.Rev.Stat., ch. 78, § 2
(1975), petitioner may be excluded from jury duty as a result of
his theft conviction. Twelve occupations licensed under Illinois
law and 23 occupations licensed under city of Chicago ordinances
require the license applicant to have "good moral character" or
some equivalent background qualification that could be found
unsatisfied because of a theft conviction. See Chicago
Council of Lawyers, Study of Licensing Restrictions on Ex-Offenders
in the City of Chicago and the State of Illinois 8, A-17 (1975).
Under federal law petitioner's theft conviction would bar him from
working in any capacity in a bank insured by the Federal Deposit
Insurance Corporation, 12 U.S.C. § 1829, or possibly in any public
or private employment requiring a security clearance. 32 CFR §§
1555 (h) and (i), and 156.7(b)(1)(iii) (1977).
[ Footnote 2/11 ] Gideon v. Wainwright, 372 U. S. 335 , 372 U. S. 344 (1963); see Junker, supra, 440
U.S. 367 fn2/5|>n. 5, at 713-714.
[ Footnote 2/12 ]
My Brother POWELL's concurrence in Argersinger, 407
U.S. at 407 U. S. 44 ,
joined by my Brother REHNQUIST, also supports petitioner's right to
appointed counsel in this case. The concurrence explicitly stated
that the right to counsel should extend at least as far as the
right to jury trial, id. at 407 U. S. 45 -46,
and its preference for a case-by-case approach was repeatedly
limited to "petty" offenses. See, e.g., id. at 407 U. S. 45 ,
and n. 2, 407 U. S. 47 , 407 U. S. 63 .
Even in petty offenses, the Argersinger concurrence would
have mandated the following procedures:
"The determination [whether counsel must be appointed] should be
made before the accused formally pleads; many petty cases are
resolved by guilty pleas in which the assistance of counsel may be
required. If the trial court should conclude that the assistance of
counsel is not required in any case, it should state its reasons so
that the issue could be preserved for review." Id. at 407 U. S.
63 .
[ Footnote 2/13 ] See 440
U.S. 367 fn2/10|>n. 10, supra. The scope of
collateral consequences that would be constitutionally permissible
under the "actual imprisonment" standard remains unsettled, and
this uncertainty is another source of confusion generated by this
standard. See, e.g., Tr. of Oral Arg. 35-37; United
States v. White, 529 F.2d 1390 (CA8 1976); Note, Argersinger v. Hamlin and the Collateral Use of Prior
Misdemeanor Convictions of Indigents Unrepresented by Counsel at
Trial, 35 Ohio St.L.J. 168 (1974).
[ Footnote 2/14 ] See, e.g., S. Krantz, C. Smith, D. Rossman, P. Froyd
& J. Hoffman, Right to Counsel in Criminal Cases: The Mandate
of Argersinger v. Hamlin 69-117 (1976); Duke, The Right to
Appointed Counsel: Argersinger and Beyond, 12
Am.Crim.L.Rev. 601 (1975).
The case-by-case approach advocated by my Brother POWELL in Argersinger has also been criticized as unworkable because
of the administrative burden it would impose. See, e.g., Uniform Rules of Criminal Procedure, Rule 321(b), Comment, 10
U.L.A. 69 (1974).
[ Footnote 2/15 ] See also Bounds v. Smith, 430 U.
S. 817 , 430 U. S. 825 (1977).
[ Footnote 2/16 ] See Uniform Rules of Criminal Procedure, Rule 321(b),
Comment, 10 U.L.A. 70 (1974) (estimates that only 10% of
misdemeanor defendants, as opposed to 60%-65% of felony defendants,
meet the necessary indigency standard); National Legal Aid and
Defender Assn., The Other Face of Justice, Note I, pp. 82-83 (1973)
(survey indicates national average is 65% indigency in felony cases
and only 47% in misdemeanor cases).
The National Advisory Commission on Criminal Justice Standards
and Goals adopted a maximum caseload standard of 150 felony cases
or 400 misdemeanor cases per attorney per year. National Advisory
Commission on Criminal Justice Standards and Goals, Courts,
Standard 13.12, pp. 276-277 (1973). See also The Other
Face of Justice, supra, Table 109, p. 73.
[ Footnote 2/17 ]
A study conducted in the State of Wisconsin, which introduced a
State Public Defender System after the Wisconsin Supreme Court, in State ex rel. Winnie v. Harris, 75 Wis.2d 547, 249 N.W.2d
791 (1977), extended the right to counsel in the way urged by
petitioner in this case, indicated that the average cost of
providing counsel in a misdemeanor case was reduced from $150-$200
to $90 by using a public defender, rather than appointing private
counsel. Brief for National Legal Aid and Defender Assn. as Amicus Curiae 10-12.
[ Footnote 2/18 ] See, e.g., Alaska: Alaska Const., Art. 1, § 11; Alaska
Stat.Ann. § 18.85.100 (1974) (any offense punishable by
incarceration; or which may result in loss of valuable license or
heavy fine); Alexander v. Anchorage, 490 P.2d 910 (Alaska 1971); Arizona: Ariz.Rule Crim. Proc. 6.1(b) (any criminal
proceedings which may result in punishment by loss of liberty; or
where the court concludes that the interest of justice so
requires); California: Cal.Penal Code Ann. § 987 (West Supp. 1978)
(all criminal cases); Connecticut: Conn.Gen. Stat. §§ 51-296(a),
51-297(f) (1979) (all criminal actions); Delaware: Del. Code Ann.,
Tit. 29, § 4602 (1974) (all indigents under arrest or charged with
crime if defendant requests or court orders); Hawaii: Haw.Rev.Stat.
§ 802-1 (1976) (any offense punishable by confinement in jail);
Indiana: Ind.Const., Art. I, § 13 (all criminal prosecutions); Bolkovac v. State, 229 Ind. 294, 98 N.E.2d
250 (1951); Kentucky: Ky.Rule Crim. Proc. 8.04 (offenses
punishable by a fine of more than $500 or by imprisonment);
Louisiana: La.Code Crim.Proc., Art. 513 (West Supp. 1978) (offenses
punishable by imprisonment); Massachusetts: Mass.Sup.Jud.Ct.Rule
3:10 (any crime for which sentence of imprisonment may be imposed);
Minnesota: Minn.Stat. §§ 609.02, 611.14 (1978) (felonies and "gross
misdemeanors"; statute defines "petty" misdemeanors as those not
punishable by imprisonment or fine over $100); New Hampshire:
N.H.Rev.Stat.Ann. §§ 604-A:2, 625:9 (1974 and Supp. 1977) (offenses
punishable by imprisonment); New Mexico: N.M.Stat.Ann. § 41-22A-12
(Supp. 1975) (offense carrying a possible sentence of
imprisonment); New York: N.Y.Crim.Proc.Law § 170.10(3) (McKinney
1971) (all misdemeanors except traffic violations); People v.
Weinstock, 80 Misc.2d 510, 363 N.Y.S.2d 878 (1974) (traffic
violations subject to possible imprisonment); Oklahoma: Okla.Stat.,
Tit. 22, § 464 (1969) (all criminal cases); Stewart v.
State, 495
P.2d 834 (Crim.App. 1972); Oregon: Brown v. Multnoma County
Dist. Ct., 29 Ore.App. 917, 566 P.2d
522 (1977) (all criminal cases); South Dakota: S.D.Comp.Laws
Ann. § 23-2-1 (Supp. 1978) (any criminal action); Tennessee:
Tenn.Code Ann. §§ 40-2002, 40-2003 (1975) (persons accused of any
crime or misdemeanor whatsoever); Texas: Tex.Code Crim.Proc.Ann.,
Art. 26.04 (Vernon 1966) (any felony or misdemeanor punishable by
imprisonment); Virginia: Va.Code §§ 19.2-157, 19.2-160 (Supp. 1978)
(misdemeanors the penalty for which may be confinement in jail);
Washington: Wash.Justice Court Crim.Rule 2.11(a)(1) (all criminal
offenss punishable by loss of liberty); West Virginia: W.Va.Code §
621a (1977) (persons under indictment for a crime); Wisconsin:
Wis.Const., Art. I, § 7; State ex rel. Winnie v. Harris, 75 Wis.2d 547, 249 N.W.2d
791 (1977) (all offenses punishable by incarceration).
Respondent claims that the statutes and case law in some of
these States "need not be read as requiring appointment of counsel
for all imprisonable cases." Brief for Respondent 33 n. 28.
Although the law is not unambiguous in every case, ambiguities in
the laws of other States suggest that the list is perhaps too
short, or at least that other States provide counsel in all but the
most trivial offenses. E.g., Colorado: Colo.Rev.Stat. §
21-1-103 (1973) (all misdemeanors and all municipal code violations
at the discretion of the public defender); Georgia: Ga.Code §
27-3203 (1978) (any violation of a state law or local ordinance
which may result in incarceration); Missouri: Mo.Op.Atty.Gen. No.
207 (1963) (counsel should be appointed in misdemeanor cases of
"more than minor significance" and "when prejudice might result");
Montana: Mont. Rev.Codes Ann. § 95-1001 (1969) (court may assign
counsel in misdemeanors "in the interest of justice"); Nevada:
Nev.Rev.Stat. § 178.397 (1977) (persons accused of "gross
misdemeanors" or felonies); New Jersey: N.J.Stat.Ann. § 2A: 158A-2
(West 1971); N.J.Crim. Rule 3:27-1 (any offense which is
indictable); Pennsylvania: Pa.Rules Crim.Proc. 316(a)-(c) (in all
but "summary cases"); Wyoming: Wyo.Stat. §§ 7-1-110(a) (entitled to
appointed counsel in "serious crimes"), 7-1108(a)(v) (serious
crimes are those for which incarceration is a "practical
possibility"), 7-9-105 (all cases where accused shall or may be
punished by imprisonment in penitentiary) (1977).
In addition, Alabama, Florida, Georgia, and Mississippi were
until today covered by the Fifth Circuit's adoption of the
"authorized imprisonment" standard. See Potts v. Estelle, 529 F.2d 450 (CA5 1976); Thomas v. Savage, 513 F.2d 536
(CA5 1975).
Several States that have not adopted the "authorized
imprisonment" standard give courts discretionary authority to
appoint counsel in cases where it is perceived to be necessary
( e.g., Maryland, Missouri, Montana, North Dakota, Ohio,
and Pennsylvania).
[ Footnote 2/19 ]
Iowa: Iowa Rules Crim. Proc. 2, § 3; 42, § 3.
[ Footnote 2/20 ]
Maryland: Md.Ann.Code, Art. 27A, §§ 2(f) and (h), 4 (1976);
Mississippi: Miss.Code Ann. § 99-15-15 (1972).
[ Footnote 2/21 ]
Idaho: Idaho Code § 19-851 (Supp. 1978); Mahler v.
Birnbaum, 95 Idaho 14, 501 P.2d 282 (1972); Maine: Newell
v. State, 277 A.2d
731 (1971); Ohio: Ohio Rules Crim.Proc. 2, 44(A) and (b); Rhode
Island: R.I.Rule Crim. Proc. 44 (Super.Ct.); R.I.Rule Crim. Proc.
44 (Dist. Ct.); State v. Holliday, 109 R.I. 93, 280
A.2d 333 (1971); Utah: Utah Code Ann. § 77-64-2 (1978); Salt Lake City Corp. v. Salt Lake County, 520 P.2d 211 (1974).
[ Footnote 2/22 ] See nn. 440
U.S. 367 fn2/18|>18-21, supra. The actual figure may
be closer to 40 States. The following States appear to be governed
only by the "likelihood of imprisonment" standard: Arkansas:
Ark.Rule Crim.Proc. 8.2(b) (all criminal offenses except in
misdemeanor cases where court determines that under no
circumstances will conviction result in imprisonment); Florida:
Fla.Rule Crim.Proc. 3.111(b) (any misdemeanor or municipal
ordinance violation unless prior written statement by judge that
conviction will not result in imprisonment); North Carolina:
N.C.Gen.Stat. § 7A-451(a) (Supp. 1977) (any case in which
imprisonment or a fine of $500 or more is likely to be adjudged);
North Dakota: N.D.Rule Crim.Proc. 44 (all nonfelony cases unless
magistrate determines that sentence upon conviction will not
include imprisonment); Vermont: Vt.Stat.Ann., Tit. 13, §§ 5201,
5231 (1974 and Supp. 1977) (any misdemeanor punishable by any
period of imprisonment or fine over $1,000 unless prior
determination that imprisonment or fine over $1,000 will not be
imposed). Two States require appointment of counsel for indigents
in cases where it is "constitutionally required": Alabama: Ala.Code
§§ 15-12-1, 15-12-20 (1975); South Carolina: S.C.Code § 17-3-10
(Supp. 1977). Some States require counsel in misdemeanor cases only
by virtue of judicial decisions reacting to Argersinger: Kansas: State v. Giddings, 216 Kan. 14, 531 P.2d 445 (1975); Michigan: People v. Studaker, 387 Mich. 698, 199 N.W.2d
177 (1972); People v. Harris, 45 Mich. App. 217, 206
N.W.2d 478 (1973); Nebraska: Kovarik v. County of Banner, 192 Neb. 816, 224 N.W.2d
761 (1975).
[ Footnote 2/23 ] See, e.g., Krantz et al., supra, 440
U.S. 367 fn2/14|>n. 14, at 445-606.
[ Footnote 2/24 ]
"In an adversary system of criminal justice, there is no right
more essential than the right to the assistance of counsel." Lakeside v. Oregon, 435 U. S. 333 , 435 U. S. 341 (1978).
[ Footnote 2/25 ]
"[T]he interest protected by the right to have guilt or
innocence determined by a jury -- tempering the possibly arbitrary
and harsh exercise of prosecutorial and judicial power -- while
important, is not as fundamental to the guarantee of a fair trial
as is the right to counsel." Argersinger v. Hamlin, 407 U.S. at 407 U. S. 46 (POWELL, J., concurring in result) (footnotes omitted).
MR. JUSTICE BLACKMUN, dissenting.
For substantially the reasons stated by MR. JUSTICE BRENNAN in
Parts I and II of his dissenting opinion, I would hold that the
right to counsel secured by the Sixth and Fourteenth Amendments
extends at least as far as the right to jury trial secured by those
Amendments. Accordingly, I would hold that an indigent defendant in
a state criminal case must be afforded appointed counsel whenever
the defendant is prosecuted Page 440 U. S. 390 for a nonpetty criminal offense, that is, one punishable by more
than six months' imprisonment, see Duncan v. Louisiana, 391 U. S. 145 (1968); Baldwin v. New York, 399 U. S.
66 (1970), or whenever the defendant is convicted of an
offense and is actually subjected to a term of imprisonment, Argersinger v. Hamlin, 407 U. S. 25 (1972).
This resolution, I feel, would provide the "bright line" that
defendants, prosecutors, and trial and appellate courts all deserve
and, at the same time, would reconcile on a principled basis the
important considerations that led to the decisions in Duncan,
Baldwin, and Argersinger. On this approach, of course, the judgment of the Supreme Court
of Illinois upholding petitioner Scott's conviction should be
reversed, since he was convicted of an offense for which he was
constitutionally entitled to a jury trial. I therefore dissent. | In the case of Scott v. Illinois, the United States Supreme Court ruled that indigent criminal defendants have the right to appointed counsel if they face a term of imprisonment, but this right does not extend to cases where imprisonment is authorized but not imposed as a penalty. The Court affirmed the Illinois Supreme Court's decision, upholding the conviction of a petitioner who was fined for shoplifting but not imprisoned. |
Criminal Trials & Prosecutions | U.S. v. Henry | https://supreme.justia.com/cases/federal/us/447/264/ | U.S. Supreme Court United States v. Henry, 447
U.S. 264 (1980) United States v.
Henry No. 79-121 Argued January 16,
1980 Decided June 16, 1980 447
U.S. 264 CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE FOURTH
CIRCUIT Syllabus After respondent was indicted for armed robbery of a bank, and
while he was in jail pending trial, Government agents contacted an
informant who was then an inmate confined in the same cellblock as
respondent. An agent instructed the informant to be alert to any
statements made by federal prisoners but not to initiate
conversations with or question respondent regarding the charges
against him. After the informant had been released from jail, he
reported to the agent that he and respondent had engaged in
conversation and that respondent made incriminating statements
about the robbery. The informant was paid for furnishing the
information. At respondent's trial, which resulted in a conviction,
the informant testified about the incriminating statements that
respondent had made to him. Respondent moved to vacate his sentence
on the ground that the introduction of the informant's testimony
interfered with and violated his Sixth Amendment right to the
assistance of counsel. The District Court denied the motion, but
the Court of Appeals reversed, holding that the Government's
actions impaired respondent's Sixth Amendment rights under Massiah v. United States, 377 U.
S. 201 . Held: Respondent's statements to the informant should
not have been admitted at trial. By intentionally creating a
situation likely to induce respondent to make incriminating
statements without the assistance of counsel, the Government
violated respondent's Sixth Amendment right to counsel. Under the
facts -- particularly the facts that the informant was acting under
instructions as a paid informant for the Government while
ostensibly no more than a fellow inmate, and that respondent was in
custody and under indictment at the time -- incriminating
statements were "deliberately elicited" from respondent within the
meaning of Massiah. Since respondent was unaware that the
informant was acting for the Government, he cannot be held to have
waived his right to the assistance of counsel. Pp. 447 U. S.
269 -275.
590 F.2d 544, affirmed.
BURGER, C.J., delivered the opinion of the Court, in which
BRENNAN, STEWART, MARSHALL, POWELL, and STEVENS, JJ., joined.
POWELL, J., filed a concurring opinion, post, p. 447 U. S. 275 .
BLACKMUN, J., filed a dissenting Page 447 U. S. 265 opinion, in which WHITE, J., joined, post, p. 447 U. S. 277 .
REHNQUIST, J., filed dissenting opinion, post, p. 447 U. S.
289 .
MR. CHIEF JUSTICE BURGER delivered the opinion of the Court.
We granted certiorari to consider whether respondent's Sixth
Amendment right to the assistance of counsel was violated by the
admission at trial of incriminating statements made by respondent
to his cellmate, an undisclosed Government informant, after
indictment and while in custody. 444 U.S. 824 (1979). I The Janaf Branch of the United Virginia Bank/Seaboard National
in Norfolk, Va., was robbed in August, 1972. Witnesses saw two men
wearing masks and carrying guns enter the bank while a third man
waited in the car. No witnesses were able to identify respondent
Henry as one of the participants. About an hour after the robbery,
the getaway car was discovered. Inside was found a rent receipt
signed by one "Allen R. Norris" and a lease, also signed by Norris,
for a house in Norfolk. Two men, who were subsequently convicted of
participating in the robbery, were arrested at the rented house.
Discovered with them were the proceeds of the robbery and the guns
and masks used by the gunmen.
Government agents traced the rent receipt to Henry; on the basis
of this information, Henry was arrested in Atlanta, Ga., in
November, 1972. Two weeks later, he was indicted for Page 447 U. S. 266 armed robbery under 18 U.S.C. §§ 2113(a) and (d). He was held
pending trial in the Norfolk city jail. Counsel was appointed on
November 27.
On November 21, 1972, shortly after Henry was incarcerated,
Government agents working on the Janaf robbery contacted one
Nichols, an inmate at the Norfolk city jail, who for some time
prior to this meeting had been engaged to provide confidential
information to the Federal Bureau of Investigation as a paid
informant. Nichols was then serving a sentence on local forgery
charges. The record does not disclose whether the agent contacted
Nichols specifically to acquire information about Henry or the
Janaf robbery. [ Footnote 1 ]
Nichols informed the agent that he was housed in the same
cellblock with several federal prisoners awaiting trial, including
Henry. The agent told him to be alert to any statements made by the
federal prisoners, but not to initiate any conversation with or
question Henry regarding the bank robbery. In early December, after
Nichols had been released from jail, the agent again contacted
Nichols, who reported that he and Henry had engaged in
conversation, and that Henry had told him about the robbery of the
Janaf bank. [ Footnote 2 ]
Nichols was paid for furnishing the information.
When Henry was tried in March, 1973, an agent of the Page 447 U. S. 267 Federal Bureau of Investigation testified concerning the events
surrounding the discovery of the rental slip and the evidence
uncovered at the rented house. Other witnesses also connected Henry
to the rented house, including the rental agent, who positively
identified Henry as the "Allen R. Norris" who had rented the house
and had taken the rental receipt described earlier. A neighbor
testified that, prior to the robbery, she saw Henry at the rented
house with John Luck, one of the two men who had by the time of
Henry's trial been convicted for the robbery. In addition, palm
prints found on the lease agreement matched those of Henry.
Nichols testified at trial that he had "an opportunity to have
some conversations with Mr. Henry while he was in the jail," and
that Henry told him that, on several occasions, he had gone to the
Janaf Branch to see which employees opened the vault. Nichols also
testified that Henry described to him the details of the robbery
and stated that the only evidence connecting him to the robbery was
the rental receipt. The jury was not informed that Nichols was a
paid Government informant.
On the basis of this testimony, [ Footnote 3 ] Henry was convicted of bank robbery and
sentenced to a term of imprisonment of 25 years. On appeal, he
raised no Sixth Amendment claims. His conviction was affirmed,
judgt. order reported at 483 F.2d 1401 (CA4 1973), and his petition
to this Court for a writ of certiorari was denied. 421 U.S. 915
(1975).
On August 28, 1975, Henry moved to vacate his sentence pursuant
to 28 U.S.C. § 2255. [ Footnote
4 ] At this stage, he stated that Page 447 U. S. 268 he had just learned that Nichols was a paid Government informant
and alleged that he had been intentionally placed in the same cell
with Nichols so that Nichols could secure information about the
robbery. Thus, Henry contended that the introduction of Nichols'
testimony violated his Sixth Amendment right to the assistance of
counsel. The District Court denied the motion without a hearing.
The Court of Appeals, however, reversed and remanded for an
evidentiary inquiry into "whether the witness [Nichols] was acting
as a government agent during his interviews with Henry."
On remand, the District Court requested affidavits from the
Government agents. An affidavit was submitted describing the
agent's relationship with Nichols and relating the following
conversation:
"I recall telling Nichols at this time to be alert to any
statements made by these individuals [the federal prisoners]
regarding the charges against them. I specifically recall telling
Nichols that he was not to question Henry or these individuals
about the charges against them, however, if they engaged him in
conversation or talked in front of him, he was requested to pay
attention to their statements. I recall telling Nichols not to
initiate any conversations with Henry regarding the bank robbery
charges against Henry, but that, if Henry initiated the
conversations with Nichols, I requested Nichols to pay attention to
the information furnished by Henry."
The agent's affidavit also stated that he never requested anyone
affiliated with the Norfolk city jail to place Nichols in the same
cell with Henry.
The District Court again denied Henry's § 2255 motion,
concluding that Nichols' testimony at trial did not violate
Henry's Page 447 U. S. 269 Sixth Amendment right to counsel. The Court of Appeals reversed
and remanded, holding that the actions of the Government impaired
the Sixth Amendment rights of the defendant under Massiah v.
United States, 377 U. S. 201 (1964). The court noted that Nichols had engaged in conversation
with Henry and concluded that, if by association, by general
conversation, or both, Nichols had developed a relationship of
trust and confidence with Henry such that Henry revealed
incriminating information, this constituted interference with the
right to the assistance of counsel under the Sixth Amendment.
[ Footnote 5 ] 590 F.2d 544
(1978). II This Court has scrutinized postindictment confrontations between
Government agents and the accused to determine whether they are
"critical stages" of the prosecution at which the Sixth Amendment
right to the assistance of counsel attaches. See, e.g., United
States v. Ash, 413 U. S. 300 (1973); United States v. Wade, 388 U.
S. 218 (1967). The present case involves incriminating
statements made by the accused to an undisclosed and undercover
Government informant while in custody and after indictment. The
Government characterizes Henry's incriminating statements as
voluntary, and not the result of any affirmative conduct on the
part of Government agents to elicit evidence. From this, the
Government argues that Henry's rights were not violated, even
assuming the Sixth Amendment applies to such surreptitious
confrontations; in short, it is contended that the Government has
not interfered with Henry's right to counsel. [ Footnote 6 ] Page 447 U. S. 270 This Court first applied the Sixth Amendment to postindictment
communications between the accused and agents of the Government in Massiah v. United States, supra. There, after the accused
had been charged, he made incriminating statements to his
codefendant, who was acting as an agent of the Government. In
reversing the conviction, the Court held that the accused was
denied
"the basic protections of [the Sixth Amendment] when there was
used against him at his trial evidence of his own incriminating
words, which federal agents had deliberately elicited from
him." Id. at 377 U. S. 206 .
The Massiah holding rests squarely on interference with
his right to counsel.
The question here is whether, under the facts of this case, a
Government agent "deliberately elicited" incriminating statements
from Henry within the meaning of Massiah. Three factors
are important. First, Nichols was acting under instructions as a
paid informant for the Government; second, Nichols was ostensibly
no more than a fellow inmate of Henry; and third, Henry was in
custody and under indictment at the time he was engaged in
conversation by Nichols.
The Court of Appeals viewed the record as showing that Nichols
deliberately used his position to secure incriminating information
from Henry when counsel was not present, and held that conduct
attributable to the Government. Nichols had been a paid Government
informant for more than a year; moreover, the FBI agent was aware
that Nichols had access to Henry and would be able to engage him in
conversations without arousing Henry's suspicion. The arrangement
between Nichols and the agent was on a contingent fee basis;
Nichols was to be paid only if he produced useful information.
[ Footnote 7 ] Page 447 U. S. 271 This combination of circumstances is sufficient to support the
Court of Appeals' determination. Even if the agent's statement that
he did not intend that Nichols would take affirmative steps to
secure incriminating information is accepted, he must have known
that such propinquity likely would lead to that result.
The Government argues that the federal agents instructed Nichols
not to question Henry about the robbery. [ Footnote 8 ] Yet according to his own testimony, Nichols
was not a passive listener; rather, he had "some conversations with
Mr. Henry" while he was in jail and Henry's incriminatory
statements were "the product of this conversation." While
affirmative interrogation, absent waiver, would certainly satisfy Massiah, we are not persuaded, as the Government contends,
that Brewer v. Williams, 430 U. S. 387 (1977), modified Massiah's "deliberately elicited" test. See Rhode Island v. Innis, 446 U.
S. 291 , 446 U. S. 300 ,
n. 4 (1980). [ Footnote 9 ] In Massiah, no inquiry was Page 447 U. S. 272 made as to whether Massiah or his codefendant first
raised the subject of the crime under investigation. [ Footnote 10 ]
It is quite a different matter when the Government uses
undercover agents to obtain incriminating statements from persons
not in custody but suspected of criminal activity prior to the time
charges are filed. In Hoffa v. United States, 385 U.
S. 293 , 385 U. S. 302 (1966), for example, this Court held that "no interest legitimately
protected by the Fourth Amendment is involved" because "the Fourth
Amendment [does not protect] a wrongdoer's misplaced belief that a
person to whom he voluntarily confides his wrongdoing will not
reveal it." See also United States v. White, 401 U.
S. 745 (1971). Similarly, the Fifth Amendment has been
held not to be implicated by the use of undercover Government
agents before charges are filed, because of the absence of the
potential for compulsion. See Hoffa v. United States,
supra at 385 U. S.
303 -304. But the Fourth and Fifth Amendment claims made
in those cases are not relevant to the inquiry under the Sixth
Amendment here -- whether the Government has interfered with the
right to counsel of the accused by "deliberately eliciting"
incriminating statements. Our holding today does not modify White or Hoffa. It is undisputed that Henry was unaware of Nichols' role as a
Government informant. The Government argues that this Court should
apply a less rigorous standard under the Page 447 U. S. 273 Sixth Amendment where the accused is prompted by an undisclosed
undercover informant than where the accused is speaking in the
hearing of persons he knows to be Government officers. That line of
argument, however, seeks to infuse Fifth Amendment concerns against
compelled self-incrimination into the Sixth Amendment protection of
the right to the assistance of counsel. An accused speaking to a
known Government agent is typically aware that his statements may
be used against him. The adversary positions at that stage are well
established; the parties are then "arm's length" adversaries.
When the accused is in the company of a fellow inmate who is
acting by prearrangement as a Government agent, the same cannot be
said. Conversation stimulated in such circumstances may elicit
information that an accused would not intentionally reveal to
persons known to be Government agents. Indeed, the Massiah Court noted that, if the Sixth Amendment "is to have any efficacy,
it must apply to indirect and surreptitious interrogations, as well
as those conducted in the jailhouse." The Court pointedly observed
that Massiah was more seriously imposed upon because he did not
know that his codefendant was a Government agent. 377 U.S. at 377 U. S.
206 .
Moreover, the concept of a knowing and voluntary waiver of Sixth
Amendment rights does not apply in the context of communications
with an undisclosed undercover informant acting for the Government. See Johnson v. Zerbst, 304 U. S. 458 (1938). In that setting, Henry, being unaware that Nichols was a
Government agent expressly commissioned to secure evidence, cannot
be held to have waived his right to the assistance of counsel.
Finally, Henry's incarceration at the time he was engaged in
conversation by Nichols is also a relevant factor. [ Footnote 11 ] As a ground Page 447 U. S. 274 for imposing the prophylactic requirements in Miranda v.
Arizona, 384 U. S. 436 , 384 U. S. 467 (1966), this Court noted the powerful psychological inducements to
reach for aid when a person is in confinement. See also
id. at 384 U. S.
448 -454. While the concern in Miranda was
limited to custodial police interrogation, the mere fact of custody
imposes pressures on the accused; confinement may bring into play
subtle influences that will make him particularly susceptible to
the ploys of undercover Government agents. The Court of Appeals
determined that, on this record, the incriminating conversations
between Henry and Nichols were facilitated by Nichols' conduct and
apparent status as a person sharing a common plight. That Nichols
had managed to gain the confidence of Henry, as the Court of
Appeals determined, is confirmed by Henry's request that Nichols
assist him in his escape plans when Nichols was released from
confinement. [ Footnote
12 ]
Under the strictures of the Court's holdings on the exclusion of
evidence, we conclude that the Court of Appeals did not err in
holding that Henry's statements to Nichols should not have been
admitted at trial. By intentionally creating a situation likely to
induce Henry to make incriminating statements without the
assistance of counsel, the Government violated Henry's Sixth
Amendment right to counsel. [ Footnote 13 ] This is Page 447 U. S. 275 not a case where, in Justice Cardozo's words, "the constable . .
. blundered," People v. DeFore, 242 N.Y. 13, 21, 150 N.E.
585, 587 (1926); rather, it is one where t.he "constable" planned
an impermissible interference with the right to the assistance of
counsel. [ Footnote 14 ]
The judgment of the Court of Appeals for the Fourth Circuit
is Affirmed. [ Footnote 1 ]
The record does disclose that, on November 21, 1972, the same
day the agent contacted Nichols, the agent's supervisor
interrogated Henry at the jail. After denying participation in the
robbery, Henry exercised his right to terminate the interview.
[ Footnote 2 ]
Henry also asked Nichols if he would help him once Nichols was
released. Henry requested Nichols to go to Virginia Beach and
contact a woman there. He prepared instructions on how to find the
woman and wanted Nichols to tell her to visit Henry in the Norfolk
jail. He explained that he wanted to ask the woman to carry a
message to his partner, who was incarcerated in the Portsmouth city
jail. Henry also gave Nichols a telephone number and asked him to
contact an individual named "Junior" or "Nail." In addition, Henry
asked Nichols to provide him with a floor plan of the United States
Marshals' office and a handcuff key because Henry intended to
attempt an escape.
[ Footnote 3 ]
Joseph Sadler, another of Henry's cellmates, also testified at
trial. He stated that Henry had told him that Henry had robbed a
bank with a man named "Lucky" or "Luck." Sadler testified that, on
advice of counsel, he informed Government agents of the
conversation with Henry. Sadler was not a paid informant, and had
no arrangement to monitor or report on conversations with
Henry.
[ Footnote 4 ]
In his § 2255 petition, Henry also alleged that Sadler's
testimony was perjurious; that the Government failed to disclose
Brady material, see Brady v. Maryland, 373 U. S.
83 (1963); that the United States Attorney's argument to
the jury was impermissibly prejudicial; and that his trial counsel
was incompetent. The District Court rejected each of these grounds,
and none of these issues is before this Court.
[ Footnote 5 ]
The Court of Appeals acknowledged that the testimony of Sadler,
another cellmate of Henry, supported the conviction, but was not
willing to conclude beyond a reasonable doubt that Nichols'
testimony did not influence the jury. Chapman v.
California, 386 U. S. 18 , 386 U. S. 24 (1967).
[ Footnote 6 ]
Although both the Government, and MR. JUSTICE REHNQUIST in
dissent, question the continuing vitality of the Massiah branch of the Sixth Amendment, we reject their invitation to
reconsider it.
[ Footnote 7 ]
The affidavit of the agent discloses that "Nichols had been paid
by the FBI for expenses and services in connection with information
he had provided" as an informant for at least a year. The only
reasonable inference from this statement is that Nichols was paid
when he produced information, not that Nichols was continuously on
the payroll of the FBI. Here, the service requested of Nichols was
that he obtain incriminating information from Henry; there is no
indication that Nichols would have been paid if he had not
performed the requested service.
[ Footnote 8 ]
Two aspects of the agent's affidavit are particularly
significant. First, it is clear that the agent, in his discussions
with Nichols, singled out Henry as the inmate in whom the agent had
a special interest. Thus, the affidavit relates that "I
specifically recall telling Nichols that he was not to question Henry or these individuals," and "I recall telling Nichols
not to initiate any conversations with Henry regarding the
bank robbery charges," but to "pay attention to the information
furnished by Henry. " (Emphasis added.) Second, the agent
only instructed Nichols not to question Henry or to initiate
conversations regarding the bank robbery charges. Under these
instructions, Nichols remained free to discharge his task of
eliciting the statements in myriad less direct ways.
[ Footnote 9 ]
The situation where the "listening post" is an inanimate
electronic device differs; such a device has no capability of
leading the conversation into any particular subject or prompting
any particular replies. See, e.g., United States v.
Hearst, 563 F.2d 1331, 1347-1348 (CA9 1977), cert.
denied, 435 U. S. 1000 (1978). However, that situation is not presented in this case, and
there is no occasion to treat it; nor are we called upon to pass on
the situation where an informant is placed in close proximity but
makes no effort to stimulate conversations about the crime
charged.
[ Footnote 10 ]
No doubt the role of the agent at the time of the conversations
between Massiah and his codefendant was more active than
that of the federal agents here. Yet the additional fact in Massiah that the agent was monitoring the conversations is
hardly determinative. In both Massiah and this case, the
informant was charged with the task of obtaining information from
an accused. Whether Massiah's codefendant questioned Massiah about
the crime or merely engaged in general conversation about it was a
matter of no concern to the Massiah Court. Moreover, we
deem it irrelevant that, in Massiah, the agent had to
arrange the meeting between Massiah and his codefendant, while here
the agents were fortunate enough to have an undercover informant
already in close proximity to the accused.
[ Footnote 11 ]
This is not to read a "custody" requirement, which is a
prerequisite to the attachment of Miranda rights, into
this branch of the Sixth Amendment. Massiah was in no
sense in custody at the time of his conversation with his
codefendant. Rather, we believe the fact of custody bears on
whether the Government "deliberately elicited" the incriminating
statements from Henry.
[ Footnote 12 ]
This is admittedly not a case, such as Massiah, where
the informant and the accused had a prior longstanding
relationship. Nevertheless, there is ample evidence in the record
which discloses that Nichols had managed to become more than a
casual jailhouse acquaintance. That Henry could be induced to
discuss his past crime is hardly surprising in view of the fact
that Nichols had so ingratiated himself that Henry actively
solicited his aid in executing his next crime -- his planned
attempt to escape from the jail.
[ Footnote 13 ]
The holding of the Court of Appeals that this was not harmless
error is on less firm grounds in view of the strong evidence
against Henry, including the testimony of a neutral fellow inmate,
Henry's rental of the hideaway house, and his presence there with
the other participants in the robbery before the crime. The
Government, however, has not argued that the error was harmless,
and, on balance, we are not inclined to disturb the determination
of the Court of Appeals.
[ Footnote 14 ]
Although it does not bear on the constitutional question in this
case, we note that Disciplinary Rule 7-14(A)(1) of the Code of
Professional Responsibility provides:
"(A) During the course of his representation of a client a
lawyer shall not:"
"(1) Communicate or cause another to communicate on the subject
of the representation with a party he knows to be represented by a
lawyer in that matter unless he has the prior consent of the lawyer
representing such other party or is authorized by law to do
so." See also Ethical Consideration 7-18.
MR. JUSTICE POWELL, concurring.
The question in this case is whether the Government deliberately
elicited information from respondent in violation of the rule of Massiah v. United States, 377 U.
S. 201 (1964), and Brewer v. Williams, 430 U. S. 387 (1977). I join the opinion of the Court, but write separately to
state my understanding of the Court's holding. I In Massiah v. United States, this Court held that the
Government violated the Sixth Amendment when it deliberately
elicited incriminating information from an indicted defendant who
was entitled to assistance of counsel. 377 U.S. at Page 447 U. S. 276 377 U. S. 206 .
Government agents outfitted an informant's automobile with radio
transmitting equipment and instructed the informant to engage the
defendant in conversation relating to the crimes. United States
v. Massiah, 307 F.2d 62, 72 (CA2 1962) (Hays, J., dissenting).
In suppressing statements overheard during the resulting
conversation, the Court emphasized that the Sixth Amendment must
" apply to indirect and surreptitious interrogations as well as
those conducted in the jailhouse. . . .'" 377 U.S. at 377 U. S. 206 ,
quoting 307 F.2d at 72 (Hays, J., dissenting). Similarly, in Brewer v. Williams, supra, we applied Massiah to
a situation in which a police detective purposefully isolated a
suspect from his lawyers and, during a long ride in a police car,
elicited incriminating remarks from the defendant through skillful
interrogation. We suppressed the statement because the government
"deliberately and designedly set out to elicit" information from a
suspect. 430 U.S. at 430 U. S. 399 ; see id. at 430 U. S. 407 (MARSHALL, J., concurring); id. at 430 U. S. 412 (POWELL, J., concurring). The rule of Massiah serves the salutary purpose of
preventing police interference with the relationship between a
suspect and his counsel once formal proceedings have been
initiated. But Massiah does not prohibit the introduction
of spontaneous statements that are not elicited by governmental
action. Thus, the Sixth Amendment is not violated when a passive
listening device collects, but does not induce, incriminating
comments. See United States v. Hearst, 563 F.2d 1331,
1347-1348 (CA9 1977), cert. denied, 435 U.
S. 1000 (1978). Similarly, the mere presence of a
jailhouse informant who had been instructed to overhear
conversations and to engage a criminal defendant in some
conversations would not necessarily be unconstitutional. In such a
case, the question would be whether the informant's actions
constituted deliberate and "surreptitious interrogatio[n]" of the
defendant. If they did not, then there would be no interference
with the relationship between client and counsel. Page 447 U. S. 277 II I view this as a close and difficult case on its facts because
no evidentiary hearing has been held on the Massiah claim.
Normally, such a hearing is helpful to a reviewing court and should
be conducted. On balance, however, I accept the view of the Court
of Appeals and of the Court that the record adequately demonstrates
the existence of a Massiah violation. I could not join the
Court's opinion if it held that the mere presence or incidental
conversation of an informant in a jail cell would violate Massiah. * To demonstrate
an infringement of the Sixth Amendment, a defendant must show that
the government engaged in conduct that, considering all of the
circumstances, is the functional equivalent of interrogation. See Brewer v. Williams, 430 U.S. at 430 U. S. 399 ; id. at 430 U. S. 411 , 430 U. S. 412 (POWELL, J., concurring). See also Rhode Island v. Innis, 446 U. S. 291 (1980).
Because I understand that the decision today rests on a
conclusion that this informant deliberately elicited incriminating
information by such conduct, I join the opinion of the Court.
* By reserving the question whether the mere presence of an
informant in a jail cell violates Massiah, the Court
demonstrates that its holding is not premised upon such a theory. Ante at 447 U. S. 269 ,
n. 6.
MR JUSTICE BLACKMUN, with whom MR. JUSTICE WHITE joins,
dissenting.
In this case, the Court, I fear, cuts loose from the moorings of Massiah v. United States, 377 U.
S. 201 (1964), [ Footnote
2/1 ] and overlooks or misapplies significant facts to reach a
result that is not required by the Sixth Amendment, by established
precedent, or by sound policy.
The Court of Appeals resolved this case by a divided vote, with
all three judges writing separately. Three of the seven Page 447 U. S. 278 judges then on that court dissented from the denial of rehearing
en banc. And MR. JUSTICE POWELL, in his separate concurring
opinion, obviously is less than comfortable, finds the case "close
and difficult," ante at 447 U. S. 277 ,
and writes to assure that his concurring vote preserves his
contrary posture when the Court will be confronted with only "the
mere presence or incidental conversation of an informant in a jail
cell." Ibid. This division of opinion about this case
attests to the importance of correct factual analysis here.
Because I view the principles of Massiah and the facts
of this case differently than the Court does, I dissent. I Massiah mandates exclusion only if a federal agent
"deliberately elicited" statements from the accused in the absence
of counsel. 377 U.S. at 377 U. S. 206 .
The word "deliberately" denotes intent. Massiah ties this
intent to the act of elicitation, that is, to conduct that draws
forth a response. Thus Massiah, by its own terms, covers
only action undertaken with the specific intent to evoke an
inculpatory disclosure.
Faced with Agent Coughlin's unequivocal expression of an intent not to elicit statements from respondent Henry, but merely
passively to receive them, ante at 447 U. S. 268 ;
App. to Pet. for Cert. 58a, the Court, in its decision to affirm
the judgment of the Court of Appeals, has no choice but to depart
from the natural meaning of the Massiah formulation. The
Court deems it critical that informant Nichols had been a paid
informant; that Agent Coughlin was aware that Nichols "had access"
to Henry and "would be able to engage him in conversations without
arousing Henry's suspicion"; and that payment to Nichols was on a
contingent fee basis. Ante at 447 U. S. 270 .
Thus, it is said, even if Coughlin's "statement is accepted . . .
he must have known that such propinquity likely would lead to that
result" (that is, that Nichols would take "affirmative steps to
secure incriminating information"). Ante at 447 U. S. 271 .
Later, the Court goes even further, characterizing this as a Page 447 U. S. 279 case of "intentionally creating a situation likely to
induce Henry to make incriminating statements." Ante at 447 U. S. 274 .
(Emphasis added.) This determination, coupled with the statement
that Nichols "prompted" respondent Henry's remarks, ante at 447 U. S. 273 ,
and see ante at 447 U. S. 271 n. 9, leads the Court to find a Massiah violation.
Thus, while claiming to retain the "deliberately elicited" test,
the Court really forges a new test that saps the word
"deliberately" of all significance. The Court's extension of Massiah would cover even a "negligent" triggering of
events resulting in reception of disclosures. This approach, in my
view, is unsupported and unwise.
A. Authority. The Court's precedents appear to me to be
contrary to this new objective approach. Spano v. New
York, 360 U. S. 315 (1959), whose concurring opinions presaged Massiah, see 377 U.S. at 377 U. S. 204 ,
concerned an "all-night inquisition" during which the defendant
"repeatedly asked to be allowed to send for his lawyer." 360 U.S.
at 360 U. S. 327 (concurring opinion). Obviously, that case involved deliberate
efforts to extract information in the absence of counsel. In Massiah itself, the agent engineered a pretrial meeting
between the accused and a turncoat codefendant. The agent
instructed the latter to talk to the defendant about the crime, see United States v. Massiah, 307 F.2d 62, 66 (CA2 1962); id. at 72 (dissenting opinion), and he bugged the meeting
place so he could listen in. [ Footnote
2/2 ] United States v. Ash, 413 U.
S. 300 (1973), by emphasizing that Massiah involved a "ruse" and that Massiah's purpose was to
neutralize "the overreaching of the prosecution," id. at 413 U. S. 312 ,
reinforced the view that deliberate elicitation entails purposeful
police action.
If any question could possibly have remained about the
subjective nature of the Massiah inquiry, it was dispelled
by Page 447 U. S. 280 Brewer v. Williams, 430 U. S. 387 (1977). There the Court closely examined testimony regarding the
agent's intentions. In the face of vigorous dissents, it found a
Sixth Amendment violation only because
"[t]here can be no serious doubt . . . that Detective Leaming deliberately and designedly set out to elicit information
from Williams,' and because, in giving his 'Christian burial
speech,' Leaming 'purposely sought . . . to obtain as much
incriminating information as possible." Id. at 430 U. S. 399 (emphasis added). See also Rhode Island v. Innis, 446 U. S. 291 , 446 U. S. 300 ,
n. 4 (1980) (reaffirming the "deliberately elicited" criterion);
Kamisar, Brewer v. Williams, Massiah, and Miranda: What is "Interrogation"? When Does it Matter?, 67
Geo.L.J. 1, 42 (1978) ("The use of the term deliberately
elicited' seems to be quite intentional"). [ Footnote 2/3 ] The unifying theme of Massiah cases, then, is the
presence of deliberate, designed, and purposeful tactics, that is,
the agent's use of an investigatory tool with the specific intent
of extracting information in the absence of counsel. Thus, the
Court's "likely to induce" test fundamentally restructures Massiah. Even if the agent engages in no "overreaching,"
and believes his actions to be wholly innocent and passive,
evidence he comes by must be excluded if a court, with the
convenient benefit of 20/20 hindsight, finds it likely that the
agent's actions would induce the statements.
B. Policy. For several reasons, I believe that the
Court's revamping of Massiah abrogates sound judicial
policy. First, its test will significantly broaden Sixth Amendment
exclusion; yet, as THE CHIEF JUSTICE has stressed before, the "high
price society pays for such a drastic remedy" as exclusion of
indisputably reliable evidence in criminal trials cannot be denied. See, e.g., Bivens v. Six Unknown Federal Narcotics Agents, 403 U. S. 388 , 403 U. S. 413 (1971) (dissenting opinion). Second, I think the Court's approach
fails to appreciate Page 447 U. S. 281 fully and to accommodate adequately the "value" and the
"unfortunate necessity of undercover work." Weatherford v.
Bursey, 429 U. S. 545 , 429 U. S. 557 (1977). Third, I find it significant that the proffered statements
are unquestionably voluntary. See United States v.
Washington, 431 U. S. 181 , 431 U. S. 187 (1977) ("Indeed, far from being prohibited by the Constitution,
admissions of guilt by wrongdoers, if not coerced, are inherently
desirable"). Fourth, the Court condemns and punishes police conduct
that I do not find culpable. See Wilson v. Henderson, 584
F.2d 1185, 1191 (CA2 1978), cert. denied, 442 U.S. 945
(1979) (investigating officer's "directions, Don't ask
questions, just keep your ears open,' suggest familiarity and
attempted compliance with, not circumvention of, the principle of Massiah "). Fifth, at least absent an active, orchestrated
ruse, I have great difficulty perceiving how canons of fairness are
violated when the Government uses statements flowing from a
"wrongdoer's misplaced belief that a person to whom he voluntarily
confides his wrongdoing will not reveal it." Hoffa v. United
States, 385 U. S. 293 , 385 U. S. 302 (1966). [ Footnote 2/4 ] Finally, I note the limits, placed in other Sixth Amendment
cases, of providing counsel to counterbalance prosecutorial
expertise and to aid defendants faced with complex and unfamiliar
proceedings. See MR. JUSTICE REHNQUIST's dissenting
opinion, post at 447 U. S.
290 -298. [ Footnote 2/5 ]
While not out of line with the Page 447 U. S. 282 Court's prior right to counsel cases, Massiah certainly
is the decision in which Sixth Amendment protections have been
extended to their outermost point. I simply do not perceive any
good reason to give Massiah the expansion it receives in
this case. [ Footnote 2/6 ] II In my view, the Court not only missteps in forging a new Massiah test; it proceeds to misapply the very test it has
created. The new test requires a showing that the agent created Page 447 U. S. 283 a situation "likely to induce" the production of incriminatory
remarks, and that the informant in fact "prompted" the defendant.
Even accepting the most capacious reading of both this language and
the facts, I believe that neither prong of the Court's test is
satisfied.
A. "Likely to Induce." In holding that Coughlin's
actions were likely to induce Henry's statements, the Court relies
on three facts: a contingent fee arrangement; Henry's assumption
that Nichols was just a cellmate; and Henry's incarceration.
[ Footnote 2/7 ]
The Court states: "The arrangement between Nichols and the agent
was on a contingent fee basis; Nichols was to be paid only if he
produced useful information." Ante at 447 U. S. 270 .
The District Court, however, made no such finding, and I am
unconvinced that the evidence of record establishes such an
understanding. [ Footnote 2/8 ] In
any event, I question whether the existence of a contingent fee
arrangement is at all significant. The reasonable conclusion of an
informant like Nichols would be that, whatever the arrangement, he
would not be remunerated Page 447 U. S. 284 if he breached his promise; yet the Court asks us to infer that
Coughlin's conversation with Nichols "likely would lead" Nichols to
engage in the very conduct which Coughlin told him to avoid. Ante at 447 U. S.
271 .
The Court also emphasizes that Henry was "unaware that Nichols
was a Government agent." Ante at 447 U. S. 273 .
One might properly assign this factor some importance, were it not
for Brewer v. Williams. In that case, the Court explicitly
held that the fact "[t]hat the incriminating statements were
elicited surreptitiously in the Massiah case, and
otherwise here, is constitutionally irrelevant. " 430 U.S.
at 430 U. S. 400 .
(Emphasis added.) The Court's teeter-tottering with this factor in Massiah analysis can only induce confusion.
It merits emphasis that the Court's resurrection of the
unawareness factor is indispensable to its holding. For, in Brewer, substantial contact and conversation with a
confined defendant preceded delivery of the "Christian burial
speech." Yet the Court clearly deemed the speech critical in
finding a Massiah violation; it thus made clear that mere
"association" and "general conversation" did not suffice to bring Massiah into play. Since nothing more transpired here,
principled application of Brewer mandates reversal of the
judgment in this case.
Finally, the Court notes that Henry was incarcerated when he
made his statements to Nichols. The Court's emphasis of the "subtle
influences" exerted by custody, however, is itself too subtle for
me. This is not a case of a custodial encounter with police, in
which the Government's display of power might overcome the free
will of the accused. The relationship here was "social" and
relaxed. Henry did not suspect that Nichols was connected with the
FBI. Moreover, even assuming that "subtle influences" might
encourage a detainee to talk about his crime, there are certainly
counterbalances of at least equal weight. Since, in jail, "official
surveillance has traditionally been the order of the day," Page 447 U. S. 285 Lanza v. New York, 370 U. S. 139 , 370 U. S. 143 (1962), and a jailmate has obvious incentives to assist
authorities, one may expect a detainee to act with corresponding
circumspection. Cf. Rhode Island v. Innis, 446 U.S. at 446 U. S. 300 ,
n. 4 ("Custody in . . . a [ Massiah ] case is not
controlling; indeed, the petitioner in Massiah was not in
custody").
The Court does more than rely on dubious factors in finding that
Coughlin's actions were "likely to induce" Nichols' successful
prompting of Henry; it fails to focus on facts that cut strongly
against that conclusion. The Court ignores Coughlin's specific
instruction to Nichols that he was not to question Henry or to
initiate conversation with him about the robbery. Nor does it note
Nichols' likely assumption that he would not be remunerated, but
reprimanded and possibly penalized, if he violated Coughlin's
orders. In addition, the record shows that Nichols had worked as an
FBI informant for four years, and that Coughlin and Nichols had
worked together for about a year on several matters. It makes
sense, given Nichols' experience and Coughlin's willingness to
renew their working relationship, to conclude that Nichols would
follow Coughlin's instruction. Finally, it is worth noting that
Henry was only one of several federal detainees to whom Nichols was
to pay attention; [ Footnote 2/9 ]
this is not a case in Page 447 U. S. 286 which officers singled out a specific target. On these facts, I
cannot agree that Coughlin "must have known that [it was] likely"
that Nichols would seek to elicit information from Henry.
Under the Court's analysis, it is not enough that Coughlin
should have anticipated disobedience by Nichols; it must also be
shown that his actions were "likely to induce" Henry to talk. In my
view, however, there was little reason to believe that even the
most aggressive efforts by Nichols would lead to disclosures by
Henry. Nothing in the record suggests that Henry and Nichols knew
each other, far less that they had the type of relationship that
would lead Henry to discuss freely a crime for which he had not yet
been tried. In this respect, the case stands in stark contrast to Massiah, where the informant had collaborated with Massiah in a drug smuggling operation and was a
codefendant in the resulting and pending prosecution. Moreover,
"[t]here is nothing in the record to suggest that . . . the
[defendant] was peculiarly susceptible to approaches by cellmates
or that [he] . . . was unusually disoriented or upset." Rhode Island v. Innis, 446 U.S. at 446 U. S.
302 -303. On these facts, it seems to me extremely
unlikely that Coughlin's actions would lead to Henry's
statements.
Even though the test forged by the Court has no precedent, we
are not without some assistance in judging its application. Just a
few weeks ago, in Rhode Island v. Innis, the Court held
that Miranda was implicated only by "words or actions on
the part of police officers that they should have known were reasonably likely to elicit an incriminating
response." Page 447 U. S. 287 446 U.S. at 446 U. S. 302 (emphasis deleted and added). Here, the Court asks whether agents
"creat[ed] a situation likely to induce Henry to make incriminating
statements." Ante at 447 U. S. 274 .
Although the Court in Innis emphasized that the Massiah and Miranda rules are distinct, 446 U.S.
at 446 U. S. 300 ,
n. 4, I have some difficulty in identifying a material difference
between these formulations. Since the Court found its test not
satisfied in Innis, it should follow that Henry's
statements may be excluded only if there was greater reason in this
case than in Innis to expect incriminatory disclosures.
The case for finding that disclosures were "likely," however, was
clearly stronger in Innis. There, the defendant had just
been arrested at 4:30 a.m.; he was handcuffed and confined in a
"caged wagon"; and the three police officers accompanying him
triggered his confession by conversing about the danger that a
"little girl" attending a nearby school for the handicapped would
"maybe kill herself" upon finding a gun he supposedly had hidden. Id. at 446 U. S.
293 -295. Against the backdrop of Innis, I
cannot fathom how the Court can conclude that Coughlin's actions
rendered Henry's disclosures "likely."
B. "Prompting." All Members of the Court agree that
Henry's statements were properly admitted if Nichols did not
"prompt" him. Ante at 447 U. S. 273 ,
and see ante at 447 U. S. 271 ,
n. 9; ante at 447 U. S. 276 (concurring opinion); post at 447 U. S. 302 (dissenting opinion). The record, however, gives no indication that
Nichols "stimulated" Henry's remarks, ante at 447 U. S. 273 ,
with "affirmative steps to secure incriminating information." Ante at 447 U. S. 271 .
Certainly the known facts reveal nothing more than "a jailhouse
informant who had been instructed to overhear conversations and to
engage a criminal defendant in some conversations." Ante at 447 U. S. 276 (concurring opinion). [ Footnote
2/10 ] The scant record demonstrates only that Nichols "had an opportunity to have some Page 447 U. S.
288 conversations with Mr. Henry while he was in the jail.'" Ante at 447 U. S. 267 .
"Henry had engaged [Nichols] in conversation," "had requested
Nichols' assistance," and "had talked to Nichols about the bank
robbery charges against him." App. to Pet. for Cert. 58a. Thus, we
know only that Nichols and Henry had conversations, hardly a
startling development, given their location in the same cellblock
in a city jail. We know nothing about the nature of these
conversations, particularly whether Nichols subtly or otherwise
focused attention on the bank robberies. Indeed, to the extent the
record says anything at all, it supports the inference that it was
Henry, not Nichols, who "engaged" the other "in some
conversations," and who was the moving force behind any mention of
the crime. I cannot believe that Massiah requires
exclusion when a cellmate previously unknown to the defendant and
asked only to keep his ears open says: "It's a nice day," and the
defendant responds: "It would be nicer if I hadn't robbed that
bank." The Court of Appeals, however, found it necessary to swallow
that bitter pill in order to decide this case the way it did, and
this Court does not show that anything more transpired. Conceivably, the amount of information purveyed by Henry to
Nichols could support an inference that some fishing for detail
occurred. The Court does not invoke this reasoning, however, and
even if the record is stretched to produce such a finding, it
clearly discloses nothing about the timing of Henry's disclosures.
It may well be that Henry first "let the cat out of the bag,"
either by volunteering statements or by inadvertently discussing
the crime with someone else within earshot of Nichols. These
possibilities are not far-fetched. In addition to revealing
Coughlin's instructions, which we may infer were followed, the
record specifically indicates that Henry "volunteered" information
about the robbery to a cellmate other than Nichols. App. 85.
Moreover, the record discloses Henry's eagerness to make contact
with a potential collaborator outside the jail; Nichols, who was
soon Page 447 U. S. 289 to be released was a logical choice to serve as a go-between.
The Court, however, seems unconcerned that some of Henry's
statements were "spontaneously given." 590 F.2d 544 549 (CA4 1978)
(dissenting opinion). It emphasizes that "[i]n Massiah, no
inquiry was made as to whether Massiah or his codefendant first
raised the subject of the crime under investigation." Ante at 447 U. S.
271 -272. This observation trivializes the central facts
of Massiah, in which an agent arranged a bugged meeting
between codefendants who shared a natural interest in their pending
prosecution, and in which the informant was instructed to, and did,
converse about the pair's misdeeds. III In sum, I think this is an unfortunate decision, which
disregards precedent and stretches to the breaking point a
virtually silent record. Whatever the bounds of Massiah, that case does not justify exclusion of the proof challenged
here.
[ Footnote 2/1 ]
For purposes of this case, I see no need to abandon Massiah
v. United States, as MR. JUSTICE REHNQUIST does.
[ Footnote 2/2 ]
The planted bug, of course, not only underscored the agent's
deliberate design to obtain incriminating information. By
permitting the agent to monitor whether the codefendant informant
abided by his agreement, it all but ensured that affirmative
elicitation in fact would occur.
[ Footnote 2/3 ]
It is noteworthy that the phrase "deliberately elicited" appears
at least three times in the Massiah opinion. See 377 U.S. at 377 U. S. 204 , 377 U. S.
206 .
[ Footnote 2/4 ]
The Court's "likely to induce" analysis might also be subjected
to the following criticism:
"Few, if any, police officers are competent to make the kind of
evaluation seemingly contemplated; even a psychiatrist asked to
express an expert opinion on these aspects of a suspect in custody
would very likely employ extensive questioning and observation to
make the judgment now charged to police officers." Rhode Island v. Innis, 446 U.
S. 291 , 446 U. S. 304 (1980) (opinion concurring in judgment).
[ Footnote 2/5 ]
MR. JUSTICE POWELL observes, ante at 447 U. S. 276 ,
that
" Massiah serves the salutary purpose of preventing
police interference with the relationship between a suspect and his
counsel once formal proceedings have been initiated."
I fail to see any greater "interference" on the facts of this
case than in a case where an inmate is permitted to have a
conversation with a trusted visitor, but with an electronic
listening device in place, a practice MR. .JUSTICE POWELL finds
unobjectionable. Ibid. Indeed, bugging might be said to
present an even stronger case for finding "deliberate elicitation."
There is, after all, a likelihood that the inmate will place added
confidence in a relative or longtime friend who visits him.
Nichols, in contrast, had not known Henry previously. Moreover,
with bugging, a defendant cannot know what he is dealing with. He
lacks the ability intelligently to gauge the probability that his
confidences will be "reported" back to government agents. See
Wilson v. Henderson, 584 F.2d 1185, 1191 (CA2 1978), cert.
denied, 442 U.S. 945 (1979).
[ Footnote 2/6 ]
Rejection of an objective test in this context is not
inconsistent with Rhode Island v. Innis, supra, since "the
policies underlying the two constitutional protections [Fifth and
Sixth Amendments] are quite distinct." 446 U.S. at 446 U. S. 300 ,
n. 4. Miranda's "prophylactic rule," see Michigan v.
Payne, 412 U. S. 47 , 412 U. S. 53 (1973), seeks to protect a suspect's privilege against
self-incrimination from "the compulsion inherent in custodial
surroundings" when "interrogation" occurs. Miranda v.
Arizona, 384 U. S. 436 , 384 U. S. 458 (1966). Thus, in Miranda cases, the degree of compulsion
is critical. Beyond an objectively defined "pressure point,"
statements will be deemed presumedly compelled, and therefore
properly excluded, absent the countercoercive effect of Miranda warnings. See id. at 384 U. S. 467 . Massiah, in contrast to Miranda, is not rooted in
the Fifth Amendment privilege against self-incrimination. Rather,
it is expressly designed to counter "deliberat[e]" interference
with an indicted suspect's right to counsel. By focusing on
deliberateness, Massiah imposes the exclusionary sanction
on that conduct that is most culpable, most likely to frustrate the
purpose of having counsel, and most susceptible to being checked by
a deterrent. Cf. Brown v. Illinois, 422 U.
S. 590 , 422 U. S. 604 (1975).
[ Footnote 2/7 ]
The Court also notes that Henry, being located in the same
cellblock as Nichols, was accessible to the informant. It
nonetheless totally ignores the fact that the investigating agent
had nothing to do with placing Henry and Nichols in the same
cellblock. Indeed, the record shows that Coughlin did not confer
with Nichols initially with the purpose of obtaining evidence about
Henry; rather, the agent's affidavit indicates t.hat he was unaware
that Nichols and Henry were in the same cellblock until Nichols
informed him. App. to Pet. for Cert. 57a-58a.
[ Footnote 2/8 ]
The record shows that Nichols "had been paid by the FBI for
expenses and services in connection with information he had
provided on . . . previous occasions," id. at 57a, and
that "Nichols was paid by the FBI for expenses and services in
connection with the [investigation] of Henry." Id. at 59a.
These facts establish, at most, an amorphous course of dealing,
emanating from an unspecified number of previous investigations.
They do not show that Nichols previously was paid only when he
produced information. There can be no assurance that Nichols would
not have been paid had he failed to come up with evidence
implicating Henry or other federal defendants. Nor is there
anything to indicate that Nichols acted on this assumption.
[ Footnote 2/9 ]
The Court's suggestion to the contrary, see ante at 447 U. S. 271 ,
n. 8, based on three isolated segments of Coughlin's affidavit,
exemplifies its treatment of the record. The relevant portion of
Coughlin's affidavit reads in full:
"Nichols advised that he was in the same cellblock, as Billy
Gale Henry as well as with other prisoners who had Federal
charges against them. I recall telling Nichols at this
time to be alert to any statements made by these
individuals regarding the charges against them. I
specifically recall telling Nichols that he was not to question
Henry or these individuals about the charges against them, however, if they engaged him in conversation or
talked in front of him, he was requested to pay attention to their
statements. I recall telling Nichols not to initiate any
conversations with Henry regarding the bank robbery charges against
Henry, but that, if Henry initiated the conversations with Nichols,
I requested Nichols to pay attention to the information furnished
by Henry."
App. to Pet. for Cert. 58a (emphases added). Since the affidavit
containing this statement was submitted in Henry's case, it is
neither surprising nor significant that it occasionally refers to
Henry by name, while not referring specifically to remarks Coughlin
might have made about other detainees. The Court's reading of this
passage as establishing that "the agent . . . singled out Henry as
the inmate in whom the agent had a special interest" seems to me
extraordinary.
[ Footnote 2/10 ]
Indeed, here, unlike the scenario sketched by MR. JUSTICE
POWELL, there was no instruction "to engage . . . in some
conversations." It would seem that, a fortiori, Henry's
statements should not be excluded.
MR. JUSTICE REHNQUIST, dissenting.
The Court today concludes that the Government, through the use
of an informant, "deliberately elicited" information from
respondent after formal criminal proceedings had begun, and thus
the statements made by respondent to the informant are inadmissible
because counsel was not present. The exclusion of respondent's
statements has no relationship whatsoever to the reliability of the
evidence, and it rests on a prophylactic application of the Sixth
Amendment right to counsel that, in my view, entirely ignores the
doctrinal foundation of that right. The Court's ruling is based on Massiah v. United States, 377 U.
S. 201 (1964), which held that a postindictment
confrontation between the accused and his accomplice, who had
turned State's evidence and was acting under the direction of the
Government, was a "critical" stage of the criminal proceedings at
which the Sixth Amendment right to counsel attached. While the
decision today sets forth the factors that are "important" in
determining whether there Page 447 U. S. 290 has been a Massiah violation, ante at 447 U. S. 270 ,
I think that Massiah constitutes such a substantial
departure from the traditional concerns that underlie the Sixth
Amendment guarantee that its language, if not its actual holding,
should be reexamined. I The doctrinal underpinnings of Massiah have been
largely left unexplained, and the result in this case, as in Massiah, is difficult to reconcile with the traditional
notions of the role of an attorney. Here, as in Massiah, the accused was not prevented from consulting with his counsel as
often as he wished. No meetings between the accused and his counsel
were disturbed or spied upon. And preparation for trial was not
obstructed. See 377 U.S. at 377 U. S. 209 (WHITE, J., dissenting). In short, as MR. JUSTICE WHITE aptly
observed in Massiah: "It is only a sterile syllogism -- an unsound one, besides -- to
say that, because [the accused] had a right to counsel's aid before
and during the trial, his out-of-court conversations and admissions
must be excluded if obtained without counsel's consent or presence.
The right to counsel has never meant as much before, Cicenia v.
Lagay, 357 U. S. 504 ; Crooker v.
California, 357 U. S. 433 , and its extension
in this case requires some further explanation, so far
unarticulated by the Court." Ibid. A Our decisions recognize that, after formal proceedings have
commenced, an accused has a Sixth Amendment right to counsel at
"critical stages" of the criminal proceedings. See, e.g.,
ante at 447 U. S. 269 .
This principle derives from Powell v. Alabama, 287 U. S. 45 (1932), which held that a trial court's failure to appoint counsel
until the trial began violated the Due Process Clause of the
Fourteenth Amendment. Id. at 287 U. S. 68 -71. Powell referred to the "critical period" as being "from
the time of [the defendants'] arraignment until the beginning
of Page 447 U. S. 291 their trial, when consultation, thoroughgoing investigation and
preparation were vitally important." Id. at 287 U. S. 57 .
During that period, the defendants in Powell "did not have
the aid of counsel in any real sense, although they were as much
entitled to such aid during that period as at the trial itself." Ibid. They thus were deprived of the opportunity to
consult with an attorney, and to have him investigate their case
and prepare a defense for trial. After observing that the duty to
assign counsel
"is not discharged by an assignment at such time or under such
circumstances as to preclude the giving of effective aid in the
preparation and trial of the case," id. at 287 U. S. 71 ,
this Court held that the defendants had been unconstitutionally
denied effective assistance of counsel. [ Footnote 3/1 ] Powell was based on the rationale that an unaided
layman, who has little or no familiarity with the law, requires
assistance in the preparation and presentation of his case and in
coping with procedural complexities in order to assure a fair
trial. The Court in Powell stated:
"Historically and in practice, in our country at least, [a
hearing] has always included the right to the aid of counsel when
desired and provided by the party asserting the right. The right to
be heard would be, in many cases, of little avail if it did not
comprehend the right to be Page 447 U. S. 292 heard by counsel. Even the intelligent and educated layman has
small and sometimes no skill in the science of law. If charged with
crime, he is incapable, generally, of determining for himself
whether the indictment is good or bad. He is unfamiliar with the
rules of evidence. Left without the aid of counsel, he may be put
on trial without a proper charge, and convicted upon incompetent
evidence, or evidence irrelevant to the issue or otherwise
inadmissible. He lacks both the skill and knowledge adequately to
prepare his defense, even though he have a perfect one. He requires
the guiding hand of counsel every step in the proceedings against
him. Without it, though he be not guilty, he faces the danger of
conviction because he does not know how to establish his innocence.
If that be true of men of intelligence, how much more true is it of
the ignorant and illiterate, or those of feeble intellect." Id. at 287 U. S. 68 -69.
[ Footnote 3/2 ] More recently, this
Court has again observed that the concerns underlying the Sixth
Amendment right to counsel are to provide aid to the layman in
arguing the law and in coping with intricate legal procedure, United States v. Ash, 413 U. S. 300 , 413 U. S.
307 -308 (1973), and to minimize the imbalance in the
adversary system that otherwise resulted with the creation of
the Page 447 U. S. 293 professional prosecuting official. Id. at 413 U. S.
308 -309. [ Footnote 3/3 ]
Thus, in examining whether a stage of the proceedings is a
"critical" one at which the accused is entitled to legal
representation it is important to recognize that the theoretical
foundation of the Sixth Amendment right to counsel is based on the
traditional role of an attorney as a legal expert and strategist.
[ Footnote 3/4 ]
"Deliberate elicitation" after formal proceedings have begun is
thus not, by itself, determinative. Ash held that an
accused has no right to be present at a photo display, because
there is no possibility that he "might be misled by his lack of
familiarity with the law or overpowered by his professional
adversary." Id. at 413 U. S. 317 . See also Gilbert v. California, 388 U.
S. 263 , 388 U. S. 267 (1967) (taking of handwriting exemplars is not a "critical" stage
of the proceedings because "there is a minimal risk that the
absence of counsel might derogate from his right to a fair trial").
If the event is not one that requires knowledge of legal procedure,
involves a communication between the accused and his attorney
concerning investigation of the case or the preparation of a
defense, or otherwise interferes with the attorney-client
relationship, there is, in my view, simply no constitutional
prohibition against the use of incriminating Page 447 U. S. 294 information voluntarily obtained from an accused despite the
fact that his counsel may not be present. In such circumstances,
the accused, at the least, has been informed of his rights as
required by Miranda v. Arizona, 384 U.
S. 436 (1966), and often will have received advice from
his counsel not to disclose any information relating to his case, see, e.g., Brewer v. Williams, 430 U.
S. 387 (1977).
Once the accused has been made aware of his rights, it is his
responsibility to decide whether or not to exercise them. If he
voluntarily relinquishes his rights by talking to authorities, or
if he decides to disclose incriminating information to someone whom
he mistakenly believes will not report it to the authorities, cf. Hoffa v. United States, 385 U.
S. 293 (1966), he is normally accountable for his
actions and must bear any adverse consequences that result. Such
information has not in any sense been obtained because the
accused's will has been overborne, nor does it result from any
"unfair advantage" that the State has over the accused: the accused
is free to keep quiet and to consult with his attorney if he so
chooses. In this sense, the decision today and the result in Massiah are fundamentally inconsistent with traditional
notions of the role of the attorney that underlie the Sixth
Amendment right to counsel.
To the extent that Massiah relies on Powell v.
Alabama, 287 U. S. 45 (1932), in concluding that the confrontation in that case was a
"critical" stage of the proceedings, 377 U.S. at 377 U. S. 205 , Massiah reads the language of Powell out of
context. In Powell, the period between arraignment and
trial was critical because the defendants had no opportunity
whatsoever to consult with an attorney during that time, and thus
they were altogether deprived of legal assistance in the
investigation of their case and the preparation of a defense. The
Court today similarly takes an overly broad view of the stages
after the commencement of formal criminal proceedings that should
be viewed as "critical" for purposes of the Sixth Amendment. And it
is not amiss to point out that Powell was decided
solely Page 447 U. S. 295 on the basis of the Due Process Clause of the Fourteenth
Amendment long before the Court selected the Sixth Amendment as one
that the Fourteenth Amendment "incorporated" and made applicable
against the States as well as the United States. See Gideon v.
Wainwright, 372 U. S. 335 (1963). B Massiah also relied heavily on a concurring opinion of
its author in Spano v. New York, 360 U.
S. 315 (1959), which expressed the notion that the
adversary system commences with indictment, and should be followed
by arraignment and trial. Id. at 360 U. S. 327 (STEWART, J., concurring). Spano, however, was a coerced
confession case in which the accused was interrogated for eight
hours after he had been indicted until he confessed. While it is
true that both the Fifth and Sixth Amendments reflect the Framers'
intent to establish essentially an accusatory, rather than an
inquisitorial, system of justice, neither suggests by its terms a
rigid dichotomy between the types of police activities that are
permissible before commencement of formal criminal proceedings and
those that are subsequently permissible. More specifically, there
is nothing in the Sixth Amendment to suggest, nor does it follow
from the general accusatory nature of our criminal scheme, that
once the adversary process formally begins the government may not
make any effort to obtain incriminating evidence from the accused
when counsel is not present. The role of counsel in an adversary
system is to offer advice and assistance in the preparation of a
defense and to serve as a spokesman for the accused in technical
legal proceedings. And the Sixth Amendment, of course, protects the
confidentiality of communications between the accused and his
attorney. But there is no constitutional or historical support for
concluding that an accused has a right to have his attorney serve
as a sort of guru who must be present whenever an accused has an
inclination to reveal incriminating information to anyone who acts
to elicit such information at the Page 447 U. S. 296 behest of the prosecution. To the extent the accused is
protected from revealing evidence that may be incriminatory, the
focus must be on the Fifth Amendment privilege against compulsory
self-incrimination. See, e.g., Spano v. New York, supra; Brown
v. Mississippi, 297 U. S. 278 (1936); Ashcraft v. Tennessee, 322 U.
S. 143 (1944). [ Footnote
3/5 ] C The objectives that underlie the exclusionary rule also suggest
that the results reached in Massiah and the decision today
are incorrect. Although the exclusion of reliable, probative
evidence imposes tremendous costs on the judicial process and on
society, see, e.g., Stone v. Powell, 428 U.
S. 465 (1976), this Court has nonetheless imposed a rule
for the exclusion of such evidence in some contexts in order to
deter unlawful police activity. See, e.g., Weeks v. United
States, 232 U. S. 383 (1914); Mapp v. Ohio, 367 U. S. 643 (1961). In cases in which incriminating statements made by the
accused are entirely voluntary, however, and the government has
merely encouraged a third party to talk to the accused and report
any incriminating information that the accused might reveal, there
is, in my view, no valid justification for the exclusion of such
evidence from trial. [ Footnote
3/6 ] Page 447 U. S. 297 Ordinary citizens are expected to report any criminal activity
they might observe, and they are often required, under pain of
compulsory process, to reveal information that may incriminate
others, even their friends and relatives. It generally does not
matter that the information was obtained as a result of trust or
confidence that develops from friendship or family ties. The
incriminating information may still be obtained through use of the
subpoena power, and in many instances, of course, it will be
voluntarily revealed by the citizen interested in the enforcement
of the laws.
In cases such as this one and Massiah, the effect of
the governmental action is to encourage an informant to reveal
information to the authorities that the ordinary citizen most
likely would reveal voluntarily. While it is true that the
informants here and in Massiah were encouraged to "elicit"
the information from the accused, I doubt that most people would
find this type of elicitation reprehensible. It involves merely
engaging the accused in conversation about his criminal activity,
and thereby encouraging him voluntarily to make incriminating
remarks. There is absolutely no element of coercion, nor is there
any interference whatsoever with the attorney-client relationship.
Anything the accused might reveal to the informant should, as with
revelations he might make to the ordinary citizen, be available for
use at trial. This Court has never held that an accused is
constitutionally protected from his inability to keep quiet,
whether or not he has been encouraged by third-party citizens to
voluntarily make incriminating remarks. I do not think the result
should be different merely because the government has encouraged a
third-party informant to report remarks obtained in this fashion.
When an accused voluntarily chooses to make an incriminatory
remark Page 447 U. S. 298 in these circumstances, he knowingly assumes the risk that his
confidant may be untrustworthy. [ Footnote 3/7 ] II In holding that the Government has "deliberately elicited"
information from the accused here, the Court considers the
following factors to be relevant:
"First, Nichols was acting under instructions as a paid
informant for the Government; second, Nichols was ostensibly no
more than a fellow inmate of Henry; and third, Henry was in custody
and under indictment at the time he was engaged in conversation by
Nichols." Ante at 447 U. S. 270 .
I disagree with the Court's evaluation of these factors, and would
conclude that no deliberate elicitation has taken place. A The Court acknowledges that the use of undercover police work is
an important and constitutionally permissible method of law
enforcement. Ante at 447 U. S. 272 .
As the Court observes, Hoffa v. United States, 385 U.S. at
302, for example, recognizes that the Constitution affords no
protection to "a wrongdoer's misplaced belief that a person to whom
he voluntarily confides his wrongdoing will not reveal it," even if
that person is an undisclosed informer. And in Weatherford v.
Bursey, 429 U. S. 545 , 429 U. S. 557 (1977), we acknowledged the "necessity of undercover work" and "the
value it often is to effective law enforcement." See also e.g.,
United States v. Russell, 411 U. S. 423 , 411 U. S. 432 (1973); United States v. White, 401 U.
S. 745 , 401 U. S. 752 (1971). Page 447 U. S. 299 The Court nonetheless holds that, once formal criminal
proceedings have commenced, such undercover activity in some
circumstances may not be constitutionally permissible even though
it leads to incriminating statements by an accused that are
entirely voluntary and inherently reliable. The reason for this
conclusion is not readily apparent from the Court's opinion.
The fact that police carry on undercover activities should not
automatically be transmuted because formal criminal proceedings
have begun. It is true that, once such proceedings have commenced,
there is an "adversary" relationship between the government and the
accused. But an adversary relationship may very well exist prior to
the commencement of formal proceedings. And, as this Court has
previously recognized, many events, while perhaps "adversarial,"
are not of such a nature that an attorney can provide any special
knowledge or assistance to the accused as a result of his legal
expertise. See, e.g., United States v. Ash, 413 U.
S. 300 (1973) (no right to an attorney at pretrial
photographic identifications at which the accused is not present); Gilbert v. California, 388 U.S. at 388 U. S. 267 (no right to an attorney at taking of handwriting exemplars). When
an attorney has no such special knowledge or skill, the Sixth
Amendment does not give the accused a right to have an attorney
present.
In addition, the mere bringing of formal proceedings does not
necessarily mean that an undercover investigation or the need for
it has terminated. A person may be arrested on the basis of
probable cause arising in the immediate aftermath of an offense and
during early stages of investigation, but before the authorities
have had an opportunity to investigate fully his connection with
the crime. And for the criminal, there is no rigid dichotomy
between the time before commencement of formal criminal proceedings
and the time after such proceedings have begun. Once out on bail
the accused remains free to continue his criminal activity, and
very well may decide to do so. See, e.g., Rogers v. United
States, 325 Page 447 U. S. 300 F.2d 485 (CA10 1963), cited in Massiah v. United
States, 377 U.S. at 377 U. S. 212 (WHITE, J., dissenting). Indeed, in Massiah itself, there
was evidence that, after indictment, one of the defendants
attempted to persuade a Government agent to go into the narcotics
business with him. Id. at 377 U. S.
212 -213 (WHITE, J., dissenting). As the Court stated in Massiah :
"We do not question that, in this case, as in many cases, it was
entirely proper to continue an investigation of the suspected
criminal activities of the defendant and his alleged confederates,
even though the defendant had already been indicted." Id. at 377 U. S. 207 .
I would hold that the Government's activity here is merely a
continuation of its lawful authority to use covert operations in
investigating a criminal case after formal proceedings have
commenced. [ Footnote 3/8 ] B The Court secondly states that, here, the informant ostensibly
was no more than a fellow inmate, and thus the conversation
"stimulated" by him may lead the accused to communicate information
that he would not intentionally reveal to persons known to be
government agents, who are "arm's length" adversaries. While the
Court deems relevant the question whether the informant took active
steps as a result of a prearranged deal with the Government to
elicit incriminating information from the accused, ante at 447 U. S. 273 ,
[ Footnote 3/9 ] I do not think
this Page 447 U. S. 301 type of encounter is one that is properly viewed as a critical
stage at which counsel is necessary to provide guidance or
protection to the accused to enable him to cope with unfamiliar
legal proceedings, or to counterbalance the expertise of a
professional prosecutor. Rather, as previously discussed, when the
accused voluntarily reveals incriminating information to a third
party in this context, I do not think there is any justification
for excluding his admissions from trial, whether or not the third
party was acting at the behest of the prosecution. C Finally, the Court considers relevant the fact that, because the
accused is confined and in custody, "subtle influences" are present
"that will make him particularly susceptible to the ploys of
undercover agents." Ante at 447 U. S. 274 .
An appeal to an accused's conscience or willingness to talk,
however, does not, in my view, have a sufficiently overbearing
impact on the accused's will to warrant special constitutional
protection.
In the instant case, for example, if the informant had been in
the cell next to respondent and overheard him make incriminating
statements to his cellmate, no Sixth Amendment violation would have
occurred. See, e.g., United States v. Hearst, 563 F.2d
1331, 1347-1348 (CA9 1977), cert. denied, 435 U.
S. 1000 (1978). In such circumstances, it would be clear
that the Government had engaged in no affirmative conduct
specifically Page 447 U. S. 302 designed to extract incriminating statements from the accused.
The same would be true if the accused made a statement that a
prison guard happened to overhear. See, e.g., United States v
Barfield, 461 F.2d 661 (CA5 1972). I think there likewise is
no Sixth Amendment violation when the accused's cellmate initiates
conversation with him, and the accused makes incriminatory
admissions. The fact that the cellmate is an informant has no
impact on the accused, because the informant appears to him to be
an ordinary cellmate. Whether the accused makes any statements is
therefore dependent on his own disposition to do so, despite the
fact that he is confined in a cell. III Finally, I disagree with the Court's reading of the facts,
though that reading obviously narrows the scope of its holding.
Here the District Court found that the Government did not employ
Nichols to question respondent or to seek information from him, but
merely to report what he heard. The Government had no part in
having Nichols placed in the jail cell with respondent. App. to
Pet. for Cert. 39a. And the record, in my view, fails to support
the conclusion that Nichols engaged in any affirmative conduct to
elicit information from respondent. The Court of Appeals did not
either explicitly or implicitly find to the contrary. Thus, this
Court's factual conclusions are not supported by the findings of
the District Court. I consequently would conclude, as did the
District Court, that here respondent has not been denied his Sixth
Amendment right to counsel.
For the foregoing reasons, I would reverse the judgment of the
Court of Appeals.
[ Footnote 3/1 ]
The Court observed:
"It is not enough to assume that counsel . . . precipitated into
the case [on the morning of the trial] thought there was no
defense, and exercised their best judgment in proceeding to trial
without preparation. Neither they nor the court could say what a
prompt and thoroughgoing investigation might disclose as to the
facts. No attempt was made to investigate. No opportunity to do so
was given. Defendants were immediately hurried to trial. Chief
Justice Anderson, after disclaiming any intention to criticize
harshly counsel who attempted to represent defendants at the
trials, said: '. . . The record indicates that the appearance was
rather pro forma than zealous and active. . . .' Under the
circumstances disclosed, we hold that defendants were not accorded
the right of counsel in any substantial sense. To decide otherwise
would simply be to ignore actualities."
287 U.S. at 287 U. S.
58 .
[ Footnote 3/2 ]
This rationale has also been applied to the arraignment, .where
"[a]vailable defenses may be as irretrievably lost, if not then and
there asserted, as they are when an accused represented by counsel
waives a right for strategic purposes," Hamilton v.
Alabama, 368 U. S. 52 , 368 U. S. 54 (1961), and to a preliminary hearing, where such defenses may
similarly be lost when the accused enters his plea. White v.
Maryland, 373 U. S. 59 (1963). See also United States v. Wade, 388 U.
S. 218 (1967) (lineup); Mempa v. Rhay, 389 U. S. 128 (1967) (combination probation-revocation and sentencing hearing); Coleman v. Alabama, 399 U. S. 1 (1970)
(preliminary examination); Moore v. Illinois, 434 U.
S. 220 (1977) (one-person showup at a hearing, which
combined the functions of a preliminary arraignment and preliminary
examination, that was adversary in nature and at which the accused
was entitled to move for suppression of evidence and dismissal of
charges).
[ Footnote 3/3 ]
As this Court stated in Ash, the
"historical background suggests that the core purpose of the
counsel guarantee was to assure 'Assistance' at trial, when the
accused was confronted with both the intricacies of the law and the
advocacy of the public prosecutor."
413 U.S. at 413 U. S. 309 .
The English common law rule, which severely limited the right of a
person accused of a felony to consult with counsel, was apparently
rejected by the Framers as inherently irrational. Id. at 413 U. S.
306 -307.
[ Footnote 3/4 ]
Any dealings that an accused may have with his attorney are, of
course, confidential, and anything the accused says to his attorney
is beyond the reach of the prosecution. But this Court has never
held, nor does it hold today, that a confrontation or stage of the
proceedings is critical because it may lead to the accused's
conviction. Rather, the test under the Sixth Amendment as
recognized in Ash "call[s] for examination of the event in order to determine
whether the accused required aid in coping with legal problems or
assistance in meeting his adversary." Id. at 413 U. S.
313 .
[ Footnote 3/5 ]
Whatever may be the appropriate role of counsel in protecting
the accused's privilege against compulsory self-incrimination, see, e.g., Fare v. Michael C., 442 U.
S. 707 , 442 U. S. 719 (1979), when, as in this case, the accused merely engages in
conversation with someone whom he does not know to be a
governmental agent, the hazards of coercion and governmental
overreaching are entirely absent.
[ Footnote 3/6 ]
As stated by MR. CHIEF JUSTICE BURGER in his dissenting opinion
in Brewer v. Williams, 430 U. S. 387 , 430 U. S.
421 -22 (1977):
"[U]nlawfully obtained evidence is not automatically excluded
from the factfinding process in all circumstances. In a variety of
contexts, we inquire whether application of the rule will promote
its objectives sufficiently to justify the enormous cost it imposes
on society."
"As with any remedial device, the application of the rule has
been restricted to those areas where its remedial objectives are
thought most efficaciously served."
" United States v. Calandra , [ 414 U.S.
338 , 414 U. S. 348 (1974)]; Accord, Stone v. Powell, supra at 428 U. S.
486 -491; United States v. Janis , [ 428 U.S.
433 (1976)]; Brown v. Illinois, 422 U. S.
590 , 422 U. S. 606 , 422 U. S.
608 , 422 U. S. 609 (1975)
(POWELL, J., concurring in part); United States v.
Peltier , [ 422 U.S.
531 , 422 U. S. 538 -539
(1975)]."
(Footnote omitted.)
[ Footnote 3/7 ] Cf. United States v. White, 401 U.
S. 745 , 401 U. S. 752 (1971), where this Court stated:
"Inescapably, one contemplating illegal activities must realize
and risk that his companions may be reporting to the police. If he
sufficiently doubts their trustworthiness, the association will
very probably end, or never materialize. But if he has no doubts,
or allays them, or risks what doubt he has, the risk is his."
[ Footnote 3/8 ]
I also disagree with the Court that the fact that Nichols was a
paid informant and on a contingency fee is relevant in making this
determination. See ante at 447 U. S.
270 .
[ Footnote 3/9 ]
It bears emphasis that, even under the Court's holding today,
affirmative steps to induce the accused to reveal incriminating
information are required before there can be a "deliberate"
elicitation in violation of the Sixth Amendment. As noted by MR.
JUSTICE POWELL in his concurring opinion:
" Massiah does not prohibit the introduction of
spontaneous statements that are not elicited by governmental
action. Thus, the Sixth Amendment is not violated when a passive
listening device collects, but does not induce, incriminating
comments. See United States v. Hearst, 563 F.2d 1331,
1347-1348 (CA9 1977), cert. denied, 435 U. S.
1000 (1978). Similarly, the mere presence of a jailhouse
informant who had been instructed to overhear conversations and to
engage a criminal defendant in some conversations would not
necessarily be unconstitutional. In such a case, the question would
be whether the informant's actions constituted deliberate and
'surreptitious interrogatio[n]' of the defendant. If they did not,
there would be no interference with the relationship between client
and counsel." Ante at 447 U. S. 276 .
Deliberate elicitation does not and cannot depend on the subjective
intention of the government or its informant to obtain
incriminatory evidence from the accused within the limits of the
law. Such an intention of course is the essence of conscientious
police work. | The Supreme Court held that the government violated the respondent's Sixth Amendment right to counsel by intentionally creating a situation where the respondent made incriminating statements to a paid government informant who was posing as a fellow inmate. The informant was instructed to be alert to any statements made by the respondent, and the respondent was unaware that the informant was working for the government. The Court ruled that the incriminating statements were "deliberately elicited" and should not have been admitted as evidence at trial. |
Criminal Trials & Prosecutions | Delaware v. Van Arsdall | https://supreme.justia.com/cases/federal/us/475/673/ | U.S. Supreme Court Delaware v. Van Arsdall, 475
U.S. 673 (1986) Delaware v. Van
Arsdall No. 84-1279 Argued January 22,
1986 Decided April 7, 1986 475
U.S. 673 CERTIORARI TO THE SUPREME COURT OF
DELAWARE Syllabus During respondent's murder trial, the Delaware trial court
refused to allow defense counsel to cross-examine a prosecution
witness about an agreement that he had made to speak with the
prosecutor about the murder in question in exchange for the
dismissal of an unrelated criminal charge against him. Respondent
was convicted. The Delaware Supreme Court reversed on the ground
that the trial court, by improperly restricting defense counsel's
cross-examination designed to show bias on the prosecution witness'
part, violated respondent's rights under the Confrontation Clause
of the Sixth Amendment, and refused to consider whether such ruling
was harmless beyond a reasonable doubt. Held: While the trial court's denial of respondent's
opportunity to impeach the prosecution witness for bias violated
respondent's rights under the Confrontation Clause, such ruling is
subject to harmless error analysis under Chapman v.
California, 386 U. S. 18 . The
correct inquiry is whether, assuming that the damaging potential of
the cross-examination were fully realized, a reviewing court might
nonetheless say that the error was harmless beyond a reasonable
doubt. Whether such an error is harmless in a particular case
depends upon a number of factors, including the importance of the
witness' testimony, whether the testimony was cumulative, the
presence or absence of corroborating or contradictory testimony on
material points, the extent of cross-examination otherwise
permitted, and the overall strength of the prosecution's case. Pp. 475 U. S.
681 -684. 486
A.2d 1 , vacated and remanded.
REHNQUIST, J., delivered the opinion of the Court, in which
BURGER, C.J., and BRENNAN, BLACKMUN, POWELL, and O'CONNOR, JJ.,
joined. WHITE, J., filed an opinion concurring in the judgment, post, p. 475 U. S. 684 .
MARSHALL, J., post, p. 475 U. S. 686 ,
and STEVENS, J., post, p. 475 U. S. 689 ,
filed dissenting opinions. Page 475 U. S. 674 JUSTICE REHNQUIST delivered the opinion of the Court.
Respondent Robert Van Arsdall was convicted of murder in a
Delaware trial court. The Supreme Court of Delaware reversed his
conviction on the ground that the trial court, by improperly
restricting defense counsel's cross-examination designed to show
bias on the part of a prosecution witness, had violated
respondent's confrontation rights under the Sixth and Fourteenth
Amendments to the United States Constitution, and that such
violation required automatic reversal. 486
A.2d 1 (1984). While we agree that the trial court's ruling was
contrary to the mandate of the Confrontation Clause of the Sixth
Amendment, we conclude that the Supreme Court of Delaware was wrong
when it declined to consider whether that ruling was harmless in
the context of the trial as a whole.
Shortly after midnight on January 1, 1982, Doris Epps was
stabbed to death in an apartment in Smyrna, Delaware, after an
all-day New Year's Eve party. Respondent and Daniel Pregent, who by
respondent's testimony were the only two people in the apartment
with Epps at the time she was killed, were arrested at the scene of
the crime and charged with Epps' murder. At separate trials,
respondent was convicted and Pregent was acquitted.
The State's case against respondent was based on circumstantial
evidence, and proceeded on the theory that respondent had either
killed Epps or assisted Pregent in doing so. Several of the
partygoers testified about the party and the scene after the
killing. The party, which lasted from late in the morning of
December 31, 1981, until shortly before midnight, was held in the
adjacent apartments of Pregent and Page 475 U. S. 675 Robert Fleetwood. Respondent, who was one of at least a dozen
guests who attended the party during the course of the day, had
stopped in for two brief periods in the late afternoon and early
evening, and then returned for a third time at about 11:30 p.m. By
that time the party was over, Pregent had quarreled with a female
guest, kicked a hole in a hallway wall, and had to be restrained.
An intoxicated Epps had been placed on a sofa bed in Pregent's
apartment after passing out. And shortly before 11 p.m., a second
altercation of some kind occurred, prompting Fleetwood to close the
party in his apartment to everyone except his two friends, Alice
Meinier and Mark Mood. When respondent returned to Pregent's
apartment at about 11:30, only Pregent and Epps were present.
Robert Fleetwood was the 10th of 16 prosecution witnesses. In
addition to recounting uncontroverted facts about the party, he
testified that, sometime between 11 and 11:30 p.m., he walked
across the hall, looked into Pregent's living room from the
doorway, and saw respondent sitting on the edge of the sofa bed
next to Pregent's feet. Fleetwood, who did not have a complete view
of the bed, did not see Epps or anyone else in the apartment. Upon
returning to his own apartment, Fleetwood stayed awake long enough
to hear nearby bells ring in the New Year, at which point he passed
out. App. 82-85.
Meinier, who with Mood had remained awake in Fleetwood's
apartment, testified that, at roughly 1 a.m., respondent knocked at
Fleetwood's door. Respondent's shirt and hands were spattered with
blood, and he was holding a long, blood-covered knife. According to
Meinier, respondent stated that "he had gotten in a fight" but that
he "got them back." Id. at 130. After turning the knife
over to Mood and washing his hands, respondent said "I think
there's something wrong across the hall." Id. at 132.
Meinier went to Pregent's apartment and discovered Epps' body lying
in a pool of blood on the kitchen floor. Mood then summoned the
police, who found respondent in Fleetwood's Page 475 U. S. 676 apartment and Pregent asleep on the blood-splattered sofa bed in
his living room.
In addition to the testimony of the partygoers and the arresting
officers, the State introduced Pregent's postarrest statement,
respondent's two postarrest statements, and the testimony of a
forensic expert. Among other things, the expert testified about the
nature and source of the bloodstains on respondent's clothing.
During Fleetwood's cross-examination, defense counsel sought to
impeach Fleetwood by questioning him about the dismissal of a
criminal charge against him -- being drunk on a highway -- after he
had agreed to speak with the prosecutor about Epps' murder. When
the prosecutor objected, the trial court allowed counsel to
question Fleetwood on the matter outside the presence of the jury.
Fleetwood acknowledged that the drunkenness charge had been dropped
in exchange for his promise to speak with the prosecutor about the
murder, but he denied that the agreement had affected his
testimony. [ Footnote 1 ] The
trial court barred any cross-examination about that agreement,
citing Delaware Rule of Evidence 403. [ Footnote 2 ] The court also refused to permit defense
counsel to cross-examine Fleetwood about his being questioned by
the police in connection with an unrelated homicide that had
occurred after Epps' murder. On voir dire conducted
outside the presence of the jury, Fleetwood denied that he had
been Page 475 U. S. 677 offered any favors, inducements, promises, or deals concerning
that homicide investigation in exchange for his testimony at
respondent's trial.
Respondent was the only defense witness. Consistent with his
second statement to the police, he attributed Epps' murder to
Pregent. Consistent with Fleetwood's testimony, he stated that he
had returned to Pregent's apartment, after drinking with friends,
by about 11:30 p.m.
Defense counsel admitted in their opening and closing arguments
to the jury that respondent was in Pregent's apartment when Epps
was killed. In closing argument, after attempting to discredit
Fleetwood's testimony (largely by emphasizing his intoxication),
counsel stressed that all that testimony proved was what respondent
"never denied," that "he was at Danny Pregent's apartment before
Doris Epps was murdered." App. 188-189. The jury found respondent
guilty of first-degree murder and possession of a deadly weapon
during the commission of a felony.
On appeal, the Delaware Supreme Court reversed respondent's
conviction on the authority of the Confrontation Clause. Noting
that
"the bias of a witness is subject to exploration at trial and is
'always relevant as discrediting the witness and affecting the
weight of his testimony,'"
486 A.2d at 6 (quoting Davis v. Alaska, 415 U.
S. 308 , 415 U. S. 316 (1974)), the court found that the trial judge's ruling denied
respondent his constitutional right to effective cross-examination.
By barring any cross-examination of Fleetwood about the
dismissal of the public drunkenness charge, the ruling kept from
the jury facts concerning bias that were central to assessing
Fleetwood's reliability. The court rejected the State's argument
that, since "Fleetwood's basic testimony was cumulative in nature
and unimportant," the Confrontation Clause error was harmless
beyond a reasonable doubt. 486 A.2d at 7. The court held that "a
blanket prohibition against exploring potential bias through
cross-examination" Page 475 U. S. 678 is "a per se error," so that "the actual prejudicial
impact of such an error is not examined." Ibid. [ Footnote 3 ]
We granted certiorari, 473 U.S. 923 (1985), and now vacate and
remand.
The Confrontation Clause of the Sixth Amendment guarantees the
right of an accused in a criminal prosecution "to be confronted
with the witnesses against him." The right of confrontation, which
is secured for defendants in state as well as federal criminal
proceedings, Pointer v. Texas, 380 U.
S. 400 (1965), "means more than being allowed to
confront the witness physically." Davis v. Alaska, 415
U.S. at 415 U. S. 315 .
Indeed, " [t]he main and essential purpose of confrontation is to secure for the opponent the opportunity of
cross-examination. '" Id. at 415 U. S.
315 -316 (quoting 5 J. Wigmore, Evidence § 1395, p. 123
(3d ed.1940)) (emphasis in original). Of particular relevance
here, "[w]e have recognized that the exposure of a witness' motivation
in testifying is Page 475 U. S. 679 a proper and important function of the constitutionally
protected right of cross-examination." Davis, supra, at 415 U. S.
316 -317 (citing Greene v. McElroy, 360 U.
S. 474 , 360 U. S. 496 (1959)). It does not follow, of course, that the Confrontation
Clause of the Sixth Amendment prevents a trial judge from imposing
any limits on defense counsel's inquiry into the potential bias of
a prosecution witness. On the contrary, trial judges retain wide
latitude insofar as the Confrontation Clause is concerned to impose
reasonable limits on such cross-examination based on concerns
about, among other things, harassment, prejudice, confusion of the
issues, the witness' safety, or interrogation that is repetitive or
only marginally relevant. And as we observed earlier this Term,
"the Confrontation Clause guarantees an opportunity for
effective cross-examination, not cross-examination that is
effective in whatever way, and to whatever extent, the defense
might wish." Delaware v. Fensterer, 474 U. S.
15 , 474 U. S. 20 (1985) (per curiam) (emphasis in original).
In this case, however, the trial court prohibited all inquiry
into the possibility that Fleetwood would be biased as a result of
the State's dismissal of his pending public drunkenness charge. By
thus cutting off all questioning about an event that the State
conceded had taken place and that a jury might reasonably have
found furnished the witness a motive for favoring the prosecution
in his testimony, the court's ruling violated respondent's rights
secured by the Confrontation Clause. [ Footnote 4 ]
The State somewhat tentatively suggests that a defendant should
have to show "outcome-determinative" prejudice in order to state a
violation of the Confrontation Clause: unless the particular
limitation on cross-examination created a reasonable possibility
that the jury returned an inaccurate guilty Page 475 U. S. 680 verdict, that limitation would not violate the Confrontation
Clause. We disagree. While some constitutional claims, by their
nature, require a showing of prejudice with respect to the trial as
a whole, see, e.g., Strickland v. Washington, 466 U.
S. 668 (1984) (ineffective assistance of counsel), the
focus of the Confrontation Clause is on individual witnesses.
Accordingly, the focus of the prejudice inquiry in determining
whether the confrontation right has been violated must be on the
particular witness, not on the outcome of the entire trial. It
would be a contradiction in terms to conclude that a defendant
denied any opportunity to cross-examine the witnesses against him
nonetheless had been afforded his right to "confront[ation]"
because use of that right would not have affected the jury's
verdict. We think that a criminal defendant states a violation of
the Confrontation Clause by showing that he was prohibited from
engaging in otherwise appropriate cross-examination designed to
show a prototypical form of bias on the part of the witness, and
thereby "to expose to the jury the facts from which jurors . . .
could appropriately draw inferences relating to the reliability of
the witness." Davis v. Alaska, supra, at 415 U. S. 318 .
Respondent has met that burden here: a reasonable jury might have
received a significantly different impression of Fleetwood's
credibility had respondent's counsel been permitted to pursue his
proposed line of cross-examination.
After concluding that the trial judge's ruling was
constitutional error, the Delaware Supreme Court rebuffed the
State's effort to show "beyond a reasonable doubt that the error
complained of did not contribute to the verdict obtained," Chapman v. California, 386 U. S. 18 , 386 U. S. 24 (1967). In so doing, it offered no explanation why the Chapman harmless error standard, which we have applied in
other Confrontation Clause cases, e.g., Harrington v.
California, 395 U. S. 250 (1969); Schneble v. Florida, 405 U.
S. 427 (1972), is inapplicable here. We find
respondent's efforts to defend the automatic reversal rule
unconvincing. Page 475 U. S. 681 As we have stressed on more than one occasion, the Constitution
entitles a criminal defendant to a fair trial, not a perfect one. E.g., United States v. Hasting, 461 U.
S. 499 , 461 U. S.
508 -509 (1983); Bruton v. United States, 391 U. S. 123 , 391 U. S. 135 (1968). In Chapman, this Court rejected the argument that
all federal constitutional errors, regardless of their nature or
the circumstances of the case, require reversal of a judgment of
conviction. The Court reasoned that, in the context of a particular
case, certain constitutional errors, no less than other errors, may
have been "harmless" in terms of their effect on the factfinding
process at trial. Since Chapman, we have repeatedly
reaffirmed the principle that an otherwise valid conviction should
not be set aside if the reviewing court may confidently say, on the
whole record, that the constitutional error was harmless beyond a
reasonable doubt. E.g., United States v. Hasting, supra, (improper comment on defendant's silence at trial); Moore v.
Illinois, 434 U. S. 220 , 434 U. S. 232 (1977) (admission of identification obtained in violation of right
to counsel); Harrington v. California, supra, (admission
of nontestifying codefendant's statement). The harmless error
doctrine recognizes the principle that the central purpose of a
criminal trial is to decide the factual question of the defendant's
guilt or innocence, United States v. Nobles, 422 U.
S. 225 , 422 U. S. 230 (1975), and promotes public respect for the criminal process by
focusing on the underlying fairness of the trial, rather than on
the virtually inevitable presence of immaterial error. Cf. R. Traynor, The Riddle of Harmless Error 50 (1970) ("Reversal for
error, regardless of its effect on the judgment, encourages
litigants to abuse the judicial process and bestirs the public to
ridicule it").
At the same time, we have observed that some constitutional
errors -- such as denying a defendant the assistance of counsel at
trial, or compelling him to stand trial before a trier of fact with
a financial stake in the outcome -- are so fundamental and
pervasive that they require reversal without regard to the facts or
circumstances of the particular case. Page 475 U. S. 682 Chapman, supra, at 386 U. S. 23 , n.
8 (citing, inter alia, Gideon v. Wainwright, 372 U.
S. 335 (1963), and Tumey v. Ohio, 273 U.
S. 510 (1927)). The error at issue here is obviously
quite different, however, as this Court's post- Chapman decisions demonstrate. In Harrington v. California, for
example, we expressly rejected the claim that the admission into
evidence of a statement made by a nontestifying codefendant, in
violation of Bruton v. United States, supra, can never be
harmless. [ Footnote 5 ] Harrington, which we have expressly reaffirmed on more
than one occasion, see, e.g., Schneble v. Florida, supra; Brown
v. United States, 411 U. S. 223 (1973), demonstrates that the denial of the opportunity to
cross-examine an adverse witness does not fit within the limited
category of constitutional errors that are deemed prejudicial in
every case.
Respondent seeks to blunt the force of Harrington in
essentially two ways. First, he suggests that this Court's decision
in Davis v. Alaska forecloses application of harmless
error analysis to the particular sort of Confrontation Clause
violation involved here, citing the following language near the end
of the Court's opinion:
"[Davis] was thus denied the right of effective
cross-examination which 'would be constitutional error of the first
magnitude, and no amount of showing of want of prejudice would cure
it.' Brookhart v. Janis , 384 U. S.
1 , Page 475 U. S. 683 384 U. S. 3 . 415 U.S. at 415 U. S. 318 (quoting Smith v. Illinois, 390 U. S. 129 , 390 U. S.
131 (1968)). Read properly, however, Davis does
not support an automatic reversal rule, and the above-quoted
language merely reflects the view that, on the facts of that case,
the trial court's error had done 'serious damage' to the
petitioner's defense."
Davis was charged with stealing a safe from a bar. The police
found the stolen safe abandoned near the home of Richard Green, who
testified at trial that he had seen Davis engaged in suspicious
activity near this site on the day of the crime. Defense counsel
was barred from eliciting on cross-examination that Green was on
juvenile probation for burglary both at the time of his pretrial
identification of Davis and at the time of trial. The defense
sought to suggest that Green may have slanted his account in the
State's favor either to shift suspicion away from himself or to
avoid revocation of probation for failing to "cooperate." 415 U.S.
at 415 U. S.
310 -311. This Court reversed Davis' conviction,
emphasizing that Green's testimony was "crucial," and that there
was a "real possibility" that pursuit of the excluded line of
impeachment evidence would have done "[s]erious damage to the
strength of the State's case." Id. at 415 U. S. 319 .
So despite the absence of a reference to Chapman, Davis plainly rests on the conclusion that, on the facts of that case,
the error might well have contributed to the guilty verdict. Davis should not be read as establishing, without
analysis, a categorical exception to the harmless error rule.
Respondent's second argument in support of a per se reversal rule is that the Confrontation Clause error in this case,
which, like Davis, involved the exclusion of
evidence, is analytically distinct from that in Harrington v.
California, which involved the erroneous admission of
harmless testimony. Because it is impossible to know how wrongfully
excluded evidence would have affected the jury, the argument runs,
reversal is mandated. But Harrington cannot be so easily
dispatched. Respondent, like Harrington, was denied Page 475 U. S. 684 an opportunity to cast doubt on the testimony of an adverse
witness. [ Footnote 6 ] In both
cases, the prosecution was thus able to introduce evidence that was
not subject to constitutionally adequate cross-examination. And in
both cases, the reviewing court should be able to decide whether
the not-fully-impeached evidence might have affected the
reliability of the factfinding process at trial.
Accordingly, we hold that the constitutionally improper denial
of a defendant's opportunity to impeach a witness for bias, like
other Confrontation Clause errors, is subject to Chapman harmless error analysis. The correct inquiry is whether, assuming
that the damaging potential of the cross-examination were fully
realized, a reviewing court might nonetheless say that the error
was harmless beyond a reasonable doubt. Whether such an error is
harmless in a particular case depends upon a host of factors, all
readily accessible to reviewing courts. These factors include the
importance of the witness' testimony in the prosecution's case,
whether the testimony was cumulative, the presence or absence of
evidence corroborating or contradicting the testimony of the
witness on material points, the extent of cross-examination
otherwise permitted, and, of course, the overall strength of the
prosecution's case. Cf. Harrington, 395 U.S. at 395 U. S. 254 ; Schneble v. Florida, 405 U.S. at 450 U. S.
432 .
We believe that the determination whether the Confrontation
Clause error in this case was harmless beyond a reasonable doubt is
best left to the Delaware Supreme Court in the first instance.
Accordingly, that court's judgment is vacated, and the case is
remanded for further proceedings not inconsistent with this
opinion. It is so ordered. [ Footnote 1 ]
When asked about his understanding of why the charge was
dropped, respondent stated:
"Well, I did understand that I did feel that you wanted to make
sure that I knew what I was talking about, and I do feel that you
wanted to make sure I had my story together before coming in here.
So that is why I did feel that it was dropped."
App. 106.
[ Footnote 2 ]
Delaware Rule of Evidence 403, which is virtually identical to
Federal Rule of Evidence 403, provides:
"Although relevant, evidence may be excluded if its probative
value is substantially outweighed by the danger of unfair
prejudice, confusion of the issues or misleading the jury, or by
considerations of undue delay, waste of time or needless
presentation of cumulative evidence."
[ Footnote 3 ]
Respondent asserts that this Court is without jurisdiction to
hear this case because the Delaware Supreme Court's automatic
reversal rule rests on an adequate and independent state ground. He
argues that the rule was adopted not on the basis of federal
constitutional law, but as a prophylactic device, announced under
that court's "superintending" authority, to "send an unequivocal
message" to state trial judges about the importance of permitting
liberal cross-examination. Brief for Respondent 41. We
disagree.
"[W]e will not assume that a state court decision rests on
adequate and independent state grounds when the"
"state court decision fairly appears to rest primarily on
federal law, or to be interwoven with the federal law, and when the
adequacy and independence of any possible state law ground is not
clear from the face of the opinion." Caldwell v. Mississippi, 472 U.
S. 320 , 472 U. S. 327 (1985) (quoting Michigan v. Long, 463 U.
S. 1032 , 463 U. S.
1040 -1041 (1983)). The opinion of the Delaware Supreme
Court, which makes use of both federal and state cases in its
analysis, lacks the requisite "plain statement" that it rests on
state grounds. Michigan v. Long, supra, at 463 U. S.
1042 , 463 U. S.
1044 . Indeed, the opinion makes no reference to any
"superintending" authority, and nowhere suggests the existence of a
state prophylactic rule designed to insure protection for a federal
constitutional right. We read the decision below as resting on
federal law.
[ Footnote 4 ]
The Delaware Supreme Court did not decide whether the trial
court erred in preventing respondent from cross-examining Fleetwood
about the unrelated homicide investigation. 486
A.2d 1 , 7, n. 3 (1984). We likewise decline to consider that
question.
[ Footnote 5 ] Bruton had held that the receipt at a joint trial of
the incriminating statement of a nontestifying codefendent deprived
Bruton of his right to cross-examine an adverse witness. In Harrington, the trial court admitted the pretrial
statements of two codefendants who did not testify. The statements
implicated Harrington by placing him at the scene of the robbery,
and their admission plainly violated Bruton. This Court
nevertheless affirmed Harrington's conviction, over his objection
that Bruton error could never be harmless. Noting that the
wrongfully admitted evidence was cumulative and that the untainted
proof of the defendant's guilt was overwhelming, the Court
concluded that the error was harmless beyond a reasonable doubt.
395 U.S. at 395 U. S.
254 .
[ Footnote 6 ]
Respondent does not contend that he was denied the opportunity
to elicit exculpatory evidence from Fleetwood.
JUSTICE WHITE, concurring in the judgment.
The Sixth Amendment confers on defendants in criminal cases the
right "to be confronted with the witnesses against" Page 475 U. S. 685 them. The Court has interpreted these words as meaning more than
being allowed to confront the witnesses physically, more than the
right to be tried by live testimony rather than affidavits. It
includes the opportunity for effective cross-examination of the
State's witnesses. I do not here dispute these interpretations of
the constitutional language; but they neither require nor advise
the Court to hold, as it does today, that the Amendment is violated
whenever a trial judge limits cross-examination of a particular
witness and the jury might have received a significantly different
impression of the witness' credibility had cross-examination not
been curtailed, even if the limitation and its consequences could
not possibly have had any effect on the outcome of the trial.
It makes much more sense to hold that no violation of the
Confrontation Clause has occurred unless there is some likelihood
that the outcome of the trial was affected. I agree that the
Delaware Court erred, and that we should remand for consideration
of prejudice, but I would not now hold that a constitutional
violation occurred. If it is ultimately held that the outcome would
have been the same whether or not cross-examination had been
limited, no Sixth Amendment violation occurred in this case.
I would thus treat this claim of a Sixth Amendment violation
just as the majority would treat limitations on cross-examination
that would fall within the trial judge's
"wide latitude insofar as the Confrontation Clause is concerned
to impose reasonable limits on . . . cross-examination based on
concerns about, among other things, harassment, prejudice,
confusion of the issues, the witness' safety, or interrogation that
is repetitive or only marginally relevant." Ante at 475 U. S. 679 .
These "reasonable" limitations are not violations at all, obviously
because they can have no impact on the fairness of the trial. Yet
the curtailment of cross-examination imposed in this case is said
to be unreasonable and an infraction of the Amendment even though
it may be held beyond reasonable doubt that it had no impact
whatsoever on the result the jury reached. Page 475 U. S. 686 No judge welcomes or can ignore being told that he committed a
constitutional violation, even if the conviction is saved by a
harmless error finding. Being advised by the Court that there is an
area of cross-examination curtailment that is not only harmless but
not a constitutional violation but, at the same time, an area of
curtailment that, even though harmless, is an infraction of our
fundamental charter, the judge will surely tend to permit the
examination rather than risk being guilty of misunderstanding the
constitutional requirements of a fair trial. I would not so
undermine the authority of the judge to restrict cross-examination
in a manner having no appreciable impact on the reliability of the
outcome, particularly since the language and purpose of the
specific provision at issue do not otherwise dictate.
Even if it is ultimately held in this case that the error was
harmless, as the Court is quite willing to assume will be the case,
the judge has been declared derelict and commanded not again to
restrict cross-examination in this manner even though he is
convinced, and rightly so, that it has no significance whatsoever
in terms of the outcome of the trial. With all due respect, I
cannot join the Court's opinion.
JUSTICE MARSHALL, dissenting.
The Court today properly holds that a complete denial of
cross-examination designed to explore the bias of a prosecution
witness violates the Confrontation Clause, whether or not the
denial influenced the outcome of the trial and whether or not the
witness was important to the prosecution's case. Nevertheless, the
Court remands in order to permit the state court to apply harmless
error analysis to that violation. I must respectfully dissent from
the latter part of the Court's holding. I believe that the
importance of cross-examination to a criminal trial is so great
that a complete denial of otherwise proper cross-examination
concerning the potential bias of a prosecution witness should lead
to no less than a reversal of the conviction. Page 475 U. S. 687 In holding the Confrontation Clause applicable to the States,
this Court referred to the right of cross-examination as "an
essential and fundamental requirement for the kind of fair trial
which is this country's constitutional goal." Pointer v.
Texas, 380 U. S. 400 , 380 U. S. 405 (1965). If indeed the harmless error doctrine focuses on the
fairness and accuracy of a criminal trial, see ante at 475 U. S. 681 ,
it is odd that the majority so easily applies it to a type of error
that calls both fairness and accuracy into question to an almost
unique degree.
The centrality of cross-examination to the factfinding process
makes it particularly unlikely that an appellate court can
determine that a denial of cross-examination had no effect on the
outcome of a trial.
"[T]he court ordinarily cannot measure whether harm has ensued
to an appellant when he has been denied the opportunity to
cross-examine witnesses against him, given all the risks. Had
cross-examination been allowed, for example, it might have served
to impeach a witness, and thus to cast doubt on corroborating
testimony, or it might have elicited exculpatory evidence. Only on
rare occasions will an appellate court be able to find that the
testimony of the witness was so tangential, or so well
corroborated, or so clearly invulnerable to attack that the denial
of the right to cross-examination was harmless."
R. Traynor, The Riddle of Harmless Error 68-69 (1970). The fact
that a particular witness' testimony was corroborated cannot render
harmless a denial of the right to expose his bias. Defense counsel
may have valid strategic reasons for challenging one witness'
testimony aggressively while treating a corroborating witness more
gently. Jurors evaluating the witnesses' demeanor may choose to
give great weight to the testimony of one witness while ignoring
the similar testimony of another. In either event, denial of
cross-examination concerning a witness' bias may deprive the
defense of its best opportunity to expose genuine flaws in the Page 475 U. S. 688 prosecution's case -- flaws that the cold record will not reveal
to an appellate court.
Indeed, an appellate court attempting to apply harmless error
analysis is faced with a formidable burden. The court cannot merely
satisfy itself that the jury would have reached the same result had
the witness in question not appeared at all; it must be convinced
beyond a reasonable doubt that the jury would have reached the same
result even if cross-examination had led the jury affirmatively to
believe that the witness was lying. Moreover, the court must
conclude, beyond a reasonable doubt, that no evidence exculpatory
to the defendant could have emerged from a genuinely adversarial
testing of the witness. I think that a court can make such a
determination only in the rarest of circumstances, and a rule of per se reversal is therefore justified.
The Confrontation Clause violation in this case is especially
pernicious. The jury was essentially misled, by the empty gesture
of cross-examination, to believe that the defense attorney had been
permitted to use all the tools at his disposal to expose weaknesses
in Fleetwood's testimony. Having survived what appeared to be
counsel's best efforts to undermine the witness' credibility,
Fleetwood's testimony necessarily carried more weight with the jury
than would the same testimony given without an apparent opportunity
to cross-examine.
This analysis makes it unnecessary to strain, as does the
majority, to reconcile the apparent per se rule of Davis v. Alaska, 415 U. S. 308 (1974), with the harmless error analysis employed in Harrington
v. California, 395 U. S. 250 (1969), and Schneble v. Florida, 405 U.
S. 427 (1972). I would simply hold that Davis mandates reversal whenever the prosecution puts a witness on the
stand but the court does not permit the defense to cross-examine
concerning relevant potential bias. I therefore dissent from the
Court's decision to permit the Delaware Supreme Court to apply Page 475 U. S. 689 harmless error analysis to the Confrontation Clause violation in
this case.
I also write to emphasize that this Court cannot require state
courts to apply harmless error analysis to violations of the
Federal Constitution. See Connecticut v. Johnson, 460 U. S. 73 , 460 U. S. 88 (1983) (STEVENS, J., concurring in judgment). While this Court has
stated that federal law governs the application of harmless error
to violations of the Federal Constitution, see Chapman v.
California, 386 U. S. 18 , 386 U. S. 21 (1967), that cannot mean more than that state courts must reverse
convictions when the Constitution so mandates. When the
Constitution does not mandate a particular remedy, this Court may
not "declare which of many admittedly constitutional [remedial]
alternatives a State may choose." Id. at 386 U. S. 48 (Harlan, J., dissenting) (footnote omitted). We have never held
that the Federal Constitution forbids state courts to reverse
certain convictions pursuant to state substantive or procedural
law, nor can I imagine what provision of the Constitution could
grant us such a power. Thus the Delaware Supreme Court remains free
on remand to decide that, even though it applied the substantive
standards of the Sixth Amendment to determine whether error
occurred, its harmless error analysis was the product of state,
rather than federal, law.
JUSTICE STEVENS, dissenting.
The Court finds the way open to reverse the judgment in this
case because
"[t]he opinion of the Delaware Supreme Court, which makes use of
both federal and state cases in its analysis, lacks the requisite
'plain statement' that it rests on state grounds." Ante at 475 U. S. 678 ,
n. 3. [ Footnote 2/1 ] In so holding,
the Court Page 475 U. S. 690 continues down the path it marked in Michigan v. Long, 463 U. S. 1032 , 463 U. S.
1037 -1044 (1983), when it announced that it would
henceforth presume jurisdiction to review state court judgments
absent a "plain statement" that such judgments rest on state
grounds. [ Footnote 2/2 ]
Despite the directness of the route chosen, today's destination
was not foreordained. Unlike Michigan v. Long, this case
concerns whether the Court should presume jurisdiction to review a
state supreme court's remedy for a federal constitutional
violation. Since courts have traditionally enjoyed broad discretion
to fashion remedies -- even remedies forbidding otherwise lawful
acts -- once a constitutional violation Page 475 U. S. 691 has been proved, [ Footnote 2/3 ]
the more logical direction would have been to presume that a state
court is merely exercising its normal supervisory power over state
officials unless it clearly states that federal law requires a
particular procedure to be followed. The Court's contrary
presumption works a further advancement of its own power, but it
flouts this Court's best traditions: it deviates from our normal
approach to questions of subject matter jurisdiction, and it
departs from our longstanding practice of reserving decision on
federal constitutional law. Even considered purely from the
standpoint of managing our own discretionary docket, the Court's
presumption includes a selection bias inconsistent with the lessons
of history as revealed in this Court's statutory jurisdiction over
the judgments of state courts. Finally, the Court's willingness to
presume jurisdiction to review state remedies evidences a lack of
respect for state courts, and will, I fear, be a recurrent source
of friction between the federal and state judiciaries. I The rules that govern this Court's jurisdiction to review state
court judgments should, of course, be consistent with the
jurisdictional principles that govern the entire federal
judicial Page 475 U. S. 692 system. Indeed, because the example that this Court sets for the
entire system inevitably affects the way in which all federal
judges tend to evaluate their own powers, we have a special
obligation to make sure that our conclusions concerning our own
jurisdiction rest on a firm and legitimate foundation.
In origin and design, federal courts are courts of limited
jurisdiction; they exercise only the authority conferred on them by
Art. III and by congressional enactments pursuant thereto. See
Bender v. Williamsport Area School Dist., ante at 475 U. S. 541 ,
and cases cited therein. Like all other federal courts, this Court
has only the power expressly given it. Because it is our
inescapable duty -- in contrast to that of the political branches
-- to construe authoritatively the very instruments which define
and limit that power, the Court early in its history wisely adopted
a presumption that every federal court is "without jurisdiction"
unless "the contrary appears affirmatively from the record." King Bridge Co. v. Otoe County, 120 U.
S. 225 , 120 U. S. 226 (1887). Accord, Thomas v. Board of Trustees, 195 U.
S. 207 , 195 U. S. 210 (1904); Minnesota v. Northern Securities Co., 194 U. S.
48 , 194 U. S. 62 -63
(1904). That presumption is just as "inflexible" in this Court as
in any other federal court. [ Footnote
2/4 ]
Even for cases unquestionably within this Court's subject matter
jurisdiction, we have disclaimed any pretension to Page 475 U. S. 693 reach questions arising under the Federal Constitution when an
alternative basis of decision fairly presented itself. Thus, in one
of the most respected opinions ever written by a Member of this
Court, Justice Brandeis wrote:
"The Court [has] developed, for its own governance in the cases
confessedly within its jurisdiction, a series of rules under which
it has avoided passing upon a large part of all the constitutional
questions pressed upon it for decision. They are:"
" * * * *" ". . . The Court will not pass upon a [federal] constitutional
question although properly presented by the record, if there is
also present some other ground upon which the case may be disposed
of." Ashwander v. TVA, 297 U. S. 288 , 297 U. S.
346 -347 (1936) (concurring opinion). [ Footnote 2/5 ]
The Court has remained faithful to these basic tenets when it is
reviewing cases that arise in the federal system. See Bender v.
Williamsport Area School Dist., ante at 475 U. S.
545 -549; Regents of University of Michigan v.
Ewing, 474 U. S. 214 , 474 U. S.
222 -223 (1985). Ironically, however -- and contrary to
tradition [ Footnote 2/6 ] -- the
Court has taken a different stance when it is Page 475 U. S. 694 asked to review cases coming to us from state courts.
Although
"[w]e cannot perform our duty to refrain from interfering in
state law questions and also to review federal ones without making
a determination whether the one or the other controls the
judgment," Herb v. Pitcairn, 324 U. S. 117 , 324 U. S.
125 -126 (1945), the jurisdictional precepts that serve
us so well in reviewing judgments rendered in federal court merit
observance in review of state court judgments too. Abjuring the
federal analogy, the Court unwisely marks for special scrutiny the
decisions of courts to which I believe it owes special respect. II The jurisdictional presumption that the Court applies -- and
extends -- today harbors a hidden selection bias that, in turn,
reveals a disturbing conception of this Court's role. Because a
state ground can only support a judgment consistent with
a Page 475 U. S. 695 federal claim, the Court's jurisdictional presumption operates
to expand this Court's review of state remedies that overcompensate
for violations of federal constitutional rights. Historically,
however, such cases have been outside the province of this Court.
For well over a century the Judiciary Act of 1789 denied this Court
authority to review state court judgments upholding federal claims.
[ Footnote 2/7 ] By conferring no
power to review these judgments, "the first Congress assembled
under the Constitution" -- whose Members had "taken part in framing
that instrument," Wisconsin v. Pelican Ins. Co., 127 U. S. 265 , 127 U. S. 297 (1888), in addition to having enacted the First Judiciary Act --
codified their conviction that this Court's overriding concern was
to ensure that state courts respect federal rights. Only in 1914
did Congress authorize this Court to take jurisdiction over state
court judgments upholding claims of federal constitutional right,
Act of Dec. 23, 1914, 38 Stat. 790, and even that legislation
reflected an understanding Page 475 U. S. 696 that the Court's role is primarily to vindicate such rights.
[ Footnote 2/8 ] Most of the bills on
this subject gave
"the litigant an absolute right to appeal or take a writ of
error to Page 475 U. S. 697 the Supreme Court . . . even though the decision is in favor of
a claim of right under the Federal Constitution."
S.Rep. No. 161, 63d Cong., 2d Sess., 2 (1914). Rather than adopt
these bills, which would have placed uniformity of federal law on a
par with vindication of federal rights by making review of such
judgments at least nominally mandatory, Congress
"substitute[d] a grant of jurisdiction to the Supreme Court of
the United States to issue a writ of certiorari or otherwise to
review the decision of the State court." Ibid. Compare Act of Sept. 24, 1789, § 25, 1
Stat. 85-86, with Act of Dec. 23, 1914, 38 Stat. 790.
Thus, although this Court now has the power to review decisions
defending federal constitutional rights, the claim of these cases
on our docket is secondary to the need to scrutinize judgments
disparaging those rights. [ Footnote
2/9 ] Page 475 U. S. 698 When the state court decision to be reviewed is ambiguous, and
it is not even clear that the judgment rests on a federal ground,
the basis for exercising jurisdiction is even less tenable. III The Court's decision to monitor state court decisions that may
or may not rest on nonfederal grounds is not only historically
disfavored, but risks the very confrontations and tensions a more
humble jurisdictional stance would avoid. The presumption applied
today allocates the risk of error in favor of the Court's power of
review; as a result, over the long run, Page 475 U. S. 699 the Court will inevitably review judgments that, in fact, rest
on adequate and independent state grounds. Even if the Court is
unconcerned by the waste inherent in review of such cases, even if
it is unmoved by the incongruity between the wholly precatory
nature of our pronouncements on such occasions and Art. III's
prohibition of advisory opinions, it should be concerned by the
inevitable intrusion upon the prerogatives of state courts that can
only provide a potential source of friction, and thereby threaten
to undermine the respect on which we must depend for the faithful
and conscientious application of this Court's expositions of
federal law.
Less obvious is the impact on mutual trust when the state court
on remand -- perhaps out of misplaced sense of duty -- confines its
state constitution to the boundaries marked by this Court for the
Federal Constitution. In Montana v. Jackson, 460 U.
S. 1030 (1983), for example, this Court vacated and
remanded "for further consideration in light of South Dakota v.
Neville, 459 U. S. 553 (1983)." In so doing, this Court presumed that the judgment of the
Montana Supreme Court did not rest on Montana's Constitution.
Justice Sheehy, joined by the author of the state court's original
opinion, rather bitterly disagreed:
"In our original opinion in this case, we had examined the
rights guaranteed our citizens under state constitutional
principles, in the light of federal constitutional decisions. Now
the United States Supreme Court has interjected itself, commanding
us in effect to withdraw the constitutional rights which we felt we
should extend to our state citizens back to the limits pr[e]scribed
by the federal decisions. Effectively, the United States Supreme
Court has intruded upon the rights of the judiciary of this
sovereign state."
"Instead of knuckling under to this unjustified expansion of
federal judicial power into the perimeters of our state power, we
should show our judicial displeasure by insisting that, in Montana,
this sovereign state can interpret Page 475 U. S. 700 its constitution to guarantee rights to its citizens greater
than those guaranteed by the federal constitution."
"If a majority of this Court had the will to press the issue, we
could put the question to the United States Supreme Court
four-square, that this State judiciary has the right to interpret
its constitution in the light of federal decisions, and to go
beyond the federal decisions in granting and preserving rights to
its citizens under its state constitution." State v. Jackson, 206 Mont. 338, 349-351, 672 P.2d 255,
260-261 (1983) (Sheehy, J., dissenting). See id. at
357-358, 672 P.2d at 264-265 (Shea, J., dissenting).
The Court's two-sentence analysis notwithstanding, one cannot be
confident that we have not trenched on state prerogatives in this
very case. Here, the Delaware Supreme Court applied a rule
reversing convictions when the defendant had been totally denied
the right to cross-examine a witness for bias. The rule was
expressly found to be
"consistent with Davis v. Alaska, 415 U. S.
308 (1974) and with our ruling in Weber [v.
State, 457 A.2d
674 (1983),] for determining whether a violation of the
confrontation clause is harmless." 486
A.2d 1 , 7 (1984) (emphasis added and citations omitted). Weber itself emphasized that
"[b]oth the United States and Delaware Constitutions guarantee
the right of a defendant to confront the witnesses against him.
U.S.Const. amend. VI; Del. Const. art. I, § 7." Weber v. State, 457 A.2d at 682 (footnote omitted). At
no point did the Delaware Supreme Court imply that it reversed the
defendant's conviction only because that result was compelled by
its understanding of federal constitutional law; rather, the
conclusion that its rule was "consistent with" a case of this Court
construing the federal Confrontation Clause suggests that it was
interested merely in respecting the bounds of federal law, as
opposed to carrying out its command. The Court rewards Page 475 U. S. 701 the Delaware Supreme Court's circumspection by unceremoniously
reversing its judgment. IV I agree with JUSTICE MARSHALL that
"the Delaware Supreme Court remains free on remand to decide
that . . . its harmless error analysis was the product of state,
rather than federal, law." Ante at 475 U. S. 689 .
Because the Court's approach does nothing to minimize, and indeed
multiplies, future occasions on which state courts may be called
upon to clarify whether their judgments were in fact based on state
law, it is appropriate to amplify the opinion I expressed in Massachusetts v. Upton, 466 U. S. 727 , 466 U. S. 736 (1984) (concurring in judgment), that the proper "sequence of
analysis when an arguable violation of the State Constitution is
disclosed by the record" is for the state court to consider the
state constitutional claim in advance of any federal constitutional
claim. In that case, I described the Oregon Supreme Court's
practice of considering state constitutional claims before reaching
issues of federal constitutional law:
"'The proper sequence is to analyze the state's law, including
its constitutional law, before reaching a federal constitutional
claim. This is required, not for the sake either of parochialism or
of style, but because the state does not deny any right claimed
under the federal Constitution when the claim before the court in
fact is fully met by state law.' Sterling v. Cupp, 290
Ore. 611, 614, 625 P.2d
123 , 126 (1981)." Massachusetts v. Upton, 466 U.S. at 466 U. S. 736 .
[ Footnote 2/10 ] Page 475 U. S. 702 Since that time, at least four other state courts have expressly
endorsed the practice of considering state constitutional claims
first. [ Footnote 2/11 ] In
response to Michigan v.
Long , 463 Page 475 U. S. 703 U.S. 1032 (1983), for example, the New Hampshire Supreme Court
concluded:
"When a defendant, as in this case, has invoked the protections
of the New Hampshire Constitution, we will first address these
claims. Page 475 U. S. 704 "
". . . We live under a unique concept of federalism and divided
sovereignty between the nation and fifty States. The New Hampshire
Constitution is the fundamental charter of our State. The sovereign
people gave limited powers to the State government, and the Bill of
Rights in part I of the New Hampshire Constitution protects the
people from governmental excesses and potential abuses. When State
constitutional issues have been raised, this court has a
responsibility to make an independent determination of the
protections afforded in the New Hampshire Constitution. If we
ignore this duty, we fail to live up to our oath to defend our
constitution and we help to destroy the federalism that must be so
carefully safeguarded by our people. The Supreme Court of the State
of Oregon recently recognized this responsibility and stated:"
"The point is . . . that a state's constitutional guarantees . .
. were meant to be and remain genuine guarantees against misuse of
the state's governmental powers, truly independent of the rising
and falling tides of federal case law both in method and specifics.
State courts cannot abdicate their responsibility for these
independent guarantees, at least not unless the people of the State
themselves choose to abandon them and entrust their rights entirely
to federal law."
" State v. Kennedy, 295 Or. 260, 271, 666 P.2d
1316 , 1323 (1983)." State v. Ball, 124 N. H. 226, 231, 471 A.2d 347, 350
(1983). Since 1983, in over a dozen cases, [ Footnote 2/12 ] the New Hampshire Supreme Court has
thereby averted unnecessary disquisitions on the meaning of the
Federal Constitution. Page 475 U. S. 705 The emerging preference for state constitutional bases of
decision in lieu of federal ones is, in my view, the analytical
approach best suited to facilitating the independent role of state
constitutions and state courts in our federal system. There is much
wisdom in THE CHIEF JUSTICE's admonition that
"State courts . . . are responsible first for resolving issues
arising under their constitutions and statutes and then for passing
on matters concerning federal law."
Year-End Report on the Judiciary 18 (1981).
It must be remembered that every State but Rhode Island had a
written constitution by the close of the Revolutionary War in
1783.
"[F]or the first century of this Nation's history, the Bill of
Rights of the Constitution of the United States was solely a
protection for the individual in relation to federal authorities.
State Constitutions protected the liberties of the people of the
several States from abuse by state authorities." Massachusetts v. Upton, 466 U.S. at 466 U. S.
738 -739 (STEVENS, J., concurring in judgment). The
independent significance of state constitutions clearly informed
this Court's conclusion, in Barron v. The Mayor and City
Council of Baltimore , 7 Pet. 243, 32 U. S.
247 -248 (1833), that the Bill of Rights applied only to
the Federal Government:
"The question thus presented is, we think, of great importance,
but not of much difficulty."
"The constitution was ordained and established by the people of
the United States for themselves, for their own Page 475 U. S. 706 government, and not for the government of the individual states.
Each state established a constitution for itself, and, in that
constitution, provided such limitations and restrictions on the
powers of its particular government as its judgment dictated."
". . . In their several constitutions, they have imposed such
restrictions on their respective governments as their own wisdom
suggested; such as they deemed most proper for themselves. It is a
subject on which they judge exclusively, and with which others
interfere no farther than they are supposed to have a common
interest."
While the holding of the Barron case has since been
superseded by ratification of the Fourteenth Amendment and
selective incorporation of the Bill of Rights, the concomitant
atrophy of state constitutional theory was both unnecessary and
unfortunate. [ Footnote 2/13 ]
State constitutions preceded the Federal Constitution, and were
obviously intended to have independent significance. [ Footnote 2/14 ] The frequent amendments to
state Page 475 U. S. 707 constitutions likewise presuppose their continued importance.
Thus, whether the national minimum set by the Federal Constitution
is high or low, state constitutions have their own unique origins,
history, language, and structure -- all of which warrant
independent attention and elucidation. State courts remain
primarily responsible for reviewing the conduct of their own
executive branches, for safeguarding the rights of their citizenry,
and for nurturing the jurisprudence of state constitutional rights
which it is their exclusive province to expound. [ Footnote 2/15 ] Page 475 U. S. 708 Because I would not presume that the Delaware Supreme Court
failed to discharge this responsibility, I would dismiss the
writ.
[ Footnote 2/1 ]
A determination that a state court judgment rests on a federal
ground is a prerequisite to the exercise of our jurisdiction in
such a case. See Fox Film Corp. v. Muller, 296 U.
S. 207 , 296 U. S. 210 (1935) ("[W]here the judgment of a state court rests upon two
grounds, one of which is federal and the other nonfederal in
character, our jurisdiction fails if the nonfederal ground is
independent of the federal ground, and adequate to support the
judgment"); Murdock v. City of
Memphis , 20 Wall. 590, 87 U. S. 626 , 87 U. S. 633 , 87 U. S. 641 (1875) (construing requirement as part of jurisdictional statute). See also Sandalow, Henry v. Mississippi and the Adequate
State Ground: Proposals for a Revised Doctrine, 1965 S.Ct.Rev. 187,
188-189, and n. 6 (discussing possible constitutional basis for the
adequate and independent state ground rule).
[ Footnote 2/2 ]
The principal question in Michigan v. Long was whether
a state court's determination that a search violated the State
Constitution was independent of its conclusion that it violated the
Federal Constitution. The Court surveyed the various approaches,
decided that "none of [them] thus far recommends itself as the
preferred method," 463 U.S. at 463 U. S.
1039 , and then selected the presumption it did as the
most administrable of the available choices, id. at 463 U. S.
1041 . I agreed with the Court that "we are left with a
choice between two presumptions: one in favor of our taking
jurisdiction, and one against it," id. at 463 U. S.
1066 , but explained that, "in reviewing the decisions of
state courts, the primary " -- although not exclusive --
"role of this Court is to make sure that persons who seek to vindicate federal rights have been fairly heard," id. at 463 U. S.
1068 (first emphasis added). See Florida v.
Meyers, 466 U. S. 380 , 466 U. S. 385 (1984) (STEVENS, J., dissenting) ("But we must not forget that a
central purpose of our written Constitution, and more specifically
of its unique creation of a life-tenured federal judiciary, was to
ensure that certain rights are firmly secured against possible oppression by the Federal or State Governments"). Compare
the Michigan v. Long Court's misreading of my dissent
as
"propos[ing] the novel view that this Court should never review a state court decision unless the Court
wishes to vindicate a federal right that has been endangered."
463 U.S. at 463 U. S.
1043 , n. 8 (emphasis added).
[ Footnote 2/3 ] See, e.g., Teachers v. Hudson, ante at 475 U. S.
309 -310, n. 22, and cases cited therein. As I explained
in my opinion concurring in the judgment in Connecticut v.
Johnson, 460 U. S. 73 , 460 U. S. 88 (1983) (footnotes omitted):
"If federal constitutional error occurs in a state criminal
trial, federal law places certain limits on the state appellate
court's disposition of the case. If the error is sufficiently
grievous, it must reverse. If the error is less grievous,
it also must reverse unless it declares its conviction beyond a
reasonable doubt that the federal error was harmless. But federal
law does not require a state appellate court to make a
harmless error determination; it merely permits the state
court to do so in appropriate cases. This is all the Court held in Chapman v. California, 386 U. S. 18 (1967)."
JUSTICE MARSHALL is therefore quite right to point out that
"this Court cannot require state courts to apply harmless
error analysis to violations of the Federal Constitution." Ante at 475 U. S.
689 .
[ Footnote 2/4 ] Cf. Mansfield C. & L. M. R. Co. v. Swan, 111 U. S. 379 , 111 U. S. 382 (1884) ("[T]he rule, springing from the nature and limits of the
judicial power of the United States, is inflexible and without
exception, which requires this court, of its own motion, to deny
its own jurisdiction, and, in the exercise of its appellate power,
that of all other courts of the United States, in all cases where
such jurisdiction does not affirmatively appear in the record on
which, in the exercise of that power, it is called to act. On every
writ of error or appeal, the first and fundamental question is that
of jurisdiction, first, of this court, and then of the court from
which the record comes. This question the court is bound to ask and
answer for itself, even when not otherwise suggested, and without
respect to the relation of the parties to it").
[ Footnote 2/5 ] See, e.g., Siler v. Louisville & Nashville R. Co., 213 U. S. 176 , 213 U. S. 193 (1909) (duty of the Federal District Court to decide first a
question of state law, over which it has merely pendent
jurisdiction, in order to avoid, if possible, a federal
constitutional question); Santa Clara County v. Southern
Pacific R. Co., 118 U. S. 394 , 118 U. S.
410 -411, 118 U. S.
416 -417 (1886). Pennhurst State School &
Hospital v. Halderman, 465 U. S. 89 (1984), did not qualify this avoidance principle; it held only that
the Eleventh Amendment proscribed the award of injunctive relief
for violations of state law in certain cases, thereby removing the
basis for avoiding decision of federal constitutional questions in
this class of cases. See id. at 465 U. S. 119 ,
n. 28 ("Nothing in our decision is meant to cast doubt on the
desirability of applying the Siler principle in cases
where the federal court has jurisdiction to decide the state law
issues").
[ Footnote 2/6 ]
The Court's time-honored "policy of strict necessity in
disposing of [federal] constitutional issues," by which
"constitutional issues . . . will not be determined if the record
presents some other ground upon which the case may be disposed of," Rescue Army v. Municipal Court, 331 U.
S. 549 , 331 U. S. 568 , 331 U. S. 569 (1947), received one of its most forceful expositions in an appeal
from a judgment rendered by a state court:
"[T]he policy . . . is one of substance, grounded in
considerations which transcend all such particular limitations.
Like the case and controversy limitation itself and the policy
against entertaining political questions, it is one of the rules
basic to the federal system and this Court's appropriate place
within that structure."
" * * * *" "The policy's ultimate foundations, some if not all of which
also sustain the jurisdictional limitation, lie in all that goes to
make up the unique place and character, in our scheme, of judicial
review of governmental action for constitutionality. They are found
in the delicacy of that function, particularly in view of possible
consequences for others stemming also from constitutional roots;
the comparative finality of those consequences; the consideration
due to the judgment of other repositories of constitutional power
concerning the scope of their authority; the necessity, if
government is to function constitutionally, for each to keep within
its power, including the courts; the inherent limitations of the
judicial process, arising especially from its largely negative
character and limited resources of enforcement; withal in the
paramount importance of constitutional adjudication in our
system." Id. at 331 U. S.
568 -571 (footnotes omitted).
[ Footnote 2/7 ]
Section 25 of the Act of Sept. 24, 1789, 1 Stat. 85-86, as the
First Judiciary Act was also known, provided for review only if the
validity of a treaty or of a federal or state statute or
"authority," or the construction of a federal treaty, statute, or
commission of the Constitution was drawn in question, and then only
if "the decision [was] against their validity" or "against the
title, right, privilege or exemption" claimed.
In 1867, the post-Civil War Congress, which was not overly
concerned with state sovereignty, revised the section to allow
review without respect to questions of validity or
construction,
"where any title, right, privilege, or immunity is claimed under
the constitution, or any treaty or statute of or commission held,
or authority exercised under the United States."
Act of Feb. 5, 1867, § 2, 14 Stat. 386. The question raised by
this amendment, however, was not whether the Court could or should
review state court decisions in favor of federal constitutional
claims, but whether the amendment had effected an implied repeal of
the doctrine that the Court could review only federal questions in cases subject to review -- a question answered
emphatically in the negative in Murdock v.
Memphis , 20 Wall. 590 (1875). (According to
Professor Charles Warren, it is "highly probable" that Congress
actually meant to provide that "every question passed on by the
State Court should be open for reconsideration in the Supreme
Court." 2 C. Warren, The Supreme Court in United States History 682
(rev. ed.1926)).
[ Footnote 2/8 ]
The legislation was a response to the New York Court of Appeals' Lochner -style substantive due process decision in Ives
v. South Buffalo R. Co., 201 N.Y. 271, 94 N.E. 431 (1911). See, e.g., S.Rep. No. 161, 63d Cong., 2d Sess., 2 (1914);
H.R.Rep. No. 1222, 63d Cong., 3d Sess., 2-3 (1914); 52 Cong.Rec.
276 (1914) (remarks of Rep. Webb). In the Ives case, the
Court of Appeals held New York's newly enacted workmen's
compensation statute unconstitutional because it imposed on the
railroad the obligation to pay for injuries for which it was not at
fault. 201 N.Y. at 292-317, 94 N.E. at 439-449. By the 1914
legislation, Congress intended to redress a seeming discrimination
in favor of railroads and other large economic interests which,
under the virulent substantive due process doctrine of the day,
could obtain review of challenges to state reform legislation in
the Supreme Court if they lost in the highest state court, but
whose judgment in state court was protected from review in the
Supreme Court if it won. See, e.g., 62 Cong.Rec. supra, at 277 (remarks of Rep. Volstead) ("The cases that
are taken to the courts for the purpose of having a statute
declared unconstitutional are, I believe, in the great majority of
cases, taken there by the large corporate interests. . . . If they
succeed in having those laws set aside in a State court, that ends
it under the law as it now stands. The other side cannot appeal. If
they fail to have the statute declared void in a State court, they
can appeal to the Supreme Court of the United States and have
another chance there to effect their purpose. . . . We ought to
allow equal treatment to all parties, and not favor these large
interests"). See also H.R.Rep. No. 1222, supra, at 2-3; 62 Cong.Rec., supra, at 276 (remarks of Rep.
Webb); ibid. (quoting letter from Mr. Wheeler of New
York); id. at 277 (remarks of Rep. Lewis).
Although Congress' response to the Ives case
demonstrates that there are cases in which a state court's judgment
vindicating a federal claim merits review, that view is perfectly
consistent with the traditional understanding that the primary
function of this Court is to review decisions rejecting such
claims. Indeed, the facts of Ives belie any suggestion
that Congress intended searching review of state court decisions
upholding claims of federal right. The workmen's compensation
legislation was of exceptional importance to the State of New York,
as attested to by the fact that it represented the labor of a
14-person commission chaired by a United States Senator, 201 N.Y.
at 284, 94 N.E. at 435-436, and was
"based upon a most voluminous array of statistical tables,
extracts from the works of philosophical writers and the industrial
laws of many countries, all of which are designed to show that our
own system of dealing with industrial accidents is economically,
morally and legally unsound," id. at 287, 94 N.E. at 437. (In response to Ives, the people of New York amended their Constitution to
allow for legislation of this kind. S.Rep. No. 161, supra, at 2; H.R.Rep. No. 1222, supra, at 3.) Not only was this
particular statute of great concern to New York, but the
constitutionality of legislation of this kind was unsettled:
"Similar laws were held constitutional in New Jersey, the State of
Washington, and some other States." H.R.Rep. No. 1222, supra, at 2. See 52 Cong.Rec., supra, at
276 (remarks of Rep. Webb) (New Jersey).
[ Footnote 2/9 ]
There is strong scholarly support for this view. For example,
Dean Choper
"submits that the essential role of judicial review in our
system is to prevent violations of that category of constitutional
provisions that secure individual liberties."
J. Choper, Judicial Review and the National Political Process 2
(1980). See id. at 64-65.
Professor Dworkin makes a similar point:
"The institution of rights against the Government is not a gift
of God, or an ancient ritual, or a national sport. It is a complex
and troublesome practice that makes the Government's job of
securing the general benefit more difficult and more expensive, and
it would be a frivolous and wrongful practice unless it served some
point. Anyone who professes to take rights seriously, and who
praises our Government for respecting them, must have some sense of
what that point is. He must accept, at the minimum, one or both of
two important ideas. The first is the vague but powerful idea of
human dignity. This idea, associated with Kant, but defended by
philosophers of different schools, supposes that there are ways of
treating a man that are inconsistent with recognizing him as a full
member of the human community, and holds that such treatment is
profoundly unjust."
"The second is the more familiar idea of political equality.
This supposes that the weaker members of a political community are
entitled to the same concern and respect of their government as the
more powerful members have secured for themselves, so that, if some
men have freedom of decision whatever the effect on the general
good, then all men must have the same freedom. I do not want to
defend or elaborate these ideas here, but only to insist that
anyone who claims that citizens have rights must accept ideas very
close to these."
"It makes sense to say that a man has a fundamental right
against the Government, in the strong sense, like free speech, if
that right is necessary to protect his dignity, or his standing as
equally entitled to concern and respect, or some other personal
value of like consequence. It does not make sense otherwise."
"So if rights make sense at all, then the invasion of a
relatively important right must be a very serious matter. It means
treating a man as less than a man, or as less worthy of concern
than other men. The institution of rights rests on the conviction
that this is a grave injustice, and that it is worth paying the
incremental cost in social policy or efficiency that is necessary
to prevent it. But then it must be wrong to say that inflating
rights is as serious as invading them. If the Government err on the
side of the individual, then it simply pays a little more in social
efficiency than it has to pay; it pays a little more, that is, of
the same coin that it has already decided must be spent. But if it
errs against the individual, it inflicts an insult upon him that,
on its own reckoning, it is worth a great deal of that coin to
avoid."
R. Dworkin, Takings Rights Seriously 198-199 (1977).
[ Footnote 2/10 ]
"[T]he basis for th[e] claim in the state constitution should be
examined first, before any issue under the federal fourteenth
amendment. To begin with the federal claim, as is customarily done,
implicitly admits that the guarantees of the state's constitution
are ineffective to protect the asserted right, and that only the
intervention of the federal constitution stands between the
claimant and the state. . . . [I]nsofar as the federal fourteenth
amendment is invoked to apply the federal Bill of Rights against
state action, particularly in the fields of freedom of ideas,
criminal procedure, and compensation for the taking of property,
there is no reason to accept such an assumption that the values
enshrined in a state's constitution, in, say, 1859, must today fall
short of those in the federal Bill of Rights of 1789. And to add a
reference to the corresponding state provision as an afterthought
to a holding under the federal guarantee is worse than merely
backwards: a holding that a state constitutional provision protects
the asserted claim in fact destroys the premise for a holding that
the state is denying what the federal Constitution would
assure."
Linde, Without "Due Process", 49 Ore.L.Rev. 125, 182 (1970). Accord, Linde, E Pluribus -- Constitutional Theory and
State Courts, 18 Ga.L.Rev. 165, 178 (1984) ("My own view has long
been that a state court always is responsible for the law of its
state before deciding whether the state falls short of a national
standard, so that no federal issue is properly reached when the
state's law protects the claimed right" (footnote omitted)); Linde,
First Things First: Rediscovering the States' Bills of Rights, 9
U.Balt.L.Rev. 379, 383 (1980) ("Just as rights under the state
constitutions were first in time, they are first also in the logic
of constitutional law"). For thoughtful discussion of other views, see Utter, Swimming in the Jaws of the Crocodile: State
Court Comment on Federal Constitutional Issues when Disposing of
Cases on State Constitutional Grounds, 63 Texas L.Rev. 1025 (1985)
(advocating that state courts comment on federal issues even in
cases decided on state constitutional grounds); Developments in the
Law -- The Interpretation of State Constitutional Rights, 95
Harv.L.Rev. 1324, 1356-1367 (1982) (contending that state
constitutions should be used only to supplement individual rights
in the event that protection under the Federal Constitution is
unavailable).
[ Footnote 2/11 ] See, e.g., Large v. Superior Court, 148 Ariz. 229, 235, 714 P.2d
399 , 405 (1986) ("Because petitioner did not articulate whether
he was proceeding under the federal or state due process clause,
and because the provisions of our state constitution settle the
matter, we address only the state constitutional issue. In
construing the Arizona Constitution we refer to federal
constitutional law only as the benchmark of minimum constitutional
protection" (citations omitted)); City of Portland v.
Jacobsky, 496 A.2d
646 , 648 (Me.1985) ("Just as we avoid expressing opinions on
constitutional questions when the issue before us on appeal may be
otherwise resolved, a similar policy of judicial restraint impels
us to forbear from ruling on federal constitutional questions when
the provisions of our state constitution may settle the matter"
(citations omitted)); State v. Chaisson, 125 N. H. 810,
814-815, 486 A.2d 297, 301 (1984) ("Next, the defendant contends
that his warrantless arrest violated both the Federal and the State
Constitutions, and that the fruits of that arrest therefore should
have been suppressed at trial. We, of course, address the State
constitutional issues first. In construing the State constitution,
we refer to Federal constitutional law as only the benchmark
minimum constitutional protection" (citations omitted)); State
v. Coe, 101 Wash. 2d
364 , 373-374, 679 P.2d
353 , 359 (1984) ("Whether the prior restraint was
constitutionally valid or invalid should be treated first under our
state constitution, for a number of reasons. First, state courts
have a duty to independently interpret and apply their state
constitutions that stems from the very nature of our federal system
and the vast differences between the federal and state
constitutions and courts. Second, the histories of the United
States and Washington Constitutions clearly demonstrate that the
protection of the fundamental rights of Washington citizens was
intended to be and remains a separate and important function of our
state constitution and courts that is closely associated with our
sovereignty. By turning to our own constitution first, we grant the
proper respect to our own legal foundations and fulfill our
sovereign duties. Third, by turning first to our own constitution,
we can develop a body of independent jurisprudence that will assist
this court and the bar of our state in understanding how that
constitution will be applied. Fourth, we will be able to assist
other states that have similar constitutional provisions develop a
principled, responsible body of law that will not appear to have
been constructed to meet the whim of the moment. Finally, to apply
the federal constitution before the Washington Constitution would
be as improper and premature as deciding a case on state
constitutional grounds when statutory grounds would have sufficed,
and for essentially the same reasons"). See also Collins,
Reliance on State Constitutions: Some Random Thoughts, 54 Miss.
L.J. 371, 389-394, and nn. 56-58, 69-72 (1984) (citing cases). See generally Abrahamson, Criminal Law and State
Constitutions: The Emergence of State Constitutional Law, 63 Texas
L.Rev. 1141, 1157-1158, n. 54 (1985) (discussing practice in state
courts generally).
To implement this practice of considering state constitutional
issues in advance of federal ones, state high courts have directed
parties to file supplemental briefs illuminating possible state
constitutional bases of decision when the initial briefings have
neglected such issues. See State v. Kennedy, 295 Ore. 260,
268, 666 P.2d
1316 , 1321 (1983). Cf. State v. Jewett, 146 Vt. 221,
222, 500 A.2d 233 ,
234 (1985).
[ Footnote 2/12 ] See Hopps v. State Bd. of Parole, 127 N. H. 133, 135,
500 A.2d 355, 356 (1985); State v. Cooper, 127 N. H. 119,
122, 498 A.2d 1209, 1212 (1985); State v. Dayutis, 127 N.
H. 101, 105, 498 A.2d 325, 328 (1985); State ex rel. McLellan
v. Cavanaugh, 127 N. H. 33, 37, 498 A.2d 735, 738 (1985); State v. Langone, 127 N. H. 49, 51-52, 498 A.2d 731, 733
(1985); State v. Corey, 127 N. H. 56, 57, 497 A.2d 1196,
1197 (1985); State v. Farasi, 127 N. H. 1, 4-5, 498 A.2d
723, 726 (1985); State v. Camargo, 126 N. H. 766, 769, 498
A.2d 292, 295 (1985); State v. Barham, 126 N. H. 631, 636,
495 A.2d 1269, 1273 (1985); State v. Farnsworth, 126 N. H.
656, 659, 497 A.2d 835, 836 (1985); State v. Cimino, 126
N. H. 570, 572, 493 A.2d 1197, 1200 (1985); State v. Cote, 126 N. H. 514, 521-522; 493 A.2d 1170, 1175 (1985); State v.
Chaison, 125 N. H. 810, 815, 486 A.2d 297, 301 (1984).
[ Footnote 2/13 ]
To quote the Vermont Supreme Court:
"One longs to hear once again of legal concepts, their meaning
and their origin. All too often, legal argument consists of a
litany of federal buzz words memorized like baseball cards. As
Justice Linde has noted:"
"People do not claim rights against self-incrimination, they
'take the fifth' and expect ' Miranda warnings.' Unlawful
searches are equated with fourth amendment violations. Journalists
do not invoke freedom of the press, they demand their first
amendment rights. All claims of unequal treatment are phrased as
denials of equal protection of the laws." State v. Jewett, 146 Vt., at 223, 500 A.2d at 235
(footnote omitted).
[ Footnote 2/14 ]
The early state Bills of Rights were, in fact, specifically
motivated by the interest in protecting the individual against
overreaching by the majority:
"In the period following independence, the state legislatures
became increasingly active, enacting a great variety of laws. To
many Americans, much of this legislation appeared to serve the
special interests of some groups at the expense of others.
Moreover, much of it was thought to violate the natural rights of
individuals. For example, the Pennsylvania Council of Censors
issued a report in 1784 that listed many examples of legislative
violations of the state constitution and bill of rights. The report
showed that 'fines had been remitted, judicially established claims
disallowed, verdicts of juries set aside, the property of one given
to another, defective titles secured, marriages dissolved,' and so
forth. Similar abuses were also taking place in New Hampshire and
other states. The injustice of these laws, as James Madison said,
brought 'into question the fundamental principle of republican
Government, that the majority who rule in such governments are the
safest Guardians both of public Good and private rights.' By the
end of the 1780's,"
"the Americans' inveterate suspicion and jealousy of political
power, once concentrated almost exclusively on the Crown and its
agents, was transferred to the various state legislatures."
" * * * *" "As Americans became more distrustful of democracy, Whig
political theory gradually declined and Federalist theory became
predominant. Americans began to impose greater restrictions on
their legislatures in order to safeguard individual rights. In the
1770's and 1780's, more and more rights were added to bills of
rights. Moreover, the power of the legislatures to limit or
alienate rights was steadily reduced. Increasingly, bills of rights
became binding on legislatures. Instead of saying merely that the
legislature 'ought' not abridge certain rights, bills of rights
began to provide that it 'shall' not do so. The prevailing view
among the Federalists was that the authority of the legislature and
of government generally should extend only to a relatively narrow
range of issues."
"In summary, during the revolutionary period a 'tidal-wave of
democracy . . . swept over the colonies.' Thereafter, during the
1780's, those waters receded and another wave swept in: a wave of
concern about protecting 'private rights against uncontrolled
legislative power.'"
Elfenbein, The Myth of Conservatism as a Constitutional
Philosophy, 71 Iowa L.Rev. 401, 472-474 (1986).
[ Footnote 2/15 ]
This would facilitate the work of federal courts, which, under
this Court's precedents, must address issues of state
constitutional law before considering claims under the Federal
Constitution. See City of Mesquite v. Aladin's Castle,
Inc., 455 U. S. 283 , 455 U. S.
294 -295 (1982) ("[T]here is no need for decision of the
federal [constitutional] issue" if the state constitution provides
"independent support"); cf. Askew v. Hargrave, 401 U. S. 476 , 401 U. S. 478 (1971) (abstention under Railroad Comm'n v. Pullman Co., 312 U. S. 496 (1941)); Reetz v. Bozanich, 397 U. S.
82 , 397 U. S. 85 (1970) (same). There exists a growing recognition among Federal
Courts of Appeals that it is incumbent upon them to resolve issues
of state constitutional law before reaching issues arising under
the Federal Constitution. See, e.g, Carreras v. City of
Anaheim, 768 F.2d 1039, 1042-1043 (CA9 1985); Seals v.
Quarterly County Court of Madison County, Tenn., 562 F.2d 890,
892 (CA6 1977). | The Supreme Court of the United States ruled that the trial court's restriction on the defense counsel's cross-examination violated the defendant's rights under the Confrontation Clause of the Sixth Amendment, but the case was remanded to determine if the error was harmless beyond a reasonable doubt. |
Criminal Trials & Prosecutions | U.S. v. Owens | https://supreme.justia.com/cases/federal/us/484/554/ | U.S. Supreme Court United States v. Owens, 484
U.S. 554 (1988) United States v.
Owens No. 86-877 Argued November 4,
1987 Decided February 23,
1988 484
U.S. 554 CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE NINTH CIRCUIT Syllabus As a result of injuries suffered in an attack at a federal
prison, correctional counselor John Foster's memory was severely
impaired. Nevertheless, in an interview with the investigating FBI
agent, Foster described the attack, named respondent as his
attacker, and identified respondent from photographs. At
respondent's Federal District Court trial for assault with intent
to commit murder, Foster testified, inter alia, that he
clearly remembered so identifying respondent. On cross-examination,
however, he admitted that he could not remember seeing his
assailant, seeing any of his numerous hospital visitors except the
FBI agent, or whether any visitor had suggested that respondent was
the assailant. Defense counsel unsuccessfully sought to refresh his
recollection with hospital records, including one indicating that
he had attributed the assault to someone other than respondent.
Respondent was convicted, but the Court of Appeals reversed,
upholding challenges based on the Confrontation Clause of the Sixth
Amendment and Rule 802 of the Federal Rules of Evidence, which
generally excludes hearsay. Held: Neither the Confrontation Clause nor Rule 802 is
violated by admission of a prior, out-of court identification
statement of a witness who is unable, because of memory loss, to
explain the basis for the identification. Pp. 484 U. S.
557 -564.
(a) The Confrontation Clause, which guarantees only an
opportunity for effective cross-examination, not successful
cross-examination, is satisfied where, as here, the defendant has a
full and fair opportunity to bring out the witness' bad memory and
other facts tending to discredit his testimony. Cf. Delaware v.
Fensterer, 474 U. S. 15 . This
analysis is not altered by the fact that the testimony here
involved an out-of-court identification that would traditionally be
categorized as hearsay, since the Confrontation Clause's
requirements are satisfied when a hearsay declarant is present at
trial, takes an oath, is subject to unrestricted cross-examination,
and the jury has an opportunity to observe his demeanor. Pp. 484 U. S.
557 -561.
(b) The Court of Appeals erred in holding that Rule 801(d)(1)(C)
-- under which a prior identification statement is not hearsay if
the declarant is "subject to cross-examination concerning the
statement" -- did not apply to Foster's identification statement
because of his memory loss. Page 484 U. S. 555 A more natural reading of the Rule is that a witness is "subject
to cross-examination" when, as here, he is placed on the stand,
under oath, and responds willingly to questions. Meaningful
cross-examination within the Rule's intent is not destroyed by the
witness' assertion of memory loss, which is often the very result
sought to be produced by cross-examination, and which can be
effective in destroying the force of the prior statement. Moreover,
the Rule does not, on its face, require more than that the
cross-examination "concer[n] the statement." The Advisory
Committee's notes on the Rule, the Rule's legislative history, and
the language of Rule 804(a)(3) -- which, in defining
"unavailability as a witness" to include memory-loss situations,
demonstrates Congress' awareness of the recurrent evidentiary
problem of witness forgetfulness -- all support this reading of the
Rule. Respondent's contention that this reading is impermissible
because it creates an internal inconsistency in the Rules -- i.e., the forgetful witness who is deemed "subject to
cross-examination" under Rule 801(d)(1)(C) is simultaneously deemed
"unavailable" under Rule 804(a)(3) -- is semantic, rather than
substantive. Because the characterizations in the two Rules were
made for entirely different purposes, there is no requirement or
expectation that they should coincide. Pp. 484 U. S.
561 -664.
789 F.2d 750, reversed and remanded.
SCALIA, J., delivered the opinion of the Court, in which
REHNQUIST, C.J., and WHITE, BLACKMUN, STEVENS, and O'CONNOR, JJ.,
joined. BRENNAN, J., filed a dissenting opinion, in which MARSHALL,
J., joined, post, p. 484 U. S. 564 .
KENNEDY, J., took no part in the consideration or decision of the
case.
JUSTICE SCALIA delivered the opinion of the Court.
This case requires us to determine whether either the
Confrontation Clause of the Sixth Amendment or Rule 802 of the
Federal Rules of Evidence bars testimony concerning a prior,
out-of-court identification when the identifying witness is Page 484 U. S. 556 unable, because of memory loss, to explain the basis for the
identification. I On April 12, 1982, John Foster, a correctional counselor at the
federal prison in Lompoc, California, was attacked and brutally
beaten with a metal pipe. His skull was fractured, and he remained
hospitalized for almost a month. As a result of his injuries,
Foster's memory was severely impaired. When Thomas Mansfield, an
FBI agent investigating the assault, first attempted to interview
Foster, on April 19, he found Foster lethargic and unable to
remember his attacker's name. On May 5, Mansfield again spoke to
Foster, who was much improved and able to describe the attack.
Foster named respondent as his attacker, and identified respondent
from an array of photographs.
Respondent was tried in Federal District Court for assault with
intent to commit murder under 18 U.S.C. § 113(a). At trial, Foster
recounted his activities just before the attack, and described
feeling the blows to his head and seeing blood on the floor. He
testified that he clearly remembered identifying respondent as his
assailant during his May 5th interview with Mansfield. On
cross-examination, he admitted that he could not remember seeing
his assailant. He also admitted that, although there was evidence
that he had received numerous visitors in the hospital, he was
unable to remember any of them except Mansfield, and could not
remember whether any of these visitors had suggested that
respondent was the assailant. Defense counsel unsuccessfully sought
to refresh his recollection with hospital records, including one
indicating that Foster had attributed the assault to someone other
than respondent. Respondent was convicted and sentenced to 20
years' imprisonment to be served consecutively to a previous
sentence.
On appeal, the United States Court of Appeals for the Ninth
Circuit considered challenges based on the Confrontation Page 484 U. S. 557 Clause and Rule 802 of the Federal Rules of Evidence. [ Footnote 1 ] By divided vote, it upheld
both challenges (though finding the Rule 802 violation harmless
error), and reversed the judgment of the District Court. 789 F.2d
750 (1986). We granted certiorari, 479 U.S. 1084 (1987), to resolve
the conflict with other Circuits on the significance of a hearsay
declarant's memory loss both with respect to the Confrontation
Clause, see, e.g., United States ex rel. Thomas v. Cuyler, 548 F.2d 460, 462-463 (CA3 1977), and with respect to Rule 802, see, e.g., United States v. Lewis, 565 F.2d 1248, 1252
(CA2 1977), cert. denied, 435 U.S. 973 (1978). II The Confrontation Clause of the Sixth Amendment gives the
accused the right "to be confronted with the witnesses against
him." This has long been read as securing an adequate opportunity
to cross-examine adverse witnesses. See, e.g., Mattox v. United
States, 156 U. S. 237 , 156 U. S.
242 -243 (1895); Douglas v. Alabama, 380 U. S. 415 , 380 U. S. 418 (1965). This Court has never held that a Confrontation Clause
violation can be founded upon a witness' loss of memory, but in two
cases has expressly left that possibility open.
In California v. Green, 399 U.
S. 149 , 399 U. S.
157 -164 (1970), we found no constitutional violation in
the admission of testimony that had been given at a preliminary
hearing, relying on (as one of two independent grounds) the
proposition that the opportunity to cross-examine the witness at
trial satisfied the Sixth Amendment's requirements. We declined,
however, to decide the admissibility of the same witness'
out-of-court statement to a police officer concerning events that
at trial he was unable to recall. In remanding on this point,
we Page 484 U. S. 558 noted that the state court had not considered, and the parties
had not briefed, the possibility that the witness' memory loss so
affected the petitioner's right to cross-examine as to violate the
Confrontation Clause. [ Footnote
2 ] Id. at 399 U. S.
168 -169. Justice Harlan, in a scholarly concurrence,
stated that he would have reached the issue of the out-of-court
statement, and would have held that a witness' inability to
"recall either the underlying events that are the subject of an
extrajudicial statement or previous testimony or recollect the
circumstances under which the statement was given, does not have
Sixth Amendment consequence." Id. at 399 U. S.
188 .
In Delaware v. Fensterer, 474 U. S.
15 (1985) (per curiam), we determined that there was no
Confrontation Clause violation when an expert witness testified as
to what opinion he had formed, but could not recollect the basis on
which he had formed it. We said:
"The Confrontation Clause includes no guarantee that every
witness called by the prosecution will refrain from giving
testimony that is marred by forgetfulness, confusion, or evasion.
To the contrary, the Confrontation Clause is generally satisfied
when the defense is given a full and fair opportunity to probe and
expose these infirmities through cross-examination, thereby calling
to the attention of the factfinder the reasons for giving scant
weight to the witness' testimony." Id. at 474 U. S. 21 -22.
Our opinion noted that a defendant seeking to discredit a forgetful
expert witness is not without ammunition, since the jury may be
persuaded that "his opinion is as unreliable as his memory." Id. at 474 U. S. 19 . We
distinguished, however, the unresolved issue in Green on the basis
that that involved the introduction of an out-of court statement.
474 U.S. at 474 U. S.
18 . Page 484 U. S. 559 JUSTICE STEVENS, concurring in the judgment, suggested that the
question at hand was in fact quite close to the question left open
in Green. 474 U.S. at 474 U. S.
23 -24.
Here that question is squarely presented, and we agree with the
answer suggested 18 years ago by Justice Harlan.
"[T]he Confrontation Clause guarantees only 'an opportunity for effective cross-examination, not
cross-examination that is effective in whatever way, and to
whatever extent, the defense might wish.'" Kentucky v. Stincer, 482 U. S. 730 , 482 U. S. 739 (1987), quoting Fensterer, supra, at 474 U. S. 20 (emphasis added); Delaware v. Van Arsdall, 475 U.
S. 673 , 475 U. S. 679 (1986); Ohio v. Roberts, 448 U. S. 56 , 448 U. S. 73 , n.
12 (1980). As Fensterer demonstrates, that opportunity is
not denied when a witness testifies as to his current belief, but
is unable to recollect the reason for that belief. It is sufficient
that the defendant has the opportunity to bring out such matters as
the witness' bias, his lack of care and attentiveness, his poor
eyesight, and even (what is often a prime objective of
cross-examination, see 3A J. Wigmore, Evidence § 995, pp.
931-932 (J. Chadbourn rev.1970)) the very fact that he has a bad
memory. If the ability to inquire into these matters suffices to
establish the constitutionally requisite opportunity for
cross-examination when a witness testifies as to his current
belief, the basis for which he cannot recall, we see no reason why
it should not suffice when the witness' past belief is introduced
and he is unable to recollect the reason for that past belief. In
both cases, the foundation for the belief (current or past) cannot
effectively be elicited, but other means of impugning the belief
are available. Indeed, if there is any difference in persuasive
impact between the statement "I believe this to be the man who
assaulted me, but can't remember why" and the statement "I don't
know whether this is the man who assaulted me, but I told the
police I believed so earlier," the former would seem, if anything,
more damaging, and hence give rise to a greater need for
memory-testing, if that is to be considered essential to an
opportunity for effective cross-examination. Page 484 U. S. 560 We conclude with respect to this latter example, as we did in Fensterer with respect to the former, that it is not. The
weapons available to impugn the witness' statement when memory loss
is asserted will of course not always achieve success, but
successful cross-examination is not the constitutional guarantee.
They are, however, realistic weapons, as is demonstrated by defense
counsel's summation in this very case, which emphasized Foster's
memory loss and argued that his identification of respondent was
the result of the suggestions of people who visited him in the
hospital.
Our constitutional analysis is not altered by the fact that the
testimony here involved an out-of-court identification that would
traditionally be categorized as hearsay. See Advisory
Committee's Notes on Fed.Rule Evid. 801(d)(1)(C), 28 U.S.C.App. p.
717. This Court has recognized a partial (and somewhat
indeterminate) overlap between the requirements of the traditional
hearsay rule and the Confrontation Clause. See Green, 399
U.S. at 399 U. S.
155 -156; id. at 399 U. S. 173 (Harlan, J., concurring). The dangers associated with hearsay
inspired the Court of Appeals in the present case to believe that
the Constitution required the testimony to be examined for "indicia
of reliability," Dutton v. Evans, 400 U. S.
74 , 400 U. S. 89 (1970), or "particularized guarantees of trustworthiness," Roberts, supra, at 448 U. S. 66 . We
do not think such an inquiry is called for when a hearsay declarant
is present at trial and subject to unrestricted cross-examination.
In that situation, as the Court recognized in Green, the
traditional protections of the oath, cross-examination, and
opportunity for the jury to observe the witness' demeanor satisfy
the constitutional requirements. 399 U.S. at 399 U. S.
158 -161. We do not think that a constitutional line
drawn by the Confrontation Clause falls between a forgetful
witness' live testimony that he once believed this defendant to be
the perpetrator of the crime, and the introduction of the witness'
earlier statement to that effect. Page 484 U. S. 561 Respondent has argued that this Court's jurisprudence concerning
suggestive identification procedures shows the special dangers of
identification testimony, and the special importance of
cross-examination when such hearsay is proffered. See, e.g.,
Manson v. Brathwaite, 432 U. S. 98 (1977); Neil v. Biggers, 409 U. S. 188 (1972). Respondent has not, however, argued that the identification
procedure used here was in any way suggestive. There does not
appear in our opinions, and we decline to adopt today, the
principle that, because of the mere possibility of suggestive
procedures, out-of-court statements of identification are
inherently less reliable than other out-of-court statements.
Respondent urges as an alternative basis for affirmance a
violation of Federal Rule of Evidence 802, which generally excludes
hearsay. Rule 801(d)(1)(C) defines as not hearsay a prior statement
"of identification of a person made after perceiving the person,"
if the declarant "testifies at the trial or hearing and is subject
to cross-examination concerning the statement." The Court of
Appeals found that Foster's identification statement did not come
within this exclusion, because his memory loss prevented his being
"subject to cross-examination concerning the statement." Although
the Court of Appeals concluded that the violation of the Rules of
Evidence was harmless (applying for purposes of that determination
a "more-probable-than-not" standard, rather than the
"beyond-a-reasonable-doubt" standard applicable to the
Confrontation Clause violation, see Delaware v. Van
Arsdall, 475 U.S. at 475 U. S.
684 ), respondent argues to the contrary.
It seems to us that the more natural reading of "subject to
cross-examination concerning the statement" includes what was
available here. Ordinarily a witness is regarded as "subject to
cross-examination" when he is placed on the stand, under oath, and
responds willingly to questions. Just as with the constitutional
prohibition, limitations on the scope Page 484 U. S. 562 of examination by the trial court or assertions of privilege by
the witness may undermine the process to such a degree that
meaningful cross-examination within the intent of the Rule no
longer exists. But that effect is not produced by the witness'
assertion of memory loss -- which, as discussed earlier, is often
the very result sought to be produced by cross-examination, and can
be effective in destroying the force of the prior statement. Rule
801(d)(1)(C), which specifies that the cross-examination need only
"concer[n] the statement," does not, on its face, require more.
This reading seems even more compelling when the Rule is
compared with Rule 804(a)(3), which defines "[u]navailability as a
witness" to include situations in which a declarant "testifies to a
lack of memory of the subject matter of the declarant's statement."
Congress plainly was aware of the recurrent evidentiary problem at
issue here -- witness forgetfulness of an underlying event -- but
chose not to make it an exception to Rule 801(d)(1)(C).
The reasons for that choice are apparent from the Advisory
Committee's Notes on Rule 801 and its legislative history. The
premise for Rule 801(d)(1)(C) was that, given adequate safeguards
against suggestiveness, out-of-court identifications were generally
preferable to courtroom identifications. Advisory Committee's Notes
on Rule 801, 28 U.S.C.App. p. 717. Thus, despite the traditional
view that such statements were hearsay, the Advisory Committee
believed that their use was to be fostered, rather than
discouraged. Similarly, the House Report on the Rule noted that,
since, "[a]s time goes by, a witness' memory will fade and his
identification will become less reliable," minimizing the barriers
to admission of more contemporaneous identification is fairer to
defendants and prevents "cases falling through because the witness
can no longer recall the identity of the person he saw commit the
crime." H.R.Rep. No. 94-355, p. 3 (1975). See also S.Rep.
No. 94-199, p. 2 (1975). To judge from the House and Senate
Reports, Rule 801(d)(1)(C) was in part directed Page 484 U. S. 563 to the very problem here at issue: a memory loss that makes it
impossible for the witness to provide an in court identification or
testify about details of the events underlying an earlier
identification.
Respondent argues that this reading is impermissible, because it
creates an internal inconsistency in the Rules, since the forgetful
witness who is deemed "subject to cross-examination" under
801(d)(1)(C) is simultaneously deemed "unavailable" under
804(a)(3). This is the position espoused by a prominent commentary
on the Rules, see 4 J. Weinstein & M. Berger,
Weinstein's Evidence 801-120 to 801-121, 801-178 (1987). It seems
to us, however, that this is not a substantive inconsistency, but
only a semantic oddity resulting from the fact that Rule 804(a)
has, for convenience of reference in Rule 804(b), chosen to
describe the circumstances necessary in order to admit certain
categories of hearsay testimony under the rubric "Unavailability as
a witness." These circumstances include not only absence from the
hearing, but also claims of privilege, refusals to obey a court's
order to testify, and inability to testify based on physical or
mental illness or memory loss. Had the rubric instead been
"unavailability as a witness, memory loss, and other special
circumstances," there would be no apparent inconsistency with Rule
801, which is a definition section excluding certain statements
entirely from the category of "hearsay." The semantic inconsistency
exists not only with respect to Rule 801(d)(1)(C), but also with
respect to the other subparagraphs of Rule 801(d)(1). It would seem
strange, for example, to assert that a witness can avoid
introduction of testimony from a prior proceeding that is
inconsistent with his trial testimony, see Rule
801(d)(1)(A), by simply asserting lack of memory of the facts to
which the prior testimony related. See United States v.
Murphy, 696 F.2d 282, 283-284 (CA4 1982), cert.
denied, 461 U.S. 945 (1983). But that situation, like this
one, presents the verbal curiosity that the witness is "subject to
cross-examination" under Rule 801 Page 484 U. S. 564 while at the same time "unavailable" under Rule 804(a)(3). Quite
obviously, the two characterizations are made for two entirely
different purposes, and there is no requirement or expectation that
they should coincide.
For the reasons stated, we hold that neither the Confrontation
Clause nor Federal Rule of Evidence 802 is violated by admission of
an identification statement of a witness who is unable, because of
a memory loss, to testify concerning the basis for the
identification. The decision of the Court of Appeals is reversed,
and the case is remanded for proceedings consistent with this
opinion. So ordered. JUSTICE KENNEDY took no part in the consideration or decision of
this case.
[ Footnote 1 ]
This case has been argued, both here and below, as though
Federal Rule of Evidence 801(d)(1)(C) were the basis of the
challenge. That is substantially, but not technically, correct. If
respondent's arguments are accepted, it is Rule 802 that would
render the out-of court statement inadmissible as hearsay; but, as
explained in 484 U. S. it
is ultimately Rule 801(d)(1)(C) that determines whether Rule 802 is
applicable.
[ Footnote 2 ]
On remand, the California Supreme Court concluded that the
Confrontation Clause was not violated by the out-of-court
statement, because the declarant testified under oath, subject to
cross-examination, and the jury was able to observe his demeanor. People v. Green, 3 Cal. 3d 981 ,
479 P.2d 998, cert. dism'd, 404 U.S. 801 (1971).
JUSTICE BRENNAN, with whom JUSTICE MARSHALL joins,
dissenting.
In an interview during his month-long hospitalization, in what
was apparently a singular moment of lucid recollection, John Foster
selected respondent James Owens' photograph from an array of
possible suspects and informed FBI Agent Thomas Mansfield that it
was respondent who had attacked him with a metal pipe on the
morning of April 12, 1982. Had Foster subsequently died from his
injuries, there is no doubt that both the Sixth Amendment and the
Federal Rules of Evidence would have barred Mansfield from
repeating Foster's out-of-court identification at trial.
Fortunately, Foster survived the beating; his memory, however, did
not, and, by the time of respondent's trial, he could no longer
recall his assailant or explain why he had previously identified
respondent as such. This profound memory loss, therefore, rendered
Foster no less a conduit for stale and inscrutable evidence than
Mansfield would have been, yet the Court nevertheless concludes
that, because defense counsel was afforded an unrestricted
opportunity to cross-examine him, Page 484 U. S. 565 Foster's unadorned reiteration of his earlier statement did not
deprive respondent of his constitutional right to confront the
witness against him. In my view, the Court today reduces the right
of confrontation to a purely procedural protection, and a markedly
hollow one at that. Because I believe the Sixth Amendment
guarantees criminal defendants the right to engage in
cross-examination sufficient to "affor[d] the trier of fact a
satisfactory basis for evaluating the truth of [a] prior
statement," California v. Green, 399 U.
S. 149 , 399 U. S. 161 (1970), and because respondent clearly was not afforded such an
opportunity here, I dissent. I On April 12, 1982, Foster was brutally assaulted while on duty
as a correctional counselor at the federal prison in Lompoc,
California. His attacker beat him repeatedly about the head and
upper body with a metal pipe, inflicting numerous and permanently
disabling injuries, one of which was a profound loss of short-term
memory. Foster spent nearly a month in the hospital recuperating
from his injuries, much of that time in a state of
semiconsciousness. Although numerous people visited him, including
his wife, who visited daily, Foster remembered none except Agent
Mansfield. While he had no recollection of Mansfield's first visit
on April 19, he testified that his memory of the interview
Mansfield conducted on May 5 was "vivid." App. 28. In particular,
he recalled telling Mansfield:
"[A]fter I was hit, I looked down and saw the blood on the
floor, and jammed my finger into Owens' chest, and said, 'That's
enough of that,' and hit my alarm button." Id. at 31.
Foster testified that, at the time he made these statements, he
was certain that his memory was accurate. In addition, he recalled
choosing respondent's photograph from those Mansfield showed him.
There is no dispute, however, that, by the time of trial, Foster
could no longer remember who had assaulted him or even whether he
had seen his attacker. Page 484 U. S. 566 Nor could he recall whether any of the prison officials or other
persons who visited him in the hospital had ever suggested that
respondent had beaten him. A medical expert who testified on behalf
of the prosecution explained that Foster's inability to remember
most of the details of the assault was attributable to a gradual
and selective memory loss caused by his head injuries. II The principal witness against respondent was not the John Foster
who took the stand in December 1983 -- that witness could recall
virtually nothing of the events of April 12, 1982, and candidly
admitted that he had no idea whether respondent had assaulted him.
Instead, respondent's sole accuser was the John Foster who, on May
5, 1982, identified respondent as his attacker. This John Foster,
however, did not testify at respondent's trial: the profound memory
loss he suffered during the approximately 18 months following his
identification prevented him from affirming, explaining, or
elaborating upon his out-of-court statement just as surely and
completely as his assertion of a testimonial privilege, or his
death, would have. Thus, while the Court asserts that defense
counsel had "realistic weapons" with which to impugn Foster's prior
statement, ante at 484 U. S. 560 ,
it does not and cannot claim that cross-examination could have
elicited any information that would have enabled a jury to evaluate
the trustworthiness or reliability of the identification. Indeed,
although the Court suggests that defense counsel was able to
explore Foster's "lack of care and attentiveness," his "bad
memory," and the possibility that hospital visitors suggested
respondent's name to him, ante at 484 U. S. 559 , 484 U. S. 560 ,
Foster's memory loss precluded any such inquiries: he simply could
not recall whether he had actually seen his assailant or even
whether he had had an opportunity to see him, nor could he remember
any of his visitors, let alone whether any of them had suggested
that respondent had attacked him. Moreover, by the Page 484 U. S. 567 time of trial, Foster was unable to shed any light on the
accuracy of his May, 1982, recollection of the assault; the most he
could state was that, on the day of the interview, he felt certain
that his statements were true. As the court below found,
"[c]learly, two of the three dangers surrounding Foster's
out-of-court identifications -- misperception and failure of memory
-- could not be mitigated in any way by the only cross-examination
of Foster that was available to [respondent]."
789 F.2d 750, 759 (CA9 1986).
In short, neither Foster nor the prosecution could demonstrate
the basis for Foster's prior identification. Nevertheless, the
Court concludes that the Sixth Amendment presents no obstacle to
the introduction of such an unsubstantiated out-of-court statement,
at least not where the declarant testifies under oath at trial and
is subjected to unrestricted cross-examination. According to the
Court, the Confrontation Clause is simply a procedural trial right
that
"guarantees only an opportunity for effective
cross-examination, not cross-examination that is effective in
whatever way, and to whatever extent, the defense might wish." Ante at 484 U. S. 559 (citations omitted; internal quotation marks omitted; emphasis in
original).
Although the Court suggests that the result it reaches today
follows naturally from our earlier cases, we have never before held
that the Confrontation Clause protects nothing more than a
defendant's right to question live witnesses, no matter how futile
that questioning might be. On the contrary, as the Court's own
recitation of our prior case law reveals, we have repeatedly
affirmed that the right of confrontation ensures "an opportunity
for effective cross-examination." Delaware v.
Fensterer, 474 U. S. 15 , 474 U. S. 20 (1985) (per curiam) (emphasis added); see also Nelson v.
O'Neil, 402 U. S. 622 , 402 U. S. 629 (1971) (Confrontation Clause does not bar admission of out-of-court
statement where defendant has "the benefit of full and effective cross-examination of [declarant]") (emphasis
added); California v. Green, 399 U.S. Page 484 U. S. 568 at 399 U. S. 159 (introduction of out-of-court statement does not violate
Confrontation Clause "as long as the defendant is assured of full
and effective cross-examination at the time of trial") (emphasis
added). While we have rejected the notion that effectiveness should
be measured in terms of a defendant's ultimate success, we have
never, until today, equated effectiveness with the mere opportunity
to pose questions. Rather, consistent with the Confrontation
Clause's mission of "advanc[ing] a practical concern for the
accuracy of the truth-determining process in criminal trials," Dutton v. Evans, 400 U. S. 74 , 400 U. S. 89 (1970), we have suggested that the touchstone of effectiveness is
whether the cross-examination affords " the trier of fact . . .
a satisfactory basis for evaluating the truth of the prior
statement.'" Ibid. (quoting California v. Green,
supra, at 399 U. S.
161 ). See also Ohio v. Roberts, 448 U. S.
56 , 448 U. S. 73 (1980) (introduction of prior testimony where the declarant was
unavailable at trial did not violate Confrontation Clause where
previous cross-examination of declarant "afforded the trier of fact
a satisfactory basis for evaluating the truth of the prior
statement" (citation omitted; internal quotation marks omitted));
[ Footnote 2/1 ] Mancusi v.
Stubbs, 408 U. S. 204 , 408 U. S. 216 (1972) Page 484 U. S. 569 (same). Where no opportunity for such cross-examination exists,
we have recognized that the Sixth Amendment permits the
introduction of out-of-court statements only when they bear
sufficient independent "indicia of reliability." Dutton v.
Evans, supra, at 400 U. S.
89 .
In dispensing with these substantive constitutional requirements
today, the Court relies almost exclusively on our decision in Delaware v. Fensterer, supra, a case that did not involve
the introduction of prior statements. Fensterer concerned
an expert witness' inability to remember which of three possible
scientific theories he had used in formulating his opinion.
Although Fensterer contended that the witness' forgetfulness made
it impossible to impeach the scientific validity of his
conclusions, we noted that "an expert who cannot recall the basis
for his opinion invites the jury to find that his opinion is as
reliable as his memory." Id. at 474 U. S. 19 .
While the witness' endorsement of a given scientific theory might
have maximized the effectiveness of cross-examination, the
Confrontation Clause guarantees only that level of effectiveness
necessary to afford the factfinder a satisfactory basis for
assessing the validity of the evidence offered. Thus, because the
expert's inability to remember the basis for his opinion was
self-impeaching, the constitutional guarantee had clearly been
satisfied. Fensterer, therefore, worked no change in our
Confrontation Clause jurisprudence, yet the Court purports to
discern in it a principle under which all live testimony as to a
witness' past belief is constitutionally admissible, provided the
defendant Page 484 U. S. 570 is afforded an opportunity to question the witness. From this
the Court derives the corollary that prior statements as to past
belief are equally admissible, again given the requisite
opportunity for questioning the declarant at trial. Accordingly,
the Court asserts, the Confrontation Clause draws no line
"between a forgetful witness' live testimony that he once
believed this defendant to be the perpetrator of the crime, and the
introduction of the witness' earlier statement to that effect." Ante at 484 U. S. 560 .
The obvious shortcoming in this reasoning, of course, is that Fensterer announced no such blanket rule: while the
expert's memory lapse in that case was self-impeaching, it does not
follow -- and we have therefore never held -- that all
forgetfulness may be so characterized. Certainly in the present
case, Foster's inability in December, 1983, to remember the events
of April, 1982, in no way impugned or otherwise cast doubt upon the
accuracy or trustworthiness of his memory in May, 1982,
particularly in light of the uncontradicted medical testimony
explaining that his forgetfulness was the result of the head
injuries he sustained. Under our prior cases, then, the
constitutional admissibility of Foster's prior statement, and the
testimony of the Court's hypothetical witness who cannot recall the
basis for his past belief, should depend on whether the memory loss
so seriously impedes cross-examination that the factfinder lacks an
adequate basis upon which to assess the truth of the proffered
evidence. Whatever may be said of the Court's hypothetical, it is
clear in the case before us that Foster's near total loss of memory
precluded any meaningful examination or assessment of his
out-of-court statement, and thus should have barred the admission
of that statement.
To the extent the Court's ruling is motivated by the fear that a
contrary result will open the door to countless Confrontation
Clause challenges to the admission of out-of-court statements, that
fear is groundless. To begin with, cases such as the present one
will be rare indeed. More typically, witnesses asserting a memory
loss will either not suffer (or Page 484 U. S. 571 claim) a total inability to recollect, or will do so under
circumstances that suggest bias or ulterior motive; in either case,
given the threshold of "effectiveness" established by our prior
decisions, the witness' partial memory or self-interest in claiming
a complete memory loss will afford the factfinder an adequate basis
upon which to evaluate the reliability and trustworthiness of the
out-of-court statement. Even in those relatively few cases where no
such basis can be elicited, the prior statement is still admissible
if it bears independent "indicia of reliability." Finally,
assessments of "effectiveness" for Confrontation Clause purposes
are no different than those undertaken by courts in deciding common
evidentiary questions, and thus should not prove unduly burdensome.
[ Footnote 2/2 ] In any event, to the
extent such assessments prove inconvenient or troublesome, those
burdens flow from our commitment to a Constitution that places a
greater value on individual liberty than on efficient judicial
administration. III I agree with the Court that the Confrontation Clause does not
guarantee defendants the right to confront only those witnesses
whose testimony is not marred by forgetfulness, Page 484 U. S. 572 confusion, or evasion, and that the right of confrontation
"'is generally satisfied when the defense is given a full and
fair opportunity to probe and expose these infirmities through
cross-examination.'" Ante at 484 U. S. 558 (quoting Fensterer, 474 U.S. at 474 U. S. 22 ).
But as we stressed just last Term, this right to cross-examination
"is essentially a functional' right designed to promote
reliability in the truthfinding functions of a criminal trial." Kentucky v. Stincer, 482 U. S. 730 , 482 U. S. 737 (1987). In the present case, respondent Owens was afforded no
opportunity to probe and expose the infirmities of Foster's May 5,
1982, recollections, for here cross-examination, the "greatest
legal engine ever invented for the discovery of truth," California v. Green, 399 U.S. at 399 U. S. 158 ,
stood as helpless as current medical technology before Foster's
profound memory loss. In concluding that respondent's Sixth
Amendment rights were satisfied by Foster's mere presence in the
courtroom, the Court reduces the right of confrontation to a hollow
formalism. Because I believe the Confrontation Clause guarantees
more than the right to ask questions of a live witness, no matter
how dead that witness' memory proves to be, I dissent. [ Footnote 2/1 ]
In Ohio v. Roberts, the Court indicated that, for
purposes of determining the constitutional admissibility of prior
testimony where the declarant is unavailable at trial, it is
unnecessary to consider whether defense counsel's questioning at
the prior hearing "surmount[ed] some inevitably nebulous threshold
of effectiveness,'" and held that, "in all but . . .
extraordinary cases, no inquiry into `effectiveness' is required."
448 U.S. at 448 U. S. 73 n.
12. In so ruling, however, the Court did not dispense with the
Sixth Amendment's substantive minima of effectiveness, but rather
rejected the claim that prior testimony should be deemed inherently
unreliable where the declarant was cross-examined by an attorney
whose performance is subsequently deemed ineffective in collateral
habeas corpus proceedings. In this context, therefore,
"effectiveness" obviously refers to the attorney's performance, not the impediments to meaningful cross-examination
created by a witness' memory loss. Indeed, the footnote in
question is appended to a sentence once again affirming the need
for affording the factfinder an adequate basis for assessing the
truth of prior statements, and the author of Roberts has
twice since confirmed that the Sixth Amendment guarantees an
opportunity for meaningful cross-examination. See Kentucky v.
Stincer, 482 U. S. 730 , 482 U. S. 739 ,
n. 9 (1987) (BLACKMUN, J.) (a state rule precluding access to
certain information before trial "may hinder [the] defendant's
opportunity for effective cross-examination at trial, and
thus . . . may violate the Confrontation Clause") (emphasis in
original); Pennsylvania v. Ritchie, 480 U. S.
39 , 480 U. S. 63 , n.
1 (1987) (BLACKMUN, J., concurring) ( Fensterer "[did] not
imply that concern about . . . effectiveness [of cross-examination]
has no place in analysis under the Confrontation Clause"). [ Footnote 2/2 ]
Indeed, in a case such as this one, the inquiry into the
constitutional adequacy of defendant's opportunity for
cross-examination is identical to that required under Federal Rule
of Evidence 804(a)(3), which deems a declarant "unavailable" if, at
trial, he or she "testifies to a lack of memory of the subject
matter of the declarant's [prior] statement" (emphasis added).
The Court today, of course, concludes that, notwithstanding Rule
804(a)'s definition of unavailability, a prior identification is
not hearsay under Rule 801(d)(1)(C), and is therefore admissible,
as long as the declarant is subject to cross-examination concerning
the statement itself, regardless of whether the declarant can
recall the basis for that statement. See ante at 484 U. S.
561 -564. Because I believe such a construction of Rule
801(d)(1)(C) renders it unconstitutional under the Confrontation
Clause, I would require, consistent with Rule 804(a), that the
declarant be subject to cross-examination as to the subject matter
of the prior statement. See 4 J. Weinstein & M.
Berger, Weinstein's Evidence 801-120 to 801-121 (1987) (endorsing
such a construction of Rule 801(d)(1)(C)). | The U.S. Supreme Court ruled that neither the Confrontation Clause of the Sixth Amendment nor Rule 802 of the Federal Rules of Evidence was violated by admitting a prior out-of-court identification statement made by a witness who could not remember the basis for that identification due to memory loss. The Court held that the Confrontation Clause guarantees an opportunity for effective cross-examination but not successful cross-examination and that meaningful cross-examination is not destroyed by a witness's assertion of memory loss. |
Criminal Trials & Prosecutions | Strickland v. Washington | https://supreme.justia.com/cases/federal/us/466/668/ | U.S. Supreme Court Strickland v. Washington, 466
U.S. 668 (1984) Strickland v.
Washington No. 82-1554 Argued January 10,
1984 Decided May 14, 1984 466
U.S. 668 CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE ELEVENTH
CIRCUIT Syllabus Respondent pleaded guilty in a Florida trial court to an
indictment that included three capital murder charges. In the plea
colloquy, respondent told the trial judge that, although he had
committed a string of burglaries, he had no significant prior
criminal record and that, at the time of his criminal spree, he was
under extreme stress caused by his inability to support his family.
The trial judge told respondent that he had "a great deal of
respect for people who are willing to step forward and admit their
responsibility." In preparing for the sentencing hearing, defense
counsel spoke with respondent about his background, but did not
seek out character witnesses or request a psychiatric examination.
Counsel's decision not to present evidence concerning respondent's
character and emotional state reflected his judgment that it was
advisable to rely on the plea colloquy for evidence as to such
matters, thus preventing the State from cross-examining respondent
and from presenting psychiatric evidence of its own. Counsel did
not request a presentence report, because it would have included
respondent's criminal history and thereby would have undermined the
claim of no significant prior criminal record. Finding numerous
aggravating circumstances and no mitigating circumstance, the trial
judge sentenced respondent to death on each of the murder counts.
The Florida Supreme Court affirmed, and respondent then sought
collateral relief in state court on the ground, inter
alia, that counsel had rendered ineffective assistance at the
sentencing proceeding in several respects, including his failure to
request a psychiatric report, to investigate and present character
witnesses, and to seek a presentence report. The trial court denied
relief, and the Florida Supreme Court affirmed. Respondent then
filed a habeas corpus petition in Federal District Court advancing
numerous grounds for relief, including the claim of ineffective
assistance of counsel. After an evidentiary hearing, the District
Court denied relief, concluding that, although counsel made errors
in judgment in failing to investigate mitigating evidence further
than he did, no prejudice to respondent's sentence resulted from
any such error in judgment. The Court of Appeals ultimately
reversed, stating that the Sixth Amendment accorded criminal
defendants a right Page 466 U. S. 669 to counsel rendering "reasonably effective assistance given the
totality of the circumstances." After outlining standards for
judging whether a defense counsel fulfilled the duty to investigate
nonstatutory mitigating circumstances and whether counsel's errors
were sufficiently prejudicial to justify reversal, the Court of
Appeals remanded the case for application of the standards. Held: 1. The Sixth Amendment right to counsel is the right to the
effective assistance of counsel, and the benchmark for judging any
claim of ineffectiveness must be whether counsel's conduct so
undermined the proper functioning of the adversarial process that
the trial cannot be relied on as having produced a just result. The
same principle applies to a capital sentencing proceeding -- such
as the one provided by Florida law -- that is sufficiently like a
trial in its adversarial format and in the existence of standards
for decision that counsel's role in the proceeding is comparable to
counsel's role at trial. Pp. 466 U. S.
684 -687.
2. A convicted defendant's claim that counsel's assistance was
so defective as to require reversal of a conviction or setting
aside of a death sentence requires that the defendant show, first,
that counsel's performance was deficient and, second, that the
deficient performance prejudiced the defense so as to deprive the
defendant of a fair trial. Pp. 466
U.S. 687 -696.
(a) The proper standard for judging attorney performance is that
of reasonably effective assistance, considering all the
circumstances. When a convicted defendant complains of the
ineffectiveness of counsel's assistance, the defendant must show
that counsel's representation fell below an objective standard of
reasonableness. Judicial scrutiny of counsel's performance must be
highly deferential, and a fair assessment of attorney performance
requires that every effort be made to eliminate the distorting
effects of hindsight, to reconstruct the circumstances of counsel's
challenged conduct, and to evaluate the conduct from counsel's
perspective at the time. A court must indulge a strong presumption
that counsel's conduct falls within the wide range of reasonable
professional assistance. These standards require no special
amplification in order to define counsel's duty to investigate, the
duty at issue in this case. Pp. 466 U.S. 687 -691.
(b) With regard to the required showing of prejudice, the proper
standard requires the defendant to show that there is a reasonable
probability that, but for counsel's unprofessional errors, the
result of the proceeding would have been different. A reasonable
probability is a probability sufficient to undermine confidence in
the outcome. A court hearing an ineffectiveness claim must consider
the totality of the evidence before the judge or jury. Pp. 466 U. S.
691 -696. Page 466 U. S. 670 3. A number of practical considerations are important for the
application of the standards set forth above. The standards do not
establish mechanical rules; the ultimate focus of inquiry must be
on the fundamental fairness of the proceeding whose result is being
challenged. A court need not first determine whether counsel's
performance was deficient before examining the prejudice suffered
by the defendant as a result of the alleged deficiencies. If it is
easier to dispose of an ineffectiveness claim on the ground of lack
of sufficient prejudice, that course should be followed. The
principles governing ineffectiveness claims apply in federal
collateral proceedings as they do on direct appeal or in motions
for a new trial. And in a federal habeas challenge to a state
criminal judgment, a state court conclusion that counsel rendered
effective assistance is not a finding of fact binding on the
federal court to the extent stated by 28 U.S.C. § 2254(d), but is a
mixed question of law and fact. Pp. 466 U. S.
696 -698.
4. The facts of this case make it clear that counsel's conduct
at and before respondent's sentencing proceeding cannot be found
unreasonable under the above standards. They also make it clear
that, even assuming counsel's conduct was unreasonable, respondent
suffered insufficient prejudice to warrant setting aside his death
sentence. Pp. 466 U. S.
698 -700.
693 F.2d 1243, reversed.
O'CONNOR, J., delivered the opinion of the Court, in which
BURGER, C.J., and WHITE, BLACKMUN, POWELL, REHNQUIST, and STEVENS,
JJ., joined. BRENNAN, J., filed an opinion concurring in part and
dissenting in part, post, p. 466 U. S. 701 .
MARSHALL, J., filed a dissenting opinion, post, p. 466 U. S.
706 . Page 466 U. S. 671 JUSTICE O'CONNOR delivered the opinion of the Court.
This case requires us to consider the proper standards for
judging a criminal defendant's contention that the Constitution
requires a conviction or death sentence to be set aside because
counsel's assistance at the trial or sentencing was
ineffective. I A During a 10-day period in September, 1976, respondent planned
and committed three groups of crimes, which included Page 466 U. S. 672 three brutal stabbing murders, torture, kidnaping, severe
assaults, attempted murders, attempted extortion, and theft. After
his two accomplices were arrested, respondent surrendered to police
and voluntarily gave a lengthy statement confessing to the third of
the criminal episodes. The State of Florida indicted respondent for
kidnaping and murder and appointed an experienced criminal lawyer
to represent him.
Counsel actively pursued pretrial motions and discovery. He cut
his efforts short, however, and he experienced a sense of
hopelessness about the case, when he learned that, against his
specific advice, respondent had also confessed to the first two
murders. By the date set for trial, respondent was subject to
indictment for three counts of first-degree murder and multiple
counts of robbery, kidnaping for ransom, breaking and entering and
assault, attempted murder, and conspiracy to commit robbery.
Respondent waived his right to a jury trial, again acting against
counsel's advice, and pleaded guilty to all charges, including the
three capital murder charges.
In the plea colloquy, respondent told the trial judge that,
although he had committed a string of burglaries, he had no
significant prior criminal record, and that, at the time of his
criminal spree, he was under extreme stress caused by his inability
to support his family. App. 50-53. He also stated, however, that he
accepted responsibility for the crimes. E.g., id. at 54, 57. The trial judge told respondent that he had "a great
deal of respect for people who are willing to step forward and
admit their responsibility," but that he was making no statement at
all about his likely sentencing decision. Id. at 62.
Counsel advised respondent to invoke his right under Florida law
to an advisory jury at his capital sentencing hearing. Respondent
rejected the advice and waived the right. He chose instead to be
sentenced by the trial judge without a jury recommendation.
In preparing for the sentencing hearing, counsel spoke with
respondent about his background. He also spoke on Page 466 U. S. 673 the telephone with respondent's wife and mother, though he did
not follow up on the one unsuccessful effort to meet with them. He
did not otherwise seek out character witnesses for respondent. App.
to Pet. for Cert. A265. Nor did he request a psychiatric
examination, since his conversations with his client gave no
indication that respondent had psychological problems. Id. at A266.
Counsel decided not to present, and hence not to look further
for, evidence concerning respondent's character and emotional
state. That decision reflected trial counsel's sense of
hopelessness about overcoming the evidentiary effect of
respondent's confessions to the gruesome crimes. See id. at A282. It also reflected the judgment that it was advisable to
rely on the plea colloquy for evidence about respondent's
background and about his claim of emotional stress: the plea
colloquy communicated sufficient information about these subjects,
and by forgoing the opportunity to present new evidence on these
subjects, counsel prevented the State from cross-examining
respondent on his claim and from putting on psychiatric evidence of
its own. Id. at A223-A225.
Counsel also excluded from the sentencing hearing other evidence
he thought was potentially damaging. He successfully moved to
exclude respondent's "rap sheet." Id. at A227; App. 311.
Because he judged that a presentence report might prove more
detrimental than helpful, as it would have included respondent's
criminal history and thereby would have undermined the claim of no
significant history of criminal activity, he did not request that
one be prepared. App. to Pet. for Cert. A227-A228, A265-A266.
At the sentencing hearing, counsel's strategy was based
primarily on the trial judge's remarks at the plea colloquy as well
as on his reputation as a sentencing judge who thought it important
for a convicted defendant to own up to his crime. Counsel argued
that respondent's remorse and acceptance of responsibility
justified sparing him from the death penalty. Id. at
A265-A266. Counsel also argued that respondent had no history of
criminal activity, and that respondent committed Page 466 U. S. 674 the crimes under extreme mental or emotional disturbance, thus
coming within the statutory list of mitigating circumstances. He
further argued that respondent should be spared death because he
had surrendered, confessed, and offered to testify against a
codefendant, and because respondent was fundamentally a good person
who had briefly gone badly wrong in extremely stressful
circumstances. The State put on evidence and witnesses largely for
the purpose of describing the details of the crimes. Counsel did
not cross-examine the medical experts who testified about the
manner of death of respondent's victims.
The trial judge found several aggravating circumstances with
respect to each of the three murders. He found that all three
murders were especially heinous, atrocious, and cruel, all
involving repeated stabbings. All three murders were committed in
the course of at least one other dangerous and violent felony, and
since all involved robbery, the murders were for pecuniary gain.
All three murders were committed to avoid arrest for the
accompanying crimes and to hinder law enforcement. In the course of
one of the murders, respondent knowingly subjected numerous persons
to a grave risk of death by deliberately stabbing and shooting the
murder victim's sisters-in-law, who sustained severe -- in one
case, ultimately fatal -- injuries.
With respect to mitigating circumstances, the trial judge made
the same findings for all three capital murders. First, although
there was no admitted evidence of prior convictions, respondent had
stated that he had engaged in a course of stealing. In any case,
even if respondent had no significant history of criminal activity,
the aggravating circumstances "would still clearly far outweigh"
that mitigating factor. Second, the judge found that, during all
three crimes, respondent was not suffering from extreme mental or
emotional disturbance, and could appreciate the criminality of his
acts. Third, none of the victims was a participant in, or consented
to, respondent's conduct. Fourth, respondent's Page 466 U. S. 675 participation in the crimes was neither minor nor the result of
duress or domination by an accomplice. Finally, respondent's age
(26) could not be considered a factor in mitigation, especially
when viewed in light of respondent's planning of the crimes and
disposition of the proceeds of the various accompanying thefts.
In short, the trial judge found numerous aggravating
circumstances and no (or a single comparatively insignificant)
mitigating circumstance. With respect to each of the three
convictions for capital murder, the trial judge concluded:
"A careful consideration of all matters presented to the court
impels the conclusion that there are insufficient mitigating
circumstances . . . to outweigh the aggravating circumstances." See Washington v. State, 362 So. 2d
658 , 663-664 (Fla.1978) (quoting trial court findings), cert. denied, 441 U.S. 937 (1979). He therefore sentenced
respondent to death on each of the three counts of murder and to
prison terms for the other crimes. The Florida Supreme Court upheld
the convictions and sentences on direct appeal. B Respondent subsequently sought collateral relief in state court
on numerous grounds, among them that counsel had rendered
ineffective assistance at the sentencing proceeding. Respondent
challenged counsel's assistance in six respects. He asserted that
counsel was ineffective because he failed to move for a continuance
to prepare for sentencing, to request a psychiatric report, to
investigate and present character witnesses, to seek a presentence
investigation report, to present meaningful arguments to the
sentencing judge, and to investigate the medical examiner's reports
or cross-examine the medical experts. In support of the claim,
respondent submitted 14 affidavits from friends, neighbors, and
relatives stating that they would have testified if asked to do so.
He also submitted one psychiatric report and one psychological
report stating that respondent, though not under the influence Page 466 U. S. 676 of extreme mental or emotional disturbance, was "chronically
frustrated and depressed because of his economic dilemma" at the
time of his crimes. App. 7; see also id. at 14.
The trial court denied relief without an evidentiary hearing,
finding that the record evidence conclusively showed that the
ineffectiveness claim was meritless. App. to Pet. for Cert.
A206-A243. Four of the assertedly prejudicial errors required
little discussion. First, there were no grounds to request a
continuance, so there was no error in not requesting one when
respondent pleaded guilty. Id. at A218-A220. Second,
failure to request a presentence investigation was not a serious
error because the trial judge had discretion not to grant such a
request and because any presentence investigation would have
resulted in admission of respondent's "rap sheet," and thus would
have undermined his assertion of no significant history of criminal
activity. Id. at A226-A228. Third, the argument and
memorandum given to the sentencing judge were "admirable" in light
of the overwhelming aggravating circumstances and absence of
mitigating circumstances. Id. at A228. Fourth, there was
no error in failure to examine the medical examiner's reports or to
cross-examine the medical witnesses testifying on the manner of
death of respondent's victims, since respondent admitted that the
victims died in the ways shown by the unchallenged medical
evidence. Id. at A229.
The trial court dealt at greater length with the two other bases
for the ineffectiveness claim. The court pointed out that a
psychiatric examination of respondent was conducted by state order
soon after respondent's initial arraignment. That report states
that there was no indication of major mental illness at the time of
the crimes. Moreover, both the reports submitted in the collateral
proceeding state that, although respondent was "chronically
frustrated and depressed because of his economic dilemma," he was
not under the influence of extreme mental or emotional disturbance.
All three Page 466 U. S. 677 reports thus directly undermine the contention made at the
sentencing hearing that respondent was suffering from extreme
mental or emotional disturbance during his crime spree.
Accordingly, counsel could reasonably decide not to seek
psychiatric reports; indeed, by relying solely on the plea colloquy
to support the emotional disturbance contention, counsel denied the
State an opportunity to rebut his claim with psychiatric testimony.
In any event, the aggravating circumstances were so overwhelming
that no substantial prejudice resulted from the absence at
sentencing of the psychiatric evidence offered in the collateral
attack.
The court rejected the challenge to counsel's failure to develop
and to present character evidence for much the same reasons. The
affidavits submitted in the collateral proceeding showed nothing
more than that certain persons would have testified that respondent
was basically a good person who was worried about his family's
financial problems. Respondent himself had already testified along
those lines at the plea colloquy. Moreover, respondent's admission
of a course of stealing rebutted many of the factual allegations in
the affidavits. For those reasons, and because the sentencing judge
had stated that the death sentence would be appropriate even if
respondent had no significant prior criminal history, no
substantial prejudice resulted from the absence at sentencing of
the character evidence offered in the collateral attack.
Applying the standard for ineffectiveness claims articulated by
the Florida Supreme Court in Knight v.
State, 394 So. 2d 997 (1981), the trial court concluded that respondent had not shown
that counsel's assistance reflected any substantial and serious
deficiency measurably below that of competent counsel that was
likely to have affected the outcome of the sentencing proceeding.
The court specifically found:
"[A]s a matter of law, the record affirmatively demonstrates
beyond any doubt that even if [counsel] had done each of the . . .
things [that respondent alleged counsel had failed to do] Page 466 U. S. 678 at the time of sentencing, there is not even the remotest chance
that the outcome would have been any different. The plain fact is
that the aggravating circumstances proved in this case were
completely overwhelming. . . ."
App. to Pet. for Cert. A230.
The Florida Supreme Court affirmed the denial of relief. Washington v. State, 397 So. 2d 285 (1981). For essentially the reasons given by the trial court, the
State Supreme Court concluded that respondent had failed to make
out a prima facie case of either "substantial deficiency
or possible prejudice" and, indeed, had "failed to such a degree
that we believe, to the point of a moral certainty, that he is
entitled to no relief. . . ." Id. at 287. Respondent's
claims were "shown conclusively to be without merit, so as to
obviate the need for an evidentiary hearing." Id. at
286. C Respondent next filed a petition for a writ of habeas corpus in
the United States District Court for the Southern District of
Florida. He advanced numerous grounds for relief, among them
ineffective assistance of counsel based on the same errors, except
for the failure to move for a continuance, as those he had
identified in state court. The District Court held an evidentiary
hearing to inquire into trial counsel's efforts to investigate and
to present mitigating circumstances. Respondent offered the
affidavits and reports he had submitted in the state collateral
proceedings; he also called his trial counsel to testify. The State
of Florida, over respondent's objection, called the trial judge to
testify.
The District Court disputed none of the state court factual
findings concerning trial counsel's assistance and made findings of
its own that are consistent with the state court findings. The
account of trial counsel's actions and decisions given above
reflects the combined findings. On the legal issue of
ineffectiveness, the District Court concluded that, although trial
counsel made errors in judgment in failing to Page 466 U. S. 679 investigate nonstatutory mitigating evidence further than he
did, no prejudice to respondent's sentence resulted from any such
error in judgment. Relying in part on the trial judge's testimony
but also on the same factors that led the state courts to find no
prejudice, the District Court concluded that "there does not appear
to be a likelihood, or even a significant possibility" that any
errors of trial counsel had affected the outcome of the sentencing
proceeding. App. to Pet. for Cert. A285-A286. The District Court
went on to reject all of respondent's other grounds for relief,
including one not exhausted in state court, which the District
Court considered because, among other reasons, the State urged its
consideration. Id. at A286-A292. The court accordingly
denied the petition for a writ of habeas corpus.
On appeal, a panel of the United States Court of Appeals for the
Fifth Circuit affirmed in part, vacated in part, and remanded with
instructions to apply to the particular facts the framework for
analyzing ineffectiveness claims that it developed in its opinion.
673 F.2d 879 (1982). The panel decision was itself vacated when
Unit B of the former Fifth Circuit, now the Eleventh Circuit,
decided to rehear the case en banc. 679 F.2d 23 (1982). The full
Court of Appeals developed its own framework for analyzing
ineffective assistance claims and reversed the judgment of the
District Court and remanded the case for new factfinding under the
newly announced standards. 693 F.2d 1243 (1982).
The court noted at the outset that, because respondent had
raised an unexhausted claim at his evidentiary hearing in the
District Court, the habeas petition might be characterized as a
mixed petition subject to the rule of Rose v. Lundy, 455 U. S. 509 (1982), requiring dismissal of the entire petition. The court held,
however, that the exhaustion requirement is "a matter of comity,
rather than a matter of jurisdiction," and hence admitted of
exceptions. The court agreed with the District Court that this case
came within an exception to the mixed petition rule. 693 F.2d at
1248, n. 7. Page 466 U. S. 680 Turning to the merits, the Court of Appeals stated that the
Sixth Amendment right to assistance of counsel accorded criminal
defendants a right to "counsel reasonably likely to render and
rendering reasonably effective assistance given the totality of the
circumstances." Id. at 1250. The court remarked in passing
that no special standard applies in capital cases such as the one
before it: the punishment that a defendant faces is merely one of
the circumstances to be considered in determining whether counsel
was reasonably effective. Id. at 1250, n. 12. The court
then addressed respondent's contention that his trial counsel's
assistance was not reasonably effective because counsel breached
his duty to investigate nonstatutory mitigating circumstances.
The court agreed that the Sixth Amendment imposes on counsel a
duty to investigate, because reasonably effective assistance must
be based on professional decisions and informed legal choices can
be made only after investigation of options. The court observed
that counsel's investigatory decisions must be assessed in light of
the information known at the time of the decisions, not in
hindsight, and that "[t]he amount of pretrial investigation that is
reasonable defies precise measurement." Id. at 1251.
Nevertheless, putting guilty plea cases to one side, the court
attempted to classify cases presenting issues concerning the scope
of the duty to investigate before proceeding to trial.
If there is only one plausible line of defense, the court
concluded, counsel must conduct a "reasonably substantial
investigation" into that line of defense, since there can be no
strategic choice that renders such an investigation unnecessary. Id. at 1252. The same duty exists if counsel relies at
trial on only one line of defense, although others are available.
In either case, the investigation need not be exhaustive. It must
include " an independent examination of the facts,
circumstances, pleadings and laws involved.'" Id. at 1253
(quoting Rummel v. Estelle, 590 F.2d 103, 104 (CA 1979)).
The scope of the duty, however, depends Page 466 U. S. 681 on such facts as the strength of the government's case and the
likelihood that pursuing certain leads may prove more harmful than
helpful. 693 F.2d at 1253, n. 16.
If there is more than one plausible line of defense, the court
held, counsel should ideally investigate each line substantially
before making a strategic choice about which lines to rely on at
trial. If counsel conducts such substantial investigations, the
strategic choices made as a result "will seldom if ever" be found
wanting. Because advocacy is an art and not a science, and because
the adversary system requires deference to counsel's informed
decisions, strategic choices must be respected in these
circumstances if they are based on professional judgment. Id. at 1254.
If counsel does not conduct a substantial investigation into
each of several plausible lines of defense, assistance may
nonetheless be effective. Counsel may not exclude certain lines of
defense for other than strategic reasons. Id. at
1257-1258. Limitations of time and money, however, may force early
strategic choices, often based solely on conversations with the
defendant and a review of the prosecution's evidence. Those
strategic choices about which lines of defense to pursue are owed
deference commensurate with the reasonableness of the professional
judgments on which they are based. Thus,
"when counsel's assumptions are reasonable, given the totality
of the circumstances, and when counsel's strategy represents a
reasonable choice based upon those assumptions, counsel need not
investigate lines of defense that he has chosen not to employ at
trial." Id. at 1255 (footnote omitted). Among the factors
relevant to deciding whether particular strategic choices are
reasonable are the experience of the attorney, the inconsistency of
unpursued and pursued lines of defense, and the potential for
prejudice from taking an unpursued line of defense. Id. at
1256-1257, n. 23.
Having outlined the standards for judging whether defense
counsel fulfilled the duty to investigate, the Court of Appeals
turned its attention to the question of the prejudice to the Page 466 U. S. 682 defense that must be shown before counsel's errors justify
reversal of the judgment. The court observed that only in cases of
outright denial of counsel, of affirmative government interference
in the representation process, or of inherently prejudicial
conflicts of interest had this Court said that no special showing
of prejudice need be made. Id. at 1258-1259. For cases of
deficient performance by counsel, where the government is not
directly responsible for the deficiencies and where evidence of
deficiency may be more accessible to the defendant than to the
prosecution, the defendant must show that counsel's errors
"resulted in actual and substantial disadvantage to the course of
his defense." Id. at 1262. This standard, the Court of
Appeals reasoned, is compatible with the "cause and prejudice"
standard for overcoming procedural defaults in federal collateral
proceedings, and discourages insubstantial claims by requiring more
than a showing, which could virtually always be made, of some
conceivable adverse effect on the defense from counsel's errors.
The specified showing of prejudice would result in reversal of the
judgment, the court concluded, unless the prosecution showed that
the constitutionally deficient performance was, in light of all the
evidence, harmless beyond a reasonable doubt. Id. at
1260-1262.
The Court of Appeals thus laid down the tests to be applied in
the Eleventh Circuit in challenges to convictions on the ground of
ineffectiveness of counsel. Although some of the judges of the
court proposed different approaches to judging ineffectiveness
claims either generally or when raised in federal habeas petitions
from state prisoners, id. at 1264-1280 (opinion of
Tjoflat, J.); id. at 1280 (opinion of Clark, J.); id. at 1285-1288 (opinion of Roney, J., joined by Fay and
Hill, JJ.); id. at 1288-1291 (opinion of Hill, J.), and
although some believed that no remand was necessary in this case, id. at 1281-1285 (opinion of Johnson, J., joined by
Anderson, J.); id. at 1285-1288 (opinion of Roney, J.,
joined by Fay and Hill, JJ.); id. at 1288-1291 (opinion of
Hill, J.), a majority Page 466 U. S. 683 of the judges of the en banc court agreed that the case should
be remanded for application of the newly announced standards.
Summarily rejecting respondent's claims other than ineffectiveness
of counsel, the court accordingly reversed the judgment of the
District Court and remanded the case. On remand, the court finally
ruled, the state trial judge's testimony, though admissible "to the
extent that it contains personal knowledge of historical facts or
expert opinion," was not to be considered admitted into evidence to
explain the judge's mental processes in reaching his sentencing
decision. Id. at 1262-1263; see Fayerweather v.
Ritch, 195 U. S. 276 , 195 U. S.
306 -307 (1904). D Petitioners, who are officials of the State of Florida, filed a
petition for a writ of certiorari seeking review of the decision of
the Court of Appeals. The petition presents a type of Sixth
Amendment claim that this Court has not previously considered in
any generality. The Court has considered Sixth Amendment claims
based on actual or constructive denial of the assistance of counsel
altogether, as well as claims based on state interference with the
ability of counsel to render effective assistance to the accused. E.g., United States v. Cronic, ante p. 466 U. S. 648 .
With the exception of Cuyler v. Sullivan, 446 U.
S. 335 (1980), however, which involved a claim that
counsel's assistance was rendered ineffective by a conflict of
interest, the Court has never directly and fully addressed a claim
of "actual ineffectiveness" of counsel's assistance in a case going
to trial. Cf. United States v. Agurs, 427 U. S.
97 , 427 U. S. 102 ,
n. 5 (1976).
In assessing attorney performance, all the Federal Courts of
Appeals and all but a few state courts have now adopted the
"reasonably effective assistance" standard in one formulation or
another. See Trapnell v. United States, 725 F.2d 149,
151-152 (CA2 1983); App. B to Brief for United States in United
States v. Cronic, O.T. 1983, No. 82-660, pp. 3a-6a; Sarno, Page 466 U. S. 684 Modern Status of Rules and Standards in State Courts as to
Adequacy of Defense Counsel's Representation of Criminal Client, 2
A.L.R. 4th 99-157, §§ 7-10 (1980). Yet this Court has not had
occasion squarely to decide whether that is the proper standard.
With respect to the prejudice that a defendant must show from
deficient attorney performance, the lower courts have adopted tests
that purport to differ in more than formulation. See App.
C to Brief for United States in United States v. Cronic,
supra, at 7a-10a; Sarno, supra, at 83-99, § 6. In
particular, the Court of Appeals in this case expressly rejected
the prejudice standard articulated by Judge Leventhal in his
plurality opinion in United States v. Decoster, 199
U.S.App.D.C. 359, 371, 374-375, 624 F.2d 196, 208, 211-212 (en
banc), cert. denied, 444 U.S. 944 (1979), and adopted by
the State of Florida in Knight v. State, 394 So. 2d at
1001, a standard that requires a showing that specified deficient
conduct of counsel was likely to have affected the outcome of the
proceeding. 693 F.2d at 1261-1262.
For these reasons, we granted certiorari to consider the
standards by which to judge a contention that the Constitution
requires that a criminal judgment be overturned because of the
actual ineffective assistance of counsel. 462 U.S. 1105 (1983). We
agree with the Court of Appeals that the exhaustion rule requiring
dismissal of mixed petitions, though to be strictly enforced, is
not jurisdictional. See Rose v. Lundy, 455 U.S. at 455 U. S.
515 -520. We therefore address the merits of the
constitutional issue. II In a long line of cases that includes Powell v.
Alabama, 287 U. S. 45 (1932), Johnson v. Zerbst, 304 U.
S. 458 (1938), and Gideon v. Wainwright, 372 U. S. 335 (1963), this Court has recognized that the Sixth Amendment right to
counsel exists, and is needed, in order to protect the fundamental
right to a fair trial. The Constitution guarantees a fair trial
through Page 466 U. S. 685 the Due Process Clauses, but it defines the basic elements of a
fair trial largely through the several provisions of the Sixth
Amendment, including the Counsel Clause:
"In all criminal prosecutions, the accused shall enjoy the right
to a speedy and public trial, by an impartial jury of the State and
district wherein the crime shall have been committed, which
district shall have been previously ascertained by law, and to be
informed of the nature and cause of the accusation; to be
confronted with the witnesses against him; to have compulsory
process for obtaining witnesses in his favor, and to have the
Assistance of Counsel for his defence."
Thus, a fair trial is one in which evidence subject to
adversarial testing is presented to an impartial tribunal for
resolution of issues defined in advance of the proceeding. The
right to counsel plays a crucial role in the adversarial system
embodied in the Sixth Amendment, since access to counsel's skill
and knowledge is necessary to accord defendants the "ample
opportunity to meet the case of the prosecution" to which they are
entitled. Adams v. United States ex rel. McCann, 317 U. S. 269 , 317 U. S. 275 , 317 U. S. 276 (1942); see Powell v. Alabama, supra, at 287 U. S.
68 -69.
Because of the vital importance of counsel's assistance, this
Court has held that, with certain exceptions, a person accused of a
federal or state crime has the right to have counsel appointed if
retained counsel cannot be obtained. See Algersinger v.
Hamlin, 407 U. S. 25 (1972); Gideon v. Wainwright, supra; Johnson v. Zerbst,
supra. That a person who happens to be a lawyer is present at
trial alongside the accused, however, is not enough to satisfy the
constitutional command. The Sixth Amendment recognizes the right to
the assistance of counsel because it envisions counsel's playing a
role that is critical to the ability of the adversarial system to
produce just results. An accused is entitled to be assisted by an
attorney, whether retained or appointed, who plays the role
necessary to ensure that the trial is fair. Page 466 U. S. 686 For that reason, the Court has recognized that "the right to
counsel is the right to the effective assistance of counsel." McMann v. Richardson, 397 U. S. 759 , 397 U. S. 771 ,
n. 14 (1970). Government violates the right to effective assistance
when it interferes in certain ways with the ability of counsel to
make independent decisions about how to conduct the defense. See, e.g., Geders v. United States, 425 U. S.
80 (1976) (bar on attorney-client consultation during
overnight recess); Herring v. New York, 422 U.
S. 853 (1975) (bar on summation at bench trial); Brooks v. Tennessee, 406 U. S. 605 , 406 U. S.
612 -613 (1972) (requirement that defendant be first
defense witness); Ferguson v. Georgia, 365 U.
S. 570 , 365 U. S.
593 -596 (1961) (bar on direct examination of defendant).
Counsel, however, can also deprive a defendant of the right to
effective assistance, simply by failing to render "adequate legal
assistance," Cuyler v. Sullivan, 446 U.S. at 446 U. S. 344 . Id. at 446 U. S.
345 -350 (actual conflict of interest adversely affecting
lawyer's performance renders assistance ineffective).
The Court has not elaborated on the meaning of the
constitutional requirement of effective assistance in the latter
class of cases -- that is, those presenting claims of "actual
ineffectiveness." In giving meaning to the requirement, however, we
must take its purpose -- to ensure a fair trial -- as the guide.
The benchmark for judging any claim of ineffectiveness must be
whether counsel's conduct so undermined the proper functioning of
the adversarial process that the trial cannot be relied on as
having produced a just result.
The same principle applies to a capital sentencing proceeding
such as that provided by Florida law. We need not consider the role
of counsel in an ordinary sentencing, which may involve informal
proceedings and standardless discretion in the sentencer, and hence
may require a different approach to the definition of
constitutionally effective assistance. A capital sentencing
proceeding like the one involved in this case, however, is
sufficiently like a trial in its adversarial format and in the
existence of standards for decision, See Barclay Page 466 U. S. 687 v. Florida, 463 U. S. 939 , 463 U. S.
952 -954 (1983); Bullington v. Missouri, 451 U. S. 430 (1981), that counsel's role in the proceeding is comparable to
counsel's role at trial -- to ensure that the adversarial testing
process works to produce a just result under the standards
governing decision. For purposes of describing counsel's duties,
therefore, Florida's capital sentencing proceeding need not be
distinguished from an ordinary trial. III A convicted defendant's claim that counsel's assistance was so
defective as to require reversal of a conviction or death sentence
has two components. First, the defendant must show that counsel's
performance was deficient. This requires showing that counsel made
errors so serious that counsel was not functioning as the "counsel"
guaranteed the defendant by the Sixth Amendment. Second, the
defendant must show that the deficient performance prejudiced the
defense. This requires showing that counsel's errors were so
serious as to deprive the defendant of a fair trial, a trial whose
result is reliable. Unless a defendant makes both showings, it
cannot be said that the conviction or death sentence resulted from
a breakdown in the adversary process that renders the result
unreliable. A As all the Federal Courts of Appeals have now held, the proper
standard for attorney performance is that of reasonably effective
assistance. See Trapnell v. United States, 725 F.2d at
151-152. The Court indirectly recognized as much when it stated in McMann v. Richardson, supra, at 397 U. S. 770 , 397 U. S. 771 ,
that a guilty plea cannot be attacked as based on inadequate legal
advice unless counsel was not "a reasonably competent attorney" and
the advice was not "within the range of competence demanded of
attorneys in criminal cases." See also Cuyler v. Sullivan,
supra, at 446 U. S. 344 .
When a convicted defendant Page 466 U. S. 688 complains of the ineffectiveness of counsel's assistance, the
defendant must show that counsel's representation fell below an
objective standard of reasonableness.
More specific guidelines are not appropriate. The Sixth
Amendment refers simply to "counsel," not specifying particular
requirements of effective assistance. It relies instead on the
legal profession's maintenance of standards sufficient to justify
the law's presumption that counsel will fulfill the role in the
adversary process that the Amendment envisions. See Michel v.
Louisiana, 350 U. S. 91 , 350 U. S.
100 -101 (1955). The proper measure of attorney
performance remains simply reasonableness under prevailing
professional norms.
Representation of a criminal defendant entails certain basic
duties. Counsel's function is to assist the defendant, and hence
counsel owes the client a duty of loyalty, a duty to avoid
conflicts of interest. See Cuyler v. Sullivan, supra, at 446 U. S. 346 .
From counsel's function as assistant to the defendant derive the
overarching duty to advocate the defendant's cause and the more
particular duties to consult with the defendant on important
decisions and to keep the defendant informed of important
developments in the course of the prosecution. Counsel also has a
duty to bring to bear such skill and knowledge as will render the
trial a reliable adversarial testing process. See Powell v.
Alabama, 287 U.S. at 287 U. S.
68 -69.
These basic duties neither exhaustively define the obligations
of counsel nor form a checklist for judicial evaluation of attorney
performance. In any case presenting an ineffectiveness claim, the
performance inquiry must be whether counsel's assistance was
reasonable considering all the circumstances. Prevailing norms of
practice as reflected in American Bar Association standards and the
like, e.g., ABA Standards for Criminal Justice 4-1.1 to
4-8.6 (2d ed.1980) ("The Defense Function"), are guides to
determining what is reasonable, but they are only guides. No
particular set of detailed rules for counsel's conduct can
satisfactorily take Page 466 U. S. 689 account of the variety of circumstances faced by defense counsel
or the range of legitimate decisions regarding how best to
represent a criminal defendant. Any such set of rules would
interfere with the constitutionally protected independence of
counsel and restrict the wide latitude counsel must have in making
tactical decisions. See United States v. Decoster, 199
U.S.App.D.C. at 371, 624 F.2d at 208. Indeed, the existence of
detailed guidelines for representation could distract counsel from
the overriding mission of vigorous advocacy of the defendant's
cause. Moreover, the purpose of the effective assistance guarantee
of the Sixth Amendment is not to improve the quality of legal
representation, although that is a goal of considerable importance
to the legal system. The purpose is simply to ensure that criminal
defendants receive a fair trial.
Judicial scrutiny of counsel's performance must be highly
deferential. It is all too tempting for a defendant to second-guess
counsel's assistance after conviction or adverse sentence, and it
is all too easy for a court, examining counsel's defense after it
has proved unsuccessful, to conclude that a particular act or
omission of counsel was unreasonable. Cf. Engle v. Isaac, 456 U. S. 107 , 456 U. S.
133 -134 (1982). A fair assessment of attorney
performance requires that every effort be made to eliminate the
distorting effects of hindsight, to reconstruct the circumstances
of counsel's challenged conduct, and to evaluate the conduct from
counsel's perspective at the time. Because of the difficulties
inherent in making the evaluation, a court must indulge a strong
presumption that counsel's conduct falls within the wide range of
reasonable professional assistance; that is, the defendant must
overcome the presumption that, under the circumstances, the
challenged action "might be considered sound trial strategy." See Michel v. Louisiana, supra, at 350 U. S. 101 .
There are countless ways to provide effective assistance in any
given case. Even the best criminal defense attorneys would not
defend a particular client in the same way. See Goodpaster, Page 466 U. S. 690 The Trial for Life: Effective Assistance of Counsel in Death
Penalty Cases, 58 N.Y.U.L.Rev. 299, 343 (1983).
The availability of intrusive post-trial inquiry into attorney
performance or of detailed guidelines for its evaluation would
encourage the proliferation of ineffectiveness challenges. Criminal
trials resolved unfavorably to the defendant would increasingly
come to be followed by a second trial, this one of counsel's
unsuccessful defense. Counsel's performance and even willingness to
serve could be adversely affected. Intensive scrutiny of counsel
and rigid requirements for acceptable assistance could dampen the
ardor and impair the independence of defense counsel, discourage
the acceptance of assigned cases, and undermine the trust between
attorney and client.
Thus, a court deciding an actual ineffectiveness claim must
judge the reasonableness of counsel's challenged conduct on the
facts of the particular case, viewed as of the time of counsel's
conduct. A convicted defendant making a claim of ineffective
assistance must identify the acts or omissions of counsel that are
alleged not to have been the result of reasonable professional
judgment. The court must then determine whether, in light of all
the circumstances, the identified acts or omissions were outside
the wide range of professionally competent assistance. In making
that determination, the court should keep in mind that counsel's
function, as elaborated in prevailing professional norms, is to
make the adversarial testing process work in the particular case.
At the same time, the court should recognize that counsel is
strongly presumed to have rendered adequate assistance and made all
significant decisions in the exercise of reasonable professional
judgment.
These standards require no special amplification in order to
define counsel's duty to investigate, the duty at issue in this
case. As the Court of Appeals concluded, strategic choices made
after thorough investigation of law and facts relevant to plausible
options are virtually unchallengeable; and strategic Page 466 U. S. 691 choices made after less than complete investigation are
reasonable precisely to the extent that reasonable professional
judgments support the limitations on investigation. In other words,
counsel has a duty to make reasonable investigations or to make a
reasonable decision that makes particular investigations
unnecessary. In any ineffectiveness case, a particular decision not
to investigate must be directly assessed for reasonableness in all
the circumstances, applying a heavy measure of deference to
counsel's judgments.
The reasonableness of counsel's actions may be determined or
substantially influenced by the defendant's own statements or
actions. Counsel's actions are usually based, quite properly, on
informed strategic choices made by the defendant and on information
supplied by the defendant. In particular, what investigation
decisions are reasonable depends critically on such information.
For example, when the facts that support a certain potential line
of defense are generally known to counsel because of what the
defendant has said, the need for further investigation may be
considerably diminished or eliminated altogether. And when a
defendant has given counsel reason to believe that pursuing certain
investigations would be fruitless or even harmful, counsel's
failure to pursue those investigations may not later be challenged
as unreasonable. In short, inquiry into counsel's conversations
with the defendant may be critical to a proper assessment of
counsel's investigation decisions, just as it may be critical to a
proper assessment of counsel's other litigation decisions. See
United States v. Decoster, supra, at 372-373, 624 F.2d at
209-210. B An error by counsel, even if professionally unreasonable, does
not warrant setting aside the judgment of a criminal proceeding if
the error had no effect on the judgment. Cf. United States v.
Morrison, 449 U. S. 361 , 449 U. S.
364 -365 (1981). The purpose of the Sixth Amendment
guarantee of counsel is to ensure Page 466 U. S. 692 that a defendant has the assistance necessary to justify
reliance on the outcome of the proceeding. Accordingly, any
deficiencies in counsel's performance must be prejudicial to the
defense in order to constitute ineffective assistance under the
Constitution.
In certain Sixth Amendment contexts, prejudice is presumed.
Actual or constructive denial of the assistance of counsel
altogether is legally presumed to result in prejudice. So are
various kinds of state interference with counsel's assistance. See United States v. Cronic, ante at 466 U. S. 659 ,
and n. 25. Prejudice in these circumstances is so likely that
case-by-case inquiry into prejudice is not worth the cost. Ante at 466 U. S. 658 .
Moreover, such circumstances involve impairments of the Sixth
Amendment right that are easy to identify and, for that reason and
because the prosecution is directly responsible, easy for the
government to prevent.
One type of actual ineffectiveness claim warrants a similar,
though more limited, presumption of prejudice. In Cuyler v.
Sullivan, 446 U.S. at 446 U. S. 345 -350, the Court held that prejudice is
presumed when counsel is burdened by an actual conflict of
interest. In those circumstances, counsel breaches the duty of
loyalty, perhaps the most basic of counsel's duties. Moreover, it
is difficult to measure the precise effect on the defense of
representation corrupted by conflicting interests. Given the
obligation of counsel to avoid conflicts of interest and the
ability of trial courts to make early inquiry in certain situations
likely to give rise to conflicts, see, e.g., Fed.Rule
Crim.Proc. 44(c), it is reasonable for the criminal justice system
to maintain a fairly rigid rule of presumed prejudice for conflicts
of interest. Even so, the rule is not quite the per se rule of prejudice that exists for the Sixth Amendment claims
mentioned above. Prejudice is presumed only if the defendant
demonstrates that counsel "actively represented conflicting
interests" and that "an actual conflict of interest adversely
affected his lawyer's performance." Cuyler v. Sullivan,
supra, at 446 U. S. 350 , 446 U. S. 348 (footnote omitted). Page 466 U. S. 693 Conflict of interest claims aside, actual ineffectiveness claims
alleging a deficiency in attorney performance are subject to a
general requirement that the defendant affirmatively prove
prejudice. The government is not responsible for, and hence not
able to prevent, attorney errors that will result in reversal of a
conviction or sentence. Attorney errors come in an infinite
variety, and are as likely to be utterly harmless in a particular
case as they are to be prejudicial. They cannot be classified
according to likelihood of causing prejudice. Nor can they be
defined with sufficient precision to inform defense attorneys
correctly just what conduct to avoid. Representation is an art, and
an act or omission that is unprofessional in one case may be sound
or even brilliant in another. Even if a defendant shows that
particular errors of counsel were unreasonable, therefore, the
defendant must show that they actually had an adverse effect on the
defense.
It is not enough for the defendant to show that the errors had
some conceivable effect on the outcome of the proceeding. Virtually
every act or omission of counsel would meet that test, cf.
United States v. Valenzuela-Bernal, 458 U.
S. 858 , 458 U. S.
866 -867 (1982), and not every error that conceivably
could have influenced the outcome undermines the reliability of the
result of the proceeding. Respondent suggests requiring a showing
that the errors "impaired the presentation of the defense." Brief
for Respondent 58. That standard, however, provides no workable
principle. Since any error, if it is indeed an error, "impairs" the
presentation of the defense, the proposed standard is inadequate,
because it provides no way of deciding what impairments are
sufficiently serious to warrant setting aside the outcome of the
proceeding.
On the other hand, we believe that a defendant need not show
that counsel's deficient conduct more likely than not altered the
outcome in the case. This outcome-determinative standard has
several strengths. It defines the relevant inquiry in a way
familiar to courts, though the inquiry, as is inevitable, is
anything but precise. The standard also reflects the profound
importance of finality in criminal proceedings. Page 466 U. S. 694 Moreover, it comports with the widely used standard for
assessing motions for new trial based on newly discovered evidence. See Brief for United States as Amicus Curiae 19-20, and nn. 10, 11. Nevertheless, the standard is not quite
appropriate.
Even when the specified attorney error results in the omission
of certain evidence, the newly discovered evidence standard is not
an apt source from which to draw a prejudice standard for
ineffectiveness claims. The high standard for newly discovered
evidence claims presupposes that all the essential elements of a
presumptively accurate and fair proceeding were present in the
proceeding whose result is challenged. Cf. United States v.
Johnson, 327 U. S. 106 , 327 U. S. 112 (1946). An ineffective assistance claim asserts the absence of one
of the crucial assurances that the result of the proceeding is
reliable, so finality concerns are somewhat weaker and the
appropriate standard of prejudice should be somewhat lower. The
result of a proceeding can be rendered unreliable, and hence the
proceeding itself unfair, even if the errors of counsel cannot be
shown by a preponderance of the evidence to have determined the
outcome.
Accordingly, the appropriate test for prejudice finds its roots
in the test for materiality of exculpatory information not
disclosed to the defense by the prosecution, United States v.
Agurs, 427 U.S. at 427 U. S. 104 , 427 U. S.
112 -113, and in the test for materiality of testimony
made unavailable to the defense by Government deportation of a
witness, United States v. Valenzuela-Bernal, supra, at 458 U. S.
872 -874. The defendant must show that there is a
reasonable probability that, but for counsel's unprofessional
errors, the result of the proceeding would have been different. A
reasonable probability is a probability sufficient to undermine
confidence in the outcome.
In making the determination whether the specified errors
resulted in the required prejudice, a court should presume, absent
challenge to the judgment on grounds of evidentiary insufficiency,
that the judge or jury acted according to law. Page 466 U. S. 695 An assessment of the likelihood of a result more favorable to
the defendant must exclude the possibility of arbitrariness,
whimsy, caprice, "nullification," and the like. A defendant has no
entitlement to the luck of a lawless decisionmaker, even if a
lawless decision cannot be reviewed. The assessment of prejudice
should proceed on the assumption that the decisionmaker is
reasonably, conscientiously, and impartially applying the standards
that govern the decision. It should not depend on the
idiosyncracies of the particular decisionmaker, such as unusual
propensities toward harshness or leniency. Although these factors
may actually have entered into counsel's selection of strategies
and, to that limited extent, may thus affect the performance
inquiry, they are irrelevant to the prejudice inquiry. Thus,
evidence about the actual process of decision, if not part of the
record of the proceeding under review, and evidence about, for
example, a particular judge's sentencing practices, should not be
considered in the prejudice determination.
The governing legal standard plays a critical role in defining
the question to be asked in assessing the prejudice from counsel's
errors. When a defendant challenges a conviction, the question is
whether there is a reasonable probability that, absent the errors,
the factfinder would have had a reasonable doubt respecting guilt.
When a defendant challenges a death sentence such as the one at
issue in this case, the question is whether there is a reasonable
probability that, absent the errors, the sentencer -- including an
appellate court, to the extent it independently reweighs the
evidence -- would have concluded that the balance of aggravating
and mitigating circumstances did not warrant death.
In making this determination, a court hearing an ineffectiveness
claim must consider the totality of the evidence before the judge
or jury. Some of the factual findings will have been unaffected by
the errors, and factual findings that were affected will have been
affected in different ways. Some errors will have had a pervasive
effect on the inferences to Page 466 U. S. 696 be drawn from the evidence, altering the entire evidentiary
picture, and some will have had an isolated, trivial effect.
Moreover, a verdict or conclusion only weakly supported by the
record is more likely to have been affected by errors than one with
overwhelming record support. Taking the unaffected findings as a
given, and taking due account of the effect of the errors on the
remaining findings, a court making the prejudice inquiry must ask
if the defendant has met the burden of showing that the decision
reached would reasonably likely have been different absent the
errors. IV A number of practical considerations are important for the
application of the standards we have outlined. Most important, in
adjudicating a claim of actual ineffectiveness of counsel, a court
should keep in mind that the principles we have stated do not
establish mechanical rules. Although those principles should guide
the process of decision, the ultimate focus of inquiry must be on
the fundamental fairness of the proceeding whose result is being
challenged. In every case, the court should be concerned with
whether, despite the strong presumption of reliability, the result
of the particular proceeding is unreliable because of a breakdown
in the adversarial process that our system counts on to produce
just results.
To the extent that this has already been the guiding inquiry in
the lower courts, the standards articulated today do not require
reconsideration of ineffectiveness claims rejected under different
standards. Cf. Trapnell v. United States, 725 F.2d at 153
(in several years of applying "farce and mockery" standard along
with "reasonable competence" standard, court "never found that the
result of a case hinged on the choice of a particular standard").
In particular, the minor differences in the lower courts' precise
formulations of the performance standard are insignificant: the
different Page 466 U. S. 697 formulations are mere variations of the overarching
reasonableness standard. With regard to the prejudice inquiry, only
the strict outcome-determinative test, among the standards
articulated in the lower courts, imposes a heavier burden on
defendants than the tests laid down today. The difference, however,
should alter the merit of an ineffectiveness claim only in the
rarest case.
Although we have discussed the performance component of an
ineffectiveness claim prior to the prejudice component, there is no
reason for a court deciding an ineffective assistance claim to
approach the inquiry in the same order or even to address both
components of the inquiry if the defendant makes an insufficient
showing on one. In particular, a court need not determine whether
counsel's performance was deficient before examining the prejudice
suffered by the defendant as a result of the alleged deficiencies.
The object of an ineffectiveness claim is not to grade counsel's
performance. If it is easier to dispose of an ineffectiveness claim
on the ground of lack of sufficient prejudice, which we expect will
often be so, that course should be followed. Courts should strive
to ensure that ineffectiveness claims not become so burdensome to
defense counsel that the entire criminal justice system suffers as
a result.
The principles governing ineffectiveness claims should apply in
federal collateral proceedings as they do on direct appeal or in
motions for a new trial. As indicated by the "cause and prejudice"
test for overcoming procedural waivers of claims of error, the
presumption that a criminal judgment is final is at its strongest
in collateral attacks on that judgment. See United States v.
Frady, 456 U. S. 152 , 456 U. S.
162 -169 (1982); Engel v. Isaac, 456 U.
S. 107 , 456 U. S.
126 -129 (1982). An ineffectiveness claim, however, as
our articulation of the standards that govern decision of such
claims makes clear, is an attack on the fundamental fairness of the
proceeding whose result is challenged. Since fundamental fairness
is the central concern of the writ of habeas corpus, see
id. Page 466 U. S. 698 at 456 U. S. 126 ,
no special standards ought to apply to ineffectiveness claims made
in habeas proceedings.
Finally, in a federal habeas challenge to a state criminal
judgment, a state court conclusion that counsel rendered effective
assistance is not a finding of fact binding on the federal court to
the extent stated by 28 U.S.C. § 2254(d). Ineffectiveness is not a
question of "basic, primary, or historical fac[t]," Townsend v.
Sain, 372 U. S. 293 , 372 U. S. 309 ,
n. 6 (1963). Rather, like the question whether multiple
representation in a particular case gave rise to a conflict of
interest, it is a mixed question of law and fact. See Cuyler v.
Sullivan, 446 U.S. at 446 U. S. 342 . Although state court findings of fact
made in the course of deciding an ineffectiveness claim are subject
to the deference requirement of § 2254(d), and although district
court findings are subject to the clearly erroneous standard of
Federal Rule of Civil Procedure 52(a), both the performance and
prejudice components of the ineffectiveness inquiry are mixed
questions of law and fact. V Having articulated general standards for judging ineffectiveness
claims, we think it useful to apply those standards to the facts of
this case in order to illustrate the meaning of the general
principles. The record makes it possible to do so. There are no
conflicts between the state and federal courts over findings of
fact, and the principles we have articulated are sufficiently close
to the principles applied both in the Florida courts and in the
District Court that it is clear that the factfinding was not
affected by erroneous legal principles. See Pullman-Standard v.
Swint, 456 U. S. 273 , 456 U. S.
291 -292 (1982).
Application of the governing principles is not difficult in this
case. The facts as described above, see supra at 466 U. S.
671 -678, make clear that the conduct of respondent's
counsel at and before respondent's sentencing proceeding cannot be
found unreasonable. They also make clear that, even assuming
the Page 466 U. S. 699 challenged conduct of counsel was unreasonable, respondent
suffered insufficient prejudice to warrant setting aside his death
sentence.
With respect to the performance component, the record shows that
respondent's counsel made a strategic choice to argue for the
extreme emotional distress mitigating circumstance and to rely as
fully as possible on respondent's acceptance of responsibility for
his crimes. Although counsel understandably felt hopeless about
respondent's prospects, see App. 383-384, 400-401, nothing
in the record indicates, as one possible reading of the District
Court's opinion suggests, see App. to Pet. for Cert. A282,
that counsel's sense of hopelessness distorted his professional
judgment. Counsel's strategy choice was well within the range of
professionally reasonable judgments, and the decision not to seek
more character or psychological evidence than was already in hand
was likewise reasonable.
The trial judge's views on the importance of owning up to one's
crimes were well known to counsel. The aggravating circumstances
were utterly overwhelming. Trial counsel could reasonably surmise
from his conversations with respondent that character and
psychological evidence would be of little help. Respondent had
already been able to mention at the plea colloquy the substance of
what there was to know about his financial and emotional troubles.
Restricting testimony on respondent's character to what had come in
at the plea colloquy ensured that contrary character and
psychological evidence and respondent's criminal history, which
counsel had successfully moved to exclude, would not come in. On
these facts, there can be little question, even without application
of the presumption of adequate performance, that trial counsel's
defense, though unsuccessful, was the result of reasonable
professional judgment.
With respect to the prejudice component, the lack of merit of
respondent's claim is even more stark. The evidence that respondent
says his trial counsel should have offered at the Page 466 U. S. 700 sentencing hearing would barely have altered the sentencing
profile presented to the sentencing judge. As the state courts and
District Court found, at most, this evidence shows that numerous
people who knew respondent thought he was generally a good person
and that a psychiatrist and a psychologist believed he was under
considerable emotional stress that did not rise to the level of
extreme disturbance. Given the overwhelming aggravating factors,
there is no reasonable probability that the omitted evidence would
have changed the conclusion that the aggravating circumstances
outweighed the mitigating circumstances and, hence, the sentence
imposed. Indeed, admission of the evidence respondent now offers
might even have been harmful to his case: his "rap sheet" would
probably have been admitted into evidence, and the psychological
reports would have directly contradicted respondent's claim that
the mitigating circumstance of extreme emotional disturbance
applied to his case.
Our conclusions on both the prejudice and performance components
of the ineffectiveness inquiry do not depend on the trial judge's
testimony at the District Court hearing. We therefore need not
consider the general admissibility of that testimony, although, as
noted supra, at 466 U. S. 695 ,
that testimony is irrelevant to the prejudice inquiry. Moreover,
the prejudice question is resolvable, and hence the ineffectiveness
claim can be rejected, without regard to the evidence presented at
the District Court hearing. The state courts properly concluded
that the ineffectiveness claim was meritless without holding an
evidentiary hearing.
Failure to make the required showing of either deficient
performance or sufficient prejudice defeats the ineffectiveness
claim. Here there is a double failure. More generally, respondent
has made no showing that the justice of his sentence was rendered
unreliable by a breakdown in the adversary process caused by
deficiencies in counsel's assistance. Respondent's sentencing
proceeding was not fundamentally unfair. Page 466 U. S. 701 We conclude, therefore, that the District Court properly
declined to issue a writ of habeas corpus. The judgment of the
Court of Appeals is accordingly Reversed. JUSTICE BRENNAN, concurring in part and dissenting in part.
I join the Court's opinion, but dissent from its judgment.
Adhering to my view that the death penalty is in all circumstances
cruel and unusual punishment forbidden by the Eighth and Fourteenth
Amendments, see Gregg v. Georgia, 428 U.
S. 153 , 428 U. S. 227 (1976) (BRENNAN, J., dissenting), I would vacate respondent's death
sentence and remand the case for further proceedings. [ Footnote 1 ] Page 466 U. S. 702 I This case and United States v. Cronic, ante p. 466 U. S. 648 ,
present our first occasions to elaborate the appropriate standards
for judging claims of ineffective assistance of counsel. In Cronic, the Court considers such claims in the context of
cases
"in which the surrounding circumstances [make] it so unlikely
that any lawyer could provide effective assistance that
ineffectiveness [is] properly presumed without inquiry into actual
performance at trial," ante at 466 U. S. 661 .
This case, in contrast, concerns claims of ineffective assistance
based on allegations of specific errors by counsel -- claims which,
by their very nature, require courts to evaluate both the
attorney's performance and the effect of that performance on the
reliability and fairness of the proceeding. Accordingly, a
defendant making a claim of this kind must show not only that his
lawyer's performance was inadequate, but also that he was
prejudiced thereby. See also Cronic, ante at 466 U. S. 659 ,
n. 26.
I join the Court's opinion because I believe that the standards
it sets out today will both provide helpful guidance to courts
considering claims of actual ineffectiveness of counsel and also
permit those courts to continue their efforts to achieve
progressive development of this area of the law. Like all federal
courts and most state courts that have previously addressed the
matter, see ante at 466 U. S.
683 -684, the Court concludes that "the proper standard
for attorney performance is that of reasonably effective
assistance." Ante at 466
U.S. 687 . And, Page 466 U. S. 703 rejecting the strict "outcome-determinative" test employed by
some courts, the Court adopts as the appropriate standard for
prejudice a requirement that the defendant
"show that there is a reasonable probability that, but for
counsel's unprofessional errors, the result of the proceeding would
have been different,"
defining a "reasonable probability" as "a probability sufficient
to undermine confidence in the outcome." Ante at 466 U. S. 694 .
I believe these standards are sufficiently precise to permit
meaningful distinctions between those attorney derelictions that
deprive defendants of their constitutional rights and those that do
not; at the same time, the standards are sufficiently flexible to
accommodate the wide variety of situations giving rise to claims of
this kind.
With respect to the performance standard, I agree with the
Court's conclusion that a "particular set of detailed rules for
counsel's conduct" would be inappropriate. Ante at 466 U. S. 688 .
Precisely because the standard of "reasonably effective assistance"
adopted today requires that counsel's performance be measured in
light of the particular circumstances of the case, I do not believe
our decision "will stunt the development of constitutional doctrine
in this area," post at 466 U. S. 709 (MARSHALL, J., dissenting). Indeed, the Court's suggestion that
today's decision is largely consistent with the approach taken by
the lower courts, ante at 466 U. S. 696 ,
simply indicates that those courts may continue to develop
governing principles on a case-by-case basis in the common law
tradition, as they have in the past. Similarly, the prejudice
standard announced today does not erect an insurmountable obstacle
to meritorious claims, but rather simply requires courts carefully
to examine trial records in light of both the nature and
seriousness of counsel's errors and their effect in the particular
circumstances of the case. Ante at 466 U. S. 695 .
[ Footnote 2 ] Page 466 U. S. 704 II Because of their flexibility and the requirement that they be
considered in light of the particular circumstances of the case,
the standards announced today can and should be applied with
concern for the special considerations that must attend review of
counsel's performance in a capital sentencing proceeding. In
contrast to a case in which a finding of ineffective assistance
requires a new trial, a conclusion that counsel was ineffective
with respect to only the penalty phase of a capital trial imposes
on the State the far lesser burden of reconsideration of the
sentence alone. On the other hand, the consequences to the
defendant of incompetent assistance at a capital sentencing could
not, of course, be greater. Recognizing the unique seriousness of
such a proceeding, we have repeatedly emphasized that
"'where discretion is afforded a sentencing body on a matter so
grave as the determination of whether a human life should be taken
or spared, that discretion must be suitably directed and limited so
as to minimize the risk of wholly arbitrary and capricious
action.'" Zant v. Stephens, 462 U. S. 862 , 462 U. S. 874 (1983) (quoting Gregg v. Georgia, 428 U.S. at 428 U. S.
188 -189 (opinion of Stewart, POWELL, and STEVENS,
JJ.)).
For that reason, we have consistently required that capital
proceedings be policed at all stages by an especially vigilant
concern for procedural fairness and for the accuracy of
factfinding. As JUSTICE MARSHALL emphasized last Term:
"This Court has always insisted that the need for procedural
safeguards is particularly great where life is at stake. Long
before the Court established the right to counsel in all felony
cases, Gideon v. Wainwright, 372 U. S.
335 (1963), it recognized that right in capital cases, Powell v. Alabama, 287 U. S. 45 , 287 U. S.
71 -72 (1932). Time Page 466 U. S. 705 and again, the Court has condemned procedures in capital cases
that might be completely acceptable in an ordinary case. See,
e.g., Bullington v. Missouri, 451 U. S.
430 (1981); Beck v. Alabama, 447 U. S.
625 (1980); Green v. Georgia, 442 U. S. 95 (1979) (per curiam); Lockett v. Ohio, 438 U. S.
586 (1978); Gardner v. Florida, 430 U. S.
349 (1977); Woodson v. North Carolina, 428 U. S.
280 (1976). . . ."
"Because of th[e] basic difference between the death penalty and
all other punishments, this Court has consistently recognized that
there is"
"a corresponding difference in the need for reliability in the
determination that death is the appropriate punishment in a
specific case."
" Ibid. " Barefoot v. Estelle, 463 U. S. 880 , 463 U. S.
913 -914 (1983) (dissenting opinion). See also
id. at 463 U. S. 924 (BLACKMUN, J., dissenting). In short, this Court has taken special
care to minimize the possibility that death sentences are "imposed
out of whim, passion, prejudice, or mistake." Eddings v.
Oklahoma, 455 U. S. 104 , 455 U. S. 118 (1982) (O'CONNOR, J., concurring).
In the sentencing phase of a capital case,
"[w]hat is essential is that the jury have before it all
possible relevant information about the individual defendant whose
fate it must determine." Jurek v. Texas, 428 U. S. 262 , 428 U. S. 276 (1976) (opinion of Stewart, POWELL, and STEVENS, JJ.). For that
reason, we have repeatedly insisted that "the sentencer in capital
cases must be permitted to consider any relevant mitigating
factor." Eddings v. Oklahoma, 455 U.S. at 455 U. S. 112 .
In fact, as JUSTICE O'CONNOR has noted, a sentencing judge's
failure to consider relevant aspects of a defendant's character and
background creates such an unacceptable risk that the death penalty
was unconstitutionally imposed that, even in cases where the matter
was not raised below, the "interests of justice" may impose on
reviewing courts "a duty to remand [the] case for resentencing." Id. at 455 U. S. 117 ,
n., and 455 U. S. 119 (O'CONNOR, J., concurring). Page 466 U. S. 706 Of course,
"[t]he right to present, and to have the sentencer consider, any
and all mitigating evidence means little if defense counsel fails
to look for mitigating evidence or fails to present a case in
mitigation at the capital sentencing hearing."
Comment, 83 Colum.L.Rev. 1544, 1549 (1983). See, e.g.,
Burger v. Zant, 718 F.2d 979 (CA11 1983) (defendant, 17 years
old at time of crime, sentenced to death after counsel failed to
present any evidence in mitigation), stay granted, post at
902. Accordingly, counsel's general duty to investigate, ante at 466 U. S. 690 ,
takes on supreme importance to a defendant in the context of
developing mitigating evidence to present to a judge or jury
considering the sentence of death; claims of ineffective assistance
in the performance of that duty should therefore be considered with
commensurate care.
That the Court rejects the ineffective assistance claim in this
case should not, of course, be understood to reflect any diminution
in commitment to the principle that
"'the fundamental respect for humanity underlying the Eighth
Amendment . . . requires consideration of the character and record
of the individual offender and the circumstances of the particular
offense as a constitutionally indispensable part of the process of
inflicting the penalty of death.'" Eddings v. Oklahoma, supra, at 455 U. S. 112 (quoting Woodson v. North Carolina, 428 U.
S. 280 , 428 U. S. 304 (1976) (opinion of Stewart, POWELL, and STEVENS, JJ.)). I am
satisfied that the standards announced today will go far towards
assisting lower federal courts and state courts in discharging
their constitutional duty to ensure that every criminal defendant
receives the effective assistance of counsel guaranteed by the
Sixth Amendment.
[ Footnote 1 ]
The Court's judgment leaves standing another in an increasing
number of capital sentences purportedly imposed in compliance with
the procedural standards developed in cases beginning with Gregg v. Georgia, 428 U. S. 153 (1976). Earlier this Term, I reiterated my view that these
procedural requirements have proven unequal to the task of
eliminating the irrationality that necessarily attends decisions by
juries, trial judges, and appellate courts whether to take or spare
human life. Pulley v. Harris, 465 U. S.
37 , 465 U. S. 59 (1984) (BRENNAN, J., dissenting). The inherent difficulty in
imposing the ultimate sanction consistent with the rule of law, see Furman v. Georgia, 408 U. S. 238 , 408 U. S.
274 -277 (1972) (BRENNAN, J., concurring); McGautha
v. California, 402 U. S. 183 , 402 U. S.
248 -312 (1971) (BRENNAN, J., dissenting), is confirmed
by the extraordinary pressure put on our own deliberations in
recent months by the growing number of applications to stay
executions. See Wainwright v. Adams, post at 965
(MARSHALL, J., dissenting) (stating that "haste and confusion
surrounding . . . decision [to vacate stay] is degrading to our
role as judges"); Autry v. McKaskle, 465 U.
S. 1085 (1984) (MARSHALL, J., dissenting) (criticizing
Court for "dramatically expediting its normal deliberative
processes to clear the way for an impending execution"); Stephens v. Kemp, 464 U. S. 1027 ,
1032 (1983) (POWELL, J., dissenting) (contending that procedures by
which stay applications are considered "undermines public
confidence in the courts and in the laws we are required to
follow"); Sullivan v. Wainwright, 464 U.
S. 109 , 464 U. S. 112 (1983) (BURGER, C.J., concurring) (accusing lawyers seeking review
of their client's death sentences of turning "the administration of
justice into [a] sporting contest"); Autry v. Estelle, 464 U. S. 1 , 464 U. S. 6 (1983)
(STEVENS, J., dissenting) (suggesting that Court's practice in
reviewing applications in death cases "injects uncertainty and
disparity into the review procedure, adds to the burdens of
counsel, distorts the deliberative process within this Court, and
increases the risk of error"). It is difficult to believe that the
decision whether to put an individual to death generates any less
emotional pressure among juries, trial judges, and appellate courts
than it does among Members of this Court.
[ Footnote 2 ]
Indeed, counsel's incompetence can be so serious that it rises
to the level of a constructive denial of counsel which can
constitute constitutional error without any showing of prejudice. See Cronic, ante at 466 U. S.
659 -660; Javor v. United States, 724 F.2d 831,
834 (CA9 1984) ("Prejudice is inherent in this case because
unconscious or sleeping counsel is equivalent to no counsel at
all").
JUSTICE MARSHALL, dissenting.
The Sixth and Fourteenth Amendments guarantee a person accused
of a crime the right to the aid of a lawyer in preparing and
presenting his defense. It has long been settled that "the right to
counsel is the right to the effective assistance Page 466 U. S. 707 of counsel." McMann v. Richardson, 397 U.
S. 759 , 397 U. S. 771 ,
n. 14 (1970). The state and lower federal courts have developed
standards for distinguishing effective from inadequate assistance.
[ Footnote 2/1 ] Today, for the first
time, this Court attempts to synthesize and clarify those
standards. For the most part, the majority's efforts are unhelpful.
Neither of its two principal holdings seems to me likely to improve
the adjudication of Sixth Amendment claims. And, in its zeal to
survey comprehensively this field of doctrine, the majority makes
many other generalizations and suggestions that I find
unacceptable. Most importantly, the majority fails to take adequate
account of the fact that the locus of this case is a capital
sentencing proceeding. Accordingly, I join neither the Court's
opinion nor its judgment. I The opinion of the Court revolves around two holdings. First,
the majority ties the constitutional minima of attorney performance
to a simple "standard of reasonableness." Ante at 466 U. S. 688 .
Second, the majority holds that only an error of counsel that has
sufficient impact on a trial to "undermine confidence in the
outcome" is grounds for overturning a conviction. Ante at 466 U. S. 694 .
I disagree with both of these rulings. A My objection to the performance standard adopted by the Court is
that it is so malleable that, in practice, it will either have no
grip at all or will yield excessive variation in the manner in
which the Sixth Amendment is interpreted and applied by different
courts. To tell lawyers and the lower courts that counsel for a
criminal defendant must behave Page 466 U. S. 708 "reasonably" and must act like "a reasonably competent
attorney," ante at 466
U.S. 687 , is to tell them almost nothing. In essence, the
majority has instructed judges called upon to assess claims of
ineffective assistance of counsel to advert to their own intuitions
regarding what constitutes "professional" representation, and has
discouraged them from trying to develop more detailed standards
governing the performance of defense counsel. In my view, the Court
has thereby not only abdicated its own responsibility to interpret
the Constitution, but also impaired the ability of the lower courts
to exercise theirs.
The debilitating ambiguity of an "objective standard of
reasonableness" in this context is illustrated by the majority's
failure to address important issues concerning the quality of
representation mandated by the Constitution. It is an unfortunate
but undeniable fact that a person of means, by selecting a lawyer
and paying him enough to ensure he prepares thoroughly, usually can
obtain better representation than that available to an indigent
defendant, who must rely on appointed counsel, who, in turn, has
limited time and resources to devote to a given case. Is a
"reasonably competent attorney" a reasonably competent adequately
paid retained lawyer or a reasonably competent appointed attorney?
It is also a fact that the quality of representation available to
ordinary defendants in different parts of the country varies
significantly. Should the standard of performance mandated by the
Sixth Amendment vary by locale? [ Footnote 2/2 ] The majority offers no clues as to the
proper responses to these questions.
The majority defends its refusal to adopt more specific
standards primarily on the ground that
"[n]o particular set of detailed rules for counsel's conduct can
satisfactorily take account Page 466 U. S. 709 of the variety of circumstances faced by defense counsel or the
range of legitimate decisions regarding how best to represent a
criminal defendant." Ante at 466 U. S.
688 -689. I agree that counsel must be afforded "wide
latitude" when making "tactical decisions" regarding trial
strategy, see ante at 466 U. S. 689 ; cf. infra, at 466 U. S. 712 , 466 U. S. 713 ,
but many aspects of the job of a criminal defense attorney are more
amenable to judicial oversight. For example, much of the work
involved in preparing for a trial, applying for bail, conferring
with one's client, making timely objections to significant,
arguably erroneous rulings of the trial judge, and filing a notice
of appeal if there are colorable grounds therefor could profitably
be made the subject of uniform standards.
The opinion of the Court of Appeals in this case represents one
sound attempt to develop particularized standards designed to
ensure that all defendants receive effective legal assistance. See 693 F.2d 1243, 1251-1258 (CA5 1982) (en banc). For
other, generally consistent efforts, see United States v.
Decoster, 159 U.S.App.D.C. 326, 333-334, 487 F.2d 1197,
1203-1204 (1973), disapproved on rehearing, 199
U.S.App.D.C. 359, 624 F.2d 196 (en banc), cert. denied, 444 U.S. 944 (1979); Coles v. Peyton, 389 F.2d 224, 226
(CA4), cert. denied, 393 U.S. 849 (1968); People v.
Pope, 23 Cal. 3d
412 , 424-425, 590 P.2d 859, 866 (1979); State v.
Harper, 57 Wis.2d 543, 550-557, 205 N.W.2d
1 , 6-9 (1973). [ Footnote 2/3 ]
By refusing to address the merits of these proposals, and indeed
suggesting that no such effort is worthwhile, the opinion of the
Court, I fear, will stunt the development of constitutional
doctrine in this area. Page 466 U. S. 710 B I object to the prejudice standard adopted by the Court for two
independent reasons. First, it is often very difficult to tell
whether a defendant convicted after a trial in which he was
ineffectively represented would have fared better if his lawyer had
been competent. Seemingly impregnable cases can sometimes be
dismantled by good defense counsel. On the basis of a cold record,
it may be impossible for a reviewing court confidently to ascertain
how the government's evidence and arguments would have stood up
against rebuttal and cross-examination by a shrewd, well-prepared
lawyer. The difficulties of estimating prejudice after the fact are
exacerbated by the possibility that evidence of injury to the
defendant may be missing from the record precisely because of the
incompetence of defense counsel. [ Footnote 2/4 ] In view of all these impediments to a fair
evaluation of the probability that the outcome of a trial was
affected by ineffectiveness of counsel, it seems to me senseless to
impose on a defendant whose lawyer has been shown to have been
incompetent the burden of demonstrating prejudice. Page 466 U. S. 711 Second and more fundamentally, the assumption on which the
Court's holding rests is that the only purpose of the
constitutional guarantee of effective assistance of counsel is to
reduce the chance that innocent persons will be convicted. In my
view, the guarantee also functions to ensure that convictions are
obtained only through fundamentally fair procedures. [ Footnote 2/5 ] The majority contends that
the Sixth Amendment is not violated when a manifestly guilty
defendant is convicted after a trial in which he was represented by
a manifestly ineffective attorney. I cannot agree. Every defendant
is entitled to a trial in which his interests are vigorously and
conscientiously advocated by an able lawyer. A proceeding in which
the defendant does not receive meaningful assistance in meeting the
forces of the State does not, in my opinion, constitute due
process.
In Chapman v. California, 386 U. S.
18 , 386 U. S. 23 (1967), we acknowledged that certain constitutional rights are "so
basic to a fair trial that their infraction can never be treated as
harmless error." Among these rights is the right to the assistance
of counsel at trial. Id. at 386 U. S. 23 , n.
8; see Gideon v. Wainwright, 372 U.
S. 335 (1963). [ Footnote
2/6 ] In my view, the right Page 466 U. S. 712 to effective assistance of counsel is entailed by the
right to counsel, and abridgment of the former is equivalent to
abridgment of the latter. [ Footnote
2/7 ] I would thus hold that a showing that the performance of a
defendant's lawyer departed from constitutionally prescribed
standards requires a new trial regardless of whether the defendant
suffered demonstrable prejudice thereby. II Even if I were inclined to join the majority's two central
holdings, I could not abide the manner in which the majority
elaborates upon its rulings. Particularly regrettable are the
majority's discussion of the "presumption" of reasonableness to be
accorded lawyers' decisions and its attempt to prejudge the merits
of claims previously rejected by lower courts using different legal
standards. A In defining the standard of attorney performance required by the
Constitution, the majority appropriately notes that many problems
confronting criminal defense attorneys admit of "a range of
legitimate" responses. Ante at 466 U. S. 689 .
And the majority properly cautions courts, when reviewing a
lawyer's selection amongst a set of options, to avoid the hubris of
hindsight. Ibid. The majority goes on, however, to suggest
that reviewing courts should "indulge a strong presumption that
counsel's conduct" was constitutionally acceptable, ibid.; see
ante at 466 U. S. 690 , 466 U. S. 696 ,
and should "appl[y] a heavy measure of deference to counsel's
judgments," ante at 466 U. S.
691 .
I am not sure what these phrases mean, and I doubt that they
will be self-explanatory to lower courts. If they denote nothing
more than that a defendant claiming he was denied effective
assistance of counsel has the burden of proof, I Page 466 U. S. 713 would agree. See United States v. Cronic, ante at 466 U. S. 658 .
But the adjectives "strong" and "heavy" might be read as imposing
upon defendants an unusually weighty burden of persuasion. If that
is the majority's intent, I must respectfully dissent. The range of
acceptable behavior defined by "prevailing professional norms," ante at 466 U. S. 688 ,
seems to me sufficiently broad to allow defense counsel the
flexibility they need in responding to novel problems of trial
strategy. To afford attorneys more latitude, by "strongly
presuming" that their behavior will fall within the zone of
reasonableness, is covertly to legitimate convictions and sentences
obtained on the basis of incompetent conduct by defense
counsel.
The only justification the majority itself provides for its
proposed presumption is that undue receptivity to claims of
ineffective assistance of counsel would encourage too many
defendants to raise such claims, and thereby would clog the courts
with frivolous suits and "dampen the ardor" of defense counsel. See ante at 466 U. S. 690 .
I have more confidence than the majority in the ability of state
and federal courts expeditiously to dispose of meritless arguments
and to ensure that responsible, innovative lawyering is not
inhibited. In my view, little will be gained and much may be lost
by instructing the lower courts to proceed on the assumption that a
defendant's challenge to his lawyer's performance will be
insubstantial. B For many years, the lower courts have been debating the meaning
of "effective" assistance of counsel. Different courts have
developed different standards. On the issue of the level of
performance required by the Constitution, some courts have adopted
the forgiving "farce-and-mockery" standard, [ Footnote 2/8 ] while others have adopted various versions
of Page 466 U. S. 714 the "reasonable competence" standard. [ Footnote 2/9 ] On the issue of the level of prejudice
necessary to compel a new trial, the courts have taken a wide
variety of positions, ranging from the stringent
"outcome-determinative" test [ Footnote 2/10 ] to the rule that a showing of
incompetence on the part of defense counsel automatically requires
reversal of the conviction regardless of the injury to the
defendant. [ Footnote 2/11 ]
The Court today substantially resolves these disputes. The
majority holds that the Constitution is violated when defense
counsel's representation falls below the level expected of
reasonably competent defense counsel, ante at 466 U.S. 687 -691, and so affects the
trial that there is a "reasonable probability" that, absent
counsel's error, the outcome would have been different, ante at 466 U. S.
691 -696.
Curiously, though, the Court discounts the significance of its
rulings, suggesting that its choice of standards matters little,
and that few if any cases would have been decided differently if
the lower courts had always applied the tests announced today. See ante at 466 U. S.
696 -697. Surely the judges in the state and lower
federal courts will be surprised to learn that the distinctions
they have so fiercely debated for many years are, in fact,
unimportant.
The majority's comments on this point seem to be prompted
principally by a reluctance to acknowledge that today's decision
will require a reassessment of many previously rejected ineffective
assistance of counsel claims. The majority's unhappiness on this
score is understandable, but its efforts to mitigate the perceived
problem will be ineffectual. Nothing the majority says can relieve
lower courts that hitherto Page 466 U. S. 715 have been using standards more tolerant of ineffectual advocacy
of their obligation to scrutinize all claims, old as well as new,
under the principles laid down today. III The majority suggests that, "[f]or purposes of describing
counsel's duties," a capital sentencing proceeding "need not be
distinguished from an ordinary trial." Ante at 466 U.S. 687 . I cannot
agree.
The Court has repeatedly acknowledged that the Constitution
requires stricter adherence to procedural safeguards in a capital
case than in other cases.
"[T]he penalty of death is qualitatively different from a
sentence of imprisonment, however long. Death, in its finality,
differs more from life imprisonment than a 100-year prison term
differs from one of only a year or two. Because of that qualitative
difference, there is a corresponding difference in the need for
reliability in the determination that death is the appropriate
punishment in a specific case." Woodson v. North Carolina, 428 U.
S. 280 , 428 U. S. 305 (1976) (plurality opinion) (footnote omitted). [ Footnote 2/12 ]
The performance of defense counsel is a crucial component of the
system of protections designed to ensure that capital punishment is
administered with some degree of rationality. "Reliability" in the
imposition of the death sentence can be approximated only if the
sentencer is fully informed of "all possible relevant information
about the individual defendant whose fate it must determine." Jurek v. Texas, 428 U. S. 262 , 428 U. S. 276 (1976) (opinion of Stewart, POWELL, and STEVENS, JJ.). The job of
amassing that information and presenting it Page 466 U. S. 716 in an organized and persuasive manner to the sentencer is
entrusted principally to the defendant's lawyer. The importance to
the process of counsel's efforts, [ Footnote 2/13 ] combined with the severity and
irrevocability of the sanction at stake, require that the standards
for determining what constitutes "effective assistance" be applied
especially stringently in capital sentencing proceedings. [ Footnote 2/14 ]
It matters little whether strict scrutiny of a claim that
ineffectiveness of counsel resulted in a death sentence is achieved
through modification of the Sixth Amendment standards or through
especially careful application of those standards. JUSTICE BRENNAN
suggests that the necessary adjustment of the level of performance
required of counsel in capital sentencing proceedings can be
effected simply by construing the phrase, "reasonableness under
prevailing professional norms," in a manner that takes into account
the nature of the impending penalty. Ante at 466 U. S.
704 -706. Though I would prefer a more specific iteration
of counsel's duties in this special context, [ Footnote 2/15 ] I can accept that proposal.
However, when instructing lower courts regarding the probability of
impact upon the outcome that requires a resentencing, I think the
Court would do best explicitly to modify the legal standard itself.
[ Footnote 2/16 ] In my view, a
person on death row, whose counsel's performance fell below
constitutionally acceptable levels, should not be compelled to
demonstrate a "reasonable probability" Page 466 U. S. 717 that he would have been given a life sentence if his lawyer had
been competent, see ante at 466 U. S. 694 ;
if the defendant can establish a significant chance that the
outcome would have been different, he surely should be entitled to
a redetermination of his fate. Cf. United States v. Agurs, 427 U. S. 97 , 427 U. S.
121 -122 (1976) (MARSHALL, J., dissenting). [ Footnote 2/17 ] IV The views expressed in the preceding section oblige me to
dissent from the majority's disposition of the case before us.
[ Footnote 2/18 ] It is undisputed
that respondent's trial counsel made virtually no investigation of
the possibility of obtaining testimony from respondent's relatives,
friends, or former employers pertaining to respondent's character
or background. Had counsel done so, he would have found several
persons willing and able to testify that, in their experience,
respondent was a responsible, nonviolent man, devoted to his
family, and active in the affairs of his church. See App.
338-365. Respondent contends that his lawyer could have and should
have used that testimony to "humanize" respondent, to counteract
the impression conveyed by the trial that he was little more than a
cold-blooded killer. Had this evidence been admitted, respondent
argues, his chances of obtaining a life sentence would have been
significantly better. Page 466 U. S. 718 Measured against the standards outlined above, respondent's
contentions are substantial. Experienced members of the death
penalty bar have long recognized the crucial importance of adducing
evidence at a sentencing proceeding that establishes the
defendant's social and familial connections. See Goodpaster, The Trial for Life: Effective Assistance of Counsel in
Death Penalty Cases, 58 N.Y.U.L.Rev. 299, 300-303, 334-335 (1983).
The State makes a colorable -- though, in my view, not compelling
-- argument that defense counsel in this case might have made a
reasonable "strategic" decision not to present such evidence at the
sentencing hearing on the assumption that an unadorned
acknowledgment of respondent's responsibility for his crimes would
be more likely to appeal to the trial judge, who was reputed to
respect persons who accepted responsibility for their actions.
[ Footnote 2/19 ] But however
justifiable such a choice might have been after counsel had fairly
assessed the potential strength of the mitigating evidence
available to him, counsel's failure to make any significant effort
to find out what evidence might be garnered from respondent's
relatives and acquaintances surely cannot be described as
"reasonable." Counsel's failure to investigate is particularly
suspicious in light of his candid admission that respondent's
confessions and conduct in the course of the trial gave him a
feeling of "hopelessness" regarding the possibility of saving
respondent's life, see App. 383-384, 400-401. Page 466 U. S. 719 That the aggravating circumstances implicated by respondent's
criminal conduct were substantial, see ante at 466 U. S. 700 ,
does not vitiate respondent's constitutional claim; judges and
juries in cases involving behavior at least as egregious have shown
mercy, particularly when afforded an opportunity to see other
facets of the defendant's personality and life. [ Footnote 2/20 ] Nor is respondent's contention
defeated by the possibility that the material his counsel turned up
might not have been sufficient to establish a statutory mitigating
circumstance under Florida law; Florida sentencing judges and the
Florida Supreme Court sometimes refuse to impose death sentences in
cases
"in which, even though statutory mitigating
circumstances do not outweigh statutory aggravating circumstances,
the addition of nonstatutory mitigating circumstances tips the
scales in favor of life imprisonment." Barclay v. Florida, 463 U. S. 939 , 463 U. S. 964 (1983) (STEVENS, J., concurring in judgment) (emphasis in
original).
If counsel had investigated the availability of mitigating
evidence, he might well have decided to present some such material
at the hearing. If he had done so, there is a significant chance
that respondent would have been given a life sentence. In my view,
those possibilities, conjoined with the unreasonableness of
counsel's failure to investigate, are more than sufficient to
establish a violation of the Sixth Amendment and to entitle
respondent to a new sentencing proceeding.
I respectfully dissent.
[ Footnote 2/1 ] See Note, Identifying and Remedying Ineffective
Assistance of Criminal Defense Counsel: A New Look After United
States v. Decoster, 93 Harv.L.Rev. 752, 756-758 (1980); Note,
Effective Assistance of Counsel: The Sixth Amendment and the Fair
Trial Guarantee, 50 U.Chi.L.Rev. 1380, 1386-1387, 1399-1401,
1408-1410 (1983).
[ Footnote 2/2 ] Cf., e.g., Moore v. United States, 432 F.2d 730, 736
(CA3 1970) (defining the constitutionally required level of
performance as "the exercise of the customary skill and knowledge
which normally prevails at the time and place").
[ Footnote 2/3 ]
For a review of other decisions attempting to develop guidelines
for assessment of ineffective assistance of counsel claims, see Erickson, Standards of Competency for Defense Counsel
in a Criminal Case, 17 Am.Crim.L.Rev. 233, 242-248 (1979). Many of
these decisions rely heavily on the standards developed by the
American Bar Association. See ABA Standards for Criminal
Justice 4-1.1 - 4-8.6 (2d ed.1980).
[ Footnote 2/4 ] Cf. United States v. Ellison, 557 F.2d 128, 131 (CA7
1977). In discussing the related problem of measuring injury caused
by joint representation of conflicting interests, we observed:
"[T]he evil . . . is in what the advocate finds himself
compelled to refrain from doing, not only at trial, but
also as to possible pretrial plea negotiations and in the
sentencing process. It may be possible in some cases to identify
from the record the prejudice resulting from an attorney's failure
to undertake certain trial tasks, but even with a record of the
sentencing hearing available, it would be difficult to judge
intelligently the impact of a conflict on the attorney's
representation of a client. And to assess the impact of a conflict
of interests on the attorney's options, tactics, and decisions in
plea negotiations would be virtually impossible. Thus, an inquiry
into a claim of harmless error here would require, unlike most
cases, unguided speculation." Holloway v. Arkansas, 435 U. S. 475 , 436 U. S.
490 -491 (1978) (emphasis in original). When defense
counsel fails to take certain actions, not because he is
"compelled" to do so, but because he is incompetent, it is often
equally difficult to ascertain the prejudice consequent upon his
omissions.
[ Footnote 2/5 ] See United States v. Decoster, 199 U.S.App.D.C. 369,
464-457, 624 F.2d 196, 291-294 (en banc) (Bazelon, J., dissenting), cert. denied, 444 U.S. 944 (1979); Note, 93 Harv.L.Rev. at
767-770.
[ Footnote 2/6 ]
In cases in which the government acted in a way that prevented
defense counsel from functioning effectively, we have refused to
require the defendant, in order to obtain a new trial, to
demonstrate that he was injured. In Glasser v. United
States, 315 U. S. 60 , 315 U. S. 76 -76
(1942), for example, we held:
"To determine the precise degree of prejudice sustained by [a
defendant] as a result of the court's appointment of [the same
counsel for two codefendants with conflicting interests] is at once
difficult and unnecessary. The right to have the assistance of
counsel is too fundamental and absolute to allow courts to indulge
in nice calculations as to the amount of prejudice arising from its
denial."
As the Court today acknowledges, United State v. Cronic,
ante at 466 U. S. 662 ,
n. 31, whether the government or counsel himself is to blame for
the inadequacy of the legal assistance received by a defendant
should make no difference in deciding whether the defendant must
prove prejudice.
[ Footnote 2/7 ] See United States v. Yelardy, 567 F.2d 863, 865, n. 1
(CA6), cert. denied, 439 U.S. 842 (1978); Beasley v.
United States, 491 F.2d 687, 696 (CA6 1974); Commonwealth
v. Badger, 482 Pa. 240, 243-244, 393 A.2d
642 , 644 (1978).
[ Footnote 2/8 ] See, e.g., State v. Pacheco, 121 Ariz. 88, 91, 588 P.2d 830 ,
833 (1978); Hoover v. State, 270 Ark. 978, 980, 606 S.W.2d
749 , 761 (1980); Line v. State, 272 Ind. 353, 354-355, 397 N.E.2d
975 , 976 (1979).
[ Footnote 2/9 ] See, e.g., Trapnell v. United States, 725 F.2d 149, 155
(CA2 1983); Cooper v. Fitzharris, 586 F.2d 1325, 1328-1330
(CA9 1978) (en banc), cert. denied, 440 U.S. 974
(1979).
[ Footnote 2/10 ] See, e.g., United States v. Decoster, 199 U.S.App.D.C.
at 370, and n. 74, 624 F.2d at 208, and n. 74 (plurality opinion); Knight v. State, 394 So. 2d
997 , 1001 (Fla.1981).
[ Footnote 2/11 ] See 466
U.S. 668 fn2/7|>n. 7, supra. [ Footnote 2/12 ] See also Zant v. Stephens, 462 U.
S. 862 , 462 U. S.
884 -885 (1983); Eddings v. Oklahoma, 455 U. S. 104 , 455 U. S.
110 -112 (1982); Lockett v. Ohio, 438 U.
S. 586 , 438 U. S. 604 (1978) (plurality opinion).
[ Footnote 2/13 ] See Goodpaster, The Trial for Life: Effective
Assistance of Counsel in Death Penalty Cases, 58 N.Y.U.L.Rev. 299,
303 (1983).
[ Footnote 2/14 ]
As JUSTICE BRENNAN points out, ante at 466 U. S. 704 ,
an additional reason for examining especially carefully a Sixth
Amendment challenge when it pertains to a capital sentencing
proceeding is that the result of finding a constitutional violation
in that context is less disruptive than a finding that counsel was
incompetent in the liability phase of a trial.
[ Footnote 2/15 ] See 466 U. S. supra. For a sensible effort to formulate guidelines for
the conduct of defense counsel in capital sentencing proceedings, see Goodpaster, supra, at 343-345, 360-362.
[ Footnote 2/16 ]
For the purposes of this and the succeeding section, I assume,
solely for the sake of argument, that some showing of prejudice is
necessary to state a violation of the Sixth Amendment. But
cf. 466 U. S. supra. [ Footnote 2/17 ]
As I read the opinion of the Court, it does not preclude this
kind of adjustment of the legal standard. The majority defines
"reasonable probability" as "a probability sufficient to undermine
confidence in the outcome." Ante at 466 U. S. 694 .
In view of the nature of the sanction at issue, and the difficulty
of determining how a sentencer would have responded if presented
with a different set of facts, it could be argued that a lower
estimate of the likelihood that the outcome of a capital sentencing
proceeding was influenced by attorney error is sufficient to
"undermine confidence" in that outcome than would be true in an
ordinary criminal case.
[ Footnote 2/18 ]
Adhering to my view that the death penalty is unconstitutional
under all circumstances, Gregg v. Georgia, 428 U.
S. 153 , 428 U. S. 231 (1976) (MARSHALL J., dissenting), I would vote to vacate
respondent's sentence even if he had not presented a substantial
Sixth Amendment claim.
[ Footnote 2/19 ]
Two considerations undercut the State's explanation of counsel's
decision. First, it is not apparent why adducement of evidence
pertaining to respondent's character and familial connections would
have been inconsistent with respondent's acknowledgment that he was
responsible for his behavior. Second, the Florida Supreme Court
possesses -- and frequently exercises -- the power to overturn
death sentences it deems unwarranted by the facts of a case. See State v. Dixon, 283 So. 2d 1 ,
10 (1973). Even if counsel's decision not to try to humanize
respondent for the benefit of the trial judge were deemed
reasonable, counsel's failure to create a record for the benefit of
the State Supreme Court might well be deemed unreasonable.
[ Footnote 2/20 ] See, e.g., Farmer & Kinard, The Trial of the
Penalty Phase (1976), reprinted in 2 California State Public
Defender, California Death Penalty Manual N-33, N-45 (1980). | In the case of Strickland v. Washington, the U.S. Supreme Court ruled on the standards for judging ineffective assistance of counsel. The Court outlined a two-part test: first, the defendant must prove that counsel's performance was deficient, and second, that the deficient performance prejudiced the defense. The Court defined "reasonable probability" as a probability sufficient to undermine confidence in the outcome. The Court also noted that a lower estimate of the likelihood that the outcome of a capital sentencing proceeding was influenced by attorney error may be sufficient to undermine confidence in that outcome compared to an ordinary criminal case. |
Criminal Trials & Prosecutions | Coy v. Iowa | https://supreme.justia.com/cases/federal/us/487/1012/ | U.S. Supreme Court Coy v. Iowa, 487
U.S. 1012 (1988) Coy v. Iowa No. 86-6757 Argued January 13,
1988 Decided June 29, 1988 487
U.S. 1012 APPEAL FROM THE SUPREME COURT OF
IOWA Syllabus Appellant was charged with sexually assaulting two 13-year-old
girls. At appellant's jury trial, the court granted the State's
motion, pursuant to a 1985 state statute intended to protect child
victims of sexual abuse, to place a screen between appellant and
the girls during their testimony, which blocked him from their
sight but allowed him to see them dimly and to hear them. The court
rejected appellant's argument that this procedure violated the
Confrontation Clause of the Sixth Amendment, which gives a
defendant the right "to be confronted with the witnesses against
him." Appellant was convicted of two counts of lascivious acts with
a child, and the Iowa Supreme Court affirmed. Held: 1. The Confrontation Clause, by its words, provides a criminal
defendant the right to "confront" face-to-face the witnesses giving
evidence against him at trial. That core guarantee serves the
general perception that confrontation is essential to fairness, and
helps to ensure the integrity of the factfinding process by making
it more difficult for witnesses to lie. Pp. 487 U. S.
1015 -1020.
2. Appellant's right to face-to-face confrontation was violated,
since the screen at issue enabled the complaining witnesses to
avoid viewing appellant as they gave their testimony. There is no
merit to the State's assertion that its statute creates a
presumption of trauma to victims of sexual abuse that outweighs
appellant's right to confrontation. Even if an exception to this
core right can be made, it would have to be based on something more
than the type of generalized finding asserted here, unless it were
"firmly . . . rooted in our jurisprudence." Bourjaily v. United
States, 483 U. S. 171 , 483 U. S. 183 .
An exception created by a 1985 statute can hardly be viewed as
"firmly rooted," and there have been no individualized findings
that these particular witnesses needed special protection. Pp. 487 U. S.
1020 -1021.
3. Since the State Supreme Court did not address the question
whether the Confrontation Clause error was harmless beyond a
reasonable doubt under Chapman v. California, 386 U. S.
18 , 386 U. S. 24 ,
the case must be remanded. Pp. 487 U. S.
1021 -1022. 397 N.W.2d
730 , reversed and remanded. Page 487 U. S. 1013 SCALIA, J., delivered the opinion of the Court, in which
BRENNAN, WHITE, MARSHALL, STEVENS, and O'CONNOR, JJ., joined.
O'CONNOR, J., filed a concurring opinion, in which WHITE, J.,
joined, post, p. 487 U. S.
1022 . BLACKMUN, J., filed a dissenting opinion, in which
REHNQUIST, C.J., joined, post, p. 487 U. S.
1025 . KENNEDY, J., took no part in the consideration or
decision of the case. Page 487 U. S. 1014 JUSTICE SCALIA delivered the opinion of the Court.
Appellant was convicted of two counts of lascivious acts with a
child after a jury trial in which a screen placed between him and
the two complaining witnesses blocked him from their sight.
Appellant contends that this procedure, authorized by state
statute, violated his Sixth Amendment right to confront the
witnesses against him. I In August, 1985, appellant was arrested and charged with
sexually assaulting two 13-year-old girls earlier that month while
they were camping out in the backyard of the house next door to
him. According to the girls, the assailant entered their tent after
they were asleep, wearing a stocking over his head, shined a
flashlight in their eyes, and warned them not to look at him;
neither was able to describe his face. In November, 1985, at the
beginning of appellant's trial, the State made a motion pursuant to
a recently enacted statute, Act of May 23, 1985, § 6, 1985 Iowa
Acts 338, now codified at Iowa Code § 910 A. 14 (1987), [ Footnote 1 ] to allow the complaining
witnesses to testify either via closed-circuit television or behind
a screen. See App. 4-5. The trial court approved the use
of a large screen to be placed between appellant and the witness
stand during the girls' testimony. After certain lighting
adjustments Page 487 U. S. 1015 in the courtroom, the screen would enable appellant dimly to
perceive the witnesses, but the witnesses to see him not at
all.
Appellant objected strenuously to use of the screen, based first
of all on his Sixth Amendment confrontation right. He argued that,
although the device might succeed in its apparent aim of making the
complaining witnesses feel less uneasy in giving their testimony,
the Confrontation Clause directly addressed this issue by giving
criminal defendants a right to face-to-face confrontation. He also
argued that his right to due process was violated, since the
procedure would make him appear guilty, and thus erode the
presumption of innocence. The trial court rejected both
constitutional claims, though it instructed the jury to draw no
inference of guilt from the screen.
The Iowa Supreme Court affirmed appellant's conviction, 397 N.W.2d
730 (1986). It rejected appellant's confrontation argument on
the ground that, since the ability to cross-examine the witnesses
was not impaired by the screen, there was no violation of the
Confrontation Clause. It also rejected the due process argument, on
the ground that the screening procedure was not inherently
prejudicial. We noted probable jurisdiction, 483 U.S. 1019
(1987). II The Sixth Amendment gives a criminal defendant the right "to be
confronted with the witnesses against him." This language "comes to
us on faded parchment," California v. Green, 399 U.
S. 149 , 399 U. S. 174 (1970) (Harlan, J., concurring), with a lineage that traces back to
the beginnings of Western legal culture. There are indications that
a right of confrontation existed under Roman law. The Roman
Governor Festus, discussing the proper treatment of his prisoner,
Paul, stated:
"It is not the manner of the Romans to deliver any man up to die
before the accused has met his accusers face to face, and has been
given a chance to defend himself against the Page 487 U. S. 1016 charges."
Acts 25:16. It has been argued that a form of the right of
confrontation was recognized in England well before the right to
jury trial. Pollitt, The Right of Confrontation: Its History and
Modern Dress, 8 J.Pub.L. 381, 384-387 (1959)
Most of this Court's encounters with the Confrontation Clause
have involved either the admissibility of out-of-court statements, see, e.g., Ohio v. Roberts, 448 U. S.
56 (1980); Dutton v. Evans, 400 U. S.
74 (1970), or restrictions on the scope of
cross-examination, Delaware v. Van Arsdall, 475 U.
S. 673 (1986); Davis v. Alaska, 415 U.
S. 308 (1974). Cf. Delaware v. Fensterer, 474 U. S. 15 , 474 U. S. 18 -19
(1985) (per curiam) (noting these two categories and finding
neither applicable). The reason for that is not, as the State
suggests, that these elements are the essence of the Clause's
protection -- but rather, quite to the contrary, that there is at
least some room for doubt (and hence litigation) as to the extent
to which the Clause includes those elements, whereas, as Justice
Harlan put it, "[s]imply as a matter of English," it confers at
least "a right to meet face to face all those who appear and give
evidence at trial." California v. Green, supra, at 399 U. S. 175 .
Simply as a matter of Latin, as well, since the word "confront"
ultimately derives from the prefix "con-" (from "contra" meaning
"against" or "opposed") and the noun "frons" (forehead).
Shakespeare was thus describing the root meaning of confrontation
when he had Richard the Second say:
"Then call them to our presence -- face to face, and frowning
brow to brow, ourselves will hear the accuser and the accused
freely speak. . . ."
Richard II, act 1, sc. 1.
We have never doubted, therefore, that the Confrontation Clause
guarantees the defendant a face-to-face meeting with witnesses
appearing before the trier of fact. See Kentucky v.
Stincer, 482 U. S. 730 , 482 U. S. 748 , 482 U. S.
749 -750 (1987) (MARSHALL, J., dissenting). For example,
in Kirby v. United States, 174 U. S.
47 , 174 U. S. 55 (1899), which concerned the admissibility of prior convictions of
codefendants to prove an element of the offense Page 487 U. S. 1017 of receiving stolen Government property, we described the
operation of the Clause as follows:
"[A] fact which can be primarily established only by witnesses
cannot be proved against an accused . . . except by witnesses who
confront him at the trial, upon whom he can look while being tried,
whom he is entitled to cross-examine, and whose testimony he may
impeach in every mode authorized by the established rules governing
the trial or conduct of criminal cases."
Similarly, in Dowdell v. United States, 221 U.
S. 325 , 221 U. S. 330 (1911), we described a provision of the Philippine Bill of Rights
as substantially the same as the Sixth Amendment, and proceeded to
interpret it as intended
"to secure the accused the right to be tried, so far as facts
provable by witnesses are concerned, by only such witnesses as meet
him face to face at the trial, who give their testimony in his
presence, and give to the accused an opportunity of
cross-examination."
More recently, we have described the "literal right to confront' the witness at the time of trial" as forming "the
core of the values furthered by the Confrontation Clause." California v. Green, supra, at 399 U. S. 157 .
Last Term, the plurality opinion in Pennsylvania v.
Ritchie, 480 U. S. 39 , 480 U. S. 51 (1987), stated that "[t]he Confrontation Clause provides two types of protections
for a criminal defendant: the right physically to face those who
testify against him and the right to conduct
cross-examination."
The Sixth Amendment's guarantee of face-to-face encounter
between witness and accused serves ends related both to appearances
and to reality. This opinion is embellished with references to and
quotations from antiquity in part to convey that there is something
deep in human nature that regards face-to-face confrontation
between accused and accuser as "essential to a fair trial in a
criminal prosecution." Pointer v. Texas, 380 U.
S. 400 , 380 U. S. 404 (1965). What was true of old is no less true in modern times.
President Eisenhower once described face-to-face confrontation as
part of the code of his home town of Abilene, Kansas. In Abilene,
he said, it was necessary to
"[m]eet anyone face to face with whom you Page 487 U. S. 1018 disagree. You could not sneak up on him from behind, or do any
damage to him, without suffering the penalty of an outraged
citizenry. . . . In this country, if someone dislikes you, or
accuses you, he must come up in front. He cannot hide behind the
shadow."
Press release of remarks given to the B'nai B'rith
Anti-Defamation League, November 23, 1953, quoted in Pollitt, supra, at 381. The phrase still persists, "Look me in the
eye and say that." Given these human feelings of what is necessary
for fairness, [ Footnote 2 ] the
right of confrontation Page 487 U. S. 1019 "contributes to the establishment of a system of criminal
justice in which the perception, as well as the reality, of
fairness prevails." Lee v. Illinois, 476 U.
S. 530 , 476 U. S. 540 (1986).
The perception that confrontation is essential to fairness has
persisted over the centuries because there is much truth to it. A
witness
"may feel quite differently when he has to repeat his story
looking at the man whom he will harm greatly by distorting or
mistaking the facts. He can now understand what sort of human being
that man is."
Z. Chafee, The Blessings of Liberty 35 (1956), quoted in Jay
v. Boyd, 351 U. S. 345 , 351 U. S.
375 -376 (1956) (Douglas, J., dissenting). It is always
more difficult to tell a lie about a person "to his face" than
"behind his back." In the former context, even if the lie is told,
it will often be told less convincingly. The Confrontation Clause
does not, of course, compel the witness to fix his eyes upon the
defendant; he may studiously look elsewhere, but the trier of fact
will draw its own conclusions. Thus, the right to face-to-face
confrontation serves much the same purpose as a less explicit
component of the Confrontation Clause that we have had more
frequent occasion to discuss Page 487 U. S. 1020 -- the right to cross-examine the accuser; both "ensur[e] the
integrity of the factfinding process." Kentucky v.
Stincer, 482 U.S. at 482 U. S. 736 .
The State can hardly gainsay the profound effect upon a witness of
standing in the presence of the person the witness accuses, since
that is the very phenomenon it relies upon to establish the
potential "trauma" that allegedly justified the extraordinary
procedure in the present case. That face-to-face presence may,
unfortunately, upset the truthful rape victim or abused child; but
by the same token it may confound and undo the false accuser, or
reveal the child coached by a malevolent adult. It is a truism that
constitutional protections have costs. III The remaining question is whether the right to confrontation was
in fact violated in this case. The screen at issue was specifically
designed to enable the complaining witnesses to avoid viewing
appellant as they gave their testimony, and the record indicates
that it was successful in this objective. App. 10-11. It is
difficult to imagine a more obvious or damaging violation of the
defendant's right to a face-to-face encounter.
The State suggests that the confrontation interest at stake here
was outweighed by the necessity of protecting victims of sexual
abuse. It is true that we have in the past indicated that rights
conferred by the Confrontation Clause are not absolute, and may
give way to other important interests. The rights referred to in
those cases, however, were not the right narrowly and explicitly
set forth in the Clause, but rather rights that are, or were
asserted to be, reasonably implicit -- namely, the right to
cross-examine, see Chambers v. Mississippi, 410 U.
S. 284 , 410 U. S. 295 (1973); the right to exclude out-of-court statements, see Ohio
v. Roberts, 448 U.S. at 448 U. S. 63 -65;
and the asserted right to face-to-face confrontation at some point
in the proceedings other than the trial itself, Kentucky v.
Stincer, supra. To hold that our determination of what Page 487 U. S. 1021 implications are reasonable must take into account other
important interests is not the same as holding that we can identify
exceptions, in light of other important interests, to the
irreducible literal meaning of the Clause: "a right to meet face to face all those who appear and give evidence at
trial. " California v. Green, 399 U.S. at 399 U. S. 175 (Harlan, J., concurring) (emphasis added). We leave for another
day, however, the question whether any exceptions exist. Whatever
they may be, they would surely be allowed only when necessary to
further an important public policy. Cf. Ohio v. Roberts,
supra, at 448 U. S. 64 ; Chambers v. Mississippi, supra, at 410 U. S. 295 .
The State maintains that such necessity is established here by the
statute, which creates a legislatively imposed presumption of
trauma. Our cases suggest, however, that, even as to exceptions
from the normal implications of the Confrontation Clause, as
opposed to its most literal application, something more than the
type of generalized finding underlying such a statute is needed
when the exception is not "firmly . . . rooted in our
jurisprudence." Bourjaily v. United States, 483 U.
S. 171 , 483 U. S. 183 (1987) (citing Dutton v. Evans, 400 U. S.
74 (1970)). The exception created by the Iowa statute,
which was passed in 1985, could hardly be viewed as firmly rooted.
Since there have been no individualized findings that these
particular witnesses needed special protection, the judgment here
could not be sustained by any conceivable exception.
The State also briefly suggests that any Confrontation Clause
error was harmless beyond a reasonable doubt under the standard of Chapman v. California, 386 U. S. 18 , 386 U. S. 24 (1967). We have recognized that other types of violations of the
Confrontation Clause are subject to that harmless error analysis, see e.g., Delaware v. Van Arsdall, 475 U.S. at 475 U. S. 679 , 475 U. S. 684 ,
and see no reason why denial of face-to-face confrontation should
not be treated the same. An assessment of harmlessness cannot
include consideration of whether the witness's testimony would have
been unchanged, or the Page 487 U. S. 1022 jury's assessment unaltered, had there been confrontation; such
an inquiry would obviously involve pure speculation, and
harmlessness must therefore be determined on the basis of the
remaining evidence. The Iowa Supreme Court had no occasion to
address the harmlessness issue, since it found no constitutional
violation. In the circumstances of this case, rather than decide
whether the error was harmless beyond a reasonable doubt, we leave
the issue for the court below.
We find it unnecessary to reach appellant's due process claim.
Since his constitutional right to face-to-face confrontation was
violated, we reverse the judgment of the Iowa Supreme Court and
remand the case for further proceedings not inconsistent with this
opinion. It is so ordered. JUSTICE KENNEDY took no part in the consideration or decision of
this case.
[ Footnote 1 ]
Section 910 A. 14 provides in part as follows:
"The court may require a party be confined [ sic ] to an
adjacent room or behind a screen or mirror that permits the party
to see and hear the child during the child's testimony, but does
not allow the child to see or hear the party. However, if a party
is so confined, the court shall take measures to insure that the
party and counsel can confer during the testimony and shall inform
the child that the party can see and hear the child during
testimony."
[ Footnote 2 ]
The dissent finds Dean Wigmore more persuasive than President
Eisenhower or even William Shakespeare. Post at 487 U. S.
1029 . Surely that must depend upon the proposition that
they are cited for. We have cited the latter two merely to
illustrate the meaning of "confrontation," and both the antiquity
and currency of the human feeling that a criminal trial is not just
unless one can confront his accusers. The dissent cites Wigmore for
the proposition that confrontation "was not a part of the common
law's view of the confrontation requirement." Ibid. To
begin with, Wigmore said no such thing. What he said, precisely,
was:
"There was never at common law any recognized right to an
indispensable thing called confrontation, as distinguished from
cross-examination. There was a right to
cross-examination as indispensable, and that right was involved in
and secured by confrontation; it was the same right under different
names."
5 J. Wigmore, Evidence § 1397, p. 158 (J. Chadbourn rev.1974)
(emphasis in original).
He was saying, in other words, not that the right of
confrontation (as we are using the term, i.e., in its
natural sense) did not exist, but that its purpose was to enable
cross-examination. He then continued:
"It follows that, if the accused has had the benefit of
cross-examination, he has had the very privilege secured to him by
the Constitution." Ibid. Of course, that does not follow at all, any more than it follows
that the right to a jury trial can be dispensed with so long as the
accused is justly convicted and publicly known to be justly
convicted -- the purposes of the right to jury trial. Moreover,
contrary to what the dissent asserts, Wigmore did mention
(inconsistently with his thesis, it would seem), that a secondary
purpose of confrontation is to produce "a certain subjective moral
effect . . . upon the witness." Id. § 1395, p. 153.
Wigmore grudgingly acknowledged that, in what he called "earlier
and more emotional periods," this effect "was supposed (more often
than it now is) to be able to unstring the nerves of a false
witness," id. § 1395, p. 153, n. 2; but he asserted,
without support, that this effect "does not arise from the
confrontation of the opponent and the witness," but from
"the witness' presence before the tribunal, " id. § 1395, p. 154 (emphasis in original).
We doubt it. In any case, Wigmore was not reciting as a fact
that there was no right of confrontation at common law, but was
setting forth his thesis that the only essential interest preserved
by the right was cross-examination -- with the purpose, of course,
of vindicating against constitutional attack sensible and
traditional exceptions to the hearsay rule (which can be otherwise
vindicated). The thesis is, on its face, implausible, if only
because the phrase "be confronted with the witnesses against him"
is an exceedingly strange way to express a guarantee of nothing
more than cross-examination.
As for the dissent's contention that the importance of the
confrontation right is "belied by the simple observation" that
"blind witnesses [might have] testified against appellant," post at 487 U. S.
1030 , that seems to us no more true than that the
importance of the right to live, oral cross-examination is belied
by the possibility that speech- and hearing-impaired witnesses
might have testified.
JUSTICE O'CONNOR, with whom JUSTICE WHITE joins, concurring.
I agree with the Court that appellant's rights under the
Confrontation Clause were violated in this case. I write separately
only to note my view that those rights are not absolute, but rather
may give way in an appropriate case to other competing interests so
as to permit the use of certain procedural devices designed to
shield a child witness from the trauma of courtroom testimony.
Child abuse is a problem of disturbing proportions in today's
society. Just last Term, we recognized that
"[c]hild abuse is one of the most difficult problems to detect
and prosecute, in large part because there often are no witnesses
except the victim." Pennsylvania v. Ritchie, 480 U. S.
39 , 480 U. S. 60 (1987). Once an instance of abuse is identified and prosecution
undertaken, new difficulties arise. Many States have determined
that a child victim may suffer trauma from exposure to the harsh
atmosphere of the typical courtroom, and have undertaken to shield
the child through a variety of Page 487 U. S. 1023 ameliorative measures. We deal today with the constitutional
ramifications of only one such measure, but we do so against a
broader backdrop. Iowa appears to be the only State authorizing the
type of screen used in this case. See generally App. to
Brief for American Bar Association as Amicus Curiae 1a-9a
(collecting statutes). A full half of the States, however, have
authorized the use of one- or two- way closed-circuit television.
Statutes sanctioning one-way systems generally permit the child to
testify in a separate room in which only the judge, counsel,
technicians, and in some cases the defendant, are present. The
child's testimony is broadcast into the courtroom for viewing by
the jury. Two-way systems permit the child witness to see the
courtroom and the defendant over a video monitor. In addition to
such closed-circuit television procedures, 33 States (including 19
of the 25 authorizing closed-circuit television) permit the use of
videotaped testimony, which typically is taken in the defendant's
presence. See generally id. at 9a-18a (collecting
statutes).
While I agree with the Court that the Confrontation Clause was
violated in this case, I wish to make clear that nothing in today's
decision necessarily dooms such efforts by state legislatures to
protect child witnesses. Initially, many such procedures may raise
no substantial Confrontation Clause problem, since they involve
testimony in the presence of the defendant. See, e.g., Ala.Code § 15-25-3 (Supp.1987) (one-way closed-circuit television;
defendant must be in same room as witness); Ga.Code Ann. § 17-8-55
(Supp.1987) (same); N.Y.Crim.Proc.Law §§ 65.00-65.30 (McKinney
Supp.1988) (two-way closed-circuit television); Cal.Penal Code Ann.
§ 1347 (West Supp.1988) (same). Indeed, part of the statute
involved here seems to fall into this category, since, in addition
to authorizing a screen, Iowa Code § 910 A. 14 (1987) permits the
use of one-way closed-circuit television with "parties" in the same
room as the child witness. Page 487 U. S. 1024 Moreover, even if a particular state procedure runs afoul of the
Confrontation Clause's general requirements, it may come within an
exception that permits its use. There is nothing novel about the
proposition that the Clause embodies a general requirement that a
witness face the defendant. We have expressly said as much, as long
ago as 1899, Kirby v. United States, 174 U. S.
47 , 174 U. S. 55 (1899), and as recently as last Term, Pennsylvania v.
Ritchie, 480 U.S. at 480 U. S. 51 .
But it is also not novel to recognize that a defendant's "right
physically to face those who testify against him," ibid., even if located at the "core" of the Confrontation Clause, is not
absolute, and I reject any suggestion to the contrary in the
Court's opinion. See ante at 487 U. S.
1020 -1021. Rather, the Court has time and again stated
that the Clause "reflects a preference for face-to-face
confrontation at trial," and expressly recognized that this
preference may be overcome in a particular case if close
examination of "competing interests" so warrants. Ohio v.
Roberts, 448 U. S. 56 , 448 U. S. 63 -64
(1980) (emphasis added). See also Chambers v. Mississippi, 410 U. S. 284 , 410 U. S. 295 (1973) ("Of course, the right to confront . . . is not absolute and
may, in appropriate cases, bow to accommodate other legitimate
interests in the criminal trial process"). That a particular
procedure impacts the "irreducible literal meaning of the Clause," ante at 487 U. S.
1021 , does not alter this conclusion. Indeed, virtually
all of our cases approving the use of hearsay evidence have
implicated the literal right to "confront" that has always been
recognized as forming "the core of the values furthered by the
Confrontation Clause," California v. Green, 399 U.
S. 149 , 399 U. S. 157 (1970), and yet have fallen within an exception to the general
requirement of face-to-face confrontation. See, e.g., Dutton v.
Evans, 400 U. S. 74 (1970). Indeed, we expressly recognized in Bourjaily v. United
States, 483 U. S. 171 (1987), that "a literal interpretation of the Confrontation Clause
could bar the use of any out-of-court statements when the declarant
is unavailable," Page 487 U. S. 1025 but we also acknowledged that "this Court has rejected that view
as unintended, and too extreme.'" Id. at 483 U. S. 182 (quoting Ohio v. Roberts, supra, at 448 U. S. 63 ).
In short, our precedents recognize a right to face-to-face
confrontation at trial, but have never viewed that right as
absolute. I see no reason to do so now, and would recognize
exceptions here as we have elsewhere. Thus, I would permit use of a particular trial procedure that
called for something other than face-to-face confrontation if that
procedure was necessary to further an important public policy. See ante at 487 U. S.
1021 (citing Ohio v. Roberts, supra; Chambers v.
Mississippi, supra ). The protection of child witnesses is, in
my view and in the view of a substantial majority of the States,
just such a policy. The primary focus therefore likely will be on
the necessity prong. I agree with the Court that more than the type
of generalized legislative finding of necessity present here is
required. But if a court makes a case-specific finding of
necessity, as is required by a number of state statutes, see,
e.g., Cal.Penal Code Ann. § 1347(d)(1) (West Supp.1988);
Fla.Stat. § 92.54(4) (1987); Mass.Gen.Laws § 278:16D(b)(1) (1986);
N.J.Stat.Ann. § 2A:84A-32.4(b) (Supp.1988), our cases suggest that
the strictures of the Confrontation Clause may give way to the
compelling state interest of protecting child witnesses. Because
nothing in the Court's opinion conflicts with this approach and
this conclusion, I join it.
JUSTICE BLACKMUN, with whom the CHIEF JUSTICE joins,
dissenting.
Appellant was convicted by an Iowa jury on two counts of
engaging in lascivious acts with a child. Because, in my view, the
procedures employed at appellant's trial did not offend either the
Confrontation Clause or the Due Process Clause, I would affirm his
conviction. Accordingly, I respectfully dissent. Page 487 U. S. 1026 I A The Sixth Amendment provides that a defendant in a criminal
trial "shall enjoy the right . . . to be confronted with the
witnesses against him." In accordance with that language, this
Court just recently has recognized once again that the essence of
the right protected is the right to be shown that the accuser is
real and the right to probe accuser and accusation in front of the
trier of fact:
"'The primary object of the [Confrontation Clause] was to
prevent depositions or ex parte affidavits . . . being
used against the prisoner in lieu of a personal examination and
cross-examination of the witness in which the accused has an
opportunity, not only of testing the recollection and sifting the
conscience of the witness, but of compelling him to stand face to
face with the jury in order that they may look at him, and judge by
his demeanor upon the stand and the manner in which he gives his
testimony whether he is worthy of belief.'" Kentucky v. Stincer, 482 U. S. 730 , 482 U. S.
736 -737 (1987), quoting Mattox v. United
States, 156 U. S. 237 , 156 U. S.
242 -243 (1895).
Two witnesses against appellant in this case were the
13-year-old girls he was accused of sexually assaulting. During
their testimony, as permitted by a state statute, a one-way
screening device was placed between the girls and appellant,
blocking the man accused of sexually assaulting them from the
girls' line of vision. [ Footnote
2/1 ] This procedure did not interfere Page 487 U. S. 1027 with what this Court previously has recognized as the "purposes
of confrontation." California v. Green, 399 U.
S. 149 , 1 399 U. S. 58 (1970). Specifically, the girls' testimony was given under oath,
was subject to unrestricted cross-examination, and "the jury that
[was] to decide the defendant's fate [could] observe the demeanor
of the witness[es] in making [their] statement[s], thus aiding the
jury in assessing [their] credibility." Ibid. See also
Lee v. Illinois, 476 U. S. 530 , 476 U. S. 540 (1986). In addition, the screen did not prevent appellant from
seeing and hearing the girls and conferring with counsel during
their testimony, did not prevent the girls from seeing and being
seen by the judge and counsel, as well as by the jury, and did not
prevent the jury from seeing the demeanor of the defendant while
the girls testified. Finally, the girls were informed that
appellant could see and hear them while they were on the stand.
[ Footnote 2/2 ] Thus, appellant's sole complaint is the very narrow objection that the girls
could not see him while they testified about the sexual assault
they endured.
The Court describes appellant's interest in ensuring that the
girls could see him while they testified as "the irreducible
literal meaning of the Clause." Ante at 487 U. S.
1021 . Whatever may be the significance of this
characterization, in my view, it is not borne out by logic or
precedent. While I agree with the concurrence that "[t]here is
nothing novel" in the proposition that the Confrontation Clause " reflects a preference '" for the witness to be able to
see the defendant, ante at 487 U. S.
1024 , quoting Ohio v. Roberts, 448 U. S.
56 , 448 U. S. 63 -64
(1980) (emphasis added in concurrence), I find it necessary to
discuss Page 487 U. S. 1028 my disagreement with the Court as to the place of this
"preference" in the constellation of rights provided by the
Confrontation Clause for two reasons. First, the minimal extent of
the infringement on appellant's Confrontation Clause interests is
relevant in considering whether competing public policies justify
the procedures employed in this case. Second, I fear that the
Court's apparent fascination with the witness' ability to see the
defendant will lead the States that are attempting to adopt
innovations to facilitate the testimony of child victims of sex
abuse to sacrifice other, more central, confrontation interests,
such as the right to cross-examination or to have the trier of fact
observe the testifying witness.
The weakness of the Court's support for its characterization of
appellant's claim as involving "the irreducible literal meaning of
the Clause" is reflected in its reliance on literature, anecdote,
and dicta from opinions that a majority of this Court did not join.
The majority cites only one opinion of the Court that, in my view,
possibly could be understood as ascribing substantial weight to a
defendant's right to ensure that witnesses against him are able to
see him while they are testifying:
"Our own decisions seem to have recognized at an early date that
it is this literal right to 'confront' the witness at the time of
trial that forms the core of the values furthered by the
Confrontation Clause." California v. Green, 399 U.S. at 399 U. S. 157 .
Even that characterization, however, was immediately explained in Green by the quotation from Mattox v. United
States, 156 U.S. at 156 U. S.
242 -243, set forth above in this opinion, to the effect
that the Confrontation Clause was designed to prevent the use of ex parte affidavits, to provide the opportunity for
cross-examination, and to compel the defendant " to stand face
to face with the jury. '" California v. Green, 399
U.S. at 399 U. S. 158 (emphasis added). Whether or not "there is something deep in human nature," ante at 487 U. S.
1017 , that considers critical the ability of a witness
to see the defendant while the witness is testifying, Page 487 U. S. 1029 that was not a part of the common law's view of the
confrontation requirement.
"There never was at common law any recognized right to an
indispensable thing called confrontation as distinguished from
cross-examination "
(Emphasis in original.) 5 J. Wigmore, Evidence § 1397, p. 158
(J. Chadbourn rev.1974). I find Dean Wigmore's statement infinitely
more persuasive than President Eisenhower's recollection of Kansas
justice, see ante at 487 U. S.
1017 -1018, or the words Shakespeare placed in the mouth
of his Richard II concerning the best means of ascertaining the
truth, see ante at 487 U. S.
1016 . [ Footnote 2/3 ] In
fact, Wigmore considered it clear "from the beginning of the
hearsay rule [in the early 1700's] to the present day" that the
right of confrontation is provided "not for the idle purpose of
gazing upon the witness, or of being gazed upon by him, "
but, rather, to allow for cross-examination (emphasis added). 5
Wigmore § 1395, p. 150. See also Davis v. Alaska, 415 U. S. 308 , 415 U. S. 316 (1974).
Similarly, in discussing the constitutional confrontation
requirement, Wigmore notes that, in addition to cross-examination
-- "the essential purpose of confrontation" -- there is a
"secondary and dispensable element [of the right:] . . . the
presence of the witness before the tribunal so that his demeanor
while testifying may furnish such evidence of his credibility as
can be gathered therefrom. . . . [This principle] is satisfied if
the witness, throughout the material part of his
testimony, is before the tribunal, where his demeanor can
be adequately observed."
(Emphasis in original.) 5 Wigmore, § 1399, p.199. The "right" to
have the witness view the defendant did not warrant mention even as
part of the "secondary Page 487 U. S. 1030 and dispensable" part of the Confrontation Clause
protection.
That the ability of a witness to see the defendant while the
witness is testifying does not constitute an essential part of the
protections afforded by the Confrontation Clause is also
demonstrated by the exceptions to the rule against hearsay, which
allow the admission of out-of-court statements against a defendant.
For example, in Dutton v. Evans, 400 U. S.
74 (1970), the Court held that the admission of an
out-of-court statement of a coconspirator did not violate the
Confrontation Clause. In reaching that conclusion, the Court did
not consider even worthy of mention the fact that the declarant
could not see the defendant at the time he made his accusatory
statement. Instead, the plurality opinion concentrated on the
reliability of the statement and the effect cross-examination might
have had. See id. at 400 U. S. 88 -89. See also Mattox v. United States, 146 U.
S. 140 , 146 U. S.
151 -152 (1892) (dying declarations admissible). In fact,
many hearsay statements are made outside the presence of the
defendant, and thus implicate the confrontation right asserted
here. Yet, as the majority seems to recognize, ante at 487 U. S.
1016 , this interest has not been the focus of this
Court's decisions considering the admissibility of such statements. See, e.g., California v. Green, 399 U.S. at 399 U. S.
158 .
Finally, the importance of this interest to the Confrontation
Clause is belied by the simple observation that, had blind
witnesses testified against appellant, he could raise no serious
objection to their testimony, notwithstanding the identity of that
restriction on confrontation and the one here presented. [ Footnote 2/4 ] Page 487 U. S. 1031 B While I therefore strongly disagree with the Court's
insinuation, ante at 487 U. S.
1016 , 487 U. S.
1019 -1020, that the Confrontation Clause difficulties
presented by this case are more severe than others this Court has
examined, I do find that the use of the screening device at issue
here implicates "a preference for face-to-face confrontation at
trial," embodied in the Confrontation Clause. Ohio v.
Roberts, 448 U.S. at 448 U. S. 63 .
This "preference," however, like all Confrontation Clause rights,
" must occasionally give way to considerations of public policy
and the necessities of the case.'" Id. at 448 U. S. 64 ,
quoting Mattox v. United States, 156 U.S. at 156 U. S. 243 . See also Chambers v. Mississippi, 410 U.
S. 284 , 410 U. S. 295 (1973). The limited departure in this case from the type of
"confrontation" that would normally be afforded at a criminal trial
therefore is proper if it is justified by a sufficiently
significant state interest. Indisputably, the state interests behind the Iowa statute are of
considerable importance. Between 1976 and 1985, the number of
reported incidents of child maltreatment in the United States rose
from .67 million to over 1.9 million, with an estimated 11.7
percent of those cases in 1985 involving allegations of sexual
abuse. See American Association for Protecting Children,
Highlights of Official Child Neglect and Abuse Reporting 1985, pp.
3, 18 (1987). The prosecution of these child sex-abuse cases poses
substantial difficulties because of the emotional trauma frequently
suffered by child witnesses who must testify about the sexual
assaults they have suffered.
"[T]o a child who does not understand the reason for
confrontation, the anticipation and experience of being in close
proximity to the defendant can be overwhelming. " Page 487 U. S. 1032 D. Whitcomb, E. Shapiro, & L. Stellwagen, When the Victim is
a Child: Issues for Judges and Prosecutors 17-18 (1985). Although
research in this area is still in its early stages, studies of
children who have testified in court indicate that such testimony
is "associated with increased behavioural disturbance in children."
G. Goodman et al., The Emotional Effects of Criminal Court
Testimony on Child Sexual Assault Victims, in The Child Witness: Do
the Courts Abuse Children?, Issues in Criminological and Legal
Psychology, No. 13, pp. 46, 52 (British Psychological Society
1988). See also Avery, The Child Abuse Witness: Potential
for Secondary Victimization, 7 Crim.Just. J. 1, 3-4 (1983); S.
Sgroi, Handbook of Clinical Intervention in Child Sexual Abuse
133-134 (1982).
Thus, the fear and trauma associated with a child's testimony in
front of the defendant has two serious identifiable consequences:
it may cause psychological injury to the child, and it may so
overwhelm the child as to prevent the possibility of effective
testimony, thereby undermining the truthfinding function of the
trial itself. [ Footnote 2/5 ]
Because of these effects, I agree with the concurring opinion, ante at 487 U. S.
1025 , that a State properly may consider the protection
of child witnesses to be an important public policy. In my view,
this important public policy, embodied in the Iowa statute that
authorized the use of the screening device, outweighs the narrow
Confrontation Clause right at issue here -- the "preference" for
having the defendant within the witness' sight while the witness
testifies.
Appellant argues, and the Court concludes, ante at 487 U. S.
1021 , that even if a societal interest can justify a
restriction on a Page 487 U. S. 1033 child witness' ability to see the defendant while the child
testifies, the State must show in each case that such a procedure
is essential to protect the child's welfare. I disagree. As the
many rules allowing the admission of out-of-court statements
demonstrate, legislative exceptions to the Confrontation Clause of
general applicability are commonplace. [ Footnote 2/6 ] I would not impose a different rule here
by requiring the State to make a predicate showing in each
case.
In concluding that the legislature may not allow a court to
authorize the procedure used in this case when a 13-year-old victim
of sexual abuse testifies, without first making a specific finding
of necessity, the Court relies on the fact that the Iowa procedure
is not " firmly . . . rooted in our jurisprudence.'" Ante at 487 U. S.
1021 , quoting Bourjaily v. United States, 483 U. S. 171 , 483 U. S. 183 (1987). Reliance on the cases employing that rationale is
misplaced. The requirement that an exception to the Confrontation
Clause be firmly rooted in our jurisprudence has been imposed only
when the prosecution seeks to introduce an out-of-court statement,
and there is a question as to the statement's reliability. In these circumstances, we have held: "Reliability can be inferred without more in a case where the
evidence falls within a firmly rooted hearsay exception. In other
cases, the evidence must be excluded, at least absent a showing of
particularized guarantees of trustworthiness." Ohio v. Roberts, 448 U.S. at 448 U. S. 66 . See also Bourjaily v. United States, 483 U.S. at 483 U. S.
182 -183. Clearly, no such case-by-case inquiry into
reliability is needed here. Because the girls testified under oath,
in full view of the jury, and were subjected to unrestricted
crossexamination, Page 487 U. S. 1034 there can be no argument that their testimony lacked sufficient
indicia of reliability.
For these reasons, I do not believe that the procedures used in
this case violated appellant's rights under the Confrontation
Clause. II Appellant also argues that the use of the screening device was
"inherently prejudicial," and therefore violated his right to due
process of law. The Court does not reach this question, and my
discussion of the issue will be correspondingly brief.
Questions of inherent prejudice arise when it is contended
that
"a procedure employed by the State involves such a probability
that prejudice will result that it is deemed inherently lacking in
due process." Estes v. Texas, 381 U. S. 532 , 381 U. S.
542 -543 (1965). When a courtroom arrangement is
challenged as inherently prejudicial, the first question is whether
"an unacceptable risk is presented of impermissible factors coming
into play," which might erode the presumption of innocence. Estelle v. Williams, 425 U. S. 501 , 425 U. S. 505 (1976). If a procedure is found to be inherently prejudicial, a
guilty verdict will not be upheld if the procedure was not
necessary to further an essential state interest. Holbrook v.
Flynn, 475 U. S. 560 , 475 U. S.
568 -569 (1986).
During the girls' testimony, the screening device was placed in
front of the defendant. In order for the device to function
properly, it was necessary to dim the normal courtroom lights and
focus a panel of bright lights directly on the screen, creating, in
the trial judge's words, "sort of a dramatic emphasis" and a
potentially "eerie" effect. App. 11, 14. Appellant argues that the
use of the device was inherently prejudicial because it indicated
to the jury that appellant was guilty. I am unpersuaded by this
argument.
Unlike clothing the defendant in prison garb, Estelle v.
Williams, supra, or having the defendant shackled and gagged, Illinois v. Allen, 397 U. S. 337 , 397 U. S. 344 (1970), using Page 487 U. S. 1035 the screening device did not "brand [appellant] . . . with
an unmistakable mark of guilt.'" See Holbrook v. Flynn, 475 U.S. at 475 U. S. 571 ,
quoting Estelle v. Williams, 425 U.S. at 425 U. S. 518 (BRENNAN, J., dissenting). A screen is not the sort of trapping
that generally is associated with those who have been convicted. It
is therefore unlikely that the use of the screen had a subconscious
effect on the jury's attitude toward appellant. See 475
U.S. at 475 U. S.
570 . In addition, the trial court instructed the jury to draw no
inference from the device:
"It's quite obvious to the jury that there's a screen device in
the courtroom. The General Assembly of Iowa recently passed a law
which provides for this sort of procedure in cases involving
children. Now, I would caution you now, and I will caution you
later, that you are to draw no inference of any kind from the
presence of that screen. You know, in the plainest of language,
that is not evidence of the defendant's guilt, and it shouldn't be
in your mind as an inference as to any guilt on his part. It's very
important that you do that intellectual thing."
App. 17. Given this helpful instruction, I doubt that the jury
-- which we must assume to have been intelligent and capable of
following instructions -- drew an improper inference from the
screen, and I do not see that its use was inherently prejudicial.
After all, "every practice tending to single out the accused from
everyone else in the courtroom [need not] be struck down." Holbrook v. Flynn, 475 U.S. at 475 U. S. 567 (placement throughout trial of four uniformed state troopers in
first row of spectators' section, behind defendant, not inherently
prejudicial).
I would affirm the judgment of conviction.
[ Footnote 2/1 ]
Apparently the girls were unable to identify appellant as their
attacker. Their ability to observe their attacker had been limited
by the facts that it was dark, that he shined a flashlight in their
eyes, and that he told them not to look at him. The attacker also
appeared to be wearing a stocking over his head. Thus, the State
made no effort to have the girls try to identify appellant at
trial, which could not have been done, of course, without moving
the screen. Neither did appellant attempt to demonstrate that the
girls could not identify him. This case therefore does not present
the question of the constitutionality of the restriction on
cross-examination that would have been imposed by a refusal to
allow appellant to show that the girls could not identify him.
[ Footnote 2/2 ]
Iowa law requires that the court "inform the child that the
party can see and hear the child during testimony." Iowa Code §
910A.14(1) (1987). Although the record in this case does not
contain a transcript of the court's so advising the girls, the Iowa
Supreme Court noted that appellant "makes no assertion [that the]
trial court failed to comply with" this or other terms of the
statute. 397 N.W.2d
730 , 733 (1986). Appellant concedes this point "[f]or purposes
of this appeal." Brief for Appellant 5, n. 9.
[ Footnote 2/3 ]
Interestingly, the precise quotation from Richard II the
majority uses to explain the "root meaning of confrontation," ante at 487 U. S.
1016 , is discussed in 5 J. Wigmore, Evidence § 1395, p.
153, n. 2 (J. Chadbourn rev.1974). That renowned and accepted
authority describes the view of confrontation expressed by the
words of Richard II as an "earlier conception, still current in
[Shakespeare's] day" which, by the time the Bill of Rights was
ratified, had merged "with the principle of cross-examination." Ibid. [ Footnote 2/4 ]
The Court answers that this is "no more true than that the
importance of the right to live, oral cross-examination is belied
by the possibility that speech- and hearing-impaired witnesses
might have testified." Ante at 487 U. S.
1019 , n. 2. The Court's comparison obviously is flawed.
To begin with, a deaf or mute witness who was physically incapable
of being cross-examined presumably also would be unable to offer
any direct testimony. More importantly, if a deaf or mute witness
were completely incapable of being cross-examined (as blind
witnesses are completely incapable of seeing a defendant about whom
they testify), I should think a successful Confrontation Clause
challenge might be brought against whatever direct testimony they
did offer.
[ Footnote 2/5 ]
Indeed, some experts and commentators have concluded that the
reliability of the testimony of child sex-abuse victims actually is
enhanced by the use of protective procedures. See State v.
Sheppard, 197 N.J.Super. 411, 416, 484 A.2d 1330 , 1332 (1984); Note, Parent-Child Incest: Proof at
Trial Without Testimony in Court by the Victim, 15 U.Mich.J.L.Ref.
131 (1981).
[ Footnote 2/6 ]
For example, statements of a coconspirator, excited utterances,
and business records are all generally admissible under the Federal
Rules of Evidence without case-specific inquiry into the
applicability of the rationale supporting the rule that allows
their admission. See Fed.Rules Evid. 801(d)(2), 803(2),
803(6). As to the first of these, and the propriety of their
admission under the Confrontation Clause without any special
showing, see United States v. Inadi, 475 U.
S. 387 (1986), and Bourjaily v. United States, 483 U. S. 171 , 483 U. S.
181 -184 (1987). | Here is a summary of the case verdict:
In Coy v. Iowa, the US Supreme Court ruled that a defendant's Sixth Amendment right to confront their accusers face-to-face during trial was violated when a screen was placed between the defendant and the witnesses, blocking their view of each other. The Court held that the core guarantee of the Confrontation Clause is the right to face-to-face confrontation, which is essential to fairness and ensures the integrity of the fact-finding process. The state's argument, based on a statute protecting child victims of sexual abuse, was rejected. The case was remanded to the state supreme court to determine if the violation was harmless beyond a reasonable doubt. |
Criminal Trials & Prosecutions | Moran v. Burbine | https://supreme.justia.com/cases/federal/us/475/412/ | U.S. Supreme Court Moran v. Burbine, 475
U.S. 412 (1986) Moran v. Burbine No. 84-1485 Argued November 13,
1985 Decided March 10,
1986 475
U.S. 412 CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE FIRST CIRCUIT Syllabus After respondent was arrested by the Cranston, Rhode Island,
police in connection with a breaking and entering, the police
obtained evidence suggesting that he might be responsible for the
murder of a woman in Providence earlier that year. An officer
telephoned the Providence police at approximately 6 p.m., and an
hour later Providence police officers arrived at the Cranston
headquarters to question respondent about the murder. That same
evening, unknown to respondent, his sister, who was unaware that
respondent was then under suspicion for murder, telephoned the
Public Defender's Office to obtain legal assistance for her brother
on the burglary charge. At 8:15 p.m., an Assistant Public Defender
telephoned the Cranston detective division, stated that she would
act as respondent's counsel if the police intended to question him,
and was informed that he would not be questioned further until the
next day. The attorney was not informed that the Providence police
were there or that respondent was a murder suspect. Less than an
hour later, the Providence police began a series of interviews with
respondent, giving him warnings pursuant to Miranda v.
Arizona, 384 U. S. 436 ,
before each session and obtaining three signed waivers from him
prior to eliciting three signed statements admitting to the murder.
At all relevant times, respondent was unaware of his sister's
efforts to retain counsel and of the attorney's telephone call, but
at no time did he request an attorney. The state trial court denied
his pretrial motion to suppress the statements, finding that he had
validly waived his privilege against self-incrimination and his
right to counsel. Respondent was convicted of first-degree murder,
and the Rhode Island Supreme Court affirmed, rejecting the
contention that the Fifth and Fourteenth Amendments required
suppression of the statements. Respondent then unsuccessfully
sought habeas corpus relief in Federal District Court, but the
Court of Appeals reversed, holding that the police conduct in
failing to inform respondent as to the attorney's call had fatally
tainted his waivers of his Fifth Amendment privilege against
self-incrimination and right to counsel. Page 475 U. S. 413 Held: 1. The Court of Appeals erred in construing the Fifth Amendment
to require the exclusion of respondent's confessions. The record
supports the state court findings that the Providence police
followed Miranda procedures with precision in obtaining
respondent's written waivers of his Fifth Amendment rights prior to
eliciting the confessions. Pp. 475 U. S.
420 -428.
(a) The police's failure to inform respondent of the attorney's
telephone call did not deprive him of information essential to his
ability to knowingly waive his Fifth Amendment rights to remain
silent and to the presence of counsel. Events occurring outside of
a suspect's presence and entirely unknown to him can have no
bearing on the capacity to comprehend and knowingly relinquish a
constitutional right. Once it is demonstrated that a suspect's
decision not to rely on his rights was uncoerced, that he at all
times knew he could stand mute and request a lawyer, and that he
was aware of the State's intention to use his statements to secure
a conviction, the analysis is complete and the waiver is valid as a
matter of law. The level of the police's culpability -- whether
intentional or inadvertent -- in failing to inform respondent of
the telephone call has no bearing on the validity of the waivers.
Pp. 475 U. S.
421 -424.
(b) Miranda 's reach will not be extended so as to
require the reversal of a conviction if the police are less than
forthright in their dealings with an attorney or if they fail to
tell a suspect of an attorney's unilateral efforts to contact him.
Reading Miranda to forbid police deception of an attorney would cut that decision loose from its rationale
of guarding against abridgment of the suspect's Fifth Amendment
rights. And, while a rule requiring that the police inform a
suspect of an attorney's efforts to reach him might add marginally
to Miranda's goal of dispelling the compulsion inherent in
custodial interrogation, overriding practical considerations --
particularly the ease and clarity of Miranda's application
-- counsel against adoption of the rule. Moreover, such a rule
would work a substantial and inappropriate shift in the subtle
balance struck in Miranda between society's legitimate law
enforcement interests and the protection of the accused's Fifth
Amendment rights. Pp. 475 U. S.
424 -428.
2. The conduct of the police did not violate respondent's Sixth
Amendment right to counsel. That right initially attaches only
after the first formal charging procedure, whereas the challenged
police conduct here occurred prior to respondent's arraignment. The
contention that the right to noninterference with an attorney's
dealings with a criminal suspect arises the moment that the
relationship is formed, or, at the very least, once the suspect is
placed in custodial interrogation, is not supported by precedent.
Moreover, such contention is both practically Page 475 U. S. 414 and theoretically unsound. By its very terms, the Sixth
Amendment becomes applicable only when the government's role shifts
from investigation to accusation through the initiation of
adversary judicial proceedings. The possibility that custodial
interrogation may have important consequences at trial, standing
alone, is insufficient to trigger the Sixth Amendment right to
counsel. Pp. 475 U. S.
428 -432.
3. Nor was the asserted misconduct of the police -- particularly
the conveying of false information to the attorney -- so offensive
as to deprive respondent of the fundamental fairness guaranteed by
the Due Process Clause of the Fourteenth Amendment. Although, on
facts more egregious than those presented here, police deception
might rise to a level of a due process violation, the conduct
challenged here falls short of the kind of misbehavior that so
shocks the sensibilities of civilized society as to warrant a
federal intrusion into the criminal processes of the States. Pp. 475 U. S.
432 -434.
753 F.2d 178, reversed and remanded.
O'CONNOR, J., delivered the opinion of the Court, in which
BURGER, C.J., and WHITE, BLACKMUN, POWELL, and REHNQUIST, JJ.,
joined. STEVENS, J., filed a dissenting opinion, in which BRENNAN
and MARSHALL, JJ., joined, post, p. 434. Page 475 U. S. 415 JUSTICE O'CONNOR delivered the opinion of the Court.
After being informed of his rights pursuant to Miranda v.
Arizona, 384 U. S. 436 (1966), and after executing a series of written waivers, respondent
confessed to the murder of a young woman. At no point during the
course of the interrogation, which occurred prior to arraignment,
did he request an attorney. While he was in police custody, his
sister attempted to retain a lawyer to represent him. The attorney
telephoned the police station and received assurances that
respondent would not be questioned further until the next day. In
fact, the interrogation session that yielded the inculpatory
statements began later that evening. The question presented is
whether either the conduct of the police or respondent's Page 475 U. S. 416 ignorance of the attorney's efforts to reach him taints the
validity of the waivers and therefore requires exclusion of the
confessions. I On the morning of March 3, 1977, Mary Jo Hickey was found
unconscious in a factory parking lot in Providence, Rhode Island.
Suffering from injuries to her skull apparently inflicted by a
metal pipe found at the scene, she was rushed to a nearby hospital.
Three weeks later, she died from her wounds.
Several months after her death, the Cranston, Rhode Island,
police arrested respondent and two others in connection with a
local burglary. Shortly before the arrest, Detective Ferranti of
the Cranston police force had learned from a confidential informant
that the man responsible for Ms. Hickey's death lived at a certain
address and went by the name of "Butch." Upon discovering that
respondent lived at that address and was known by that name,
Detective Ferranti informed respondent of his Miranda rights. When respondent refused to execute a written waiver,
Detective Ferranti spoke separately with the two other suspects
arrested on the breaking and entering charge and obtained
statements further implicating respondent in Ms. Hickey's murder.
At approximately 6 p.m., Detective Ferranti telephoned the police
in Providence to convey the information he had uncovered. An hour
later, three officers from that department arrived at the Cranston
headquarters for the purpose of questioning respondent about the
murder.
That same evening, at about 7:45 p.m., respondent's sister
telephoned the Public Defender's Office to obtain legal assistance
for her brother. Her sole concern was the breaking and entering
charge, as she was unaware that respondent was then under suspicion
for murder. She asked for Richard Casparian, who had been scheduled
to meet with respondent earlier that afternoon to discuss another
charge unrelated to either the break-in or the murder. As soon as
the conversation Page 475 U. S. 417 ended, the attorney who took the call attempted to reach Mr.
Casparian. When those efforts were unsuccessful, she telephoned
Allegra Munson, another Assistant Public Defender, and told her
about respondent's arrest and his sister's subsequent request that
the office represent him.
At 8:15 p.m., Ms. Munson telephoned the Cranston police station
and asked that her call be transferred to the detective division.
In the words of the Supreme Court of Rhode Island, whose factual
findings we treat as presumptively correct, 28 U.S.C. § 2254(d),
the conversation proceeded as follows:
"A male voice responded with the word 'Detectives.' Ms. Munson
identified herself and asked if Brian Burbine was being held; the
person responded affirmatively. Ms. Munson explained to the person
that Burbine was represented by attorney Casparian, who was not
available; she further stated that she would act as Burbine's legal
counsel in the event that the police intended to place him in a
lineup or question him. The unidentified person told Ms. Munson
that the police would not be questioning Burbine or putting him in
a lineup, and that they were through with him for the night. Ms.
Munson was not informed that the Providence Police were at the
Cranston police station or that Burbine was a suspect in Mary's
murder." State v. Burbine, 451 A.2d
22 , 23-24 (1982). At all relevant times, respondent was unaware
of his sister's efforts to retain counsel and of the fact and
contents of Ms. Munson's telephone conversation.
Less than an hour later, the police brought respondent to an
interrogation room and conducted the first of a series of
interviews concerning the murder. Prior to each session, respondent
was informed of his Miranda rights, and on three separate
occasions he signed a written form acknowledging that he understood
his right to the presence of an attorney and explicitly indicating
that he "[did] not want an attorney Page 475 U. S. 418 called or appointed for [him]" before he gave a statement. App.
to Pet. for Cert. 94, 103, 107. Uncontradicted evidence at the
suppression hearing indicated that at least twice during the course
of the evening, respondent was left in a room where he had access
to a telephone, which he apparently declined to use. Tr. of
Suppression Hearing 23, 85. Eventually, respondent signed three
written statements fully admitting to the murder.
Prior to trial, respondent moved to suppress the statements. The
court denied the motion, finding that respondent had received the Miranda warnings and had "knowingly, intelligently, and
voluntarily waived his privilege against self-incrimination [and]
his right to counsel." App. to Pet. for Cert. 116. Rejecting the
contrary testimony of the police, the court found that Ms. Munson
did telephone the detective bureau on the evening in question, but
concluded that "there was no . . . conspiracy or collusion on the
part of the Cranston Police Department to secrete this defendant
from his attorney." Id. at 114. In any event, the court
held, the constitutional right to request the presence of an
attorney belongs solely to the defendant, and may not be asserted
by his lawyer. Because the evidence was clear that respondent never
asked for the services of an attorney, the telephone call had no
relevance to the validity of the waiver or the admissibility of the
statements.
The jury found respondent guilty of murder in the first degree,
and he appealed to the Supreme Court of Rhode Island. A divided
court rejected his contention that the Fifth and Fourteenth
Amendments to the Constitution required the suppression of the
inculpatory statements, and affirmed the conviction. Failure to
inform respondent of Ms. Munson's efforts to represent him, the
court held, did not undermine the validity of the waivers.
"It hardly seems conceivable that the additional information
that an attorney whom he did not know had called the police station
would have added significantly to the quantum of information
necessary for the Page 475 U. S. 419 accused to make an informed decision as to waiver." State v. Burbine, 451 A.2d
22 , 29 (1982). Nor, the court concluded, did Miranda v.
Arizona or any other decision of this Court independently
require the police to honor Ms. Munson's request that interrogation
not proceed in her absence. In reaching that conclusion, the court
noted that, because two different police departments were operating
in the Cranston station house on the evening in question, the
record supported the trial court's finding that there was no
"conspiracy or collusion" to prevent Ms. Munson from seeing
respondent. 451 A.2d at 30, n. 5. In any case, the court held, the
right to the presence of counsel belongs solely to the accused, and
may not be asserted by "benign third parties, whether or not they
happen to be attorneys." Id. at 28.
After unsuccessfully petitioning the United States District
Court for the District of Rhode Island for a writ of habeas corpus, 589 F.
Supp. 1245 (1984), respondent appealed to the Court of Appeals
for the First Circuit. That court reversed. 753 F.2d 178 (1985).
Finding it unnecessary to reach any arguments under the Sixth and
Fourteenth Amendments, the court held that the police's conduct had
fatally tainted respondent's "otherwise valid" waiver of his Fifth
Amendment privilege against self-incrimination and right to
counsel. Id. at 184. The court reasoned that, by failing
to inform respondent that an attorney had called and that she had
been assured that no questioning would take place until the next
day, the police had deprived respondent of information crucial to
his ability to waive his rights knowingly and intelligently. The
court also found that the record would support "no other
explanation for the refusal to tell Burbine of Attorney Munson's
call than . . . deliberate or reckless irresponsibility." Id. at 185. This kind of "blameworthy action by the
police," the court concluded, together with respondent's ignorance
of the telephone call, "vitiate[d] any claim that [the] waiver of
counsel was knowing and voluntary." Id. at 185, 187. Page 475 U. S. 420 We granted certiorari to decide whether a prearraignment
confession preceded by an otherwise valid waiver must be suppressed
either because the police misinformed an inquiring attorney about
their plans concerning the suspect or because they failed to inform
the suspect of the attorney's efforts to reach him. 471 U.S. 1098
(1985). We now reverse. II In Miranda v. Arizona, the Court recognized that
custodial interrogations, by their very nature, generate
"compelling pressures which work to undermine the individual's
will to resist and to compel him to speak where he would not
otherwise do so freely."
384 U.S. at 384 U. S. 467 .
To combat this inherent compulsion, and thereby protect the Fifth
Amendment privilege against self-incrimination, Miranda imposed on the police an obligation to follow certain procedures in
their dealings with the accused. In particular, prior to the
initiation of questioning, they must fully apprise the suspect of
the State's intention to use his statements to secure a conviction,
and must inform him of his rights to remain silent and to "have
counsel present . . . if [he] so desires." Id. at 384 U. S.
468 -470. Beyond this duty to inform, Miranda requires that the police respect the accused's decision to exercise
the rights outlined in the warnings.
"If the individual indicates in any manner, at any time prior to
or during questioning, that he wishes to remain silent, [or if he]
states that he wants an attorney, the interrogation must
cease." Id. at 384 U. S.
473 -474. See also Edwards v. Arizona, 451 U. S. 477 (1981).
Respondent does not dispute that the Providence police followed
these procedures with precision. The record amply supports the
state court findings that the police administered the required
warnings, sought to assure that respondent understood his rights,
and obtained an express written waiver prior to eliciting each of
the three statements. Nor does respondent contest the Rhode Island
courts' determination that he at no point requested the presence of
a lawyer. Page 475 U. S. 421 He contends instead that the confessions must be suppressed
because the police's failure to inform him of the attorney's
telephone call deprived him of information essential to his ability
to knowingly waive his Fifth Amendment rights. In the alternative,
he suggests that, to fully protect the Fifth Amendment values
served by Miranda, we should extend that decision to
condemn the conduct of the Providence police. We address each
contention in turn. A Echoing the standard first articulated in Johnson v.
Zerbst, 304 U. S. 458 , 304 U. S. 464 (1938), Miranda holds that "[t]he defendant may waive
effectuation" of the rights conveyed in the warnings "provided the
waiver is made voluntarily, knowingly and intelligently." 384 U.S.
at 384 U. S. 444 , 384 U. S. 475 .
The inquiry has two distinct dimensions. Edwards v. Arizona,
supra, at 451 U. S. 482 ; Brewer v. Williams, 430 U. S. 387 , 430 U. S. 404 (1977). First, the relinquishment of the right must have been
voluntary in the sense that it was the product of a free and
deliberate choice, rather than intimidation, coercion, or
deception. Second, the waiver must have been made with a full
awareness of both the nature of the right being abandoned and the
consequences of the decision to abandon it. Only if the "totality
of the circumstances surrounding the interrogation" reveals both an
uncoerced choice and the requisite level of comprehension may a
court properly conclude that the Miranda rights have been
waived. Fare v. Michael C., 442 U.
S. 707 , 442 U. S. 725 (1979). See also North Carolina v. Butler, 441 U.
S. 369 , 441 U. S.
374 -375 (1979).
Under this standard, we have no doubt that respondent validly
waived his right to remain silent and to the presence of counsel.
The voluntariness of the waiver is not at issue. As the Court of
Appeals correctly acknowledged, the record is devoid of any
suggestion that police resorted to physical or psychological
pressure to elicit the statements. 753 F.2d at 184. Indeed it
appears that it was respondent, and not the Page 475 U. S. 422 police, who spontaneously initiated the conversation that led to
the first and most damaging confession. Id. at 180 Cf.
Edwards v. Arizona, supra. Nor is there any question about
respondent's comprehension of the full panoply of rights set out in
the Miranda warnings and of the potential consequences of
a decision to relinquish them. Nonetheless, the Court of Appeals
believed that the "[d]eliberate or reckless" conduct of the police,
in particular their failure to inform respondent of the telephone
call, fatally undermined the validity of the otherwise proper
waiver. 753 F.2d at 187. We find this conclusion untenable as a
matter of both logic and precedent.
Events occurring outside of the presence of the suspect and
entirely unknown to him surely can have no bearing on the capacity
to comprehend and knowingly relinquish a constitutional right.
Under the analysis of the Court of Appeals, the same defendant,
armed with the same information and confronted with precisely the
same police conduct, would have knowingly waived his Miranda rights had a lawyer not telephoned the police
station to inquire about his status. Nothing in any of our waiver
decisions or in our understanding of the essential components of a
valid waiver requires so incongruous a result. No doubt the
additional information would have been useful to respondent;
perhaps even it might have affected his decision to confess. But we
have never read the Constitution to require that the police supply
a suspect with a flow of information to help him calibrate his
self-interest in deciding whether to speak or stand by his rights. See, e.g., Oregon v. Elstad, 470 U.
S. 298 , 470 U. S.
316 -317 (1985); United States v. Washington, 431 U. S. 181 , 431 U. S. 188 (1977). Cf. Hill v. Lockhart, 474 U. S.
52 , 474 U. S. 56 (1985); McMann v. Richardson, 397 U.
S. 759 , 397 U. S. 769 (1970). Once it is determined that a suspect's decision not to rely
on his rights was uncoerced, that he at all times knew he could
stand mute and request a lawyer, and that he was aware of the
State's intention to use his statements to secure a conviction, the
analysis Page 475 U. S. 423 is complete, and the waiver is valid as a matter of law.
[ Footnote 1 ] The Court of
Appeals' conclusion to the contrary was in error.
Nor do we believe that the level of the police's culpability in
failing to inform respondent of the telephone call has any bearing
on the validity of the waivers. In light of the state court
findings that there was no "conspiracy or collusion" on the part of
the police, 451 A.2d at 30, n. 5, we have serious doubts about
whether the Court of Appeals was free to conclude that their
conduct constituted "deliberate or reckless irresponsibility." 753
F.2d at 185; see 28 U.S.C. § 2254(d). But whether
intentional or inadvertent, the state of mind of the police is
irrelevant to the question of the intelligence and voluntariness of
respondent's election to abandon his rights. Although highly
inappropriate, even deliberate deception of an attorney could not
possibly affect a suspect's decision to waive his Miranda rights unless he were at least aware of the incident. Compare
Escobedo v. Illinois, 378 U. S. 478 , 378 U. S. 481 (1964) (excluding confession where police incorrectly told the
suspect that his lawyer " didn't want to see' him"). Nor was the
failure to inform respondent of the telephone call the kind of
"trick[ery]" that can vitiate the validity of a waiver. Miranda, 384 U.S. at 384 U. S. 476 .
Granting that the "deliberate or reckless" withholding of
information is objectionable as a Page 475 U. S. 424 matter of ethics, such conduct is only relevant to the
constitutional validity of a waiver if it deprives a defendant of
knowledge essential to his ability to understand the nature of his
rights and the consequences of abandoning them. Because
respondent's voluntary decision to speak was made with full
awareness and comprehension of all the information Miranda requires the police to convey, the waivers were valid. B At oral argument respondent acknowledged that a constitutional
rule requiring the police to inform a suspect of an attorney's
efforts to reach him would represent a significant extension of our
precedents. Tr. of Oral Arg. 32-33. He contends, however, that the
conduct of the Providence police was so inimical to the Fifth
Amendment values Miranda seeks to protect that we should
read that decision to condemn their behavior. Regardless of any
issue of waiver, he urges, the Fifth Amendment requires the
reversal of a conviction if the police are less than forthright in
their dealings with an attorney or if they fail to tell a suspect
of a lawyer's unilateral efforts to contact him. Because the
proposed modification ignores the underlying purposes of the Miranda rules, and because we think that the decision as
written strikes the proper balance between society's legitimate law
enforcement interests and the protection of the defendant's Fifth
Amendment rights, we decline the invitation to further extend Miranda's reach.
At the outset, while we share respondent's distaste for the
deliberate misleading of an officer of the court, reading Miranda to forbid police deception of an attorney "would cut [the decision] completely loose from its own explicitly
stated rationale." Beckwith v. United States, 425 U.
S. 341 , 425 U. S. 345 (1976). As is now well established,
"[t]he . . . Miranda warnings are 'not themselves
rights protected by the Constitution, but [are] instead measures to
insure that the [suspect's] right against compulsory
self-incrimination [is] protected.' " Page 475 U. S. 425 New York v. Quarles, 467 U. S. 649 , 467 U. S. 654 (1984), quoting Michigan v. Tucker, 417 U.
S. 433 , 417 U. S. 444 (1974). Their objective is not to mold police conduct for its own
sake. Nothing in the Constitution vests in us the authority to
mandate a code of behavior for state officials wholly unconnected
to any federal right or privilege. The purpose of the Miranda warnings, instead, is to dissipate the compulsion
inherent in custodial interrogation and, in so doing, guard against
abridgment of the suspect's Fifth Amendment rights. Clearly, a rule
that focuses on how the police treat an attorney -- conduct that
has no relevance at all to the degree of compulsion experienced by
the defendant during interrogation -- would ignore both Miranda's mission and its only source of legitimacy.
Nor are we prepared to adopt a rule requiring that the police
inform a suspect of an attorney's efforts to reach him. While such
a rule might add marginally to Miranda's goal of
dispelling the compulsion inherent in custodial interrogation,
overriding practical considerations counsel against its adoption.
As we have stressed on numerous occasions, "[o]ne of the principal
advantages" of Miranda is the ease and clarity of its
application. Berkemer v. McCarty, 468 U.
S. 420 , 468 U. S. 430 (1984); see also New York v. Quarles, supra, at 467 U. S.
662 -664 (concurring opinion); Fare v. Michael
C., 442 U.S. at 442 U. S. 718 .
We have little doubt that the approach urged by respondent and
endorsed by the Court of Appeals would have the inevitable
consequence of muddying Miranda's otherwise relatively
clear waters. The legal questions it would spawn are legion: to
what extent should the police be held accountable for knowing that
the accused has counsel? Is it enough that someone in the station
house knows, or must the interrogating officer himself know of
counsel's efforts to contact the suspect? Do counsel's efforts to
talk to the suspect concerning one criminal investigation trigger
the obligation to inform the defendant before interrogation may
proceed on a wholly separate matter? We are unwilling to modify Miranda in a Page 475 U. S. 426 manner that would so clearly undermine the decision's
central
"virtue of informing police and prosecutors with specificity . .
. what they may do in conducting [a] custodial interrogation, and
of informing courts under what circumstances statements obtained
during such interrogation are not admissible." Fare v. Michael C., supra, at 442 U. S.
718 .
Moreover, problems of clarity to one side, reading Miranda to require the police in each instance to inform a
suspect of an attorney's efforts to reach him would work a
substantial and, we think, inappropriate shift in the subtle
balance struck in that decision. Custodial interrogations implicate
two competing concerns. On the one hand, "the need for police
questioning as a tool for effective enforcement of criminal laws"
cannot be doubted. Schneckloth v. Bustamonte, 412 U.
S. 218 , 412 U. S. 225 (1973). Admissions of guilt are more than merely "desirable," United States v. Washington, 431 U.S. at 431 U. S. 186 ;
they are essential to society's compelling interest in finding,
convicting, and punishing those who violate the law. On the other
hand, the Court has recognized that the interrogation process is
"inherently coercive," and that, as a consequence, there exists a
substantial risk that the police will inadvertently traverse the
fine line between legitimate efforts to elicit admissions and
constitutionally impermissible compulsion. New York v. Quarles,
supra, at 467 U. S. 656 . Miranda attempted to reconcile these opposing concerns by
giving the defendant the power to exert some control over
the course of the interrogation. Declining to adopt the more
extreme position that the actual presence of a lawyer was necessary
to dispel the coercion inherent in custodial interrogation, see Brief for American Civil Liberties Union as Amicus
Curiae in Miranda v. Arizona, O.T. 1965, No. 759, pp.
22-31, the Court found that the suspect's Fifth Amendment rights
could be adequately protected by less intrusive means. Police
questioning, often an essential part of the investigatory process,
could continue in its traditional form, the Court held, but only if
the suspect clearly understood Page 475 U. S. 427 that, at any time, he could bring the proceeding to a halt or,
short of that, call in an attorney to give advice and monitor the
conduct of his interrogators.
The position urged by respondent would upset this carefully
drawn approach in a manner that is both unnecessary for the
protection of the Fifth Amendment privilege and injurious to
legitimate law enforcement. Because, as Miranda holds,
full comprehension of the rights to remain silent and request an
attorney are sufficient to dispel whatever coercion is inherent in
the interrogation process, a rule requiring the police to inform
the suspect of an attorney's efforts to contact him would
contribute to the protection of the Fifth Amendment privilege only
incidentally, if at all. This minimal benefit, however, would come
at a substantial cost to society's legitimate and substantial
interest in securing admissions of guilt. Indeed, the very premise
of the Court of Appeals was not that awareness of Ms. Munson's
phone call would have dissipated the coercion of the interrogation
room, but that it might have convinced respondent not to speak at
all. 753 F.2d at 185. Because neither the letter nor purposes of Miranda require this additional handicap on otherwise
permissible investigatory efforts, we are unwilling to expand the Miranda rules to require the police to keep the suspect
abreast of the status of his legal representation.
We acknowledge that a number of state courts have reached a
contrary conclusion. Compare State v. Jones, 19 Wash. App.
850, 578 P.2d 71 (1978), with State v.
Beck, 687 S.W.2d
155 (Mo.1985) (en banc). We recognize also that our
interpretation of the Federal Constitution, if given the dissent's
expansive gloss, is at odds with the policy recommendations
embodied in the American Bar Association Standards of Criminal
Justice. Cf. ABA Standards for Criminal Justice 5-7.1 (2d
ed.1980). Notwithstanding the dissent's protestations, however, our
interpretive duties go well beyond deferring to the numerical
preponderance of lower court decisions or to the subconstitutional
recommendations Page 475 U. S. 428 of even so esteemed a body as the American Bar Association. See Nix v. Whiteside, ante at 475 U. S. 189 (BLACKMUN, J., concurring in judgment). Nothing we say today
disables the States from adopting different requirements for the
conduct of its employees and officials as a matter of state law. We
hold only that the Court of Appeals erred in construing the Fifth
Amendment to the Federal Constitution to require the exclusion of
respondent's three confessions. III Respondent also contends that the Sixth Amendment requires
exclusion of his three confessions. [ Footnote 2 ] It is clear, of course, that, absent a valid
waiver, the defendant has the right to the presence of an attorney
during any interrogation occurring after the first formal charging
proceeding, the point at which the Sixth Amendment right to counsel
initially attaches. United States v. Gouveia, 467 U.
S. 180 , 467 U. S. 187 (1984); Kirby v. Illinois, 406 U.
S. 682 , 406 U. S. 689 (1972) (opinion of Stewart, J.). See Brewer v. Williams, 430 U.S. at 430 U. S.
400 -401. And we readily agree that, once the right has
attached, it follows that the police may not interfere with the
efforts of a defendant's attorney to act as a " medium' between
[the suspect] and the State" during the interrogation. Maine v.
Moulton, 474 U. S. 159 , 474 U. S. 176 (1985); see Brewer v. Williams, supra, at 430 U. S. 401 ,
n. 8. The difficulty for respondent is that the interrogation
sessions that yielded the inculpatory statements took place before
the initiation of "adversary judicial proceedings." United
States v. Gouveia, supra, at 467 U. S. 192 .
He contends, however, that this circumstance is not fatal to his
Sixth Amendment claim. At least in some situations, he argues, the
Sixth Amendment protects the integrity of the Page 475 U. S. 429 attorney-client relationship [ Footnote 3 ] regardless of whether the prosecution has in
fact commenced "by way of formal charge, preliminary hearing,
indictment, information or arraignment." 467 U.S. at 467 U. S. 188 .
Placing principal reliance on a footnote in Miranda, 384
U.S. at 384 U. S. 465 ,
n. 35, and on Escobedo v. Illinois, 378 U.
S. 478 (1964), he maintains that Gouveia,
Kirby, and our other "critical stage" cases concern only the
narrow question of when the right to counsel -- that is,
to the appointment or presence of counsel -- attaches. The right to
noninterference with an attorney's dealings with a criminal
suspect, he asserts, arises the moment that the relationship is
formed, or, at the very least, once the defendant is placed in
custodial interrogation.
We are not persuaded. At the outset, subsequent decisions
foreclose any reliance on Escobedo and Miranda for the proposition that the Sixth Amendment right, in any of its
manifestations, applies prior to the initiation of adversary
judicial proceedings. Although Escobedo was originally
decided as a Sixth Amendment case,
"the Court in retrospect perceived that the 'prime purpose' of Escobedo was not to vindicate the constitutional right to
counsel as such, but, like Miranda, 'to guarantee full
effectuation of the privilege against self-incrimination. . .
.'" Kirby v. Illinois, supra, Page 475 U. S. 430 at 406 U. S. 689 ,
quoting Johnson v. New Jersey, 384 U.
S. 719 , 384 U. S. 729 (1966). Clearly then, Escobedo provides no support for
respondent's argument. Nor, of course, does Miranda, the
holding of which rested exclusively on the Fifth Amendment. Thus,
the decision's brief observation about the reach of Escobedo's Sixth Amendment analysis is not only dictum,
but reflects an understanding of the case that the Court has
expressly disavowed. See also United States v. Gouveia,
supra, at 467 U. S. 188 ,
n. 5; Y. Kamisar, Police Interrogation and Confessions 217-218, n.
94 (1980).
Questions of precedent to one side, we find respondent's
understanding of the Sixth Amendment both practically and
theoretically unsound. As a practical matter, it makes little sense
to say that the Sixth Amendment right to counsel attaches at
different times depending on the fortuity of whether the suspect or
his family happens to have retained counsel prior to interrogation. Cf. id. at 220-221. More importantly, the suggestion that
the existence of an attorney-client relationship itself triggers
the protections of the Sixth Amendment misconceives the underlying
purposes of the right to counsel. The Sixth Amendment's intended
function is not to wrap a protective cloak around the
attorney-client relationship for its own sake, any more than it is
to protect a suspect from the consequences of his own candor. Its
purpose, rather, is to assure that, in any "criminal
prosecutio[n]," U.S.Const., Amdt. 6, the accused shall not be left
to his own devices in facing the " prosecutorial forces of
organized society.'" Maine v. Moulton, supra, at 474 U. S. 170 (quoting Kirby v. Illinois, 406 U.S. at 406 U. S.
689 ). By its very terms, it becomes applicable only when
the government's role shifts from investigation to accusation. For
it is only then that the assistance of one versed in the
"intricacies . . . of law," ibid., is needed to assure
that the prosecution's case encounters "the crucible of meaningful
adversarial testing." United States v. Cronic, 466 U. S. 648 , 466 U. S. 656 (1984). Page 475 U. S. 431 Indeed, in Maine v. Moulton, decided this Term, the
Court again confirmed that looking to the initiation of adversary
judicial proceedings, far from being mere formalism, is fundamental
to the proper application of the Sixth Amendment right to counsel.
There, we considered the constitutional implications of a
surreptitious investigation that yielded evidence pertaining to two
crimes. For one, the defendant had been indicted; for the other, he
had not. Concerning the former, the Court reaffirmed that, after
the first charging proceeding, the government may not deliberately
elicit incriminating statements from an accused out of the presence
of counsel. See also Massiah v. United States, 377 U. S. 201 (1964). The Court made clear, however, that the evidence concerning
the crime for which the defendant had not been indicted -- evidence
obtained in precisely the same manner from the identical suspect --
would be admissible at a trial limited to those charges. Maine
v. Moulton, 474 U.S. at 474 U. S. 180 ,
and n. 16. The clear implication of the holding, and one that
confirms the teaching of Gouveia, is that the Sixth
Amendment right to counsel does not attach until after the
initiation of formal charges. Moreover, because Moulton already had
legal representation, the decision all but forecloses respondent's
argument that the attorney-client relationship itself triggers the
Sixth Amendment right.
Respondent contends, however, that custodial interrogations
require a different rule. Because confessions elicited during the
course of police questioning often seal a suspect's fate, he
argues, the need for an advocate -- and the concomitant right to
noninterference with the attorney-client relationship -- is at its
zenith, regardless of whether the State has initiated the first
adversary judicial proceeding. We do not doubt that a lawyer's
presence could be of value to the suspect; and we readily agree
that, if a suspect confesses, his attorney's case at trial will be
that much more difficult. But these concerns are no more decisive
in this context than they were for the equally damaging
preindictment lineup Page 475 U. S. 432 at issue in Kirby, or the statements pertaining to the
unindicted crime elicited from the defendant in Maine v.
Moulton. Compare United States v. Wade, 388 U.
S. 218 , 388 U. S.
226 -227 (1967) (Sixth Amendment attaches at
postindictment lineup); Massiah v. United States, supra, (after indictment, police may not elicit statements from suspect
out of the presence of counsel). For an interrogation, no more or
less than for any other "critical" pretrial event, the possibility
that the encounter may have important consequences at trial,
standing alone, is insufficient to trigger the Sixth Amendment
right to counsel. As Gouveia made clear, until such time
as the " government has committed itself to prosecute, and . . .
the adverse positions of government and defendant have
solidified,'" the Sixth Amendment right to counsel does not attach.
467 U.S. at 467 U. S. 189 (quoting Kirby v. Illinois, supra, at 406 U. S.
689 ). Because, as respondent acknowledges, the events that led to the
inculpatory statements preceded the formal initiation of adversary
judicial proceedings, we reject the contention that the conduct of
the police violated his rights under the Sixth Amendment. IV Finally, respondent contends that the conduct of the police was
so offensive as to deprive him of the fundamental fairness
guaranteed by the Due Process Clause of the Fourteenth Amendment.
Focusing primarily on the impropriety of conveying false
information to an attorney, he invites us to declare that such
behavior should be condemned as violative of canons fundamental to
the " traditions and conscience of our people.'" Rochin v.
California, 342 U. S. 165 , 342 U. S. 169 (1952), quoting Snyder v. Massachusetts, 291 U. S.
97 , 291 U. S. 105 (1934). We do not question that, on facts more egregious than those
presented here, police deception might rise to a level of a due
process violation. Accordingly, JUSTICE STEVENS' Page 475 U. S. 433 apocalyptic suggestion that we have approved any and all forms
of police misconduct is demonstrably incorrect. [ Footnote 4 ] We hold only that, on these
facts, the challenged conduct falls short of the kind of
misbehavior that so shocks the sensibilities Page 475 U. S. 434 of civilized society as to warrant a federal intrusion into the
criminal processes of the States.
We hold therefore that the Court of Appeals erred in finding
that the Federal Constitution required the exclusion of the three
inculpatory statements. Accordingly, we reverse and remand for
proceedings consistent with this opinion. So ordered. [ Footnote 1 ]
The dissent incorrectly reads our analysis of the components of
a valid waiver to be inconsistent with the Court's holding in Edwards v. Arizona, 451 U. S. 477 (1981). Post at 475 U. S. 452 .
When a suspect has requested counsel, the interrogation
must cease, regardless of any question of waiver, unless the
suspect himself initiates the conversation. In the course of its
lengthy exposition, however, the dissent never comes to grips with
the crucial distinguishing feature of this case -- that Burbine at
no point requested the presence of counsel, as was his right under Miranda to do. We do not quarrel with the dissent's
characterization of police interrogation as a "privilege terminable
at the will of the suspect." Post at 475 U. S. 458 .
We reject, however, the dissent's entirely undefended suggestion
that the Fifth Amendment "right to counsel" requires anything more
than that the police inform the suspect of his right to
representation and honor his request that the interrogation cease
until his attorney is present. See, e.g., Michigan v.
Mosley, 423 U. S. 96 , 423 U. S. 104 ,
n. 10 (1975).
[ Footnote 2 ]
Petitioner does not argue that respondent's valid waiver of his
Fifth Amendment right to counsel necessarily served to waive his
parallel rights under the Sixth Amendment. Accordingly, we have no
occasion to consider whether a waiver for one purpose necessarily
operates as a general waiver of the right to counsel for all
purposes.
[ Footnote 3 ]
Notwithstanding the Rhode Island Supreme Court's finding that,
as a matter of state law, no attorney-client relationship existed
between respondent and Ms. Munson, the Sixth Amendment issue is
properly before us. State v. Burbine, 461 A.2d 22, 29
(1982). Petitioner now concedes that such a relationship existed,
and invites us to decide the Sixth Amendment question based on that
concession. Of course, a litigant's concession cannot be used to
circumvent the rule that this Court may not disregard a state
court's interpretation of state law. Respondent's argument,
however, does not focus on whether an attorney-client relationship
actually existed as a formal matter of state law. He argues instead
that, on the particular facts of this case, the Sixth Amendment
right to counsel has been violated. In any event, even if the
existence of an attorney-client relationship could somehow
independently trigger the Sixth Amendment right to counsel, a
position we reject, the type of circumstances that would give rise
to the right would certainly have a federal definition.
[ Footnote 4 ]
Among its other failings, the dissent declines to follow Oregon v. Elstad, 470 U. S. 298 (1986), a decision that categorically forecloses JUSTICE STEVENS'
major premise -- that Miranda requires the police to
inform a suspect of any and all information that would be useful to
a decision whether to remain silent or speak with the police. See also United States v. Washington, 431 U.
S. 181 , 431 U. S. 188 (1977). The dissent also launches a novel "agency" theory of the
Fifth Amendment under which any perceived deception of a lawyer is
automatically treated as deception of his or her client. This
argument entirely disregards the elemental and established
proposition that the privilege against compulsory
self-incrimination is, by hypothesis, a personal one that can only
be invoked by the individual whose testimony is being
compelled.
Most importantly, the dissent's misreading of Miranda itself is breathtaking in its scope. For example, it reads Miranda as creating an undifferentiated right to the
presence of an attorney that is triggered automatically by the
initiation of the interrogation itself. Post at 475 U. S. 463 .
Yet, as both Miranda and subsequent decisions construing Miranda make clear beyond refute, " the interrogation
must cease until an attorney is present' only `[i]f the
individual states that he wants an attorney.'" Michigan v.
Mosley, 423 U. S. 96 , 423 U. S. 104 ,
n. 10 (1975) (emphasis added), quoting Miranda, 384 U.S.
at 384 U. S. 474 .
The dissent condemns us for embracing "incommunicado questioning .
. . as a societal goal of the highest order that justifies police
deception of the shabbiest kind." Post at 475 U. S. 439 .
We, of course, do nothing of the kind. As any reading of Miranda reveals, the decision, rather than proceeding from
the premise that the rights and needs of the defendant are
paramount to all others, embodies a carefully crafted balance
designed to fully protect both the defendant's and
society's interests. The dissent may not share our view that the
Fifth Amendment rights of the defendant are amply protected by
application of Miranda as written. But the dissent is
"simply wrong," post at 475 U. S. 452 ,
in suggesting that exclusion of Burbine's three confessions follows
perfunctorily from Miranda's mandate. Y. Kamisar, Police
Interrogation and Confessions 217-218, n. 94 (1980). Quite understandably, the dissent is outraged by the very idea
of police deception of a lawyer. Significantly less understandable
is its willingness to misconstrue this Court's constitutional
holdings in order to implement its subjective notions of sound
policy.
JUSTICE STEVENS, with whom JUSTICE BRENNAN and JUSTICE MARSHALL
join, dissenting.
This case poses fundamental questions about our system of
justice. As this Court has long recognized, and reaffirmed only
weeks ago, "ours is an accusatorial, and not an inquisitorial,
system." Miller v. Fenton, 474 U.
S. 104 , 474 U. S. 110 (1985). [ Footnote 2/1 ] The Court's
opinion today represents a startling departure from that basic
insight. Page 475 U. S. 435 The Court concludes that the police may deceive an attorney by
giving her false information about whether her client will be
questioned, and that the police may deceive a suspect by failing to
inform him of his attorney's communications and efforts to
represent him. [ Footnote 2/2 ] For
the majority, this conclusion, though "distaste[ful]," ante at 475 U. S. 424 ,
is not even debatable. The deception of the attorney is irrelevant,
because the attorney has no right to information, accuracy,
honesty, or fairness in the police response to her questions about
her client. The deception of the client is acceptable, because,
although the information would affect the client's assertion of his
rights, the client's actions in ignorance of the availability of
his attorney are voluntary, knowing, and intelligent; additionally,
society's interest in apprehending, prosecuting, and punishing
criminals outweighs the suspect's interest in information regarding
his attorney's efforts to communicate with him. Finally, even
mendacious police interference in the communications between a
suspect and his lawyer does not violate any notion of fundamental
fairness, because it does not shock the conscience of the
majority.
The case began in March, 1977, with the discovery of Mary Jo
Hickey, unconscious and disheveled in a deserted parking lot, lying
in a pool of blood, with semen on her clothes, her dentures broken,
and a piece of heavy, bloodstained metal nearby. Days later, Brian
Burbine, then 20 years old, went to Maine and stayed with friends.
According to the friends' testimony at trial, he was upset, and
described a night out with Hickey, who was then 35. After several
drinks, Page 475 U. S. 436 Burbine told them, a ride home turned into a violent encounter;
he hit Hickey several times and threw her out of the car. Three
weeks after she was discovered in the parking lot, Hickey died.
Three months later, after the 21-hour period of detention by the
Cranston and Providence, Rhode Island, police that is the focus of
this dispute, Burbine was charged with her murder, and ultimately
found guilty of it.
The murder of Mary Jo Hickey was a vicious crime, fully meriting
a sense of outrage and a desire to find and prosecute the
perpetrator swiftly and effectively. Indeed, by the time Burbine
was arrested on an unrelated breaking-and-entering charge, the
Hickey murder had been the subject of a local television special.
[ Footnote 2/3 ] Not surprisingly,
Detective Ferranti, the Cranston Detective who "broke" the case,
was rewarded with a special commendation for his efforts. [ Footnote 2/4 ]
The recognition that ours is an accusatorial, and not an
inquisitorial, system nevertheless requires that the government's
actions, even in responding to this brutal crime, respect those
liberties and rights that distinguish this society from most
others. As Justice Jackson observed shortly after his return from
Nuremberg, cases of this kind present
"a real dilemma in a free society . . . for the defendant is
shielded by such safeguards as no system of law except the
Anglo-American concedes to him. [ Footnote 2/5 ]"
Justice Frankfurter similarly Page 475 U. S. 437 emphasized that it is "a fair summary of history to say that the
safeguards of liberty have been forged in controversies involving
not very nice people." [ Footnote
2/6 ] And, almost a century and a half ago, Macaulay observed
that the guilt of Titus Oates could not justify his conviction by
improper methods:
"That Oates was a bad man is not a sufficient excuse; for the
guilty are almost always the first to suffer those hardships which
are afterwards used as precedents against the innocent. [ Footnote 2/7 ]"
The Court's holding focuses on the period after a suspect has
been taken into custody and before he has been charged with an
offense. The core of the Court's holding is that police
interference with an attorney's access to her client during that
period is not unconstitutional. The Court reasons that a State has
a compelling interest, not simply in custodial interrogation, but
in lawyer-free, incommunicado custodial interrogation. Such
incommunicado interrogation is so important that a lawyer may be
given false information that prevents her presence and
representation; it is so important that police may refuse to inform
a suspect of his attorney's Page 475 U. S. 438 communications and immediate availability. [ Footnote 2/8 ] This conclusion flies in the face of
this Court's repeated expressions of deep concern about
incommunicado questioning. [ Footnote
2/9 ] Until Page 475 U. S. 439 today, incommunicado questioning has been viewed with the
strictest scrutiny by this Court; today, incommunicado questioning
is embraced as a societal goal of the highest order that justifies
police deception of the shabbiest kind.
It is not only the Court's ultimate conclusion that is deeply
disturbing; it is also its manner of reaching that conclusion. The
Court completely rejects an entire body of law on the subject --
the many carefully reasoned state decisions that have come to
precisely the opposite conclusion. [ Footnote 2/10 ] The Court Page 475 U. S. 440 similarly dismisses the fact that the police deception which it
sanctions quite clearly violates the American Bar Association's
Standards for Criminal Justice [ Footnote 2/11 ] -- Standards which Page 475 U. S. 441 THE CHIEF JUSTICE has described as
"the single most comprehensive and probably the most monumental
undertaking in the field of criminal justice ever attempted by the
American legal profession in our national history, [ Footnote 2/12 ]"
and which this Court frequently finds helpful. [ Footnote 2/13 ] And, of course, the Court dismisses
the fact that the American Bar Association has emphatically
endorsed the prevailing state court position, and expressed its
serious concern about the effect that a contrary view -- a view,
such as the Court's, that exalts incommunicado interrogation,
sanctions police deception, and demeans the right to consult with
an attorney -- will have in police stations and courtrooms
throughout this Nation. [ Footnote
2/14 ] Of greatest importance, the Court misapprehends or
rejects the central principles that have, for several decades,
animated this Court's decisions concerning incommunicado
interrogation. [ Footnote
2/15 ]
Police interference with communications between an attorney and
his client is a recurrent problem. The factual variations in the
many state court opinions condemning this interference as a
violation of the Federal Constitution suggest the Page 475 U. S. 442 variety of contexts in which the problem emerges. In Oklahoma,
police led a lawyer to several different locations while they
interrogated the suspect; [ Footnote
2/16 ] in Oregon, police moved a suspect to a new location when
they learned that his lawyer was on his way; [ Footnote 2/17 ] in Illinois, authorities failed to
tell a suspect that his lawyer had arrived at the jail and asked to
see him; [ Footnote 2/18 ] in
Massachusetts, police did not tell suspects that their lawyers were
at or near the police station. [ Footnote 2/19 ] In all these cases, the police not only
failed to inform the suspect, but also misled the attorneys. The
scenarios vary, but the core problem of police interference
remains. "Its recurrence suggests that it has roots in some
condition fundamental and general to our criminal system." Watts v. Indiana, 338 U. S. 49 , 338 U. S. 57 (1949) (Jackson, J., concurring in result).
The near-consensus of state courts and the legal profession's
Standards about this recurrent problem lends powerful support to
the conclusion that police may not interfere with communications
between an attorney and the client whom they are questioning.
Indeed, at least two opinions from this Court seemed to express
precisely that view. [ Footnote
2/20 ] The Court today flatly rejects that widely held view, and
responds to this recurrent problem by adopting the most restrictive
interpretation of the federal constitutional restraints on
police Page 475 U. S. 443 deception, misinformation, and interference in attorney-client
communications.
The exact reach of the Court's opinion is not entirely clear
because, on the one hand, it indicates that more egregious forms of
police deception might violate the Constitution, ante at 475 U. S. 432 ,
while, on the other hand, it endeavors to make its disposition of
this case palatable by making findings of fact concerning the
voluntariness of Burbine's confessions that the trial judge who
heard the evidence declined to make. [ Footnote 2/21 ] Before addressing the legal issues, it
therefore seems appropriate to make certain additional comments
about what the record discloses concerning the incriminating
statements made by Burbine during the 21-hour period that he was
detained by the Cranston and Providence police on June 29 and June
30, 1977 I As the majority points out, with respect to attorney Munson's
telephone call, the Rhode Island Supreme Court's summary of factual
findings provides the common ground for analysis:
"At approximately 8:15 [on June 29, 1977], Ms. Munson called the
Cranston police station and asked that her call be transferred to
the detective division. A male voice responded with the word
'Detectives.' Ms. Munson identified herself and asked if Brian
Burbine was being held; the person responded affirmatively. Ms.
Munson explained to the person that Burbine was represented by
attorney Casparian, who was not available; she further stated that
she would act as Burbine's legal counsel in the event that the
police intended to place him in a lineup or question him. The
unidentified person told Ms. Munson that the police would not be
questioning Burbine or putting him in a lineup, and that they
were Page 475 U. S. 444 through with him for the night. Ms. Munson was not informed that
the Providence police were at the Cranston police station, or that
Burbine was a suspect in Mary's murder. The trial justice found as
a fact that Ms. Munson did make the call, but further found that
there was no collusion or conspiracy on the part of the police 'to
secrete [Burbine] from his attorney. . . .'" State v. Burbine , 451 A.2d
22 , 23-24 (1982). [ Footnote
2/22 ]
Although this paragraph accurately describes attorney Munson's
8:15 call, the significance of the false response to her inquiry is
best understood in the context of the events that were then
proceeding in the police station. The difficulty in reconstructing
some of those events illustrates the need for strict presumptions
regarding the consequences of custodial interrogation -- a need
this Court has repeatedly recognized. [ Footnote 2/23 ] Page 475 U. S. 445 On June 27, 1977, an unidentified person advised Detective
Ferranti that a man known as "Butch," who lived at 306 New York
Avenue in Providence, was responsible for the death of Mary Jo
Hickey. The record does not explain why Ferranti, who was a member
of the Cranston Police Force, was informed about a crime that
occurred in Providence.
At about 3 p.m. on June 29, 1977, Cranston police officers
apprehended respondent Burbine and two other men (DiOrio and
Sparks) in "a burned-out building in the Cranston area." S.H. 6,
180. The three men were taken to the Cranston police station,
charged with "breaking and entering," and placed in separate rooms.
After noticing that DiOrio and Burbine lived at 306 New York Avenue
in Providence, Detective Ferranti talked to DiOrio and was told
that Burbine was the only "Butch" at that address. Id. at
146-147.
At approximately 4:30, Ferranti "went in the room where Burbine
was" and asked him "if there was anybody that he knew by the name
of Butch on the street, and he said he was the only Butch." Id. at 148. [ Footnote
2/24 ] After the brief questioning about the identity of
"Butch," Detective Ferranti left Burbine in the interrogation room
-- where he remained until about 9 p.m. [ Footnote 2/25 ] -- and interrogated DiOrio and Sparks.
They both "made damaging statements relative to Burbine's being
involved in the murder in Providence"; Ferranti therefore
"immediately contacted Providence Police." Id. at 149-150.
The Providence officers -- Captain Wilson (the Chief of
Detectives), Lieutenant Gannon, and Detective Trafford -- responded
promptly, and arrived at the Cranston station between Page 475 U. S. 446 6 and 7 p.m. Lieutenant Gannon testified that, as he drove to
the Cranston police station, he knew that he might not be able to
question Burbine
"[i]f for some reason he didn't want to give me a statement, if
for some reason he chose to get an attorney and the attorney
informed us that he didn't want him to give a statement."
Trial Tr. 407.
After arriving at the station, the three Providence officers, as
well as Ferranti and a second Cranston officer (Lieutenant Ricard),
either remained in the large central room in the basement of the
Cranston police station or participated in the questioning of
DiOrio and Sparks in interrogation rooms adjacent to that large
central room.
It was at this point -- with Burbine alone in another adjacent
room, with Providence police on hand, with police from two
Departments questioning Sparks and DiOrio about Burbine's
involvement in the Hickey homicide -- that attorney Munson
telephoned. Her call arrived at 8:15; she asked for "Detectives,"
and was told that the police "would not be questioning Burbine" and
that they were "through" with him for the night. These statements
were false. Moreover, she was not told that Burbine would be
questioned about a homicide, rather than the breaking-and-entering
charge on which he had been arrested, and she was not told that
Providence police were at the Cranston police station preparing to
question Burbine about a Providence crime.
At about 9, some 45 minutes after Munson received the assurance
that the police were "through" with Burbine, the officers completed
their questioning of DiOrio and Sparks and were prepared to
question Burbine. There is no dispute about the fact that Burbine
was brought into the central room at about 9, that all five police
officers were then present, and that Burbine appeared somewhat
upset and professed that he " didn't do anything wrong.'" S.H.
21. Detective Ferranti testified that this statement was in
response to questions from the Providence police about the
Hickey Page 475 U. S.
447 homicide; [ Footnote 2/26 ]
Lieutenant Gannon of the Providence police testified that the
statement was about the Hickey homicide, but that Providence police
did not question Burbine, and that they merely saw Burbine being
escorted by Ferranti. [ Footnote
2/27 ] Burbine was not told that attorney Munson had called and
had asked about him; nor was he told that Munson had been informed
that the police were through with him for the night. After his
protestations, Burbine was taken into another interrogation
room. Detective Ferranti then went into that room and, according to
the testimony of the Providence officers, spent either "ten
minutes" or from "five to ten minutes" alone with Burbine.
[ Footnote 2/28 ] The record does
not tell us whether he told Burbine that Sparks and DiOrio had just
given statements implicating him in the Hickey homicide. Nor does
it resolve the question whether Burbine's decision to confess was
made before his session with Ferranti or as a
result of that session. The Court evidently makes the former
assumption, for it asserts that Burbine "initiated" this encounter. Ante at 475 U. S.
421 -422. However, the state courts made no finding about
this Page 475 U. S. 448 "initiation" by Burbine. Detective Ferranti testified that
Burbine banged and kicked on the door, S.H. 153-154; Lieutenant
Gannon testified that he "believed" there was a knocking or some
communication from Burbine, id. at 22, but he was "not
sure." Id. at 66. [ Footnote
2/29 ] None of the other officers, who were apparently in the
large room adjacent to Burbine's, corroborated this testimony by
mentioning any "banging," "kicking," or other noise from Burbine's
direction. In all events, some minutes later, Detective Ferranti
came back out of the room and indicated that Burbine wanted to
talk.
Lieutenant Gannon and Detective Trafford of the Providence
police accompanied Detective Ferranti "back into the room." During
the period between 9:30 and 10:20 p.m., they administered Miranda warnings and typed out a four-page statement which
Burbine signed, waiving his constitutional rights, acknowledging
his responsibility for the death of Hickey, and reciting his
version of that event. Ferranti alternately testified that Burbine
was "coherent" and "incoherent" at the time of this questioning. Id. at 157-158; Trial Tr.198, 208-209. Apparently for the
first time since his arrival at the station in the afternoon, the
police then brought Burbine some food. S.H. 160, Trial Tr. 205.
After obtaining Burbine's signature on the first written
statement at 10:20 p.m., the police were still not "through" with
Burbine. Burbine's first statement included no mention of the
clothes that he had been wearing, or of a glass that was found with
Hickey's purse a few blocks from the homicide. Soon after the
completion of the first statement, and after the Providence and
Cranston officers had discussed the first statement and expressed
pleasure with their success, [ Footnote 2/30 ] Page 475 U. S. 449 Gannon, Trafford, and Ferranti again questioned Burbine. They
ascertained that he was wearing his "red toke" and "black
windbreaker" at the time, and that Hickey had left the bar with a
glass in hand. [ Footnote 2/31 ] At
11:20 p.m., Burbine signed the second statement.
The following morning, the officers obtained a warrant,
conducted a search of Burbine's residence, and seized the clothing
that he had described in the second statement. In the meantime,
Burbine was arraigned in Cranston court on the charge for which he
had been arrested. Still without counsel, Burbine pleaded guilty to
malicious damage. After the Cranston proceeding, Providence
officers instantly arrested him for the Hickey homicide. Trial Tr.
501. Burbine was taken to the Providence police station, where he
executed a third waiver of rights and identified the coat and
jacket that the officers had seized. Shortly after noon, Major
Leyden called the Public Defender's Office and requested counsel
for Burbine because he would be placed in a lineup. Id. at
423.
Thus, although there are a number of ambiguities in the record,
the state court findings established (1) that attorney Munson made
her call at about 8:15 p.m.; (2) that she was given false
information; (3) that Burbine was not told of her Page 475 U. S. 450 call; and (4) that he was thereafter given the Miranda warnings, waived his rights, and signed three incriminating
statements without receiving any advice from an attorney. The
remainder of the record underscores two points. The first is the
context of the call -- a context in which two Police Departments
were on the verge of resolving a highly publicized, hauntingly
brutal homicide, and in which, as Lieutenant Gannon testified, the
police were aware that counsel's advice to remain silent might be
an obstacle to obtaining a confession. The second is the extent of
the uncertainty about the events that motivated Burbine's decision
to waive his rights. The lawyer-free privacy of the interrogation
room, so exalted by the majority, provides great difficulties in
determining what actually transpired. It is not simply the
ambiguity that is troublesome; if so, the problem would be not
unlike other difficult evidentiary problems. Rather, the
particularly troublesome aspect is that the ambiguity arises in the
very situation -- incommunicado interrogation -- for which this
Court has developed strict presumptions, and for which this Court
has, in the past, imposed the heaviest burden of justification on
the government. It is in this context, and the larger context of
our accusatorial system, that the deceptive conduct of the police
must be evaluated. II Well-settled principles of law lead inexorably to the conclusion
that the failure to inform Burbine of the call from his attorney
makes the subsequent waiver of his constitutional rights invalid.
Analysis should begin with an acknowledgment that the burden of
proving the validity of a waiver of constitutional rights is always
on the government. [ Footnote
2/32 ] When Page 475 U. S. 451 such a waiver occurs in a custodial setting, that burden is an
especially heavy one because custodial interrogation is inherently
coercive, [ Footnote 2/33 ] because
disinterested witnesses are seldom available to describe what
actually happened, [ Footnote
2/34 ] and because history has taught us that the danger of
overreaching during incommunicado interrogation is so real.
[ Footnote 2/35 ]
In applying this heavy presumption against the validity of
waivers, this Court has sometimes relied on a case-by-case totality
of the circumstances analysis. [ Footnote 2/36 ] We have found, however, that some
custodial interrogation situations require strict presumptions
against the validity of a waiver. Miranda established that
a waiver is not valid in the absence of certain warnings. Edwards v. Arizona, 451 U. S. 477 (1981), similarly established that a waiver is not valid if
police Page 475 U. S. 452 initiate questioning after the defendant has invoked his right
to counsel. In these circumstances, the waiver is invalid as a
matter of law even if the evidence overwhelmingly establishes, as a
matter of fact, that
"a suspect's decision not to rely on his rights was uncoerced,
that he at all times knew that he could stand mute and request a
lawyer, and that he was aware of the State's intention to use his
statements to secure a conviction," see ante at 475 U. S. 422 .
In light of our decision in Edwards, the Court is simply
wrong in stating that "the analysis is complete and the waiver is
valid as a matter of law" when these facts have been established. Ante at 475 U. S.
422 -423. [ Footnote
2/37 ] Like the failure to give warnings and like police
initiation of interrogation after a request for counsel, police
deception of a suspect through omission of information regarding
attorney communications greatly exacerbates the inherent problems
of incommunicado interrogation, and requires a clear principle to
safeguard the presumption against the waiver of constitutional
rights. As in those situations, the police deception should render
a subsequent waiver invalid.
Indeed, as Miranda itself makes clear, proof that the
required warnings have been given is a necessary, but by no means
sufficient, condition for establishing a valid waiver. As the Court
plainly stated in Miranda, "any evidence that the accused was threatened, tricked, or
cajoled into a waiver will, of course, show that the defendant did
not voluntarily waive his privilege. The requirement of warnings
and waiver of rights is a fundamental with respect to the Fifth Page 475 U. S. 453 Amendment privilege and not simply a preliminary ritual to
existing methods of interrogation."
384 U.S. at 384 U. S.
476 .
In this case, it would be perfectly clear that Burbine's waiver
was invalid if, for example, Detective Ferranti had "threatened,
tricked, or cajoled" Burbine in their private preconfession meeting
-- perhaps by misdescribing the statements obtained from DiOrio and
Sparks -- even though, under the Court's truncated analysis of the
issue, Burbine fully understood his rights. For Miranda clearly condemns threats or trickery that cause a suspect to make
an unwise waiver of his rights even though he fully understands
those rights. In my opinion, there can be no constitutional
distinction -- as the Court appears to draw, ante at 475 U. S.
423 -424 -- between a deceptive misstatement and the
concealment by the police of the critical fact that an attorney
retained by the accused or his family has offered assistance,
either by telephone or in person. [ Footnote 2/38 ]
Thus, the Court's truncated analysis, which relies in part on a
distinction between deception accomplished by means of an omission
of a critically important fact and deception by means of a
misleading statement, is simply untenable. If, as the Court
asserts, "the analysis is at an end" as soon as the suspect is
provided with enough information to have the capacity to understand
and exercise his rights, I see no reason why the police should not
be permitted to make the same kind of misstatements to the suspect
that they are apparently allowed to make to his lawyer. Miranda, however, clearly Page 475 U. S. 454 establishes that both kinds of deception vitiate the suspect's
waiver of his right to counsel. [ Footnote 2/39 ]
As the Court notes, the question is whether the deceptive police
conduct
"deprives a defendant of knowledge essential to his ability to
understand the nature of his rights and the consequences of
abandoning them." Ante at 475 U. S. 424 .
This question has been resoundingly answered time and time again by
the state courts that, with rare exceptions, [ Footnote 2/40 ] have correctly understood the
meaning of the Miranda opinion. [ Footnote 2/41 ] The majority's Page 475 U. S. 455 blithe assertion of "no doubt" about the outcome of this case, ante at 475 U. S. 421 ,
simply ignores the prevailing view of the state courts that have
considered this issue. Particularly in an opinion that relies on a
desire to avoid "a federal intrusion into the criminal processes of
the States," ante at 475 U. S. 434 ,
one would expect at least some indication why, in the majority's
view, so many state courts have been so profoundly wrong on this
precise issue. Unlike the majority, the state courts have realized
that attorney communication to the police Page 475 U. S. 456 about the client is an event that has a direct "bearing" on the
knowing and intelligent waiver of constitutional rights. As the
Oregon Supreme Court has explained:
"To pass up an abstract offer to call some unknown lawyer is
very different from refusing to talk with an identified attorney
actually available to provide at least initial assistance and
advice, whatever might be arranged in the long run. A suspect
indifferent to the first offer may well react quite differently to
the second." State v. Haynes, 288 Ore. 59, 72, 602 P.2d
272 , 278 (1979), cert. denied, 446 U.S. 945 (1980).
[ Footnote 2/42 ]
In short, settled principles about construing waivers of
constitutional rights and about the need for strict presumptions in
custodial interrogations, as well as a plain reading of the Miranda opinion itself, overwhelmingly support the
conclusion reached by almost every state court that has considered
the matter -- a suspect's waiver of his right to counsel is invalid
if police refuse to inform the suspect of his counsel's
communications. III The Court makes the alternative argument that requiring police
to inform a suspect of his attorney's communications to Page 475 U. S. 457 and about him is not required because it would upset the careful
"balance" of Miranda. Despite its earlier notion that the
attorney's call is an "outside event" that has "no bearing" on a
knowing and intelligent waiver, the majority does acknowledge that
information of attorney Munson's call "would have been useful to
respondent," and "might have affected his decision to confess." Ante at 475 U. S. 422 .
[ Footnote 2/43 ] Thus, a rule
requiring the police to inform a suspect of an attorney's call
would have two predictable effects. It would serve
" Miranda's goal of dispelling the compulsion inherent in
custodial interrogation," ante at 475 U. S. 425 ,
and it would disserve the goal of custodial interrogation, because
it would result in fewer confessions. By a process of balancing
these two concerns, the Court finds the benefit to the individual
outweighed by the "substantial cost to society's legitimate and
substantial interest in securing admissions of guilt." Ante at 475 U. S.
427 .
The Court's balancing approach is profoundly misguided. The cost
of suppressing evidence of guilt will always make the value of a
procedural safeguard appear "minimal," "marginal," or
"incremental." Indeed, the value of any trial at all seems like a
"procedural technicality" when balanced against the interest in
administering prompt justice to a murderer or a rapist caught
redhanded. The individual interest in procedural safeguards that
minimize the risk of error is easily discounted when the fact of
guilt appears certain beyond doubt.
What is the cost of requiring the police to inform a suspect of
his attorney's call? It would decrease the likelihood that
custodial interrogation will enable the police to obtain a
confession. This is certainly a real cost, but it is the same cost
that this Court has repeatedly found necessary to preserve Page 475 U. S. 458 the character of our free society and our rejection of an
inquisitorial system. Three examples illustrate the point.
In Escobedo v. Illinois, 378 U.
S. 478 (1964), we excluded a confession by a defendant
who had not been permitted to consult with his lawyer, and whose
lawyer had not been permitted to see him. We emphasized the "lesson
of history" that our system of justice is not founded on a fear
that a suspect will exercise his rights.
"If the exercise of constitutional rights will thwart the
effectiveness of a system of law enforcement, then there is
something very wrong with that system." Id. at 378 U. S. 490 .
In Miranda v. Arizona, 384 U. S. 436 (1966), we similarly stressed this character of our system, despite
its "cost," by unequivocally holding that an individual has an
absolute right to refuse to respond to police interrogation and to
have the assistance of counsel during any questioning. [ Footnote 2/44 ] Thus, as a matter of law,
the assumed right of the police to interrogate a suspect is no
right at all; at best, it is a mere privilege terminable at the
will of the suspect. And, more recently, in Dunaway v. New
York, 442 U. S. 200 (1979), the Court corrected the long-held but mistaken view of the
police that they have some sort of right to take any suspect Page 475 U. S. 459 into custody for the purpose of questioning him, even though
they may not have probable cause to arrest. [ Footnote 2/45 ]
Just as the "cost" does not justify taking a suspect into
custody or interrogating him without giving him warnings simply
because police desire to question him, so too the "cost" does not
justify permitting police to withhold from a suspect knowledge of
an attorney's communication, even though that communication would
have an unquestionable effect on the suspect's exercise of his
rights. The "cost" that concerns the Court amounts to nothing more
than an acknowledgment that the law enforcement interest in
obtaining convictions suffers whenever a suspect exercises the
rights that are afforded by our system of criminal justice. In
other words, it is the fear that an individual may exercise his
rights that tips the scales of justice for the Court today. The
principle that ours is an accusatorial, not an inquisitorial,
system, however, has repeatedly led the Court to reject that fear
as a valid reason for inhibiting the invocation of rights.
If the Court's cost-benefit analysis were sound, it would
justify a repudiation of the right to a warning about counsel
itself. There is only a difference in degree between a presumption
that advice about the immediate availability of a lawyer would not
affect the voluntariness of a decision to confess and a presumption
that every citizen knows that he has a right to remain silent, and
therefore no warnings of any kind are needed. In either case, the
withholding of information serves precisely the same law
enforcement interests. And in both cases, the cost can be described
as nothing more than Page 475 U. S. 460 an incremental increase in the risk that an individual will make
an unintelligent waiver of his rights.
In cases like Escobedo, Miranda, and Dunn, the
Court has viewed the balance from a much broader perspective. In
all these cases -- indeed, whenever the distinction between an
inquisitorial and an accusatorial system of justice is implicated
-- the law enforcement interest served by incommunicado
interrogation has been weighed against the interest in individual
liberty that is threatened by such practices. The balance has never
been struck by an evaluation of empirical data of the kind
submitted to legislative decisionmakers -- indeed, the Court relies
on no such data today. Rather, the Court has evaluated the quality
of the conflicting rights and interests. In the past, that kind of
balancing process has led to the conclusion that the police have no right to compel an individual to respond to custodial
interrogation, and that the interest in liberty that is threatened
by incommunicado interrogation is so precious that special
procedures must be followed to protect it. The Court's contrary
conclusion today can only be explained by its failure to appreciate
the value of the liberty that an accusatorial system seeks to
protect. IV The Court also argues that a rule requiring the police to inform
a suspect of an attorney's efforts to reach him would have an
additional cost: it would undermine the "clarity" of the rule of
the Miranda case. Ante at 475 U. S.
425 -426. This argument is not supported by any reference
to the experience in the States that have adopted such a rule. The
Court merely professes concern about its ability to answer three
quite simple questions. [ Footnote
2/46 ] Page 475 U. S. 461 Moreover, the Court's evaluation of the interest in "clarity" is
rather one-sided. For a police officer with a printed card
containing the exact text he is supposed to recite, perhaps the
rule is clear. But the interest in clarity that the Miranda decision was intended to serve is not merely for
the benefit of the police. Rather, the decision was also, and
primarily, intended to provide adequate guidance to the person in
custody who is being asked to waive the protections afforded by the
Constitution. [ Footnote 2/47 ]
Inevitably, the Miranda decision also serves the judicial
interest in clarifying the inquiry Page 475 U. S. 462 into what actually transpired during a custodial interrogation.
[ Footnote 2/48 ] Under the Court's
conception of the interest in clarity, however, the police would
presumably prevail whenever they could convince the trier of fact
that a required ritual was performed before the confession was
obtained. V At the time attorney Munson made her call to the Cranston police
station, she was acting as Burbine's attorney. Under ordinary
principles of agency law, the deliberate deception of Munson was
tantamount to deliberate deception of her client. [ Footnote 2/49 ] If an attorney makes a mistake in
the course of her representation of her client, the client must
accept the consequences of that mistake. [ Footnote 2/50 ] It is equally clear that, when an
attorney makes an inquiry on behalf of her client, the client is
entitled to a truthful answer. Surely the client must have the same
remedy for a false representation to his lawyer that he would have
if he were acting pro se and had propounded the question
himself.
The majority brushes aside the police deception involved in the
misinformation of attorney Munson. It is irrelevant to the Fifth
Amendment analysis, concludes the majority, because that right is
personal; it is irrelevant to the Sixth Page 475 U. S. 463 Amendment analysis, continues the majority, because the Sixth
Amendment does not apply until formal adversary proceedings have
begun.
In my view, as a matter of law, the police deception of Munson
was tantamount to deception of Burbine himself. It constituted a
violation of Burbine's right to have an attorney present during the
questioning that began shortly thereafter. The existence of that
right is undisputed. [ Footnote
2/51 ] Whether the source of that right is the Sixth Amendment,
the Fifth Amendment, or a combination of the two is of no special
importance, for I do not understand the Court to deny the existence
of the right.
The pertinent question is whether police deception of the
attorney is utterly irrelevant to that right. In my judgment, it
blinks at reality to suggest that misinformation which prevented
the presence of an attorney has no bearing on the protection and
effectuation of the right to counsel in custodial interrogation.
The majority parses the role of attorney and suspect so narrowly
that the deception of the attorney is of no Page 475 U. S. 464 constitutional significance. In other contexts, however, the
Court does not hesitate to recognize an identity between the
interest of attorney and accused. [ Footnote 2/52 ] The character of the attorney-client
relationship requires rejection of the Court's notion that the
attorney is some entirely distinct, completely severable entity,
and that deception of the attorney is irrelevant to the right of
counsel in custodial interrogation. [ Footnote 2/53 ] Page 475 U. S. 465 The possible reach of the Court's opinion is stunning. For the
majority seems to suggest that police may deny counsel all access
to a client who is being held. At least since Escobedo v.
Illinois, it has been widely accepted that police may not
simply deny attorneys access to their clients who are in custody.
This view has survived the recasting of Escobedo from a
Sixth Amendment to a Fifth Amendment case that the majority finds
so critically important. That this prevailing view is shared by the
police can be seen in the state court opinions detailing various
forms of police deception of attorneys. [ Footnote 2/54 ] For, if there were no obligation to give
attorneys access, there would be no need to take elaborate steps to
avoid access, such as shuttling the suspect to a different location
[ Footnote 2/55 ] or taking the
lawyer to different locations; [ Footnote 2/56 ] police could simply refuse to allow the
attorneys to see the suspects. But the law enforcement profession
has apparently believed, quite rightly in my view, that denying
lawyers access to their clients is impermissible. The Court today
seems to assume that this view was error -- that, from the federal
constitutional perspective, the lawyer's access is, as a question
from the Court put it in oral argument, merely "a matter of
prosecutorial grace." Tr. of Oral Arg. 32. Certainly, nothing in
the Court's Fifth and Sixth Amendment analysis acknowledges that
there is any federal constitutional bar to an absolute
denial of lawyer access to a suspect who is in police custody.
In sharp contrast to the majority, I firmly believe that the
right to counsel at custodial interrogation is infringed by police
treatment of an attorney that prevents or impedes the attorney's
representation of the suspect at that interrogation. Page 475 U. S. 466 VI The Court devotes precisely five sentences to its conclusion
that the police interference in the attorney's representation of
Burbine did not violate the Due Process Clause. In the majority's
new, the due process analysis is a simple "shock the conscience"
test. Finding its conscience troubled, [ Footnote 2/57 ] but not shocked, the majority rejects
the due process challenge.
In a variety of circumstances, however, the Court has given a
more thoughtful consideration to the requirements of due process.
For instance, we have concluded that use of a suspect's
post- Miranda warnings silence against him violates the due
process requirement of fundamental fairness because such use
breaches an implicit promise that "silence will carry no penalty."
[ Footnote 2/58 ] Similarly, we
have concluded that
"the suppression by the prosecution of evidence favorable to an
accused upon request violates due process where the evidence is
material either to guilt or to punishment. [ Footnote 2/59 ]"
We have also concluded that vindictive prosecution violates due
process; [ Footnote 2/60 ] so too
does vindictive sentencing. [ Footnote
2/61 ] Indeed, we have emphasized that analysis of the
"voluntariness" of a confession is frequently a "convenient
shorthand" for reviewing objectionable police methods under the
rubric of the due process requirement of fundamental fairness.
[ Footnote 2/62 ] What emerges
from Page 475 U. S. 467 these cases is not the majority's simple "shock the conscience"
test, but the principle that due process requires fairness,
integrity, and honor in the operation of the criminal justice
system, and in its treatment of the citizen's cardinal
constitutional protections.
In my judgment, police interference in the attorney-client
relationship is the type of governmental misconduct on a matter of
central importance to the administration of justice that the Due
Process Clause prohibits. Just as the police cannot impliedly
promise a suspect that his silence will not be used against him and
then proceed to break that promise, so too police cannot tell a
suspect's attorney that they will not question the suspect and then
proceed to question him. Just as the government cannot conceal from
a suspect material and exculpatory evidence, so too the government
cannot conceal from a suspect the material fact of his attorney's
communication. Page 475 U. S. 468 Police interference with communications between an attorney and
his client violates the due process requirement of fundamental
fairness. Burbine's attorney was given completely false information
about the lack of questioning, moreover, she was not told that her
client would be questioned regarding a murder charge about which
she was unaware. Burbine, in turn, was not told that his attorney
had phoned and that she had been informed that he would not be
questioned. Quite simply, the Rhode Island police effectively drove
a wedge between an attorney and a suspect through misinformation
and omissions.
The majority does not "question that on facts more egregious
than those presented here police deception might rise to a level of
a due process violation." Ante at 475 U. S. 432 .
In my view, the police deception disclosed by this record plainly
does rise to that level. VII This case turns on a proper appraisal of the role of the lawyer
in our society. If a lawyer is seen as a nettlesome obstacle to the
pursuit of wrongdoers -- as in an inquisitorial society -- then the
Court's decision today makes a good deal of sense. If a lawyer is
seen as an aid to the understanding and protection of
constitutional rights -- as in an accusatorial society -- then
today's decision makes no sense at all.
Like the conduct of the police in the Cranston station on the
evening of June 29, 1977, the Court's opinion today serves the goal
of insuring that the perpetrator of a vile crime is punished. Like
the police on that June night as well, however, the Court has
trampled on well-established legal principles and flouted the
spirit of our accusatorial system of justice.
I respectfully dissent.
[ Footnote 2/1 ]
Justice Frankfurter succinctly explained the character of that
distinction in his opinion in Watts v. Indiana, 338 U. S. 49 , 338 U. S. 54 (1949):
"Ours is the accusatorial, as opposed to the inquisitorial,
system. Such has been the characteristic of Anglo-American criminal
justice since it freed itself from practices borrowed by the Star
Chamber from the Continent whereby an accused was interrogated in
secret for hours on end. See Ploscowe, The Development of
Present-Day Criminal Procedures in Europe and America, 48
Harv.L.Rev. 433, 457-458, 467-473 (1935). Under our system, society
carries the burden of proving its charge against the accused not
out of his own mouth. It must establish its case, not by
interrogation of the accused, even under judicial safeguards, but
by evidence independently secured through skillful investigation.
'The law will not suffer a prisoner to be made the deluded
instrument of his own conviction.' 2 Hawkins, Pleas of the Crown,
c. 46, § 34 (8th ed. 1824). The requirement of specific charges,
their proof beyond a reasonable doubt, the protection of the
accused from confessions extorted through whatever form of police
pressures, the right to a prompt hearing before a magistrate, the
right to assistance of counsel, to be supplied by government when
circumstances make it necessary, the duty to advise an accused of
his constitutional rights -- these are all characteristics of the
accusatorial system and manifestations of its demands. Protracted,
systematic and uncontrolled subjection of an accused to
interrogation by the police for the purpose of soliciting
disclosures or confession is subversive of the accusatorial system. See generally Malloy v. Hogan, 378 U. S. 1 , 378 U. S. 7 -8 (1964); Rogers
v. Richmond, 365 U. S. 534 , 365 U. S.
540 -541 (1961); Bram v. United States, 168 U. S.
532 , 168 U. S. 543 -545
(1897)."
[ Footnote 2/2 ]
I agree with the majority that, in considering "the type of
circumstances" that give rise to constitutional rights in this
area, the relationship between an attorney and suspect has "a
federal definition." Ante at 475 U. S. 429 ,
n. 3. In my view, for federal constitutional purposes, members of a
suspect's family may provide a lawyer with authority to act on a
suspect's behalf while the suspect is in custody.
[ Footnote 2/3 ]
Tr. of Suppression Hearing 167 (S. H.).
[ Footnote 2/4 ] Id. at 168.
[ Footnote 2/5 ]
"Amid much that is irrelevant or trivial, one serious situation
seems to me to stand out in these cases. The suspect neither had
nor was advised of his right to get counsel. This presents a real
dilemma in a free society. To subject one without counsel to
questioning which may and is intended to convict him is a real
peril to individual freedom. To bring in a lawyer means a real
peril to solution of the crime, because, under our adversary
system, he deems that his sole duty is to protect his client --
guilty or innocent -- and that, in such a capacity, he owes no duty
whatever to help society solve its crime problem. Under this
conception of criminal procedure, any lawyer worth his salt will
tell the suspect in no uncertain terms to make no statement to
police under any circumstances."
"If the State may arrest on suspicion and interrogate without
counsel, there is no denying the fact that it largely negates the
benefits of the constitutional guaranty of the right to assistance
of counsel. Any lawyer who has ever been called into a case after
his client has 'told all' and turned any evidence he has over to
the Government knows how helpless he is to protect his client
against the facts thus disclosed."
"I suppose the view one takes will turn on what one thinks
should be the right of an accused person against the State. Is it
his right to have the judgment on the facts? Or is it his right to
have a judgment based on only such evidence as he cannot conceal
from the authorities, who cannot compel him to testify in court and
also cannot question him before? Our system comes close to the
latter by any interpretation, for the defendant is shielded by such
safeguards as no system of law except the Anglo-American concedes
to him. Watts v. Indiana, 338 U. S. 49 , 59 (1949) (Jackson,
J., concurring in result)."
[ Footnote 2/6 ] United States v. Rabinowitz, 339 U. S.
56 , 339 U. S. 69 (1950) (Frankfurter, J., dissenting).
[ Footnote 2/7 ]
T. Macaulay, The History of England 482 (1968 ed.).
[ Footnote 2/8 ]
This kind of police-maintained incommunicado questioning
becomes, in the Court's rendition, "an essential part of the
investigatory process." Ante at 475 U. S. 426 .
Police interference in communications between a lawyer and her
client are justified because "[a]dmissions of guilt . . . are
essential to society's compelling interest in finding, convicting,
and punishing those who violate the law." Ibid. It is this
overriding interest in obtaining self-incriminatory statements in
the lawyer-free privacy of the police interrogation room that
motivates the Court's willingness to swallow its admitted "distaste
for the deliberate misleading of an officer of the court." Ante at 475 U. S.
424 .
[ Footnote 2/9 ] See, e.g., Tague v. Louisiana, 444 U.
S. 469 , 444 U. S. 470 (1980) (per curiam) (State bears " heavy burden'" in proving
validity of waivers given "`during incommunicado interrogation'"); Beckwith v. United States, 425 U.
S. 341 , 425 U. S. 346 (1976) ("special safeguards" are required for "incommunicado
interrogation of individuals in a police-dominated atmosphere"); Darwin v. Connecticut, 391 U. S. 346 , 391 U. S. 349 (1968) (per curiam) (prolonged "incommunicado" interrogation
renders confession involuntary); Miranda v. Arizona, 384 U. S. 436 , 384 U. S. 475 (1966) (State has "heavy burden" in proving validity of waiver of
rights in "incommunicado interrogation"); Haynes v.
Washington, 373 U. S. 503 , 373 U.S. 514 (1963)
("incommunicado detention" rendered confession involuntary); Ashcraft v. Tennessee, 322 U. S. 143 , 322 U. S. 153 ,
n. 8 (1944) ("`Holding incommunicado is objectionable because
arbitrary -- at the mere will and unregulated pleasure of a police
officer'"); Ward v. Texas, 316 U.
S. 547 , 316 U. S. 555 (1942) ("This Court has set aside convictions based upon
confessions extorted from ignorant persons . . . who have been
unlawfully held incommunicado without advice of friends or
counsel"); Lisenba v. California, 314 U.
S. 219 , 314 U. S. 240 (1941) ("[W]here a prisoner, held incommunicado, is subjected to
questioning by officers for long periods, and deprived of the
advice of counsel, we shall scrutinize the record with care to
determine whether, by the use of his confession, he is deprived of
liberty or life through tyrannical or oppressive means"); Wan
v. United States, 266 U. S. 1 , 266 U. S. 11 (1924) (holding of suspect "incommunicado" contributes to
suppression of confession). To be sure, in many of these cases, the evidence showed that the
suspect had requested, and was denied access to, a lawyer. Until
today, however, the Court has never viewed "incommunicado" as
applying only to the denial of the suspect's efforts to reach the
attorney, and not to the attorney's efforts to reach the suspect. See, e.g., Darwin v. Connecticut, 391 U.S. at 391 U. S. 349 (per curiam) (referring both to fact that "petitioner's
lawyers made numerous attempts to communicate with petitioner or
with the officer in charge" and to fact that "petitioner on three
separate occasions sought and was denied permission to communicate
with the outside world" in reaching the "inescapable" conclusion
that "the officers kept petitioner incommunicado"). It is also true
that many of these cases involved incommunicado interrogations for
very long periods of time; not one of those cases suggested that
incommunicado interrogation for shorter periods, maintained by
misinforming attorney and client of each other's actions, was
supported by a compelling societal interest that justified police
deception and misinformation about attorney communications.
[ Footnote 2/10 ]
The American Bar Association has summarized the relevant
cases:
"In all but the last two of the following cases, the Court
excluded the statement(s) obtained. Elfadl v. Maryland, 61
Md.App. 132, 485 A.2d 275 , cert. denied, 303 Md. 42, 491 A.2d 1197,
petition for cert. filed, 54 U.S.L.W. 3019 (U.S. June 21, 1985)
(No. 85-24) (lawyer retained by defendant's wife refused permission
to communicate with defendant or have him informed of counsel's
presence); Lodowski v. Maryland, 302 Md. 691, 490 A.2d
1228 (1985), petition for cert. filed, 54 U.S.L.W. 3019
(U.S. June 21, 1985) (No. 85-23) (police prevented communication
between lawyer and defendant and did not tell defendant that lawyer
was present); Dunn v. State, No. 248-84 (Tex. June 26,
1985), summarized, 37 Crim.L.Rep. (BNA) 2274 (July 17,
1985) (suspect not told that his wife had retained an attorney who
was close at hand); Lewis v. State, 695 P.2d
528 (Okla.1984) (lawyer hired by defendant's parents
misdirected by sheriff throughout jail and courthouse while
defendant, unaware that parents had retained attorney, was being
interrogated in another part of the building); Commonwealth v.
Sherman, 389 Mass. 287, 450
N.E.2d 566 (1983) (police failed to honor lawyer's request to
be present during interrogation, and failed to inform suspect of
the request); Weber v. State, 457
A.2d 674 (Del.1983) (defendant's father and attorney hired by
the father refused access to defendant; police failed to inform
defendant of lawyer's presence); People v.
Smith, 93 Ill. 2d
179 , 442 N.E.2d
1325 (1982) (associate of defendant's retained lawyer denied
access to client based on fabricated claim that defendant was
undergoing drug withdrawal, and would not be interrogated in the
near future; individual never told of lawyer's attempt to see him
although he was given card lawyer left for him); State v.
Matthews, 408 So. 2d
1274 (La.1982) (attorney's request to speak with defendant
refused, and instruction to cease interrogation ignored); State
v. Haynes, 288 Or. 59, 602 P.2d
272 (1979), cert. denied, 446 U.S. 945 (1980) (lawyer
retained by defendant's wife was told where defendant was being
held, but the police moved him before lawyer could offer counsel
and defendant never told of lawyer's request to offer counsel); State v. Jones, 19 Wash. App. 850, [5]78 P.2d 71 (1978)
(defendant not informed that counsel had been retained for him or
that attorney had instructed client not to speak); Commonwealth
v. Hilliard, 471 Pa. 318, 370 A.2d
322 (1977) (lawyer first misinformed that defendant was not in
custody and later denied access to defendant until he confessed;
defendant was not told of lawyer's presence until he confessed); State v. Jackson, 303 So.
2d 734 (La.1974) (lawyer retained by defendant's family denied
permission to see defendant, who was not told of the lawyer's
presence); Commonwealth v. McKenna, 355 Mass. 313, 244
N.E.2d 560 (1969) (lawyer retained by suspect's mother asked to
see client; police misinformed lawyer of suspect's whereabouts and
did not indicate that he was already being interrogated); Blanks v. State, [254 Ga. 420], 330 S.E.2d
575 (1985) (police finished taking confession before advising
defendant that a lawyer was present who wished to see him); State v. Beck, 687 S.W.2d
155 (Mo.1985) (en banc) (lawyer obtained by defendant's mother
at defendant's direction given before he was in custody; lawyer
called the police and asked to be notified when defendant was
arrested, but, at prosecutor's suggestion, police did not so notify
lawyer when defendant was arrested in Florida, nor did they advise
defendant of lawyer's request)."
Brief for American Bar Association as Amicus Curiae 4,
n. 2.
Since the filing of the ABA brief, still another State Supreme
Court has expressed this prevailing view that statements obtained
through police interference in communications between an attorney
and a suspect must be suppressed. See Haliburton v.
Florida, 476 So. 2d
192 (Fla.1985) (police continued questioning suspect without
telling him that an attorney retained by his sister was at the
police station seeking to speak with him).
[ Footnote 2/11 ] See ABA Standards for Criminal Justice 5-5.1 (2d
ed.1980) ("Counsel should be provided to the accused as soon as
feasible after custody begins"); ABA Standards for Criminal Justice
5-7.1 (2d ed.1980) ("At the earliest opportunity, a person in
custody should be effectively placed in communication with a
lawyer").
[ Footnote 2/12 ]
Burger, Introduction: The ABA Standards for Criminal Justice, 12
Am.Crim.L.Rev. 251 (1974). See also id. at 253 ("Everyone
connected with criminal justice should become totally familiar with
the substantive content of the Standards. . . . [T]he Justices of
the Supreme Court and hundreds of other judges . . . consult the
Standards and make use of them whenever they are relevant").
[ Footnote 2/13 ] See, e.g., Caldwell v. Mississippi, 472 U.
S. 320 , 472 U. S. 334 ,
n. 6 (1985); Holloway v. Arkansas, 435 U.
S. 475 , 435 U. S. 480 ,
n. 4 (1978); Dickey v. Florida, 398 U. S.
30 , 398 U. S. 37 -38,
nn. 7 and 8 (1970). Cf. Nix v. Whiteside, ante at 475 U. S.
167 -168 (emphasizing ABA Model Code and Model Rules in
Sixth Amendment analysis).
[ Footnote 2/14 ] See Brief for American Bar Association as Amicus
Curiae 4 ("The ABA is deeply concerned that, if the police may
constitutionally prevent any communication between a lawyer and an
individual held in isolation, an important right to legal
representation will be lost. . . . Many cases decided across the
country demonstrate that there is cause for concern as to such
police tactics").
[ Footnote 2/15 ] See 475
U.S. 412 fn2/9|>n. 9, supra. [ Footnote 2/16 ] Lewis v. State, 695 P.2d
528 (Okla. Crim. App.1984).
[ Footnote 2/17 ] State v. Haynes, 288 Ore. 59, 602 P.2d
272 (1979), cert. denied, 446 U.S. 945 (1980).
[ Footnote 2/18 ] People v. Smith, 93 Ill. 2d
179 , 442 N.E.2d
1325 (1982).
[ Footnote 2/19 ] Commonwealth v. McKenna, 355 Mass. 313, 244
N.E.2d 560 (1969).
[ Footnote 2/20 ] See Miranda v. Arizona, 384 U.S. at 384 U. S. 465 ,
n. 35 (In Escobedo, "[t]he police also prevented the
attorney from consulting with his client. Independent of any other
constitutional proscription, this action constitutes a violation of
the Sixth Amendment right to the assistance of counsel, and
excludes any statement obtained in its wake"); Escobedo v.
Illinois, 378 U. S. 478 , 378 U. S. 487 (1964) ("[I]t would be highly incongruous if our system of
justice permitted the district attorney, the lawyer representing
the State, to extract a confession from the accused while his own
lawyer, seeking to speak with him, was kept from him by the
police'"), quoting People v. Donovan, 13 N.Y.2d 148, 152,
193 N.E.2d 628, 629 (1963). [ Footnote 2/21 ] See infra at 475 U. S.
447 -448; 475
U.S. 412 fn2/25|>n. 25, infra. [ Footnote 2/22 ]
The Court of Appeals, see 753 F.2d 178, 185 (CA1 1986),
and the dissenting opinion of Justice Kelleher of the Rhode Island
Supreme Court, see 451 A.2d at 38-39, were concerned by
the apparent inconsistency between the finding that there was no
conspiracy to "secrete" Burbine and the unequivocal finding that
attorney Munson's call had been made. I see no inconsistency,
however, because the officer who gave the false information to
attorney Munson acknowledged that Burbine was at the station -- he
did not "secrete" him. The state court's finding that the call was
answered by "Detectives" is especially significant in light of
Lieutenant Ricard's undisputed testimony that, at the time in
question, only he or Detective Ferranti would have answered a call
to the detectives division. S.H. 142. Thus, the state court
finding, and the evidence in the record on which it was based, make
it perfectly clear that either Ricard or Ferranti must have known
of the call. Both categorically denied any such knowledge in their
testimony.
[ Footnote 2/23 ] See, e.g., Edwards v. Arizona, 451 U.
S. 477 (1981); Miranda v. Arizona, 384 U.
S. 436 (1966). Cf. Oregon v. Bradshaw, 462 U. S. 1039 , 462 U. S.
1044 (1983) (plurality opinion of REHNQUIST, J.)
( Edwards articulated "a prophylactic rule, designed to
protect an accused in police custody from being badgered by police
officers in the manner in which the defendant in Edwards was").
[ Footnote 2/24 ]
In his police report completed the night of June 29, Detective
Ferranti stated, in contrast to his testimony, that he questioned
Burbine before questioning DiOrio. Defendant Ex. D.
[ Footnote 2/25 ]
The Court makes its own findings about Burbine's access to a
telephone during this period. Ante at 475 U. S. 418 .
No state court made such a finding, and the record contains no
evidence indicating whether Burbine was told he could use the
phone, whether an outside line was available without use of the
police switchboard, or any number of other possibly relevant
factors.
[ Footnote 2/26 ] See Testimony of Detective Ferranti, S.H. 152
(Providence police "started to question him relative to the murder
in Providence"). See also Defendant Ex. D (Detective
Ferranti's contemporaneous account) (Burbine "was confronted with
this murder by Lt. Gan[n]on and other members of the PPD Det. Div.
Lt. Ricard and myself. He flatly denied being involved or having
any knowledge of this murder, although he did state that he had
been in the bar with this girl and that he knew her from his
mother, who was friendly with her in the past").
[ Footnote 2/27 ] See, e.g., Testimony of Lieutenant Gannon, S.H. 21
(agreeing with questioner's statement that "none of these police
officers said anything to Brian Burbine before he said those
things"). Cf. Testimony of Detective Trafford, id. at 79 (Burbine "passed through the detective division
and he was brought to, I believe, one of their interview rooms. . .
. He was muttering something. I really don't know what he was
saying").
[ Footnote 2/28 ] See id. at 22, 57. Detective Ferranti testified that he
was alone with Burbine for "a couple of minutes." Id. at
174. He also testified that he went into the room, that Burbine
told him to summon the Providence police, and that he complied
"immediately." Id. at 155.
[ Footnote 2/29 ] See Testimony of Lieutenant Gannon, id. at 63
("I don't know if he knocked on the door. I'm not sure how we were
re-summoned back into the room").
[ Footnote 2/30 ] See Testimony of Lieutenant Gannon, id. at 62
(noting that, after first statement, officers discussed it, and
that "we were all collectively pleased that we did obtain a
statement from him"). Major Leyden, a high-ranking Providence
officer, had been told about the break in the case, and he arrived
at the Cranston station toward the end of Burbine's statement.
[ Footnote 2/31 ]
According to Lieutenant Gannon, "in the second statement, the
questions about the glass and the clothes were Captain Wilson's
ideas." Trial Tr. 387. The state courts made no finding about the
initiation of the conversation leading to the second statement.
According to the signed statement, Lieutenant Gannon stated that
Burbine "remembered something concerning a glass," App. to Pet. for
Cert. 105, and Burbine did not contest that account. Detective
Ferranti testified that Providence police told him Burbine
initiated the conversation. Trial Tr. 252. In contrast, Providence
Detective Trafford testified that he was "not sure" how they
concluded Burbine wished to speak again, but he "believe[d]
Detective Ferranti notified us." Id. at 443. Lieutenant
Gannon testified that he "believe[d]" Burbine "indicated by
knocking on the door." Id. at 409.
[ Footnote 2/32 ] See, e.g., Brewer v. Williams, 430 U.
S. 387 , 430 U. S. 404 (1977) ("[C]ourts indulge in every reasonable presumption against
waiver"); Miranda v. Arizona, 384 U.S. at 384 U. S. 475 ("If the interrogation continues without the presence of an
attorney and a statement is taken, a heavy burden rests on the
government to demonstrate that the defendant knowingly and
intelligently waived his privilege against self-incrimination and
his right to retained or appointed counsel. . . . Since the State
is responsible for establishing the isolated circumstances under
which the interrogation takes place, and has the only means of
making available corroborated evidence of warnings given during
incommunicado interrogation, the burden is rightly on its
shoulders"); Johnson v. Zerbst, 304 U.
S. 458 , 304 U. S. 454 (1938) (" [C]ourts indulge every reasonable presumption against
waiver' of fundamental constitutional rights, and . . . we `do not
presume acquiescence in the loss of fundamental rights'")
(footnotes omitted). [ Footnote 2/33 ] See Miranda, 384 U.S. at 384 U. S. 455 ("[T]he very fact of custodial interrogation exacts a heavy toll on
individual liberty and trades on the weakness of individuals").
[ Footnote 2/34 ]
There is a natural tendency to discredit the testimony of the
suspect because of his obvious interest, but it is also true that
there have been cases in which the desire to insure a conviction of
an apparently guilty suspect has led police officers to color their
testimony. As Judge Wilkey observed in a different context, a
police officer may "feel that he has a higher duty' than the
truth. He may perjure himself to convict the defendant." Wilkey,
The Exclusionary Rule, 62 Judicature 215, 226 (1978). [ Footnote 2/35 ] See United States v. Carignan, 342 U. S.
36 , 342 U. S. 46 (1951) (Douglas, J., concurring) ("What happens behind doors that
are opened and closed at the sole discretion of the police is a
black chapter in every country -- the free as well as the despotic,
the modern as well as the ancient").
[ Footnote 2/36 ] See, e.g., Fare v. Michael C., 442 U.
S. 707 , 442 U. S.
724 -725 (1979); North Carolina v. Butler, 441 U. S. 369 , 441 U. S.
374 -375 (1979); Faretta v. California, 422 U. S. 806 , 422 U. S. 835 (1975).
[ Footnote 2/37 ] See also Solem v. Stumes, 465 U.
S. 638 , 465 U. S. 641 , 465 U. S.
647 -648 (1984) (Under Edwards, "once a suspect
has invoked the right to counsel, any subsequent conversation must
be initiated by him. . . . It does not in any way cast doubt on the
legitimacy or necessity of Edwards to acknowledge that, in
some cases, a waiver could be knowing, voluntary, and intelligent
even though it occurred when the police recommenced questioning
after an accused had invoked the right to counsel").
[ Footnote 2/38 ]
The Court cites Johnson v. Zerbst, 304 U.
S. 458 (1938), a case involving a claim that a defendant
had waived his right to trial counsel. I find it inconceivable
that, in such a situation, an otherwise sufficient series of
questions and answers can support a valid waiver if the government
misinforms an attorney about the defendant's trial date, and if the
government fails to tell the defendant of the attorney's
communications. Yet that would be the consequence of the Court's
"what the suspect doesn't know can't hurt him" approach to this
case.
[ Footnote 2/39 ]
It is thus clear that the majority's comparison of a suspect in
Burbine's position with "the same defendant . . . had a lawyer not
telephoned the police station," ante at 475 U. S. 422 ,
sets up a false comparison. For Miranda's condemnation of
trickery and cajolery requires that an assessment of police conduct
figure importantly in the assessment of a suspect's decision to
waive his fundamental constitutional rights. In the majority's
comparison, however, the police conduct is irrelevant. In contrast,
the appropriate comparison is between a suspect in Burbine's
position and a suspect who is otherwise tricked and deceived into a
waiver of his rights. Miranda itself, as well as the
long-established presumption against the waiver of constitutional
rights, requires that both kinds of waiver be held invalid.
[ Footnote 2/40 ] See n. 475
U.S. 412 fn2/10|>10, supra. Aside from this case,
the only two exceptions were decided in 1985. Those recent cases
may reflect a recognition that this Court is increasingly less than
faithful to Miranda's clear teachings. See, e.g., New
York v. Quarles, 467 U. S. 649 (1984); Oregon v. Elstad, 470 U.
S. 298 (1985). Cf. New York v. Quarles, 467
U.S. at 467 U. S. 660 (O'CONNOR, J., dissenting in part) (" Miranda is now the
law, and, in my view, the Court has not provided sufficient
justification for departing from it or for blurring its now clear
strictures").
[ Footnote 2/41 ] See Lodowski v. State, 302 Md. 691, 721, 490 A.2d 1228,
1243 (1985) ("We have stated our view that a suspect must be fully
informed of the actual presence and availability of counsel who
seeks to confer with him in order that any waiver of a right to
counsel, as established by Miranda, can be knowing and
intelligent"); Haliburton v. Florida, 476 So. 2d at 194
("In order for the right to counsel to be meaningful, a defendant
must be told when an attorney who has been retained on his behalf
is trying to advise him"); Lewis v. State, 695 P.2d at 529
("The dispositive issue on this appeal is . . . whether a
defendant's waiver of his rights to counsel and against
self-incrimination is knowingly and intelligently made when the
defendant is not informed of his attorney's availability at police
headquarters. We hold today that such a waiver is constitutionally
invalid"); Commonwealth v. Sherman, 389 Mass. 287, 296, 450
N.E.2d 566 , 571 (1983) ("[W]e conclude that the statement of
the defendant must be suppressed because, under principles of
construction of Miranda, the failure of the police to
inform the defendant of the attorney's request [to see him]
vitiated the defendant's waiver of his Miranda rights"); Weber v. State, 457 A.2d
674 , 685 (Del.1983) ("When a suspect does not know that an
attorney, who has been retained or properly designated to represent
him, is actually present in the police station seeking an
opportunity to render legal assistance, and the police do not
inform him of that fact, there can be no intelligent and knowing
waiver"); People v. Smith, 93 Ill. 2d at 189, 442 N.E.2d
at 1329 ("We hold that, when police, prior to or during custodial
interrogation, refuse an attorney appointed or retained to assist a
suspect access to the suspect, there can be no knowing waiver of
the right to counsel if the suspect has not been informed that the
attorney was present and seeking to consult with him"); State
v. Haynes, 288 Ore., at 70, 602 P.2d at 277 ("We hold only
that, when unknown to the person in this situation an identified
attorney is actually available and seeking an opportunity to
consult with him, and the police do not inform him of that fact,
any statement or the fruits of any statement obtained after the
police themselves know of the attorney's efforts to reach the
arrested person cannot be rendered admissible on the theory that
the person knowingly and intelligently waived counsel").
As noted, two state courts besides the Rhode Island Supreme
Court have reached a contrary conclusion. See State v.
Beck, 687 S.W.2d
155 , 159 (Mo.1985) ("In light of the careful attention the
deputies gave to insuring that defendant was properly informed of
his Miranda rights, his unequivocal responses and
determined conduct evince nothing less than a deliberate, firm,
knowing, and intelligent choice to speak without the prior counsel
of Ms. Hendrix or any other attorney"); Blanks v. State, 254 Ga. 420, 423, 330 S.E.2d
575 , 579 (1985) ("In this case, Blanks was advised of his right
to legal assistance on numerous occasions. The record shows
overwhelmingly that he knowingly, intelligently, and voluntarily
waived this right and spoke willingly to law enforcement
officers").
[ Footnote 2/42 ] See also People v. Smith, 93 Ill. 2d at 187, 442 N.E.2d
at 1328-1329; Commonwealth v. Sherman, 389 Mass., at 291,
450 N.E.2d at 568.
The majority mischaracterizes this dissent by stating that its
"major premise" is that
" Miranda requires the police to inform a suspect of any
and all information that would be useful to a decision whether to
remain silent or speak with the police." Ante at 475 U. S. 433 ,
n. 4. The majority's response ignores the fact that the police
action here is not simply a failure to provide "useful"
information; rather, it is affirmative police interference in a
communication between an attorney and a suspect. Moreover, the
"information" intercepted by the police bears directly on the right
to counsel that police are asking the suspect to waive. The
"information" at issue is thus far different from information about
"the nature and quality of the evidence," Oregon v.
Elstad, 470 U.S. at 470 U. S. 317 ,
or about a grand jury witness' possible target status, United
States v. Washington, 431 U. S. 181 , 431 U. S.
188 -189 (1977).
[ Footnote 2/43 ]
In contrast, the theory of the Rhode Island Supreme Court's
decision was that, as a matter of fact, knowledge of attorney
Munson's call would not have affected Burbine's decision to
confess. State v. Burbine, 451
A.2d 22 , 29 (1982).
[ Footnote 2/44 ]
After endorsing the statement by "one of our country's
distinguished jurists" that the quality of a nation's civilization
can be largely measured by the methods it uses in the enforcement
of its criminal law, the Court wrote:
"If the individual desires to exercise his privilege, he has the
right to do so. This is not for the authorities to decide. An
attorney may advise his client not to talk to police until he has
had an opportunity to investigate the case, or he may wish to be
present with his client during any police questioning. In doing so,
an attorney is merely exercising the good professional judgment he
has been taught. This is not cause for considering the attorney a
menace to law enforcement. He is merely carrying out what he is
sworn to do under his oath -- to protect to the extent of his
ability the rights of his client. In fulfilling this
responsibility, the attorney plays a vital role in the
administration of criminal justice under our Constitution." Miranda v. Arizona, 384 U.S. at 384 U. S.
480 -481.
[ Footnote 2/45 ]
A recent treatise describes the significant effect of Dunaway: "Over the years, the impression generally prevailed that the
police could 'pick-up' suspects for questioning. In 1979, however,
the Supreme Court of the United States held, in Dunaway v. New
York, that a confession obtained after a 'pick-up' without
probable cause ( i.e., without reasonable grounds) to make
an actual arrest could not be used as evidence."
F. Inbau, J. Reid, & J. Buckley, Criminal Interrogation and
Confessions 211 (3d ed.1986).
[ Footnote 2/46 ]
Thus, the Court asks itself:
(1) "To what extent should the police be held accountable for
knowing that the accused has counsel?" Ante at 475 U. S. 425 .
The simple answer is that police should be held accountable to the
extent that the attorney or the suspect informs the police of the
representation.
(2) "Is it enough that someone in the station house knows, or
must the interrogating officer himself know of counsel's efforts to
contact the suspect?" Ibid. Obviously, police should be
held responsible for getting a message of this importance from one
officer to another.
(3) "Do counsel's efforts to talk to the suspect concerning one
criminal investigation trigger the obligation to inform the
defendant before interrogation may proceed on a wholly separate
matter?" Ibid. As the facts of this case forcefully
demonstrate, the answer is "yes."
[ Footnote 2/47 ]
Two examples will illustrate the one-sided character of the
Court's conception of the clarity of the Miranda warnings.
Although a suspect is told that a lawyer will be appointed if he
"cannot afford one," he may have no way of determining whether his
resources are adequate to pay an attorney; even Members of this
Court cannot agree when a person is too poor to pay his own legal
costs. See, e.g., Pfeil v. Rogers, 474 U.S. 812 (1985)
(Court splits 5-4 on whether to grant petitioner leave to proceed in forma pauperis ); Barrett v. United States Customs
Service, 474 U.S. 812 (1985) (same). Similarly, although a
suspect is entitled to rely on the implicit promise that his
silence will not be used against him, Wainwright v.
Greenfield, 474 U. S. 284 (1986); Doyle v. Ohio, 426 U. S. 610 (1976), it is by no means clear that every suspect will understand
that promise; many may fear that silence or a request for counsel
will be construed as an admission of guilt. Cf. Griffin v.
California, 380 U. S. 609 ,
610-611 (1965) (prosecutor argued that defendant's silence was
probative of his guilt); App. in Michigan v. Jackson, O.T.
1985, No. 84-1531, pp. 157-158 (police statement to suspect) ("I
think you need a brick to hit you against a wall to realize that
your in serious trouble here, and that the only way that you have
any hope is by us. I don't know what your gonna think, how if you
want an attorney, I'll tell you what an attorney is gonna tell ya,
an attorney is gonna tell ya don't talk to police. . . . But the
attorney doesn't go to jail, does he?").
[ Footnote 2/48 ]
Indeed, in contrast to the majority's remarks about clarity, the
operation of the principle expressed by almost all the state courts
would be far clearer than the operation of the Court's contrary
principle. For it is surely easier to administer a rule that
applies to an external event, such as an attorney's telephone call
or a visit to the police station, than a rule that requires an
evaluation of the state of mind of a person undergoing custodial
interrogation.
[ Footnote 2/49 ]
In contrast to the Court's opinion today, the Court in the past
has had no problems applying principles of agency to the invocation
of constitutional rights. See Brewer v. Williams, 430 U.S.
at 430 U. S. 405 (the accused "had effectively asserted his right to counsel by
having secured attorneys at both ends of the automobile trip, both
of whom, acting as his agents, had made clear to the
police that no interrogation was to occur during the journey")
(emphasis added).
[ Footnote 2/50 ] See, e.g., Engle v. Isaac, 456 U.
S. 107 , 456 U. S. 134 (1982).
[ Footnote 2/51 ] See Edwards v. Arizona, 451 U.S. at 451 U. S. 482 (" Miranda . . . declared that an accused has a Fifth and
Fourteenth Amendment right to have counsel present during custodial
interrogation"); Miranda, 384 U.S. at 384 U. S. 479 .
In his Miranda dissent, Justice Harlan correctly noted
that the Court had held that a person in custody "has a right to
have present an attorney during the questioning, and that, if
indigent, he has a right to a lawyer without charge." Id. at 384 U. S. 504 .
The standard written waiver form used by the police in this case
recited: "I have the right to the presence of an attorney prior to
and during any questioning by the police."
In his argument for the United States as amicus curiae, the Solicitor General advanced the remarkable suggestion that Miranda's requirement that an individual be told that he
has a right to consult with counsel while in custody is "a sort of
a white lie" that is "harmless" and "useful." Tr. of Oral Arg. 21.
He contended that "police do not have to provide a lawyer if he
asks for a lawyer. They need simply terminate the interrogation." Ibid. I find this view completely untenable, and I take it
that the Court's opinion, in today's sanctioning of police
deception, does not in any way accept the suggestion that this
Court's required warnings are themselves a constitutionally
compelled form of deception, or "white lie."
[ Footnote 2/52 ] See, e.g., Strickland v. Washington, 466 U.
S. 668 , 466 U. S. 690 (1984) (when client challenges effectiveness of assistance,
"counsel is strongly presumed to have rendered adequate assistance
and made all significant decisions in the exercise of reasonable
professional judgment"); Wainwright v. Sykes, 433 U. S.
72 , 433 U. S. 91 , n.
14 (1977) ("[D]ecisions of counsel relating to trial strategy, even
when made without the consultation of the defendant, would bar
direct federal review of claims thereby forgone, except where the circumstances are exceptional'"). [ Footnote 2/53 ]
Prevailing norms of legal practice prevent a lawyer from
communicating with a party, rather than a lawyer. See Disciplinary Rule 7-104(A)(1), ABA Code of Professional
Responsibility (1980) ("During the course of his representation of
a client, a lawyer shall not: communicate or cause another to
communicate on the subject of the representation with a party he
knows to be represented by a lawyer in that matter unless he has
the prior consent of the lawyer representing such other party or is
authorized by law to do so"). Cf. United States v. Foley, 735 F.2d 45, 48 (CA2 1984) (prosecutorial practice of interviewing
defendants in the absence of counsel before arraignment "raises
serious constitutional questions" and "contravene[s] the principles
of DR7-104(A)(1))," cert. denied sub nom. Edler v. United
States, 469 U.S. 1161 (1985); State v. Yatman, 320
So. 2d 401, 403 (Fla.App.1975) ("Disciplinary Rule 7-104 of the
Code of Professional Responsibility applies equally to lawyers
involved in the prosecution of criminal cases as in civil cases. .
. . If any communication with a person represented by counsel on
the subject under litigation is prohibited, then taking the
deposition of an individual charged with a criminal offense without
notice to his counsel regarding matters which are relevant to the
criminal charges pending against said represented individual is
also clearly prohibited by the foregoing disciplinary rule"); United States v. Springer, 460 F.2d 1344, 1354-1355 (CA7
1972) (Stevens, J., dissenting) (interview of defendant in absence
of counsel would have violated DR7-104(A) in civil context and
violated "procedural regularity" required by Due Process Clause in
criminal context). These cases suggest the established legal
principle that an attorney and his client frequently share a common
identity for purposes related to the client's legal interests.
[ Footnote 2/54 ] See 475
U.S. 412 fn2/10|>n. 10, supra. [ Footnote 2/55 ] State v. Haynes, 288 Ore. 59, 602 P.2d
272 (1979), cert. denied, 446 U.S. 945 (1980).
[ Footnote 2/56 ] Lewis v. State, 695 P.2d
528 (Okla.Crim.App.1984).
[ Footnote 2/57 ] See ante at 475 U. S. 424 ("[W]e share respondent's distaste for the deliberate misleading of
an officer of the court").
[ Footnote 2/58 ] See Wainwright v. Greenfield, 474 U.S. at 474 U. S. 295 ; Doyle v. Ohio, 426 U.S. at 426 U. S.
618 .
[ Footnote 2/59 ] Brady v. Maryland, 373 U. S. 83 , 373 U. S. 87 (1963). See also United States v. Bagley, 473 U.
S. 667 (1985); United States v. Agurs, 427 U. S. 97 (1976); Moore v. Illinois, 408 U.
S. 786 (1972).
[ Footnote 2/60 ] Blackledge v. Perry, 417 U. S. 21 (1974).
[ Footnote 2/61 ] North Carolina v. Pearce, 395 U.
S. 711 (1969).
[ Footnote 2/62 ]
"This Court has long held that certain interrogation techniques,
either in isolation or as applied to the unique characteristics of
a particular suspect, are so offensive to a civilized system of
justice that they must be condemned under the Due Process Clause of
the Fourteenth Amendment. Brown v. Mississippi, 297 U. S.
278 (1936), was the wellspring of this notion, now
deeply embedded in our criminal law. Faced with statements
extracted by beatings and other forms of physical and psychological
torture, the Court held that confessions procured by means
'revolting to the sense of justice' could not be used to secure a
conviction. Id. at 297 U. S.
286 . On numerous subsequent occasions, the Court has set
aside convictions secured through the admission of an improperly
obtained confession. . . . Although these decisions framed the
legal inquiry in a variety of different ways, usually through the
'convenient shorthand' of asking whether the confession was
'involuntary,' Blackburn v. Alabama, 361 U. S.
199 , 361 U. S. 207 (1960), the
Court's analysis has consistently been animated by the view that
'ours is an accusatorial, and not an inquisitorial, system,' Rogers v. Richmond, 365 U. S. 534 , 365 U. S.
541 (1961), and that, accordingly, tactics for eliciting
inculpatory statements must fall within the broad constitutional
boundaries imposed by the Fourteenth Amendment's guarantee of
fundamental fairness. Indeed, even after holding that the Fifth
Amendment privilege against compulsory self-incrimination applies
in the context of custodial interrogations, . . . and is binding on
the States, . . . the Court has continued to measure confessions
against the requirements of due process. See, e.g., Mincey v.
Arizona, supra, at 402; Beecher v. Alabama, 389 U. S.
35 , 389 U. S. 38 (1967) (per
curiam)." Miller v. Fenton, 474 U. S. 104 , 474 U. S.
109 -110 (1985). | The Supreme Court ruled that the police's failure to inform the respondent of his attorney's phone call did not violate his Fifth Amendment rights as he was properly informed of his rights and waived them. The Court found that the respondent's sister's actions were not enough to invoke his right to counsel as he was unaware of her efforts and did not request an attorney himself. The Court also held that the police's conduct, while misleading, did not violate the respondent's due process rights. |
Criminal Trials & Prosecutions | Richardson v. Marsh | https://supreme.justia.com/cases/federal/us/481/200/ | U.S. Supreme Court Richardson v. Marsh, 481
U.S. 200 (1987) Richardson v. Marsh No. 85-1433 Argued January 14,
1987 Decided April 21,
1987 481
U.S. 200 CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE SIXTH CIRCUIT Syllabus Respondent and Benjamin Williams were charged with murder,
robbery, and assault. At their joint trial, Williams' confession
was admitted over respondent's objection. The confession had been
redacted to omit all reference to respondent -- indeed, to omit all
indication that anyone other than Williams and a third accomplice
participated in the crime. In his confession, Williams described a
conversation he had with the third accomplice as they drove to the
victims' home, during which the accomplice said that he would have
to kill the victims after robbing them. At the time the confession
was admitted, the jury was admonished not to use it in any way
against respondent. Williams did not testify. Respondent's
testimony indicated that she had been in the car with Williams and
the third accomplice, but had not heard their conversation.
Respondent insisted that she had not intended to rob or kill
anyone. Respondent was convicted of felony murder and assault to
commit murder, and the Michigan Court of Appeals affirmed. The
Federal District Court denied respondent's petition for a writ of
habeas corpus, but the Court of Appeals reversed, holding that
respondent was entitled to a new trial under Bruton v. United
States, 391 U. S. 123 . Bruton held that a defendant is deprived of his rights
under the Confrontation Clause when his nontestifying codefendant's
confession naming him as a participant in the crime is introduced
at their joint trial, even if the jury is instructed to consider
that confession only against the codefendant. The Court of Appeals
held that Bruton requires the same result when the
codefendant's confession is redacted to omit any reference to the
defendant, but the defendant is nonetheless linked to the
confession by evidence properly admitted against him at trial. Held: The Confrontation Clause is not violated by the
admission of a nontestifying codefendant's confession with a proper
limiting instruction when, as here, the confession is redacted to
eliminate not only the defendant's name, but any reference to her
existence. The Bruton Court recognized a very narrow
exception to the almost invariable assumption of the law that
jurors follow their instructions in the situation when the facially
incriminating confession of a nontestifying codefendant is
introduced at a joint trial and the jury is instructed to consider
the confession only against the codefendant. In that situation, Bruton explained, the Page 481 U. S. 201 risk that the jury will not follow its instructions is so great,
and the consequences of that failure so vital to the defendant,
that jurors will be assumed incapable of obeying their
instructions. There are two important distinctions between this
case and Bruton which cause it to fall outside the narrow
exception Bruton created. First, in Bruton, the
codefendant's confession expressly implicated the defendant as his
accomplice, whereas here the confession was not incriminating on
its face, but became so only when linked with evidence introduced
later at trial. Where the necessity of such linkage is involved,
there does not exist the overwhelming probability of jurors'
inability to disregard incriminating inferences that is the
foundation of Bruton. Second, evidence requiring linkage
differs from evidence incriminating on its face in the practical
effects which application of the Bruton exception would
produce. If limited to facially incriminating confessions, Bruton can be complied with by redaction. If extended to
confessions incriminating by connection, not only is that not
possible, but it is not even possible to predict the admissibility
of a confession in advance of trial. Compliance with the Court of
Appeals' overbroad reading of Bruton could not be achieved
without enormous costs to the criminal justice system. Pp. 481 U. S.
206 -211.
781 F.2d 1201, reversed and remanded.
SCALIA, J., delivered the opinion of the Court, in which
REHNQUIST, C.J., and WHITE, BLACKMUN, POWELL, and O'CONNOR, JJ.,
joined. STEVENS, J., filed a dissenting opinion, in which BRENNAN
and MARSHALL, JJ., joined, post, p. 481 U. S.
211 .
JUSTICE SCALIA delivered the opinion of the Court.
In Bruton v. United States, 391 U.
S. 123 (1968), we held that a defendant is deprived of
his rights under the Confrontation Clause when his nontestifying
codefendant's confession naming him as a participant in the crime
is introduced at their joint trial, even if the jury is instructed
to consider Page 481 U. S. 202 that confession only against the codefendant. Today we consider
whether Bruton requires the same result when the
codefendant's confession is redacted to omit any reference to the
defendant, but the defendant is nonetheless linked to the
confession by evidence properly admitted against him at trial. I Respondent Clarissa Marsh, Benjamin Williams, and Kareem Martin
were charged with assaulting Cynthia Knighton and murdering her
4-year-old son, Koran, and her aunt, Ollie Scott. Respondent and
Williams were tried jointly, over her objection. (Martin was a
fugitive at the time of trial.) At the trial, Knighton testified as
follows: On the evening of October 29, 1978, she and her son were
at Scott's home when respondent and her boyfriend Martin visited.
After a brief conversation in the living room, respondent announced
that she had come to "pick up something" from Scott, and rose from
the couch. Martin then pulled out a gun, pointed it at Scott and
the Knightons, and said that "someone had gotten killed, and
[Scott] knew something about it." Respondent immediately walked to
the front door and peered out the peephole. The doorbell rang,
respondent opened the door, and Williams walked in, carrying a gun.
As Williams passed respondent, he asked, "Where's the money?"
Martin forced Scott upstairs, and Williams went into the kitchen,
leaving respondent alone with the Knightons. Knighton and her son
attempted to flee, but respondent grabbed Knighton and held her
until Williams returned. Williams ordered the Knightons to lie on
the floor, and then went upstairs to assist Martin. Respondent,
again left alone with the Knightons, stood by the front door and
occasionally peered out the peephole. A few minutes later, Martin,
Williams, and Scott came down the stairs, and Martin handed a paper
grocery bag to respondent. Martin and Williams then forced Scott
and the Knightons into the basement, where Martin shot them. Only
Cynthia Knighton survived. Page 481 U. S. 203 In addition to Knighton's testimony, the State introduced (over
respondent's objection) a confession given by Williams to the
police shortly after his arrest. The confession was redacted to
omit all reference to respondent -- indeed, to omit all indication
that anyone other than Martin and Williams participated in the
crime. [ Footnote 1 ] The
confession largely corroborated Page 481 U. S. 204 Knighton's account of the activities of persons other than
respondent in the house. In addition, the confession described a
conversation Williams had with Martin as they drove to the Scott
home, during which, according to Williams, Martin said that he
would have to kill the victims after the robbery. At the time the
confession was admitted, the jury was admonished not to use it in
any way against respondent. Williams did not testify.
After the State rested, respondent took the stand. She testified
that, on October 29, 1978, she had lost money that Martin intended
to use to buy drugs. Martin was upset, and suggested to respondent
that she borrow money from Scott, with whom she had worked in the
past. Martin and respondent picked up Williams and drove to Scott's
house. During the drive, respondent, who was sitting in the
backseat, "knew that [Martin and Williams] were talking," but could
not hear the conversation because "the radio was on and the speaker
was right in [her] ear." Martin and respondent were admitted into
the home, and respondent had a short conversation with Scott,
during which she asked for a loan. Martin then pulled a gun, and
respondent walked to the door to see where the car was. When she
saw Williams, she opened the door for him. Respondent testified
that, during the robbery, she did not feel free to leave, and was
too scared to flee. She said that she did not know why she
prevented the Knightons from escaping. She admitted taking the bag
from Martin, but said that, after Martin and Williams took the
victims into the basement, she left the house without the bag.
Respondent insisted that she had possessed no prior knowledge that
Martin and Williams were armed, had heard no conversation about
anyone's being harmed, and had not intended to rob or kill
anyone. Page 481 U. S. 205 During his closing argument, the prosecutor admonished the jury
not to use Williams' confession against respondent. Later in his
argument, however, he linked respondent to the portion of Williams'
confession describing his conversation with Martin in the car.
[ Footnote 2 ] (Respondent's
attorney did not object to this.) After closing arguments, the
judge again instructed the jury that Williams' confession was not
to be considered against respondent. The jury convicted respondent
of two counts of felony murder in the perpetration of an armed
robbery and one count of assault with intent to commit murder. The
Michigan Court of Appeals affirmed in an unpublished opinion, People v. Marsh, No. 46128 (Dec. 17, 1980), and the
Michigan Supreme Court denied leave to appeal, 412 Mich. 927
(1982).
Respondent then filed a petition for a writ of habeas corpus
pursuant to 28 U.S.C. § 2254. She alleged that her conviction was
not supported by sufficient evidence, and that introduction of
Williams' confession at the joint trial had violated her rights
under the Confrontation Clause. The District Court denied the
petition. Civ.Action No. 83-CV-2665-DT (ED Mich., Oct. 11, 1984).
The United States Court of Appeals for the Sixth Circuit reversed.
781 F.2d 1201 (1986). The Court of Appeals held that, in
determining whether Bruton bars the admission of a
nontestifying codefendant's confession, a court must assess the
confession's "inculpatory Page 481 U. S. 206 value" by examining not only the face of the confession, but
also all of the evidence introduced at trial. 781 F.2d at 1212.
Here, Williams' account of the conversation in the car was the only
direct evidence that respondent knew before entering Scott's house
that the victims would be robbed and killed. Respondent's own
testimony placed her in that car. In light of the "paucity" of
other evidence of malice and the prosecutor's linkage of respondent
and the statement in the car during closing argument, admission of
Williams' confession "was powerfully incriminating to [respondent]
with respect to the critical element of intent." Id. at
1213. Thus, the Court of Appeals concluded, the Confrontation
Clause was violated. We granted certiorari, 476 U.S. 1168 (1986),
because the Sixth Circuit's decision conflicts with those of other
Courts of Appeals which have declined to adopt the "evidentiary
linkage" or "contextual implication" approach to Bruton questions, see, e.g., United States v. Belle, 593 F.2d 487
(CA3 1979) (en banc). II The Confrontation Clause of the Sixth Amendment, extended
against the States by the Fourteenth Amendment, guarantees the
right of a criminal defendant "to be confronted with the witnesses
against him." The right of confrontation includes the right to
cross-examine witnesses. See Pointer v. Texas, 380 U. S. 400 , 380 U. S. 404 , 380 U. S.
406 -407 (1965). Therefore, where two defendants are
tried jointly, the pretrial confession of one cannot be admitted
against the other unless the confessing defendant takes the
stand.
Ordinarily, a witness whose testimony is introduced at a joint
trial is not considered to be a witness "against" a defendant if
the jury is instructed to consider that testimony only against a
codefendant. This accords with the almost invariable assumption of
the law that jurors follow their instructions, Francis v.
Franklin, 471 U. S. 307 , 471 U. S. 325 ,
n. 9 (1985), which we have applied in many varying contexts. For
example, in Harris v. New York, 401 U.
S. 222 (1971), Page 481 U. S. 207 we held that statements elicited from a defendant in violation
of Miranda v. Arizona, 384 U. S. 436 (1966), can be introduced to impeach that defendant's credibility,
even though they are inadmissible as evidence of his guilt, so long
as the jury is instructed accordingly. Similarly, in Spencer v.
Texas, 385 U. S. 554 (1967), we held that evidence of the defendant's prior criminal
convictions could be introduced for the purpose of sentence
enhancement, so long as the jury was instructed it could not be
used for purposes of determining guilt. Accord, Marshall v.
Lonberger, 459 U. S. 422 , 459 U. S.
438 -439, n. 6 (1983). See also Tennessee v.
Street, 471 U. S. 409 , 471 U. S.
414 -416 (1985) (instruction to consider accomplice's
incriminating confession only for purpose of assessing truthfulness
of defendant's claim that his own confession was coerced); Watkins v. Sowders, 449 U. S. 341 , 449 U. S. 347 (1981) (instruction not to consider erroneously admitted eyewitness
identification evidence); Walder v. United States, 347 U. S. 62 (1954)
(instruction to consider unlawfully seized physical evidence only
in assessing defendant's credibility). In Bruton, however,
we recognized a narrow exception to this principle: we held that a
defendant is deprived of his Sixth Amendment right of confrontation
when the facially incriminating confession of a nontestifying
codefendant is introduced at their joint trial, even if the jury is
instructed to consider the confession only against the codefendant.
We said:
"[T]here are some contexts in which the risk that the jury will
not, or cannot, follow instructions is so great, and the
consequences of failure so vital to the defendant, that the
practical and human limitations of the jury system cannot be
ignored. Such a context is presented here, where the powerfully
incriminating extrajudicial statements of a codefendant, who stands
accused side-by-side with the defendant, are deliberately spread
before the jury in a joint trial. . . ."
391 U.S. at 391 U. S.
135 -136 (citations omitted). Page 481 U. S. 208 There is an important distinction between this case and Bruton which causes it to fall outside the narrow
exception we have created. In Bruton, the codefendant's
confession "expressly implicat[ed]" the defendant as his
accomplice. Id. at 391 U. S. 124 ,
n. 1. Thus, at the time that confession was introduced there was
not the slightest doubt that it would prove "powerfully
incriminating." Id. at 391 U. S. 135 .
By contrast, in this case, the confession was not incriminating on
its face, and became so only when linked with evidence introduced
later at trial (the defendant's own testimony). [ Footnote 3 ]
Where the necessity of such linkage is involved, it is a less
valid generalization that the jury will not likely obey the
instruction to disregard the evidence. Specific testimony that "the
defendant helped me commit the crime" is more vivid than
inferential incrimination, and hence more difficult to thrust out
of mind. Moreover, with regard to such an explicit statement, the
only issue is, plain and simply, whether the jury can possibly be
expected to forget it in assessing the defendant's guilt; whereas,
with regard to inferential incrimination, the judge's instruction
may well be successful in dissuading the jury from entering onto
the path of inference in the first place, so that there is no
incrimination to forget. In short, while it may not always be
simple for the members of a jury to obey the instruction that they
disregard an incriminating inference, there does not exist the
overwhelming probability of their inability to do so that is the
foundation of Bruton's exception to the general rule.
Even more significantly, evidence requiring linkage differs from
evidence incriminating on its face in the practical effects which
application of the Bruton exception would produce. If Page 481 U. S. 209 limited to facially incriminating confessions, Bruton can be complied with by redaction -- a possibility suggested in
that opinion itself. Id. at 391 U. S. 134 ,
n. 10. If extended to confessions incriminating by connection, not
only is that not possible, but it is not even possible to predict
the admissibility of a confession in advance of trial. The
"contextual implication" doctrine articulated by the Court of
Appeals would presumably require the trial judge to assess at the
end of each trial whether, in light of all of the evidence, a
nontestifying codefendant's confession has been so "powerfully
incriminating" that a new, separate trial is required for the
defendant. This obviously lends itself to manipulation by the
defense -- and, even without manipulation, will result in numerous
mistrials and appeals. It might be suggested that those
consequences could be reduced by conducting a pretrial hearing at
which prosecution and defense would reveal the evidence they plan
to introduce, enabling the court to assess compliance with Bruton ex ante, rather than ex post. If this
approach is even feasible under the Federal Rules (which is
doubtful -- see, e.g., Fed.Rule Crim.Proc. 14), it would
be time-consuming and obviously far from foolproof.
One might say, of course, that a certain way of assuring
compliance would be to try defendants separately whenever an
incriminating statement of one of them is sought to be used. That
is not as facile or as just a remedy as might seem. Joint trials
play a vital role in the criminal justice system, accounting for
almost one-third of federal criminal trials in the past five years.
Memorandum from David L. Cook, Administrative Office of the United
States Courts, to Supreme Court Library (Feb. 20, 1987) (available
in Clerk of Court's case file). Many joint trials -- for example,
those involving large conspiracies to import and distribute illegal
drugs -- involve a dozen or more codefendants. Confessions by one
or more of the defendants are commonplace -- and indeed the
probability of confession increases with the number Page 481 U. S. 210 of participants, since each has reduced assurance that he will
be protected by his own silence. It would impair both the
efficiency and the fairness of the criminal justice system to
require, in all these cases of joint crimes where incriminating
statements exist, that prosecutors bring separate proceedings,
presenting the same evidence again and again, requiring victims and
witnesses to repeat the inconvenience (and sometimes trauma) of
testifying, and randomly favoring the last-tried defendants who
have the advantage of knowing the prosecution's case beforehand.
Joint trials generally serve the interests of justice by avoiding
inconsistent verdicts and enabling more accurate assessment of
relative culpability -- advantages which sometimes operate to the
defendant's benefit. Even apart from these tactical considerations,
joint trials generally serve the interests of justice by avoiding
the scandal and inequity of inconsistent verdicts. [ Footnote 4 ] The other way of assuring
compliance with an expansive Bruton rule would be to forgo
use of codefendant confessions. That price also is too high, since
confessions
"are more than merely 'desirable;' they are essential to
society's compelling interest in finding, convicting, and punishing
those who violate the law." Moran v. Burbine, 475 U. S. 412 , 475 U. S. 426 (1986) (citation omitted). Page 481 U. S. 211 The rule that juries are presumed to follow their instructions
is a pragmatic one, rooted less in the absolute certitude that the
presumption is true than in the belief that it represents a
reasonable practical accommodation of the interests of the state
and the defendant in the criminal justice process. On the precise
facts of Bruton, involving a facially incriminating
confession, we found that accommodation inadequate. As our
discussion above shows, the calculus changes when confessions that
do not name the defendant are at issue. While we continue to apply Bruton where we have found that its rationale validly
applies, see Cruz v. New York, ante p. 481 U. S. 186 , we
decline to extend it further. We hold that the Confrontation Clause
is not violated by the admission of a nontestifying codefendant's
confession with a proper limiting instruction when, as here, the
confession is redacted to eliminate not only the defendant's name,
but any reference to his or her existence. [ Footnote 5 ]
In the present case, however, the prosecutor sought to undo the
effect of the limiting instruction by urging the jury to use
Williams' confession in evaluating respondent's case. See
supra at 481 U. S. 205 ,
and n. 2. On remand, the court should consider whether, in light of
respondent's failure to object to the prosecutor's comments, the
error can serve as the basis for granting a writ of habeas corpus. See Wainwright v. Sykes, 433 U. S. 72 (1977).
The judgment of the Court of Appeals is reversed, and the case
is remanded for further proceedings consistent with this
opinion. So ordered. [ Footnote 1 ]
The redacted confession, in its entirety, read:
"On Sunday evening, October the 29th, 1978, at about 6:30 p.m.,
I was over to my girl friend's house at 237 Moss, Highland Park,
when I received a phone call from a friend of mine named Kareem
Martin. He said he had been looking for me and James Coleman, who I
call Tom. He asked me if I wanted to go on a robbery with him. I
said okay. Then he said he'd be by and pick me up. About 15 or 20
minutes later, Kareem came by in his black Monte Carlo car. I got
in the car and Kareem told me he was going to stick up this crib,
told me the place was a numbers house. Kareem said there would be
over $6,000 or $10,000 in the place. Kareem said he would have to
take them out after the robbery. Kareem had a big silver gun. He
gave me a long barrelled [ sic ] .22 revolver. We then drove
over to this house and parked the car across the big street near
the house. The plan was that I would wait in the car in front of
the house, and then I would move the car down across the big
street, because he didn't want anybody to see the car. Okay, Kareem
went up to the house and went inside. A couple of minutes later, I
moved the car and went up to the house. As I entered, Kareem and
this older lady were in the dining room, a little boy and another
younger woman were sitting on the couch in the front room. I pulled
my pistol and told the younger woman and the little boy to lay on
the floor. Kareem took the older lady upstairs. He had a pistol,
also. I stayed downstairs with the two people on the floor. After
Kareem took the lady upstairs I went upstairs, and the lady was
laying on the bed in the room to the left as you get up the stairs.
The lady had already given us two bags full of money before we ever
got upstairs. Kareem had thought she had more money, and that's why
we had went upstairs. Me and Kareem started searching the rooms,
but I didn't find any money. I came downstairs, and then Kareem
came down with the lady. I said, 'Let's go, let's go.' Kareem said
no. Kareem then took the two ladies and little boy down the
basement, and that's when I left to go to the car. I went to the
car and got in the back seat. A couple of minutes later, Kareem
came to the car and said he thinks the girl was still living,
because she was still moving, and he didn't have any more bullets.
He asked me how come I didn't go down the basement, and I said I
wasn't doing no shit like that. He then dropped me back off at my
girl's house in Highland Park, and I was supposed to get together
with him today, get my share of the robbery after he had counted
the money. That's all."
App. in No. 84-1777 (CA6), pp. 88-90.
[ Footnote 2 ]
The prosecutor said:
"It's important in light of [respondent's] testimony when she
says Kareem drives over to Benjamin Williams' home and picks him up
to go over. What's the thing that she says? 'Well, I'm sitting in
the back seat of the car.' 'Did you hear any conversation that was
going on in the front seat between Kareem and Mr. Williams?' 'No,
couldn't hear any conversation. The radio was too loud.' I asked
[ sic ] you whether that is reasonable. Why did she say
that? Why did she say she couldn't hear any conversation? She said,
'I know they were having conversation, but I couldn't hear it
because of the radio.' Because if she admits that she heard the
conversation, and she admits to the plan, she's guilty of at least
armed robbery. So she can't tell you that." Id. at 164.
[ Footnote 3 ]
The dissent is mistaken in believing we "assum[e] that
[Williams'] confession did not incriminate respondent." Post at 481 U. S. 215 ,
n. 3. To the contrary, the very premise of our discussion is that
respondent would have been harmed by Williams' confession if the jury had disobeyed its instructions. Our
disagreement pertains not to whether the confession incriminated
respondent, but to whether the trial court could properly assume
that the jury did not use it against her.
[ Footnote 4 ]
The dissent notes that
"all of the cases in this Court that involved joint trials
conducted after Bruton was decided, in which compliance
with the rule of that case was at issue, appear to have originated
in a state court." Post at 481 U. S. 219 .
It concludes from this that "[f]ederal prosecutors seem to have had
little difficulty" in implementing Bruton as the dissent
believes it must be implemented. Ibid. Since the cases in
question number only a handful, the fact that they happened to be
state cases may signify nothing more than that there are many times
more state prosecutions than federal. There is assuredly no basis
to believe that federal prosecutors have been applying the
dissent's interpretation of Bruton. Indeed the contrary
proposition -- as well as the harmfulness of that interpretation to
federal law enforcement efforts -- is suggested by the fact that
the Solicitor General has appeared here as amicus to urge
reversal for substantially the reasons we have given. See Brief for United States as Amicus Curiae. [ Footnote 5 ]
We express no opinion on the admissibility of a confession in
which the defendant's name has been replaced with a symbol or
neutral pronoun.
JUSTICE STEVENS, with whom JUSTICE BRENNAN and JUSTICE MARSHALL
join, dissenting.
The rationale of our decision in Bruton v. United
States, 391 U. S. 123 , 391 U. S.
135 -136 (1968), applies without exception to all Page 481 U. S. 212 inadmissible confessions that are "powerfully incriminating."
Today, however, the Court draws a distinction of constitutional
magnitude between those confessions that directly identify the
defendant and those that rely for their inculpatory effect on the
factual and legal relationships of their contents to other evidence
before the jury. Even if the jury's indirect inference of the
defendant's guilt based on an inadmissible confession is much more
devastating to the defendant's case than its inference from a
direct reference in the codefendant's confession, the Court
requires the exclusion of only the latter statement. This illogical
result demeans the values protected by the Confrontation Clause.
Moreover, neither reason nor experience supports the Court's
argument that a consistent application of the rationale of the Bruton case would impose unacceptable burdens on the
administration of justice. I It is a "basic premise" of the Confrontation Clause that certain
kinds of hearsay
"are at once so damaging, so suspect, and yet so difficult to
discount, that jurors cannot be trusted to give such evidence the
minimal weight it logically deserves, whatever instructions the trial judge might give. [ Footnote 2/1 ] Page 481 U. S. 213 This constitutionally mandated skepticism undergirds the Bruton holding, and is equally applicable to this case.
The Court framed the issue in Bruton as"
"whether the conviction of a defendant at a joint trial should
be set aside although the jury was instructed that a codefendant's
confession inculpating the defendant had to be disregarded in
determining his guilt or innocence."
391 U.S. at 391 U. S. 123 -124.
We answered that question in the affirmative, noting that the Sixth
Amendment is violated
"where the powerfully incriminating extrajudicial statements of
a codefendant, who stands accused side-by-side with the defendant,
are deliberately spread before the jury in a joint trial." Id. at 391 U. S.
135 -136.
Today, the Court nevertheless draws a line between codefendant
confessions that expressly name the defendant and those that do
not. The Court relies on the presumption that, in the latter
category, "it is a less valid generalization that the jury will not
likely obey the instruction to disregard the evidence." Ante at 481 U. S. 208 .
I agree; but I do not read Bruton to require the exclusion
of all codefendant confessions that do not mention the
defendant. [ Footnote 2/2 ] Some such
confessions may not have any significant impact on the defendant's
case. But others will. If we presume, as we must, that jurors give
their full and vigorous attention to every witness and each item of
evidence, the very acts of listening and seeing will sometimes lead
them down "the path of inference." Indeed, the Court tacitly
acknowledges this point; while the Court speculates that the
judge's instruction may dissuade the jury Page 481 U. S. 214 from making inferences at all, it also concedes the probability
of their occurrence, arguing that there is no overwhelming
probability that jurors will be unable to "disregard an
incriminating inference." Ibid. Bruton has always
required trial judges to answer the question whether a particular
confession is or is not "powerfully incriminating" on a
case-by-case basis; they should follow the same analysis whether or
not the defendant is actually named by his or her codefendant.
Instructing the jury that it was to consider Benjamin Williams'
confession only against him, and not against Clarissa Marsh, failed
to guarantee the level of certainty required by the Confrontation
Clause. The uncertainty arose because the prosecution's case made
it clear at the time Williams' statement was introduced that the
statement would prove "powerfully incriminating" of the respondent, as well as of Williams himself. There can be
absolutely no doubt that spreading Williams' carefully edited
confession before the jury intolerably interfered with the jury's
solemn duty to treat the statement as nothing more than meaningless
sounds in its consideration of Marsh's guilt or innocence.
At the time that Williams' confession was introduced, the
evidence already had established that respondent and two men
committed an armed robbery in the course of which the two men
killed two persons and shot a third. Ante at 481 U. S. 202 .
There was a sharp dispute, however, on the question whether
respondent herself intended to commit a robbery in which murder was
a foreseeable result, or knew that the two men planned to do so.
The quantum of evidence admissible against respondent was just
sufficient to establish this intent, and hence to support her
conviction. As the Court of Appeals explained:
"[T]he issue is whether the evidence was sufficient to show that
Marsh aided and abetted the assault with the specific intent to
murder Knighton, or with the knowledge that Martin had this
specific intent. . . . Marsh's case presents a much closer question
on this issue than Page 481 U. S. 215 does Williams'. There was no testimony indicating she harbored
an intent to murder Knighton, nor was there any showing that she
heard Martin's statements regarding the need to 'hurt' or 'take
out' the victims. There was, in addition, no testimony placing her
in the basement, the scene of the shootings. The evidence does
indicate, viewed in the light most favorable to the prosecution,
that she was aware that Williams and Martin were armed, that she
served as a guard or 'lookout' at the door, that she prevented an
attempted escape by Knighton, and that she was given the paper bag
thought to contain the proceeds of a robbery. The evidence also
indicates that Marsh knew Scott, supporting the inference that it
was Marsh who allowed Martin to gain entrance. While it is a close
question, we believe the evidence presented at the time of the
motion was sufficient to survive a motion for directed
verdict."
781 F.2d 1201, 1204 (CA6 1986) (emphasis omitted).
In the edited statement that the jury was instructed not to
consider against Marsh, Williams described the conversation he had
with Kareem Martin while they were in a car driving to their
victims' residence. In that conversation, Martin stated that "he
would have to take them out after the robbery." See ante at 481 U. S. 203 ,
n. 1. The State's principal witness had testified that Martin and
Marsh arrived at the victims' house together. The jury was
therefore certain to infer from the confession that respondent had
been in the car and had overheard the statement by Martin. Viewed
in the total context of the trial evidence, this confession was of
critical importance, because it was the only evidence directly
linking respondent with the specific intent, expressed before the
robbery, to kill the victims afterwards. [ Footnote 2/3 ] If Williams had taken Page 481 U. S. 216 the witness stand and testified, respondent's lawyer could have
cross-examined him to challenge his credibility and to establish or
suggest that the car radio was playing so loudly that Marsh could
not have overheard the conversation between the two men from the
backseat. An acknowledgment of the possibility of such facts by
Williams would have done much more to eliminate the certainty
beyond a reasonable doubt that Marsh knew about the murder plan
than could possibly have been achieved by the later testimony of
respondent herself. Moreover, the price respondent had to pay in
order to attempt to rebut the obvious inference that she had
overheard Martin was to remind the jury once again of what he had
said, and to give the prosecutor a further opportunity to point to
this most damaging evidence on the close question of her specific
intent. See ante at 481 U. S. 205 ,
n. 2.
The facts in this case are, admittedly, different from those in Bruton, because Williams' statement did not directly
mention respondent. Thus, instead of being "incriminating on its
face," ante at 481 U. S. 208 ,
it became so only when considered in connection with the other
evidence presented to the jury. The difference between the facts of Bruton and the facts of this case does not eliminate their
common, substantial, and constitutionally unacceptable risk that
the jury, when resolving Page 481 U. S. 217 a critical issue against respondent, may have relied on
impermissible evidence. [ Footnote
2/4 ] II The facts that joint trials conserve prosecutorial resources,
diminish inconvenience to witnesses, and avoid delays in the
administration of criminal justice have been well known for a long
time. See United States v. Lane, 474 U.
S. 438 , 474 U. S. 449 (1986) (quoting Bruton, 391 U.S. at 391 U. S.
134 ). It is equally well known that joint trials create
special risks of prejudice to one of the defendants, and that such
risks often make it necessary to grant severances. See
Bruton, 391 U.S. at 391 U. S. 131 ;
Fed.Rule Crim.Proc. 14 (Relief from Prejudicial Joinder). The
Government argues that the costs of requiring the prosecution to
choose between severance and not offering the codefendant's
confession at a joint trial outweigh the benefits to the defendant.
Brief for United States as Amicus Curiae 22. On the scales
of justice, however, considerations of fairness normally outweigh
administrative concerns.
In the Bruton case, the United States argued that the
normal
"benefits of joint proceedings should not have to be
sacrificed Page 481 U. S. 218 by requiring separate trials in order to use the confession
against the declarant." See 391 U.S. at 391 U. S. 134 .
The Court endorsed the answer to this argument that Judge Lehman of
the New York Court of Appeals had previously made in his dissenting
opinion in People v. Fisher, 249 N.Y. 419, 432, 164 N.E.
336, 341 (1928):
"We still adhere to the rule that an accused is entitled to
confrontation of the witnesses against him and the right to
cross-examine them. . . . We destroy the age-old rule which in the
past has been regarded as a fundamental principle of our
jurisprudence by a legalistic formula, required of the judge, that
the jury may not consider any admissions against any party who did
not join in them. We secure greater speed, economy and convenience
in the administration of the law at the price of fundamental
principles of constitutional liberty. That price is too high."
The concern about the cost of joint trials, even if valid, does
not prevail over the interests of justice. Moreover, the Court's
effort to revive this concern in a state criminal case rests on the
use of irrelevant statistics. The Court makes the startling
discovery that joint trials account for "almost one-third of
federal criminal trials in the past five years." Ante at 481 U. S. 209 .
In the interest of greater precision, the Court might have stated
that there were 10,904 federal criminal trials involving more than
one defendant during that 5-year period. [ Footnote 2/5 ] The Court might have added that the
database from which that figure was obtained does not contain any
information at all to show the number of times that confessions
were offered in evidence in those 10,904 federal cases. [ Footnote 2/6 ] The Page 481 U. S. 219 relevance of this data is also difficult to discern, because all
of the cases in this Court that involved joint trials conducted
after Bruton was decided, in which compliance with the
rule of that case was at issue, appear to have originated in a
state court. Federal prosecutors seem to have had little
difficulty, in conducting the literally thousands of joint trials
to which the Court points, in maintaining "both the efficiency and
the fairness of the criminal justice system" that the Court
speculates will occur if Bruton's reasoning is applied to
this case. See ante at 481 U. S. 210 .
Presumably, the options of granting immunity, making plea bargains,
or simply waiting until after a confessing defendant has been tried
separately before trying to use his admissions against an
accomplice have enabled the Federal Government to enforce the
criminal law without sacrificing the basic premise of the
Confrontation Clause. [ Footnote
2/7 ] Page 481 U. S. 220 The Court also expresses concern that trial judges will be
unable to determine whether a codefendant's confession that does
not directly mention the defendant and is inadmissible against him
will create a substantial risk of unfair prejudice. In most such
cases, the trial judge can comply with the dictates of Bruton by postponing his or her decision on the
admissibility of the confession until the prosecution rests, at
which time its potentially inculpatory effect can be evaluated in
the light of the government's entire case. The Court expresses
concern that such a rule would enable "manipulation by the
defense," see ante at 481 U. S. 209 ,
by which the Court presumably means the defense might tailor its
evidence to make sure that a confession which does not directly
mention the defendant is deemed powerfully incriminating when
viewed in light of the prosecution's entire case. As a practical
matter, I cannot believe that there are many defense lawyers who
would deliberately pursue this high-risk strategy of "manipulating"
their evidence in order to enhance the prejudicial impact of a
codefendant's confession. Moreover, a great many experienced and
competent trial judges throughout the Nation are fully capable of
managing cases and supervising counsel in order to avoid the
problems that seem insurmountable to appellate judges who are
sometimes distracted by illogical distinctions and irrelevant
statistics.
I respectfully dissent. [ Footnote
2/8 ]
[ Footnote 2/1 ] Bruton v. United States, 391 U.
S. 123 , 391 U. S. 138 (1968) (Stewart, J., concurring) (emphasis in original). Judge
Learned Hand and Justice Frankfurter also would recognize that the
admission of Williams' confession, even with limiting instructions,
placed too great a strain upon the jury's ability to exclude this
evidence from its consideration of respondent's innocence or guilt.
As we noted in Bruton: "Judge Hand addressed the subject several times. The limiting
instruction, he said, is a 'recommendation to the jury of a mental
gymnastic which is beyond, not only their powers, but anybody's
else,' Nash v. United States, 54 F.2d 1006, 1007; 'Nobody
can indeed fail to doubt whether the caution is effective, or
whether usually the practical result is not to let in hearsay,' United States v. Gottfried, 165 F.2d 360, 367; 'it is
indeed very hard to believe that a jury will, or for that matter
can, in practice, observe the admonition,' Delli Paoli v.
United States, 229 F.2d 319, 321. Judge Hand referred to the
instruction as a 'placebo,' medically defined as 'a medicinal
lie.'"
391 U.S. at 391 U. S. 132 ,
n. 8. In a similar vein, Justice Frankfurter observed:
"The Government should not have the windfall of having the jury
be influenced by evidence against a defendant which, as a matter of
law, they should not consider, but which they cannot put out of
their minds." Delli Paoli v. United States, 352 U.
S. 232 , 352 U. S. 248 (1957) (dissenting opinion).
[ Footnote 2/2 ]
Indeed, I have no doubt that there are some codefendant
confessions that expressly mention the defendant, but nevertheless
need not be excluded under Bruton because they are not
prejudicial.
[ Footnote 2/3 ]
The Court assumes that the confession did not incriminate
respondent at the time the confession was introduced. I disagree.
Cynthia Knighton had already testified that respondent and Kareem
Martin had arrived at the victims' residence together, and that
respondent admitted Williams to the house a few minutes later. In
his statement Williams said:
"We then drove over to this house and parked the car across the
big street near the house. The plan was that I would wait in the
car in front of the house, and then I would move the car down
across the big street, because he didn't want anybody to see the
car. Okay, Kareem went up to the house and went inside. A couple of
minutes later, I moved the car and went up to the house." Ante at 481 U. S. 203 ,
n. 1.
It is unrealistic to believe that the jury would assume that
respondent did not accompany the two men in the car, but had just
magically appeared at the front door of the apartment at the same
time that Martin did.
[ Footnote 2/4 ]
It is worth noting that the dissenting opinion in Bruton did not regard the Court's decision as limited to
codefendant confessions expressly implicating the defendant:
"I would suppose that it will be necessary to exclude all
extrajudicial confessions unless all portions of them which
implicate defendants other than the declarant are effectively
deleted. Effective deletion will probably require not only
omission of all direct and indirect inculpations of codefendants,
but also of any statement that could be employed against those
defendants once their identity is otherwise established. "
391 U.S. at 391 U. S. 143 (emphasis added) (WHITE, J., dissenting).
The author of that opinion today adheres to that interpretation
of Bruton. See Cruz v. New York, ante at 481 U. S.
195 -196 (WHITE, J., dissenting) ("[A] codefendant's
out-of-court statements implicating the defendant are not only
hearsay, but also have traditionally been viewed with special
suspicion. . . . Bruton held that, where the defendant has
not himself confessed, there is too great a chance that the jury
would rely on the codefendant's confession").
[ Footnote 2/5 ] See Memorandum from David L. Cook, Administrative
Office of the United States Courts, to Supreme Court Library (Feb.
20, 1987) (available in Clerk of Court's case file).
[ Footnote 2/6 ] See Memorandum from David L. Cook, Administrative
Office of the United States Courts, to Supreme Court Library (Mar.
25, 1987) (available in Clerk of Court's case file) (establishing
that figures cited in Memorandum of February 20, 1987, cited ante at 481 U. S. 209 ,
carry no information whatever about the number of
multiple-defendant trials in which a codefendant's confession was
offered or admitted).
[ Footnote 2/7 ]
The Court expresses an apparently deep-seated fear that an
evenhanded application of Bruton would jeopardize the use
of joint trials. This proposition rests on the unsupported
assumption that the number of powerfully incriminating confessions
that do not name the defendant is too large to be evaluated on a
case-by-case basis. The Court then proceeds to the ostensible
administrative outrages of the separate trials that would be
necessary, contending that it would be unwise to compel prosecutors
to
"bring separate proceedings, presenting the same evidence again
and again, requiring victims and witnesses to repeat the
inconvenience (and sometimes trauma) of testifying, and randomly
favoring the last-tried defendants who have the advantage of
knowing the prosecution's case beforehand." Ante at 481 U. S. 210 .
This speculation also floats unattached to any anchor of reality.
Since the likelihood that more than one of the defendants in a
joint trial will have confessed is fairly remote, the prospect of
"presenting the same evidence again and again" is nothing but a
rhetorical flourish. At worst, in the typical case, two trials may
be required, one for the confessing defendant and another for the
nonconfessing defendant or defendants. And even in that category,
presumably most confessing defendants are likely candidates for
plea bargaining.
[ Footnote 2/8 ]
Except for Williams' confession, and the prosecutor's closing
argument that will be separately considered on remand, there was a
paucity of other evidence connecting respondent with the plan
discussed in the car on the way to the victims' home. The Court of
Appeals was thus unquestionably correct in concluding that the
violation of the Confrontation Clause in this case was not harmless
error. | The U.S. Supreme Court case, Richardson v. Marsh (1987), dealt with the admissibility of a nontestifying codefendant's confession in a joint trial. The Court held that the Confrontation Clause is not violated by admitting a redacted confession that eliminates any reference to the defendant, as long as a proper limiting instruction is given to the jury. This case narrowed the scope of Bruton v. United States (1968), which established that a defendant's rights under the Confrontation Clause are violated when a nontestifying codefendant's confession naming them is introduced at their joint trial. The Court distinguished this case from Bruton, as the confession in Richardson was carefully redacted to omit any reference to the defendant, and the jury was instructed not to use it against her. |
Criminal Trials & Prosecutions | U.S. v. Gonzalez-Lopez | https://supreme.justia.com/cases/federal/us/548/140/ | OPINION OF THE COURT UNITED STATES V. GONZALEZ-LOPEZ 548 U. S. ____ (2006) SUPREME COURT OF THE UNITED STATES NO. 05-352 UNITED STATES, PETITIONER v. CUAUHTEMOC
GONZALEZ-LOPEZ
on writ of certiorari to the united states court of
appeals for the eighth circuit
[June 26, 2006]
Justice Scalia delivered the
opinion of the Court.
We must decide whether a trial
court’s erroneous deprivation of a criminal defendant’s choice of
counsel entitles him to a reversal of his conviction.
I
Respondent Cuauhtemoc
Gonzalez-Lopez was charged in the Eastern District of Missouri with
conspiracy to distribute more than 100 kilograms of marijuana. His
family hired attorney John Fahle to represent him. After the
arraignment, respondent called a California attorney, Joseph Low,
to discuss whether Low would represent him, either in addition to
or instead of Fahle. Low flew from California to meet with
respondent, who hired him.
Some time later, Low and Fahle
represented respondent at an evidentiary hearing before a
Magistrate Judge. The Magistrate Judge accepted Low’s provisional
entry of appearance and permitted Low to participate in the hearing
on the condition that he immediately file a motion for admission pro hac vice . During the hearing, however, the Magistrate
Judge revoked the provisional acceptance on the ground that, by
passing notes to Fahle, Low had violated a court rule restricting
the cross-examination of a witness to one counsel.
The following week, respondent informed Fahle
that he wanted Low to be his only attorney. Low then filed an
application for admission pro hac vice . The District Court
denied his application without comment. A month later, Low filed a
second application, which the District Court again denied without
explanation. Low’s appeal, in the form of an application for a writ
of mandamus, was dismissed by the United States Court of Appeals
for the Eighth Circuit.
Fahle filed a motion to withdraw as counsel
and for a show-cause hearing to consider sanctions against Low.
Fahle asserted that, by contacting respondent while respondent was
represented by Fahle, Low violated Mo. Rule of Professional Conduct
4–4.2 (1993), which prohibits a lawyer “[i]n representing a client”
from “communicat[ing] about the subject of the representation with
a party … represented by another lawyer” without that lawyer’s
consent. Low filed a motion to strike Fahle’s motion. The District
Court granted Fahle’s motion to withdraw and granted a continuance
so that respondent could find new representation. Respondent
retained a local attorney, Karl Dickhaus, for the trial. The
District Court then denied Low’s motion to strike and, for the
first time, explained that it had denied Low’s motions for
admission pro hac vice primarily because, in a separate
case before it, Low had violated Rule 4–4.2 by communicating with a
represented party.
The case proceeded to trial, and Dickhaus
represented respondent. Low again moved for admission and was again
denied. The Court also denied Dickhaus’s request to have Low at
counsel table with him and ordered Low to sit in the audience and
to have no contact with Dickhaus during the proceedings. To enforce
the Court’s order, a United States Marshal sat between Low and
Dickhaus at trial. Respondent was unable to meet with Low
throughout the trial, except for once on the last night. The jury
found respondent guilty.
After trial, the District Court granted
Fahle’s motion for sanctions against Low. It read Rule 4–4.2 to
forbid Low’s contact with respondent without Fahle’s permission. It
also reiterated that it had denied Low’s motions for admission on
the ground that Low had violated the same Rule in a separate
matter.
Respondent appealed, and the Eighth Circuit
vacated the conviction. 399 F. 3d 924 (2005). The Court first
held that the District Court erred in interpreting Rule 4–4.2 to
prohibit Low’s conduct both in this case and in the separate matter
on which the District Court based its denials of his admission
motions. The District Court’s denials of these motions were
therefore erroneous and violated respondent’s Sixth Amendment right
to paid counsel of his choosing. See id. , at 928–932. The
Court then concluded that this Sixth Amendment violation was not
subject to harmless-error review. See id. , at 932–935. We
granted certiorari. 546 U. S. ___ (2006).
II
The Sixth Amendment provides that
“[i]n all criminal prosecutions, the accused shall enjoy the right
… to have the Assistance of Counsel for his defence.” We have
previously held that an element of this right is the right of a
defendant who does not require appointed counsel to choose who will
represent him. See Wheat v. United States, 486 U. S. 153 , 159 (1988). Cf. Powell v. Alabama, 287 U. S. 45 , 53 (1932)
(“It is hardly necessary to say that, the right to counsel being
conceded, a defendant should be afforded a fair opportunity to
secure counsel of his own choice”). The Government here agrees, as
it has previously, that “the Sixth Amendment guarantees the
defendant the right to be represented by an otherwise qualified
attorney whom that defendant can afford to hire, or who is willing
to represent the defendant even though he is without funds.” Caplin & Drysdale, Chartered v. United
States, 491 U.
S. 617 , 624–625 (1989). To be sure, the right to counsel of
choice “is circumscribed in several important respects.” Wheat , supra , at 159. But the Government does not
dispute the Eighth Circuit’s conclusion in this case that the
District Court erroneously deprived respondent of his counsel of
choice.
The Government contends, however,
that the Sixth Amendment violation is not “complete” unless the
defendant can show that substitute counsel was ineffective within
the meaning of Strickland v. Washington, 466 U. S. 668 , 691–696
(1984)— i.e. , that substitute counsel’s performance was
deficient and the defendant was prejudiced by it. In the
alternative, the Government contends that the defendant must at
least demonstrate that his counsel of choice would have pursued a
different strategy that would have created a “reasonable
probability that … the result of the proceedings would have been
different,” id. , at 694—in other words, that he was
prejudiced within the meaning of Strickland by the denial
of his counsel of choice even if substitute counsel’s performance
was not constitutionally deficient.[ Footnote 1 ] To support these propositions, the Government
points to our prior cases, which note that the right to counsel
“has been accorded … not for its own sake, but for the effect it
has on the ability of the accused to receive a fair trial.” Mickens v. Taylor, 535 U. S. 162 , 166
(2002) (internal quotation marks omitted). A trial is not unfair
and thus the Sixth Amendment is not violated, the Government
reasons, unless a defendant has been prejudiced.
Stated as broadly as this, the Government’s
argument in effect reads the Sixth Amendment as a more detailed
version of the Due Process Clause—and then proceeds to give no
effect to the details. It is true enough that the purpose of the
rights set forth in that Amendment is to ensure a fair trial; but
it does not follow that the rights can be disregarded so long as
the trial is, on the whole, fair. What the Government urges upon us
here is what was urged upon us (successfully, at one time, see Ohio v. Roberts , 448 U. S. 56 (1980)) with
regard to the Sixth Amendment’s right of confrontation—a line of
reasoning that “abstracts from the right to its purposes, and then
eliminates the right.” Maryland v. Craig, 497 U. S. 836 ,
862 (1990) (Scalia, J., dissenting). Since, it was argued, the
purpose of the Confrontation Clause was to ensure the reliability
of evidence, so long as the testimonial hearsay bore “indicia of
reliability,” the Confrontation Clause was not violated. See Roberts, supra, at 65–66. We rejected that
argument (and our prior cases that had accepted it) in Crawford v. Washington , 541 U. S. 36 (2004),
saying that the Confrontation Clause “commands, not that evidence
be reliable, but that reliability be assessed in a particular
manner: by testing in the crucible of cross-examination.” Id., at 61.
So also with the Sixth Amendment right to
counsel of choice. It commands, not that a trial be fair, but that
a particular guarantee of fairness be provided—to wit, that the
accused be defended by the counsel he believes to be best. “The
Constitution guarantees a fair trial through the Due Process
Clauses, but it defines the basic elements of a fair trial largely
through the several provisions of the Sixth Amendment, including
the Counsel Clause.” Strickland, supra, at
684–685. In sum, the right at stake here is the right to counsel of
choice, not the right to a fair trial; and that right was violated
because the deprivation of counsel was erroneous. No additional
showing of prejudice is required to make the violation
“complete.”[ Footnote 2 ]
The cases the Government relies on involve the
right to the effective assistance of counsel, the violation of
which generally requires a defendant to establish prejudice. See, e.g., Strickland, supra, at 694; Mickens , supra, at 166; United States v. Cronic , 466
U. S. 648 (1984). The earliest case generally cited for the
proposition that “the right to counsel is the right to the
effective assistance of counsel,” McMann v. Richardson , 397 U. S. 759 , 771,
n. 14 (1970), was based on the Due Process Clause rather than
on the Sixth Amendment, see Powell, 287 U. S., at 57
(cited in e.g., McMann, supra, at 771,
n. 14). And even our recognition of the right to effective
counsel within the Sixth Amendment was a consequence of our
perception that representation by counsel “is critical to the
ability of the adversarial system to produce just results.” Strickland , supra, at 685. Having derived the
right to effective representation from the purpose of ensuring a
fair trial, we have, logically enough, also derived the limits of
that right from that same purpose. See Mickens, supra, at 166. The requirement that a defendant show
prejudice in effective representation cases arises from the very
nature of the specific element of the right to counsel at issue
there— effective (not mistake-free) representation. Counsel
cannot be “ineffective” unless his mistakes have harmed the defense
(or, at least, unless it is reasonably likely that they have).
Thus, a violation of the Sixth Amendment right to effective representation is not “complete” until the
defendant is prejudiced. See Strickland , supra ,
at 685.
The right to select counsel of one’s choice,
by contrast, has never been derived from the Sixth Amendment’s
purpose of ensuring a fair trial.[ Footnote 3 ] It has been regarded as the root meaning of
the constitutional guarantee. See Wheat, 486 U. S., at
159; Andersen v. Treat , 172 U. S. 24 (1898). See
generally W. Beaney, The Right to Counsel in American Courts 18–24,
27–33 (1955). Cf. Powell , supra, at 53. Where the
right to be assisted by counsel of one’s choice is wrongly denied,
therefore, it is unnecessary to conduct an ineffectiveness or
prejudice inquiry to establish a Sixth Amendment violation.
Deprivation of the right is “complete” when the defendant is
erroneously prevented from being represented by the lawyer he
wants, regardless of the quality of the representation he received.
To argue otherwise is to confuse the right to counsel of
choice—which is the right to a particular lawyer regardless of
comparative effectiveness—with the right to effective counsel—which
imposes a baseline requirement of competence on whatever lawyer is
chosen or appointed.
III
Having concluded, in light of the
Government’s concession of erroneous deprivation, that the trial
court violated respondent’s Sixth Amendment right to counsel of
choice, we must consider whether this error is subject to review
for harmlessness. In Arizona v. Fulminante , 499 U. S. 279 (1991), we divided constitutional errors into two classes. The
first we called “trial error,” because the errors “occurred during
presentation of the case to the jury” and their effect may “be
quantitatively assessed in the context of other evidence presented
in order to determine whether [they were] harmless beyond a
reasonable doubt.” Id. , at 307–308 (internal quotation
marks omitted). These include “most constitutional errors.” Id. , at 306. The second class of constitutional error we
called “structural defects.” These “defy analysis by
‘harmless-error’ standards” because they “affec[t] the framework
within which the trial proceeds,” and are not “simply an error in
the trial process itself.” Id. , at 309–310.[ Footnote 4 ] See also Neder v. United States , 527 U. S. 1 , 7–9 (1999). Such errors
include the denial of counsel, see Gideon v. Wainwright, 372 U. S. 335 (1963),
the denial of the right of self-representation, see McKaskle v. Wiggins , 465 U. S. 168 , 177–178, n. 8
(1984), the denial of the right to public trial, see Waller v. Georgia, 467 U. S. 39 , 49, n. 9 (1984), and the
denial of the right to trial by jury by the giving of a defective
reasonable-doubt instruction, see Sullivan v. Louisiana, 508 U. S. 275 (1993).
We have little trouble concluding
that erroneous deprivation of the right to counsel of choice, “with
consequences that are necessarily unquantifiable and indeterminate,
unquestionably qualifies as ‘structural error.’ ” Id. , at 282. Different attorneys will pursue different
strategies with regard to investigation and discovery, development
of the theory of defense, selection of the jury, presentation of
the witnesses, and style of witness examination and jury argument.
And the choice of attorney will affect whether and on what terms
the defendant cooperates with the prosecution, plea bargains, or
decides instead to go to trial. In light of these myriad aspects of
representation, the erroneous denial of counsel bears directly on
the “framework within which the trial proceeds,” Fulminante , supra, at 310—or indeed on whether it
proceeds at all. It is impossible to know what different choices
the rejected counsel would have made, and then to quantify the
impact of those different choices on the outcome of the
proceedings. Many counseled decisions, including those involving
plea bargains and cooperation with the government, do not even
concern the conduct of the trial at all. Harmless-error analysis in
such a context would be a speculative inquiry into what might have
occurred in an alternate universe.
The Government acknowledges that the
deprivation of choice of counsel pervades the entire trial, but
points out that counsel’s ineffectiveness may also do so and yet we
do not allow reversal of a conviction for that reason without a
showing of prejudice. But the requirement of showing prejudice in
ineffectiveness claims stems from the very definition of the right
at issue; it is not a matter of showing that the violation was
harmless, but of showing that a violation of the right to effective
representation occurred . A choice-of-counsel violation
occurs whenever the defendant’s choice is wrongfully
denied. Moreover, if and when counsel’s ineffectiveness “pervades”
a trial, it does so (to the extent we can detect it) through
identifiable mistakes. We can assess how those mistakes affected
the outcome. To determine the effect of wrongful denial of choice
of counsel, however, we would not be looking for mistakes committed
by the actual counsel, but for differences in the defense that
would have been made by the rejected counsel—in matters ranging
from questions asked on voir dire and cross-examination to
such intangibles as argument style and relationship with the
prosecutors. We would have to speculate upon what matters the
rejected counsel would have handled differently—or indeed, would
have handled the same but with the benefit of a more jury-pleasing
courtroom style or a longstanding relationship of trust with the
prosecutors. And then we would have to speculate upon what effect
those different choices or different intangibles might have had.
The difficulties of conducting the two assessments of prejudice are
not remotely comparable.[ Footnote
5 ]
IV
Nothing we have said today casts
any doubt or places any qualification upon our previous holdings
that limit the right to counsel of choice and recognize the
authority of trial courts to establish criteria for admitting
lawyers to argue before them. As the dissent too discusses, post, at 3, the right to counsel of choice does not extend
to defendants who require counsel to be appointed for them. See Wheat, 486 U. S., at 159; Caplin & Drysdale ,
491 U. S., at 624, 626. Nor may a defendant insist on
representation by a person who is not a member of the bar, or
demand that a court honor his waiver of conflict-free
representation. See Wheat , 486 U. S., at 159–160. We have
recognized a trial court’s wide latitude in balancing the right to
counsel of choice against the needs of fairness, id. , at
163–164, and against the demands of its calendar, Morris v. Slappy , 461 U. S. 1 , 11–12 (1983).
The court has, moreover, an “independent interest in ensuring that
criminal trials are conducted within the ethical standards of the
profession and that legal proceedings appear fair to all who
observe them.” Wheat , supra, at 160. None of
these limitations on the right to choose one’s counsel is relevant
here. This is not a case about a court’s power to enforce rules or
adhere to practices that determine which attorneys may appear
before it, or to make scheduling and other decisions that
effectively exclude a defendant’s first choice of counsel. However
broad a court’s discretion may be, the Government has conceded that
the District Court here erred when it denied respondent his choice
of counsel. Accepting that premise, we hold that the error violated
respondent’s Sixth Amendment right to counsel of choice and that
this violation is not subject to harmless-error analysis.
* * *
The judgment of the Court of
Appeals is affirmed, and the case is remanded for further
proceedings consistent with this opinion.
It is so ordered. Footnote 1 The dissent proposes yet a third
standard—viz., that the defendant must show “ ‘an identifiable
difference in the quality of representation between the
disqualified counsel and the attorney who represents the defendant
at trial.’ ” Post, at 4 (opinion of Alito, J.). That
proposal suffers from the same infirmities (outlined later in text)
that beset the Government’s positions. In addition, however, it
greatly impairs the clarity of the law. How is a lower-court judge
to know what an “identifiable difference” consists of? Whereas the
Government at least appeals to Strickland and the case law
under it, the most the dissent can claim by way of precedential
support for its rule is that it is “consistent with” cases that
never discussed the issue of prejudice. Id. Footnote 2 The dissent resists giving effect to our
cases’ recognition, and the Government’s concession, that a
defendant has a right to be defended by counsel of his choosing. It
argues that because the Sixth Amendment guarantees the right to the
“assistance of counsel,” it is not violated unless “the erroneous
disqualification of a defendant’s counsel of choice … impair[s] the
assistance that a defendant receives at trial.” Post, at 1–2
(opinion of Alito, J.). But if our cases (and the Government’s
concession) mean anything, it is that the Sixth Amendment is
violated when the erroneous disqualification of counsel “impair[s]
the assistance that a defendant receives at trial [from the
counsel that he chose].” Footnote 3 In Wheat v. United States, 486 U. S. 153 (1988), where we
formulated the right to counsel of choice and discussed some of the
limitations upon it, we took note of the overarching purpose of
fair trial in holding that the trial court has discretion to
disallow a first choice of counsel that would create serious risk
of conflict of interest. Id., at 159. It is one thing to
conclude that the right to counsel of choice may be limited by the
need for fair trial, but quite another to say that the right does
not exist unless its denial renders the trial unfair. Footnote 4 The dissent criticizes us for our trial
error/structural defect dichotomy, asserting that Fulminante never said that “trial errors are the only sorts of errors amenable to harmless-error review, or
that all errors affecting the framework within which the
trial proceeds are structural,” post, at 8 (opinion of
Alito, J.) (internal quotation marks and citation omitted).
Although it is hard to read that case as doing anything other than
dividing constitutional error into two comprehensive categories,
our ensuing analysis in fact relies neither upon such
comprehensiveness nor upon trial error as the touchstone for the
availability of harmless-error review. Rather, here, as we have
done in the past, we rest our conclusion of structural error upon
the difficulty of assessing the effect of the error. See Waller v. Georgia, 467 U. S. 39 , 49, n. 9 (1984)
(violation of the public-trial guarantee is not subject to
harmlessness review because “the benefits of a public trial are
frequently intangible, difficult to prove, or a matter of chance”); Vasquez v. Hillery, 474 U. S. 254 , 263
(1986) (“[W]hen a petit jury has been selected upon improper
criteria or has been exposed to prejudicial publicity, we have
required reversal of the conviction because the effect of the
violation cannot be ascertained”). The dissent would use
“fundamental unfairness” as the sole criterion of structural error,
and cites a case in which that was the determining factor, see Neder v. United States , 527 U. S. 1 , 9 (1999) (quoted by the
dissent, post, at 6). But this has not been the only
criterion we have used. In addition to the above cases using
difficulty of assessment as the test, we have also relied on the
irrelevance of harmlessness, see McKaskle v. Wiggins, 465 U. S. 168 , 177, n. 8 (1984)
(“Since the right to self-representation is a right that when
exercised usually increases the likelihood of a trial outcome
unfavorable to the defendant, its denial is not amenable to
‘harmless error’ analysis”). Thus, it is the dissent that creates a
single, inflexible criterion, inconsistent with the reasoning of
our precedents, when it asserts that only those errors
that always or necessarily render a trial
fundamentally unfair and unreliable are structural, post, at 8. Footnote 5 In its discussion of the analysis that would
be required to conduct harmless-error review, the dissent focuses
on which counsel was “better.” See post, at 7–8 (opinion
of Alito, J.). This focus has the effect of making the analysis
look achievable, but it is fundamentally inconsistent with the
principle (which the dissent purports to accept for the sake of
argument) that the Sixth Amendment can be violated without a
showing of harm to the quality of representation. Cf. McKaskle,
supra, at 177, n. 8. By framing its inquiry in these
terms and expressing indignation at the thought that a defendant
may receive a new trial when his actual counsel was at least as
effective as the one he wanted, the dissent betrays its
misunderstanding of the nature of the right to counsel of choice
and its confusion of this right with the right to effective
assistance of counsel. ALITO, J., DISSENTING UNITED STATES V. GONZALEZ-LOPEZ 548 U. S. ____ (2006) SUPREME COURT OF THE UNITED STATES NO. 05-352 UNITED STATES, PETITIONER v. CUAUHTEMOC
GONZALEZ-LOPEZ
on writ of certiorari to the united states court of
appeals for the eighth circuit
[June 26, 2006]
Justice Alito, with whom The
Chief Justice, Justice Kennedy, and Justice Thomas join,
dissenting.
I disagree with the Court’s
conclusion that a criminal conviction must automatically be
reversed whenever a trial court errs in applying its rules
regarding pro hac vice admissions and as a result prevents
a defendant from being represented at trial by the defendant’s
first-choice attorney. Instead, a defendant should be required to
make at least some showing that the trial court’s
erroneous ruling adversely affected the quality of assistance that
the defendant received. In my view, the majority’s contrary holding
is based on an incorrect interpretation of the Sixth Amendment and
a misapplication of harmless-error principles. I respectfully
dissent.
I
The majority makes a subtle but
important mistake at the outset in its characterization of what the
Sixth Amendment guarantees. The majority states that the Sixth
Amendment protects “the right of a defendant who does not require
appointed counsel to choose who will represent him.” Ante ,
at 3. What the Sixth Amendment actually protects, however, is the
right to have the assistance that the defendant’s counsel
of choice is able to provide. It follows that if the erroneous
disqualification of a defendant’s counsel of choice does not impair
the assistance that a defendant receives at trial, there is no
violation of the Sixth Amendment.[ Footnote 1 ]
The language of the Sixth
Amendment supports this interpretation. The Assistance of Counsel
Clause focuses on what a defendant is entitled to receive
(“Assistance”), rather than on the identity of the provider. The
background of the adoption of the Sixth Amendment points in the
same direction. The specific evil against which the Assistance of
Counsel Clause was aimed was the English common-law rule severely
limiting a felony defendant’s ability to be assisted by counsel. United States v. Ash , 413 U. S. 300 , 306
(1973). “[T]he core purpose of the counsel guarantee was to assure
‘Assistance’ at trial,” id. , at 309, and thereby “to
assure fairness in the adversary criminal process,” United
States v. Morrison , 449 U. S. 361 , 364
(1981). It was not “the essential aim of the Amendment … to ensure
that a defendant will inexorably be represented by the lawyer whom
he prefers.” Wheat v. United States , 486 U. S. 153 , 159
(1988); cf. Morris v. Slappy , 461 U. S. 1 , 14 (1983)
(“[W]e reject the claim that the Sixth Amendment guarantees a
‘meaningful relationship’ between an accused and his counsel”).
There is no doubt, of course, that the right
“to have the Assistance of Counsel” carries with it a limited right
to be represented by counsel of choice. At the time of the adoption
of the Bill of Rights, when the availability of appointed counsel
was generally limited,[ Footnote
2 ] that is how the right inevitably played out: A defendant’s
right to have the assistance of counsel necessarily meant the right
to have the assistance of whatever counsel the defendant was able
to secure. But from the beginning, the right to counsel of choice
has been circumscribed.
For one thing, a defendant’s choice of counsel
has always been restricted by the rules governing admission to
practice before the court in question. The Judiciary Act of 1789
made this clear, providing that parties “in all the courts of the
United States” had the right to “the assistance of such counsel or
attorneys at law as by the rules of the said courts respectively
shall be permitted to manage and conduct cases therein.” Ch. 20,
§35, 1 Stat. 92. Therefore, if a defendant’s first-choice attorney
was not eligible to appear under the rules of a particular court,
the defendant had no right to be represented by that attorney.
Indeed, if a defendant’s top 10 or top 25 choices were all
attorneys who were not eligible to appear in the court in question,
the defendant had no right to be represented by any of them. Today,
rules governing admission to practice before particular courts
continue to limit the ability of a criminal defendant to be
represented by counsel of choice. See Wheat, 486 U. S., at
159.
The right to counsel of choice is also limited
by conflict- of-interest rules. Even if a defendant is aware that
his or her attorney of choice has a conflict, and even if the
defendant is eager to waive any objection, the defendant has no
constitutional right to be represented by that attorney. See id. , at 159–160.
Similarly, the right to be represented by
counsel of choice can be limited by mundane case-management
considerations. If a trial judge schedules a trial to begin on a
particular date and defendant’s counsel of choice is already
committed for other trials until some time thereafter, the trial
judge has discretion under appropriate circumstances to refuse to
postpone the trial date and thereby, in effect, to force the
defendant to forgo counsel of choice. See, e.g. , Slappy , supra; United States v. Hughey , 147 F. 3d 423, 428–431 (CA5 1998).
These limitations on the right to counsel of
choice are tolerable because the focus of the right is the quality
of the representation that the defendant receives, not the identity
of the attorney who provides the representation. Limiting a
defendant to those attorneys who are willing, available, and
eligible to represent the defendant still leaves a defendant with a
pool of attorneys to choose from—and, in most jurisdictions today,
a large and diverse pool. Thus, these restrictions generally have
no adverse effect on a defendant’s ability to secure the best
assistance that the defendant’s circumstances permit.
Because the Sixth Amendment focuses on the
quality of the assistance that counsel of choice would have
provided, I would hold that the erroneous disqualification of
counsel does not violate the Sixth Amendment unless the ruling
diminishes the quality of assistance that the defendant would have
otherwise received. This would not require a defendant to show that
the second-choice attorney was constitutionally ineffective within
the meaning of Strickland v. Washington , 466 U. S. 668 (1984).
Rather, the defendant would be entitled to a new trial if the
defendant could show “an identifiable difference in the quality of
representation between the disqualified counsel and the attorney
who represents the defendant at trial.” Rodriguez v. Chandler , 382 F. 3d 670, 675 (CA7 2004), cert.
denied, 543 U. S.
1156 (2005).
This approach is fully consistent with our
prior decisions. We have never held that the erroneous
disqualification of counsel violates the Sixth Amendment when there
is no prejudice, and while we have stated in several cases that the
Sixth Amendment protects a defendant’s right to counsel of choice,
see Caplin & Drysdale, Chartered v. United
States , 491 U.
S. 617 , 624–625 (1989); Wheat , supra , at 159; Powell v. Alabama, 287 U. S. 45 , 53 (1932),
we had no occasion in those cases to consider whether a violation
of this right can be shown where there is no prejudice. Nor do our
opinions in those cases refer to that question. It is therefore
unreasonable to read our general statements regarding counsel of
choice as addressing the issue of prejudice.[ Footnote 3 ]
II
But even accepting, as the
majority holds, that the erroneous disqualification of counsel of
choice always violates the Sixth Amendment, it still would not
follow that reversal is required in all cases. The Constitution, by
its terms, does not mandate any particular remedy for violations of
its own provisions. Instead, we are bound in this case by Federal
Rule of Criminal Procedure 52(a), which instructs federal courts to
“disregar[d]” “[a]ny error … which does not affect substantial
rights.” See also 28 U. S. C. §2111; Chapman v. California, 386 U. S. 18 , 22 (1967).
The only exceptions we have recognized to this rule have been for
“a limited class of fundamental constitutional errors that ‘defy
analysis by “harmless error” standards.’ ” Neder v. United States, 527 U. S. 1 , 7 (1999)
(quoting Arizona v. Fulminante, 499 U. S. 279 , 309
(1991)); see also Chapman , supra , at 23. “Such
errors … ‘necessarily render a trial fundamentally unfair’ [and]
deprive defendants of ‘basic protections’ without which ‘a criminal
trial cannot reliably serve its function as a vehicle for
determination of guilt or innocence … and no criminal punishment
may be regarded as fundamentally fair.’ ” Neder , supra, at 8–9 (quoting Rose v. Clark, 478 U. S. 570 ,
577–578 (1986) (second omission in original)); see also ante , at 9 (listing such errors).
Thus, in Neder , we
rejected the argument that the omission of an element of a crime in
a jury instruction “ necessarily render[s] a criminal trial
fundamentally unfair or an unreliable vehicle for determining guilt
or innocence.” 527 U. S., at 9. In fact, in that case, “quite the
opposite [was] true: Neder was tried before an impartial judge,
under the correct standard of proof and with the assistance of
counsel; a fairly selected, impartial jury was instructed to
consider all of the evidence and argument in respect to Neder’s
defense . …” Ibid. Neder’s situation—with an impartial judge, the
correct standard of proof, assistance of counsel, and a fair
jury—is much like respondent’s. Fundamental unfairness does not
inexorably follow from the denial of first-choice counsel. The
“decision to retain a particular lawyer” is “often uninformed,” Cuyler v. Sullivan , 446 U. S. 335 , 344
(1980); a defendant’s second-choice lawyer may thus turn out to be
better than the defendant’s first-choice lawyer. More often, a
defendant’s first- and second-choice lawyers may be simply
indistinguishable. These possibilities would not justify violating
the right to choice of counsel, but they do make me hard put to
characterize the violation as “ always render[ing] a trial
unfair,” Neder , supra , at 9. Fairness may not
limit the right, see ante , at 5, but it does inform the
remedy.
Nor is it always or nearly always impossible
to determine whether the first choice would have provided better
representation than the second choice. There are undoubtedly cases
in which the prosecution would have little difficulty showing that
the second-choice attorney was better qualified than or at least as
qualified as the defendant’s initial choice, and there are other
cases in which it will be evident to the trial judge that any
difference in ability or strategy could not have possibly affected
the outcome of the trial.
Requiring a defendant to fall back on a
second-choice attorney is not comparable to denying a defendant the
right to be represented by counsel at all. Refusing to permit a
defendant to receive the assistance of any counsel is the epitome
of fundamental unfairness, and as far as the effect on the outcome
is concerned, it is much more difficult to assess the effect of a
complete denial of counsel than it is to assess the effect of
merely preventing representation by the defendant’s first-choice
attorney. To be sure, when the effect of an erroneous
disqualification is hard to gauge, the prosecution will be unable
to meet its burden of showing that the error was harmless beyond a
reasonable doubt. But that does not justify eliminating the
possibility of showing harmless error in all cases.
The majority’s focus on the “trial
error”/“structural defect” dichotomy is misleading. In Fulminante , we used these terms to denote two poles of
constitutional error that had appeared in prior cases; trial errors
always lead to harmless-error review, while structural defects
always lead to automatic reversal. See 499 U. S., at 306–310. We
did not suggest that trial errors are the only sorts of
errors amenable to harmless-error review, or that all errors “affecting the framework within which the trial proceeds,” id. , at 310, are structural. The touchstone of structural
error is fundamental unfairness and unreliability. Automatic
reversal is strong medicine that should be reserved for
constitutional errors that “ always ” or
“ necessarily ,” Neder , supra , at 9
(emphasis in original), produce such unfairness.
III
Either of the two courses
outlined above—requiring at least some showing of prejudice, or
engaging in harmless-error review—would avoid the anomalous and
unjustifiable consequences that follow from the majority’s two-part
rule of error without prejudice followed by automatic reversal.
Under the majority’s holding, a
defendant who is erroneously required to go to trial with a
second-choice attorney is automatically entitled to a new trial
even if this attorney performed brilliantly. By contrast, a
defendant whose attorney was ineffective in the constitutional
sense ( i.e. , “made errors so serious that counsel was not
functioning as the ‘counsel’ guaranteed … by the Sixth Amendment,” Strickland , 466 U. S., at 687) cannot obtain relief
without showing prejudice.
Under the majority’s holding, a trial court
may adopt rules severely restricting pro hac vice admissions, cf. Leis v. Flynt , 439 U. S. 438 , 443
(1979) (per curiam), but if it adopts a generous rule and
then errs in interpreting or applying it, the error automatically
requires reversal of any conviction, regardless of whether the
erroneous ruling had any effect on the defendant.
Under the majority’s holding, some defendants
will be awarded new trials even though it is clear that the
erroneous disqualification of their first-choice counsel did not
prejudice them in the least. Suppose, for example, that a defendant
is initially represented by an attorney who previously represented
the defendant in civil matters and who has little criminal
experience. Suppose that this attorney is erroneously disqualified
and that the defendant is then able to secure the services of a
nationally acclaimed and highly experienced criminal defense
attorney who secures a surprisingly favorable result at trial—for
instance, acquittal on most but not all counts. Under the
majority’s holding, the trial court’s erroneous ruling
automatically means that the Sixth Amendment was violated—even if
the defendant makes no attempt to argue that the disqualified
attorney would have done a better job. In fact, the defendant would
still be entitled to a new trial on the counts of conviction even
if the defendant publicly proclaimed after the verdict that the
second attorney had provided better representation than any other
attorney in the country could have possibly done.
Cases as stark as the above hypothetical are
unlikely, but there are certainly cases in which the erroneous
disqualification of a defendant’s first-choice counsel neither
seriously upsets the defendant’s preferences nor impairs the
defendant’s representation at trial. As noted above, a defendant’s
second-choice lawyer may sometimes be better than the defendant’s
first-choice lawyer. Defendants who retain counsel are frequently
forced to choose among attorneys whom they do not know and about
whom they have limited information, and thus a defendant may not
have a strong preference for any one of the candidates. In
addition, if all of the attorneys considered charge roughly
comparable fees, they may also be roughly comparable in experience
and ability. Under these circumstances, the erroneous
disqualification of a defendant’s first-choice attorney may simply
mean that the defendant will be represented by an attorney whom the
defendant very nearly chose initially and who is able to provide
representation that is just as good as that which would have been
furnished by the disqualified attorney. In light of these
realities, mandating reversal without even a minimal showing of
prejudice on the part of the defendant is unwarranted.
The consequences of the majority’s holding are
particularly severe in the federal system and in other court
systems that do not allow a defendant to take an interlocutory
appeal when counsel is disqualified. See Flanagan v. United States , 465 U. S. 259 , 260
(1984). Under such systems, appellate review typically occurs after
the defendant has been tried and convicted. At that point, if an
appellate court concludes that the trial judge made a marginally
incorrect ruling in applying its own pro hac vice rules,
the appellate court has no alternative but to order a new
trial—even if there is not even any claim of prejudice. The Sixth
Amendment does not require such results.
Because I believe that some showing of
prejudice is required to establish a violation of the Sixth
Amendment, I would vacate and remand to let the Court of Appeals
determine whether there was prejudice. However, assuming for the
sake of argument that no prejudice is required, I believe that such
a violation, like most constitutional violations, is amenable to
harmless-error review. Our statutes demand it, and our precedents
do not bar it. I would then vacate and remand to let the Court of
Appeals determine whether the error was harmless in this case. Footnote 1 This view is consistent with the Government’s
concession that “[t]he Sixth Amendment … encompasses a non-indigent
defendant’s right to select counsel who will represent him in a
criminal prosecution,” Brief for United States 11, though this
right is “circumscribed in several important respects,” id. , at 12 (citation and internal quotation marks
omitted). Footnote 2 See Act of Apr. 30, 1790, ch. 9, §29, 1 Stat.
118 (providing for appointment of counsel in capital cases); Betts v. Brady , 316 U. S. 455 , 467,
n. 20 (1942) (surveying state statutes). Footnote 3 Powell is the case generally cited
as first noting a defendant’s right to counsel of choice. Powell involved an infamous trial in which the defendants
were prevented from obtaining any counsel of their choice and were
instead constrained to proceed with court-appointed counsel of
dubious effectiveness. We held that this denied them due process
and that “a fair opportunity to secure counsel of [one’s] own
choice” is a necessary concomitant of the right to counsel. 287 U.
S., at 53; cf. id. , at 71 (“[T]he failure of the trial
court to give [petitioners] reasonable time and opportunity to
secure counsel was a clear denial of due process”). It is clear
from the facts of the case that we were referring to the denial of
the opportunity to choose any counsel, and we certainly
said nothing to suggest that a violation of the right to counsel of
choice could be established without any showing of prejudice.
In Wheat , we held that the trial judge had not erred in
declining the defendant’s waiver of his right to conflict-free
counsel, and therefore we had no need to consider whether an
incorrect ruling would have required reversal of the defendant’s
conviction in the absence of a showing of prejudice. We noted that
“the right to select and be represented by one’s preferred attorney
is comprehended by the Sixth Amendment,” 486 U. S., at l59, but we
went on to stress that this right “is circumscribed in several
important respects,” ibid ., including by the requirement
of bar membership and rules against conflicts of interest. Wheat did not suggest that a violation of the limited
Sixth Amendment right to counsel of choice can be established
without showing prejudice, and our statements about the Sixth
Amendment’s “purpose” and “essential aim”—providing effective
advocacy and a fair trial, ibid. —suggest the opposite.
Finally, in Caplin & Drysdale , we
held that the challenged action of the trial judge—entering an
order forfeiting funds that the defendant had earmarked for use in
paying his attorneys—had been proper, and, accordingly, we had no
occasion to address the issue of prejudice. We recognized that “the
Sixth Amendment guarantees a defendant the right to be represented
by an otherwise qualified attorney whom that defendant can afford
to hire, or who is willing to represent the defendant even though
he is without funds,” 491 U. S., at 624–625, but we added that
“[w]hatever the full extent of the Sixth Amendment’s protection of
one’s right to retain counsel of his choosing, that protection does
not go beyond ‘the individual’s right to spend his own money to
obtain the advice and assistance of … counsel,’ ” id., at 626 (omission in original). | The Supreme Court ruled that a criminal defendant's choice of counsel is protected by the Sixth Amendment, and if this right is violated, it is a "structural error" that does not require a showing of harm to warrant reversal of a conviction. |
Criminal Trials & Prosecutions | Kuhlmann v. Wilson | https://supreme.justia.com/cases/federal/us/477/436/ | U.S. Supreme Court Kuhlmann v. Wilson, 477
U.S. 436 (1986) Kuhlmann v. Wilson No. 84-1479 Argued January 14,
1986 Decided June 26, 1986 477
U.S. 436 CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE SECOND CIRCUIT Syllabus After his arraignment on charges arising from a 1970 robbery and
murder in New York, respondent was confined in a cell with a
prisoner, named Benny Lee, who had previously agreed to act as a
police informant. Respondent made incriminating statements, and Lee
reported them to the police. Prior to trial in a New York court,
respondent moved to suppress the statements on the ground that they
were obtained in violation of his Sixth Amendment right to counsel.
After an evidentiary hearing, the trial court denied the motion,
finding that Lee had obeyed a police officer's instructions only to
listen to respondent for the purpose of identifying his
confederates in the robbery and murder, but not to question
respondent about the crimes. The court also found that respondent's
statements to Lee were "spontaneous" and "unsolicited." In 1972,
respondent was convicted of, and sentenced to imprisonment for,
common law murder and felonious possession of a weapon, and the
Appellate Division affirmed. In 1973, respondent sought federal
habeas corpus relief, asserting that his statements to Lee were
obtained by police investigative methods that violated his Sixth
Amendment rights. The District Court denied the writ, and the Court
of Appeals affirmed. After the 1980 decision in United States
v. Henry, 447 U. S. 264 --
which applied the "deliberately elicited" test of Massiah v.
United States, 377 U. S. 201 , to
suppress statements made to a paid jailhouse informant --
respondent unsuccessfully sought to have his conviction vacated by
the state courts on the basis of his Sixth Amendment claim. In
1982, respondent filed the instant habeas corpus petition in
Federal District Court, again asserting his Sixth Amendment claim.
The District Court denied relief, but the Court of Appeals
reversed. As an initial matter, the Court of Appeals concluded
that, under Sanders v. United States, 373 U. S.
1 , the "ends of justice" required consideration of this
petition for habeas corpus, notwithstanding the adverse
determination on the merits of respondent's Sixth Amendment claim
in the earlier federal habeas corpus proceedings. The court then
held that, under Henry, respondent was entitled to
relief. Page 477 U. S. 437 Held: The judgment is reversed, and the case is
remanded. 742 F.2d 741, reversed and remanded.
JUSTICE POWELL delivered the opinion of the Court with respect
to Parts I, IV, and V, concluding that the Court of Appeals erred
in holding that respondent was entitled to relief under United
States v. Henry, supra, which left open the question whether
the Sixth Amendment forbids admission in evidence of an accused's
statements to a jailhouse informant who was placed in close
proximity but made no effort to stimulate conversations about the
crime charged. Pp. 477 U. S.
456 -461.
(a) The primary concern of the Massiah and Henry line of decisions was secret interrogation by
investigatory techniques that are the equivalent of direct police
interrogation. Since the Sixth Amendment is not violated whenever
-- by luck or happenstance -- the State obtains incriminating
statements from the accused after the right to counsel has
attached, a defendant does not make out a violation of that right
simply by showing that an informant, either through prior
arrangement or voluntarily, reported his incriminating statements
to the police. Rather, the defendant must demonstrate that the
police and their informant took some action, beyond merely
listening, that was designed deliberately to elicit incriminating
remarks. Pp. 477 U. S.
456 -459.
(b) Under the circumstances of this case, the Court of Appeals'
conclusion that respondent's right to counsel was violated because
the police "deliberately elicited" incriminating statements was
clear error in light of the provisions and intent of 28 U.S.C. §
2254(d), which requires that the state trial court's factual
findings be accorded a presumption of correctness. Pp. 477 U. S.
459 -461.
JUSTICE POWELL, joined by THE CHIEF JUSTICE, JUSTICE REHNQUIST,
and JUSTICE O'CONNOR, delivered an opinion with respect to Parts II
and III, concluding that the Court of Appeals erred in holding that
the "ends of justice" would be served by entertaining respondent's
present "successive" petition for habeas corpus, and that the
District Court and the Court of Appeals should have dismissed this
successive petition under 28 U.S.C. § 2244(b) on the ground that
the prior judgment denying relief on respondent's identical Sixth
Amendment claim was final. Sanders v. United States derived its "ends of justice" test directly from language of the
then-applicable statute, and left for another day the task of
defining the considerations that properly support a decision to
entertain a successive petition. Although § 2244(b) makes no
reference to the "ends of justice," that phrase still may be used
generally to describe the standard for identifying those cases
where successive review may be appropriate. However, specific
guidance should be given to the federal courts as to the kind of
proof that a state prisoner must offer to establish that the "ends
of justice" will be served by relitigation Page 477 U. S. 438 of claims previously decided against him. Balancing the State's
interests in finality of convictions and the prisoner's interest in
access to a forum compels the conclusion that the "ends of justice"
are served by successive review only where the petitioner
supplements his constitutional claim with a colorable showing of
factual innocence. The prisoner must make his evidentiary showing
even though -- as argued in this case -- the evidence of guilt may
have been unlawfully admitted. Here, the Court of Appeals conceded
that the evidence of respondent's guilt "was nearly overwhelming,"
and respondent's constitutional claim did not itself raise any
question as to his guilt or innocence. Pp. 477 U. S.
444 -455.
POWELL, J., announced the judgment of the Court and delivered
the opinion of the Court with respect to Parts I, IV, and V, in
which BURGER, C.J., and WHITE, BLACKMUN, REHNQUIST, and O'CONNOR,
JJ., joined, and an opinion with respect to Parts II and III, in
which BURGER, C.J., and REHNQUIST and O'CONNOR, JJ., joined.
BURGER, C.J., filed a concurring opinion, post, p. 477 U. S. 461 .
BRENNAN, J., filed a dissenting opinion, in which MARSHALL, J.,
joined, post, p. 477 U. S. 461 .
STEVENS, J., filed a dissenting opinion, post, p. 477 U. S.
476 .
JUSTICE POWELL announced the judgment of the Court and delivered
the opinion of the Court with respect to Parts I, IV, and V, and an
opinion with respect to Parts II and III in which THE CHIEF
JUSTICE, JUSTICE REHNQUIST, and JUSTICE O'CONNOR join.
This case requires us to define the circumstances under which
federal courts should entertain a state prisoner's petition for
writ of habeas corpus that raises claims rejected on a prior
petition for the same relief. I In the early morning of July 4, 1970, respondent and two
confederates robbed the Star Taxicab Garage in the Bronx, New York,
and fatally shot the night dispatcher. Shortly Page 477 U. S. 439 before, employees of the garage had observed respondent, a
former employee there, on the premises conversing with two other
men. They also witnessed respondent fleeing after the robbery,
carrying loose money in his arms. After eluding the police for four
days, respondent turned himself in. Respondent admitted that he had
been present when the crimes took place, claimed that he had
witnessed the robbery, gave the police a description of the
robbers, but denied knowing them. Respondent also denied any
involvement in the robbery or murder, claiming that he had fled
because he was afraid of being blamed for the crimes.
After his arraignment, respondent was confined in the Bronx
House of Detention, where he was placed in a cell with a prisoner
named Benny Lee. Unknown to respondent, Lee had agreed to act as a
police informant. Respondent made incriminating statements that Lee
reported to the police. Prior to trial, respondent moved to
suppress the statements on the ground that they were obtained in
violation of his right to counsel. The trial court held an
evidentiary hearing on the suppression motion, which revealed that
the statements were made under the following circumstances.
Before respondent arrived in the jail, Lee had entered into an
arrangement with Detective Cullen, according to which Lee agreed to
listen to respondent's conversations and report his remarks to
Cullen. Since the police had positive evidence of respondent's
participation, the purpose of placing Lee in the cell was to
determine the identities of respondent's confederates. Cullen
instructed Lee not to ask respondent any questions, but simply to
"keep his ears open" for the names of the other perpetrators.
Respondent first spoke to Lee about the crimes after he looked out
the cellblock window at the Star Taxicab Garage, where the crimes
had occurred. Respondent said, "someone's messing with me," and
began talking to Lee about the robbery, narrating the same story
that he had given the police at the time of his arrest. Lee advised
respondent that this explanation "didn't Page 477 U. S. 440 sound too good," [ Footnote
1 ] but respondent did not alter his story. Over the next few
days, however, respondent changed details of his original account.
Respondent then received a visit from his brother, who mentioned
that members of his family were upset because they believed that
respondent had murdered the dispatcher. After the visit, respondent
again described the crimes to Lee. Respondent now admitted that he
and two other men, whom he never identified, had planned and
carried out the robbery, and had murdered the dispatcher. Lee
informed Cullen of respondent's statements and furnished Cullen
with notes that he had written surreptitiously while sharing the
cell with respondent.
After hearing the testimony of Cullen and Lee, [ Footnote 2 ] the trial court found that Cullen
had instructed Lee "to ask no questions of [respondent] about the
crime but merely to listen as to what [respondent] might say in his
presence." The court determined that Lee obeyed these instructions,
that he "at no time asked any questions with respect to the crime,"
and that he "only listened to [respondent] and made notes regarding
what [respondent] had to say." The trial court also found that
respondent's statements to Lee were "spontaneous" and
"unsolicited." Under state precedent, a defendant's volunteered
statements to a police agent were admissible in evidence because
the police were not required to prevent talkative defendants from
making incriminating statements. See People v. Kaye, 25
N.Y.2d 139, 145, 250 N.E.2d 329, 332 (1969). The trial court
accordingly denied the suppression motion. Page 477 U. S. 441 The jury convicted respondent of common law murder and felonious
possession of a weapon. On May 18, 1972, the trial court sentenced
him to a term of 20 years to life on the murder count, and to a
concurrent term of up to 7 years on the weapons count. The
Appellate Division affirmed without opinion, People v.
Wilson, 41 App.Div.2d 903, 343 N.Y.S.2d 563 (1973), and the
New York Court of Appeals denied respondent leave to appeal.
On December 7, 1973, respondent filed a petition for federal
habeas corpus relief. Respondent argued, among other things, that
his statements to Lee were obtained pursuant to police
investigative methods that violated his constitutional rights.
After considering Massiah v. United States, 377 U.
S. 201 (1964), the District Court for the Southern
District of New York denied the writ on January 7, 1977. The record
demonstrated "no interrogation whatsoever" by Lee, and "only
spontaneous statements" from respondent. In the District Court's
view, these "fact[s] preclude[d] any Sixth Amendment
violation."
A divided panel of the Court of Appeals for the Second Circuit
affirmed. Wilson v. Henderson, 584 F.2d 1185 (1978). The
court noted that a defendant is denied his Sixth Amendment rights
when the trial court admits in evidence incriminating statements
that state agents " had deliberately elicited from him after he
had been indicted and in the absence of counsel.'" Id. at
1189, quoting Massiah v. United States, supra, at 377 U. S. 206 .
Relying in part on Brewer v. Williams, 430 U.
S. 387 (1977), the court reasoned that the "deliberately
elicited" test of Massiah requires something more than
incriminating statements uttered in the absence of counsel. On the
facts found by the state trial court, which were entitled to a
presumption of correctness under 28 U.S.C. § 2254(d), the court
held that respondent had not established a violation of his Sixth
Amendment rights. [ Footnote 3 ]
We denied a Page 477 U. S. 442 petition for a writ of certiorari. Wilson v. Henderson, 442 U.S. 945 (1979).
Following this Court's decision in United States v.
Henry, 447 U. S. 264 (1980), which applied the Massiah test to suppress
statements made to a paid jailhouse informant, respondent decided
to relitigate his Sixth Amendment claim. On September 11, 1981, he
filed in state trial court a motion to vacate his conviction. The
judge denied the motion, on the grounds that Henry was
factually distinguishable from this case, [ Footnote 4 ] and that. under state precedent, Henry was not to be given retroactive effect, see
People v. Pepper, 53 N.Y.2d 213, 423 N.E.2d 366 (1981). The
Appellate Division denied respondent leave to appeal.
On July 6, 1982, respondent returned to the District Court for
the Southern District of New York on a habeas petition, again
arguing that admission in evidence of his incriminating statements
to Lee violated his Sixth Amendment rights. Respondent contended
that the decision in Henry constituted a new rule of law
that should be applied retroactively to this case. The District
Court found it unnecessary to consider retroactivity, because it
decided that Henry did not undermine the Court of Appeals'
prior disposition of respondent's Sixth Amendment claim. Noting
that Henry reserved the question whether the Constitution
forbade admission in evidence of an accused's statements to an
informant who made "no effort to stimulate conversations about the
crime charged," see United States v. Henry, supra, at 447 U. S. 271 ,
n. 9, Page 477 U. S. 443 the District Court believed that this case presented that open
question, and that the question must be answered negatively. The
District Court noted that the trial court's findings were
presumptively correct, see 28 U.S.C. § 2254(d), and were
fully supported by the record. The court concluded that these
findings were "fatal" to respondent's claim under Henry, since they showed that Lee made no "affirmative effort" of any kind
"to elicit information" from respondent.
A different, and again divided, panel of the Court of Appeals
reversed. Wilson v. Henderson, 742 F.2d 741 (1984). As an
initial matter, the court stated that, under Sanders v. United
States, 373 U. S. 1 (1963),
the "ends of justice" required consideration of this petition,
notwithstanding the fact that the prior panel had determined the
merits adversely to respondent. 742 F.2d at 743. The court then
reasoned that the circumstances under which respondent made his
incriminating statements to Lee were indistinguishable from the
facts of Henry. Finally, the court decided that Henry was fully applicable here, because it did not
announce a new constitutional rule, but merely applied settled
principles to new facts. 742 F.2d at 746-747. Therefore, the court
concluded that all of the judges who had considered and rejected
respondent's claim had erred, and remanded the case to the District
Court with instructions to order respondent's release from prison
unless the State elected to retry him. [ Footnote 5 ] Page 477 U. S. 444 We granted certiorari, 472 U.S. 1026 (1985), to consider the
Court of Appeals' decision that the "ends of justice" required
consideration of this successive habeas corpus petition and that
court's application of our decision in Henry to the facts
of this case. We now reverse. II A In concluding that it was appropriate to entertain respondent's
successive habeas corpus petition, the Court of Appeals relied upon Sanders v. United States, 373 U. S.
1 (1963), which announced guidelines for the federal
courts to follow when presented with habeas petitions or their
equivalent claimed to be "successive" or an "abuse of the writ."
[ Footnote 6 ] The narrow
question in Sanders was whether a federal prisoner's
motion under 28 U.S.C. § 2255 was properly denied without a hearing
on the ground that the motion constituted a successive application. Id. at 373 U. S. 4 -6. The
Court undertook not only to answer that question, but also to
explore the standard that should govern district courts'
consideration of successive petitions. Sanders framed the
inquiry in terms of the requirements of the "ends of justice,"
advising district courts to dismiss habeas petitions or their
equivalent raising claims determined adversely to the prisoner on a
prior petition if Page 477 U. S. 445 "the ends of justice would not be served by reaching the merits
of the subsequent application." Id. at 373 U. S. 15 , 373 U. S. 16 -17.
While making clear that the burden of proof on this issue rests on
the prisoner, id. at 373 U. S. 17 , the
Court in Sanders provided little specific guidance as to
the kind of proof that a prisoner must offer to establish that the
"ends of justice" would be served by relitigation of the claims
previously decided against him.
The Court of Appeals' decision in this case demonstrates the
need for this Court to provide that guidance. The opinion of the
Court of Appeals sheds no light on this important threshold
question, merely declaring that the "ends of justice" required
successive federal habeas corpus review. Failure to provide clear
guidance leaves district judges "at large in disposing of
applications for a writ of habeas corpus," creating the danger that
they will engage in "the exercise not of law, but of
arbitrariness." Brown v. Allen, 344 U.
S. 443 , 344 U. S. 497 (1953) (opinion of Frankfurter, J.). This Court therefore must now
define the considerations that should govern federal courts'
disposition of successive petitions for habeas corpus. B Since 1867, when Congress first authorized the federal courts to
issue the writ on behalf of persons in state custody, [ Footnote 7 ] this Court often has been
called upon to interpret the language of the statutes defining the
scope of that jurisdiction. It may be helpful to review our cases
construing these frequently used statutes before we answer the
specific question before us today.
Until the early years of this century, the substantive scope of
the federal habeas corpus statutes was defined by reference Page 477 U. S. 446 to the scope of the writ at common law, where the courts'
inquiry on habeas was limited exclusively "to the jurisdiction of
the sentencing tribunal." Stone v. Powell, 428 U.
S. 465 , 428 U. S. 475 (1976). See Wainwright v. Sykes, 433 U. S.
72 , 433 U. S. 78 , 433 U. S. 79 (1977); see also Oaks, Legal History in the High Court --
Habeas Corpus, 64 Mich.L.Rev. 451, 458-468 (1966). Thus, the
finality of the judgment of a committing court of competent
jurisdiction was accorded absolute respect on habeas review. See Schneckloth v. Bustamonte, 412 U.
S. 218 , 412 U. S.
254 -256 (1973) (POWELL, J., concurring). During this
century, the Court gradually expanded the grounds on which habeas
corpus relief was available, authorizing use of the writ to
challenge convictions where the prisoner claimed a violation of
certain constitutional rights. See Wainwright v. Sykes,
supra, at 433 U. S. 79 -80; Stone v. Powell, supra, at 428 U. S.
475 -478. The Court initially accomplished this expansion
while purporting to adhere to the inquiry into the sentencing
court's jurisdiction. Wainwright v. Sykes, 433 U.S. at 433 U. S. 79 .
Ultimately, the Court abandoned the concept of jurisdiction and
acknowledged that habeas
"review is available for claims of 'disregard of the
constitutional rights of the accused, and where the writ is the
only effective means of preserving his rights.'" Ibid., quoting Waley v. Johnston, 316 U.
S. 101 , 316 U. S.
104 -105 (1942).
Our decisions have not been limited to expanding the scope of
the writ. Significantly, in Stone v. Powell, we removed
from the reach of the federal habeas statutes a state prisoner's
claim that "evidence obtained in an unconstitutional search or
seizure was introduced at his trial" unless the prisoner could show
that the State had failed to provide him "an opportunity for full
and fair litigation" of his Fourth Amendment claim. 428 U.S. at 428 U. S. 494 (footnotes omitted). Although the Court previously had accepted
jurisdiction of search and seizure claims, id. at 428 U. S. 480 ,
we were persuaded that any "advance of the legitimate goal of
furthering Fourth Amendment rights" through application of the
judicially created Page 477 U. S. 447 exclusionary rule on federal habeas was "outweighed by the
acknowledged costs to other values vital to a rational system of
criminal justice." Id. at 428 U. S. 494 .
Among those costs were diversion of the attention of the
participants at a criminal trial "from the ultimate question of
guilt or innocence," and exclusion of reliable evidence that was
"often the most probative information bearing on the guilt or
innocence of the defendant." Id. at 428 U. S. 490 .
Our decision to except this category of claims from habeas corpus
review created no danger that we were denying a "safeguard against
compelling an innocent man to suffer an unconstitutional loss of
liberty." Id. at 428 U. S.
491 -492, n. 31. Rather, a convicted defendant who
pressed a search and seizure claim on collateral attack was
"usually asking society to redetermine an issue that ha[d] no
bearing on the basic justice of his incarceration." Id. at 428 U. S. 492 ,
n. 31.
In decisions of the past two or three decades construing the
reach of the habeas statutes, whether reading those statutes
broadly or narrowly, the Court has reaffirmed that "habeas corpus
has traditionally been regarded as governed by equitable
principles." Fay v. Noia, 372 U.
S. 391 , 372 U. S. 438 (1963), citing United States ex rel. Smith v. Baldi, 344 U. S. 561 , 344 U. S. 573 (1953) (dissenting opinion). See Stone v. Powell, supra, at 428 U. S. 478 ,
n. 11. The Court uniformly has been guided by the proposition that
the writ should be available to afford relief to those "persons
whom society has grievously wronged" in light of modern concepts of
justice. Fay v. Noia, supra, at 372 U. S.
440 -441. See Stone v. Powell, supra, at 428 U. S. 492 ,
n. 31. Just as notions of justice prevailing at the inception of
habeas corpus were offended when a conviction was issued by a court
that lacked jurisdiction, so the modern conscience found
intolerable convictions obtained in violation of certain
constitutional commands. But the Court never has defined the scope
of the writ simply by reference to a perceived need to assure that
an individual accused of crime is afforded a trial free of
constitutional error. Rather, the Court has performed its Page 477 U. S. 448 statutory task through a sensitive weighing of the interests
implicated by federal habeas corpus adjudication of constitutional
claims determined adversely to the prisoner by the state courts. E.g., Engle v. Isaac, 456 U. S. 107 , 456 U. S.
126 -129 (1982); Stone v. Powell, supra, at 428 U. S.
489 -495; Fay v. Noia, supra, at 372 U. S.
426 -434. [ Footnote
8 ] III The Court in Sanders drew the phrase "ends of justice"
directly from the version of 28 U.S.C. § 2244 in effect in 1963.
The provision, which then governed petitions filed by both federal
and state prisoners, stated in relevant part that no federal
judge
"shall be required to entertain an application for a writ of
habeas corpus to inquire into the detention of a person . . . if it
appears that the legality of such detention has been
determined"
by a federal court
"on a prior application for a writ of habeas corpus and the
petition presents no new ground not theretofore presented and
determined, and the judge . . . is satisfied that the ends of
justice will not be served by such inquiry. "
28 U.S.C. § 2244 (1964 ed.) (emphasis added). Accordingly, in
describing guidelines for successive Page 477 U. S. 449 petitions, Sanderson did little more than quote the
language of the then-pertinent statute, leaving for another day the
task of giving that language substantive content.
In 1966, Congress carefully reviewed the habeas corpus statutes
and amended their provisions, including § 2244. Section 2244(b),
which we construe today, governs successive petitions filed by
state prisoners. The section makes no reference to the "ends of
justice," [ Footnote 9 ] and
provides that the federal courts "need not" entertain "subsequent
applications" from state prisoners "unless the application alleges
and is predicated on a factual or other ground not adjudicated on"
the prior application
"and unless the court . . . is satisfied that the applicant has
not on the earlier application deliberately withheld the newly
asserted ground or otherwise abused the writ. [ Footnote 10 ]"
In construing this language, we are cognizant that Congress
adopted the section in light of the need -- often recognized by
this Court -- to weigh the interests of the individual prisoner
against the sometimes contrary interests of the State in
administering a fair and rational system of criminal laws.
[ Footnote 11 ] Page 477 U. S. 450 The legislative history demonstrates that Congress intended the
1966 amendments, including those to § 2244(b), to introduce "a
greater degree of finality of judgments in habeas corpus
proceedings." S.Rep. No. 1797, 89th Cong., 2d Sess., 2 (1966)
(Senate Report). Congress was concerned with the "steadily
increasing" burden imposed on the federal courts by "applications
by State prisoners for writs of habeas corpus." [ Footnote 12 ] Id. at l; see H.R.Rep. No. 1892, 89th Cong., 2d Sess., 5-6 (1966)
(House Report). In many instances, the "heavy burden" created by
these applications was "unnecessary," because state prisoners
"have been filing applications either containing allegations
identical to those asserted in a previous application that has been
denied, or predicated upon grounds obviously well known to them
when they filed the preceding application."
Senate Report at 2; see House Report at 5. The Senate
Report explicitly states that the "purpose" of the amendments was
to "alleviate the unnecessary burden" by adding "to section 2244 .
. . provisions for a qualified application of the doctrine of res judicata. " Senate Report at 2; see House
Report at 8. The House also Page 477 U. S. 451 expressed concern that the increasing number of habeas
applications from state prisoners
"greatly interfered with the procedures and processes of the
State courts by delaying, in many cases, the proper enforcement of
their judgments." Id. at 5.
Based on the 1966 amendments and their legislative history,
petitioner argues that federal courts no longer must consider the
"ends of justice" before dismissing a successive petition. We
reject this argument. It is clear that Congress intended for
district courts, as the general rule, to give preclusive effect to
a judgment denying on the merits a habeas petition alleging grounds
identical in substance to those raised in the subsequent petition.
But the permissive language of § 2244(b) gives federal courts
discretion to entertain successive petitions under some
circumstances. Moreover, Rule 9(b) of the Rules Governing Section
2254 Cases in the United States District Courts, which was amended
in 1976, contains similar permissive language, providing that the
district court "may" dismiss a "second or successive petition" that
does not "allege new or different grounds for relief." Consistent
with Congress' intent in enacting § 2244(b), however, the Advisory
Committee Note to Rule 9(b), 28 U.S.C. p. 358, states that federal
courts should entertain successive petitions only in "rare
instances." [ Footnote 13 ]
Unless those "rare instances" are to be identified by whim or
caprice, district judges must be given guidance for determining
when to exercise the limited discretion granted them by § 2244(b).
Accordingly, as a means of identifying the rare case in which
federal courts should exercise their discretion to hear a
successive petition, we continue to rely on the reference in Sanders to the "ends of justice." Our task is to provide a
definition of the "ends of justice" that will accommodate Congress'
intent to give finality to federal habeas judgments with Page 477 U. S. 452 the historic function of habeas corpus to provide relief from
unjust incarceration. B We now consider the limited circumstances under which the
interests of the prisoner in relitigating constitutional claims
held meritless on a prior petition may outweigh the countervailing
interests served by according finality to the prior judgment. We
turn first to the interests of the prisoner.
The prisoner may have a vital interest in having a second chance
to test the fundamental justice of his incarceration. Even where,
as here, the many judges who have reviewed the prisoner's claims in
several proceedings provided by the State and on his first petition
for federal habeas corpus have determined that his trial was free
from constitutional error, a prisoner retains a powerful and
legitimate interest in obtaining his release from custody if he is
innocent of the charge for which he was incarcerated. That interest
does not extend, however, to prisoners whose guilt is conceded or
plain. As Justice Harlan observed, the guilty prisoner himself
has
"an interest in insuring that there will at some point be the
certainty that comes with an end to litigation, and that attention
will ultimately be focused not on whether a conviction was free
from error, but rather on whether the prisoner can be restored to a
useful place in the community." Sanders v. United States, 373 U.S. at 373 U. S. 24 -25
(dissenting).
Balanced against the prisoner's interest in access to a forum to
test the basic justice of his confinement are the interests of the
State in administration of its criminal statutes. Finality serves
many of those important interests. Availability of unlimited
federal collateral review to guilty defendants frustrates the
State's legitimate interest in deterring crime, since the deterrent
force of penal laws is diminished to the extent that persons
contemplating criminal activity believe there is a possibility that
they will escape punishment Page 477 U. S. 453 through repetitive collateral attacks. [ Footnote 14 ] See Engle v. Isaac, 456
U.S. at 456 U. S.
127 -128, n. 32. Similarly, finality serves the State's
goal of rehabilitating those who commit crimes because
"[r]ehabilitation demands that the convicted defendant realize
that 'he is justly subject to sanction, that he stands in need of
rehabilitation.'" Id. at 456 U. S. 128 ,
n. 32 (quoting Bator, Finality in Criminal Law and Federal Habeas
Corpus for State Prisoners, 76 Harv.L.Rev. 441, 452 (1963)). See Schneckloth v. Bustamonte, 412 U.S. at 412 U. S. 262 (POWELL, J., concurring). Finality also serves the State's
legitimate punitive interests. When a prisoner is freed on a
successive petition, often many years after his crime, the State
may be unable successfully to retry him. [ Footnote 15 ] Peyton v. Rowe, 391 U. S.
54 , 391 U. S. 62 (1968). This result is unacceptable if the State must forgo
conviction of a guilty defendant through the "erosion of memory"
and "dispersion of witnesses" that occur with the passage of time
that invariably attends collateral attack. [ Footnote 16 ] Page 477 U. S. 454 Engle v. Isaac, supra, at 456 U. S.
127 -128; Friendly, Is Innocence Irrelevant? Collateral
Attack on Criminal Judgments, 38 U.Chi.L.Rev. 142, 146-148
(1970).
In the light of the historic purpose of habeas corpus and the
interests implicated by successive petitions for federal habeas
relief from a state conviction, we conclude that the "ends of
justice" require federal courts to entertain such petitions only
where the prisoner supplements his constitutional claim with a
colorable showing of factual innocence. This standard was proposed
by Judge Friendly more than a decade ago as a prerequisite for
federal habeas review generally. Friendly, supra. As Judge
Friendly persuasively argued then, a requirement that the prisoner
come forward with a colorable showing of innocence identifies those
habeas petitioners who are justified in again seeking relief from
their incarceration. We adopt this standard now to effectuate the
clear intent of Congress that successive federal habeas review
should be granted only in rare cases, but that it should be
available when the ends of justice so require. The prisoner may
make the requisite showing by establishing that, under the
probative evidence, he has a colorable claim of factual innocence.
The prisoner must make his evidentiary showing even though -- as
argued in this case -- the evidence of guilt may have been
unlawfully admitted. [ Footnote
17 ] Page 477 U. S. 455 C Applying the foregoing standard in this case, we hold that the
Court of Appeals erred in concluding that the "ends of justice"
would be served by consideration of respondent's successive
petition. The court conceded that the evidence of respondent's
guilt "was nearly overwhelming." 742 F.2d at 742. The
constitutional claim argued by respondent does not itself raise any
question as to his guilt or innocence. The District Court and the
Court of Appeals should have dismissed this successive petition
under § 2244(b) on the ground that the prior judgment denying
relief on this identical claim was final. [ Footnote 18 ] Page 477 U. S. 456 IV Even if the Court of Appeals had correctly decided to entertain
this successive habeas petition, we conclude that it erred in
holding that respondent was entitled to relief under United
States v. Henry, 447 U. S. 264 (1980). As the District Court observed, Henry left open
the question whether the Sixth Amendment forbids admission in
evidence of an accused's statements to a jailhouse informant who
was "placed in close proximity but [made] no effort to stimulate
conversations about the crime charged." Id. at 447 U. S. 271 ,
n. 9. [ Footnote 19 ] Our
review of the line of cases beginning with Massiah v. United
States, 377 U. S. 201 (1964), shows that this question must, as the District Court
properly decided, be answered negatively. A The decision in Massiah had its roots in two concurring
opinions written in Spano v. New York, 360 U.
S. 315 (1959). See Maine v. Moulton, 474 U. S. 159 , 474 U. S. 172 (1985). Following his indictment for first-degree murder, the
defendant in Spano retained a lawyer and surrendered to
the authorities. Before leaving the defendant in police custody,
counsel cautioned him not to respond to interrogation. The
prosecutor and police questioned the defendant, persisting in the
face of his repeated refusal to answer and his repeated request to
speak with his lawyer. The lengthy interrogation involved improper
police tactics, and the defendant ultimately confessed. Page 477 U. S. 457 Following a trial at which his confession was admitted in
evidence, the defendant was convicted and sentenced to death. 360
U.S. at 360 U. S.
316 -320. Agreeing with the Court that the confession was
involuntary, and thus improperly admitted in evidence under the
Fourteenth Amendment, the concurring Justices also took the
position that the defendant's right to counsel was violated by the
secret interrogation. Id. at 360 U. S. 325 (Douglas, J., concurring). As Justice Stewart observed, an indicted
person has the right to assistance of counsel throughout the
proceedings against him. Id. at 360 U. S. 327 .
The defendant was denied that right when he was subjected to an
"all-night inquisition," during which police ignored his repeated
requests for his lawyer. Ibid. The Court in Massiah adopted the reasoning of the
concurring opinions in Spano and held that, once a
defendant's Sixth Amendment right to counsel has attached, he is
denied that right when federal agents "deliberately elicit"
incriminating statements from him in the absence of his lawyer. 377
U.S. at 377 U. S. 206 .
The Court adopted this test, rather than one that turned simply on
whether the statements were obtained in an "interrogation," to
protect accused persons from
"'indirect and surreptitious interrogations, as well as those
conducted in the jailhouse. In this case, Massiah was more
seriously imposed upon. . . . because he did not even know that he
was under interrogation by a government agent.'" Ibid., quoting United States v. Massiah, 307
F.2d 62, 72-73 (1962) (Hays, J., dissenting in part). Thus, the
Court made clear that it was concerned with interrogation or
investigative techniques that were equivalent to interrogation, and
that it so viewed the technique in issue in Massiah. [ Footnote 20 ] Page 477 U. S. 458 In United States v. Henry, the Court applied the Massiah test to incriminating statements made to a
jailhouse informant. The Court of Appeals in that case found a
violation of Massiah because the informant had engaged the
defendant in conversations and "had developed a relationship of
trust and confidence with [the defendant] such that [the defendant]
revealed incriminating information." 447 U.S. at 447 U. S. 269 .
T his Court affirmed, holding that the Court of Appeals reasonably
concluded that the Government informant "deliberately used his
position to secure incriminating information from [the defendant]
when counsel was not present." Id. at 447 U. S. 270 .
Although the informant had not questioned the defendant, the
informant had "stimulated" conversations with the defendant in
order to "elicit" incriminating information. Id. at 447 U. S. 273 ; see id. at 447 U. S. 271 ,
n. 9. The Court emphasized that those facts, like the facts of Massiah, amounted to " indirect and surreptitious
interrogatio[n]'" of the defendant. 447 U.S. at 447 U. S.
273 . Earlier this Term, we applied the Massiah standard in a
case involving incriminating statements made under circumstances
substantially similar to the facts of Massiah itself. In Maine v. Moulton, 474 U. S. 159 (1985), the defendant made incriminating statements in a meeting
with his accomplice, who had agreed to cooperate with the police.
During that meeting, the accomplice, who wore a wire transmitter to
record the conversation, discussed with the defendant the charges
pending against him, repeatedly asked the defendant to remind him
of the details of the crime, and encouraged the defendant to
describe his plan for killing witnesses. Id. at 474 U. S.
165 -166, and n. 4. The Court concluded that these
investigatory techniques denied the defendant his right to counsel
on the pending charges. [ Footnote 21 ] Significantly, the Court emphasized that,
because of the relationship between the defendant Page 477 U. S. 459 and the informant, the informant's engaging the defendant "in
active conversation about their upcoming trial was certain to
elicit" incriminating statements from the defendant. Id. at 474 U. S. 177 ,
n. 13. Thus, the informant's participation "in this conversation
was the functional equivalent of interrogation.'" Ibid. (quoting United States v. Henry, 447 U.S.
at 447 U. S. 277 (POWELL, J., concurring)). As our recent examination of this Sixth Amendment issue in
Moulton makes clear, the primary concern of the Massiah line of decisions is secret interrogation by investigatory
techniques that are the equivalent of direct police interrogation.
Since
"the Sixth Amendment is not violated whenever -- by luck or
happenstance -- the State obtains incriminating statements from the
accused after the right to counsel has attached,"
474 U.S. at 474 U. S. 176 ,
citing United States v. Henry, supra, at 447 U. S. 276 (POWELL, J., concurring), a defendant does not make out a violation
of that right simply by showing that an informant, either through
prior arrangement or voluntarily, reported his incriminating
statements to the police. Rather, the defendant must demonstrate
that the police and their informant took some action, beyond merely
listening, that was designed deliberately to elicit incriminating
remarks. B It is thus apparent that the Court of Appeals erred in
concluding that respondent's right to counsel was violated under
the circumstances of this case. Its error did not stem from any
disagreement with the District Court over appropriate resolution of
the question reserved in Henry, but rather from its
implicit conclusion that this case did not present that open
question. That conclusion was based on a fundamental mistake,
namely, the Court of Appeals' failure to accord to the state trial
court's factual findings the presumption of correctness expressly
required by 28 U.S.C. § 2254(d). Patton v. Yount, 467 U. S. 1025 (1984); Sumner v. Mata, 449 U. S. 539 (1981). Page 477 U. S. 460 The state court found that Officer Cullen had instructed Lee
only to listen to respondent for the purpose of determining the
identities of the other participants in the robbery and murder. The
police already had solid evidence of respondent's participation.
[ Footnote 22 ] The court
further found that Lee followed those instructions, that he "at no
time asked any questions" of respondent concerning the pending
charges, and that he "only listened" to respondent's "spontaneous"
and "unsolicited" statements. The only remark made by Lee that has
any support in this record was his comment that respondent's
initial version of his participation in the crimes "didn't sound
too good." Without holding that any of the state court's findings
were not entitled to the presumption of correctness under §
2254(d), [ Footnote 23 ] the
Court of Appeals focused on that one remark and gave a description
of Lee's interaction with respondent that is completely at odds
with the facts found by the trial court. In the Court of Appeals'
view,
"[s]ubtly and slowly, but surely, Lee's ongoing verbal
intercourse with [respondent] served to exacerbate [respondent's]
already troubled state of mind. [ Footnote 24 ]"
742 F.2d at 745. After thus revising some of the trial court's
findings, and ignoring other more relevant findings, the Court of
Appeals concluded that the police "deliberately elicited"
respondent's incriminating statements. Ibid. This
conclusion conflicts with the Page 477 U. S. 461 decision of every other state and federal judge who reviewed
this record, and is clear error in light of the provisions and
intent of § 2254(d). V The judgment of the Court of Appeals is reversed, and the case
is remanded for further proceedings consistent with this
opinion. It is so ordered. [ Footnote 1 ]
At the suppression hearing, Lee testified that, after hearing
respondent's initial version of his participation in the crimes, "I
think I remember telling him that the story wasn't -- it didn't
sound too good. Things didn't look too good for him." At trial, Lee
testified to a somewhat different version of his remark: "Well, I
said, look, you better come up with a better story than that,
because that one doesn't sound too cool to me, that's what I
said."
[ Footnote 2 ]
Respondent did not testify at the suppression hearing.
[ Footnote 3 ]
The Court of Appeals observed that suppression of respondent's
statements would serve "no useful purpose" because Cullen had not
engaged in "reprehensible police behavior," but rather had made a
"conscious effort" to protect respondent's "constitutional rights
[under Massiah ] while pursuing a crucial homicide
investigation." Wilson v. Henderson, 584 F.2d at 1191.
Judge Oakes dissented, arguing that the "deliberately elicited"
test of Massiah proscribed admission in evidence of an
accused's statements obtained pursuant to the investigatory tactics
used here. Id. at 1194-1195.
[ Footnote 4 ]
The trial judge found that United States v. Henry was
distinguishable because the jailhouse informant in that case was
paid for reporting the defendant's statements to the police.
[ Footnote 5 ]
Judge Van Graafeiland, dissenting, observed that the majority
conceded that there had been no change in the law that had
"transformed conduct that we formerly held to be constitutional
into conduct that is now unconstitutional." 742 F.2d at 749. Thus,
the majority's rejection of the conclusion reached by the judges
who previously had considered respondent's claim was based on its
refusal to accept the trial court's factual determinations. Id. at 748. The dissent criticized the majority for
disregarding
"the presumption that the State court's factual findings are
correct, 28 U.S.C. § 2254(d), without an adequate explanation as to
why the findings are not fairly supported by the record." Id. at 749. In Judge Van Graafeiland's view, "[a]
boilerplate statement that the "ends of justice" justify
reconsideration on the merits does not warrant rejection of all
that has gone on before." Ibid. (citations omitted).
[ Footnote 6 ]
The terms "successive petition" and "abuse of the writ" have
distinct meanings. A "successive petition" raises grounds identical
to those raised and rejected on the merits on a prior petition. See Sanders v. United States, 373 U.S. at 373 U. S. 16 -17.
Our decision today concerns the circumstances under which district
courts properly should entertain the merits of such a petition. The
concept of "abuse of the writ" is founded on the equitable nature
of habeas corpus. Thus, where a prisoner files a petition raising
grounds that were available but not relied upon in a prior
petition, or engages in other conduct that "disentitle[s] him to
the relief he seeks," the federal court may dismiss the subsequent
petition on the ground that the prisoner has abused the writ. Id. at 373 U. S.
17 -19.
[ Footnote 7 ]
The Judiciary Act of 1789, ch. 20, § 14, 1 Stat. 81, the first
grant of jurisdiction to the federal courts, included authority to
issue the writ of habeas corpus ad subjiciendum on behalf
of federal prisoners. In 1867, Congress authorized the federal
courts to grant habeas relief to persons in the custody of the
States. Act of Feb. 6, 1867, ch. 28, §§ 1, 14 Stat. 385. See
Stone v. Powell, 428 U. S. 465 , 428 U. S.
474 -475 (1976).
[ Footnote 8 ]
Contrary to the suggestion of JUSTICE BRENNAN's dissent, our
cases deciding that federal habeas review ordinarily does not
extend to procedurally defaulted claims plainly concern the
"general scope of the writ." Post at 477 U. S. 464 .
The point of those decisions is that, on balancing the competing
interests implicated by affording federal collateral relief to
persons in state custody, federal courts should not exercise habeas
corpus jurisdiction over a certain category of constitutional
claims, whether or not those claims are meritorious. Whether one
characterizes those decisions as carving out an "exception" to
federal habeas jurisdiction, as the dissent apparently prefers to
do, post at 477 U. S. 465 ,
n. 3, or as concerning the scope of that jurisdiction, the result
is the same, and was reached under a framework of analysis that
weighed the pertinent interests. Similarly, in Fay v.
Noia, JUSTICE BRENNAN's opinion for the Court expressly made a
"practical appraisal of the state interest" in a system of
procedural forfeitures, weighing that interest against the other
interests implicated by federal collateral review of procedurally
defaulted claims. 372 U.S. at 477 U. S. 433 .
Of course, that the Court in Noia adopted an expansive
reading of the scope of the writ does not undercut the fact that it
did so by balancing competing interests.
[ Footnote 9 ]
In § 2244(a), which now governs successive petitions filed by
federal prisoners, Congress preserved virtually intact the language
of former § 2244, including the reference to the "ends of
justice."
[ Footnote 10 ]
Title 28 U.S.C. § 2244(b) provides:
"When after an evidentiary hearing on the merits of a material
factual issue, or after a hearing on the merits of an issue of law,
a person in custody pursuant to the judgment of a State court has
been denied by a court of the United States or a justice or judge
of the United States release from custody or other remedy on an
application for a writ of habeas corpus, a subsequent application
for a writ of habeas corpus in behalf of such person need not be
entertained by a court of the United States or a justice or judge
of the United States unless the application alleges and is
predicated on a factual or other ground not adjudicated on the
hearing of the earlier application for the writ, and unless the
court, justice, or judge is satisfied that the applicant has not on
the earlier application deliberately withheld the newly asserted
ground or otherwise abused the writ."
[ Footnote 11 ]
Sensitivity to the interests implicated by federal habeas corpus
review is implicit in the statutory command that the federal courts
"shall . . . dispose of the matter as law and justice require." 28
U.S.C. § 2243 (emphasis added).
[ Footnote 12 ]
The Senate Report incorporates a letter from Senior Circuit
Judge Orie L. Phillips to Senator Joseph D. Tydings that
states:
"The need for this legislation . . . is demonstrated by the fact
that the number of applications for writs of habeas corpus in
Federal courts by State court prisoners increased from 134 in 1941
to 814 in 1957. In fiscal 1963, 1,692 applications for the writ
were filed by State court prisoners; in fiscal 1964, 3,248 such
applications were filed; in fiscal 1965, 4,845 such applications
were filed; and in the first 9 months of fiscal 1966, 3,773 such
applications were filed, yet less than 5 percent of such
applications were decided by the Federal district courts in favor
of the applicant for the writ. More than 95 percent were held to be
without merit."
Senate Report at 4, 5-6.
Since 1966, the burden imposed by applications for federal
habeas corpus filed by state prisoners has continued to increase.
In 1966, a total of 5,339 such applications was filed. In 1985,
8,534 applications were filed. Annual Report of the Director of the
Administrative Office of the U.S. Courts (1985).
[ Footnote 13 ]
The Advisory Committee Note relies on the "ends of justice"
inquiry described in Sanders to identify the unusual case
where a successive petition should be heard.
[ Footnote 14 ]
"Deterrence depends upon the expectation that 'one violating the
law will swiftly and certainly become subject to punishment, just
punishment.'" Engle v. Isaac, 456 U. S. 107 , 456 U. S.
127 -128, n. 32 (1982), quoting Bator, Finality in
Criminal Law and Federal Habeas Corpus for State Prisoners, 76
Harv.L.Rev. 441, 452 (1963).
[ Footnote 15 ]
Where the prisoner secures his release on a successive petition,
the delay between the crime and retrial following issuance of the
writ often will be substantial. The delay in this case is
illustrative. Respondent committed the robbery and murder in 1970,
and was convicted in 1972. Direct appeal was completed in 1973. The
intervening years have been largely consumed by federal habeas
corpus review, with the past four years devoted to relitigation of
respondent's claim that admission in evidence of his statements to
Lee violated the Sixth Amendment.
[ Footnote 16 ]
Finality serves other goals important to our system of criminal
justice and to federalism. Unlimited availability of federal
collateral attack burdens our criminal justice system as successive
petitions divert the "time of judges, prosecutors, and lawyers"
from the important task of trying criminal cases. Friendly, Is
Innocence Irrelevant? Collateral Attack on Criminal Judgments, 38
U.Chi.L.Rev. 142, 148-149 (1970). See Engle v. Isaac,
supra, at 456 U. S. 127 .
Federal habeas review creates friction between our state and
federal courts, as state judges -- however able and thorough --
know that their judgments may be set aside by a single federal
judge, years after it was entered and affirmed on direct appeal. See 456 U.S. at 456 U. S. 128 .
Moreover, under our federal system, the States "possess primary
authority for defining and enforcing the criminal law," and
"hold the initial responsibility for vindicating constitutional
rights. Federal intrusions into state criminal trials frustrate
both the States' sovereign power to punish offenders and their good
faith attempts to honor constitutional rights." Ibid., citing Schneckloth v. Bustamonte, 412 U. S. 218 , 412 U. S.
263 -265 (1983) (POWELL, J., concurring). Despite those
costs, Congress has continued to afford federal habeas relief in
appropriate cases,
"recognizing the need in a free society for an additional
safeguard against compelling an innocent [person] to suffer an
unconstitutional loss of liberty." Stone v. Powell, 428 U.S. at 428 U. S.
491 -492, n. 31.
[ Footnote 17 ]
As Judge Friendly explained, a prisoner does not make a
colorable showing of innocence
"by showing that he might not, or even would not have been
convicted in the absence of evidence claimed to have been
unconstitutionally obtained."
Friendly, supra, at 160. Rather, the prisoner must
"show a fair probability that, in light of all the evidence,
including that alleged to have been illegally admitted (but with
due regard to any unreliability of it) and evidence tenably claimed
to have been wrongly excluded or to have become available only
after the trial, the trier of the facts would have entertained a
reasonable doubt of his guilt." Ibid. (footnote omitted). Thus, the question whether
the prisoner can make the requisite showing must be determined by
reference to all probative evidence of guilt or innocence.
[ Footnote 18 ]
JUSTICE BRENNAN's dissenting opinion mischaracterizes our
opinion in several respects. The dissent states that the
plurality
" implies that federal habeas review is not available as
a matter of right to a prisoner who alleges in his first federal petition a properly preserved [constitutional claim]." Post at 477 U. S. 462 (emphasis added). This case involves, and our opinion describes, only the standard applicable to successive petitions for federal habeas corpus relief. Thus, the first six
pages of the dissent have little, if any, relevance to this case.
There, JUSTICE BRENNAN merely reiterates at length his views as to
the general scope of federal habeas corpus jurisdiction, with no
explanation of how those views apply when a district judge is
required to consider a habeas corpus petition presenting an issue
decided on the merits in a previous federal habeas proceeding.
The dissent further mistakenly asserts that we reject Sanders' holding that the question whether successive
review is proper should be decided under a " sound discretion'
standard." Post at 477 U. S. 462 .
As we have stated, the permissive language of § 2244(b), of course,
gives the federal courts discretion to decide whether to entertain
a successive petition, and, since Sanders, those courts
have relied on the phrase "ends of justice" as a general standard
for identifying cases in which successive review may be
appropriate. What Sanders left open -- and the dissent
today ignores -- is the critical question of what considerations
should inform a court's decision that successive review of an issue
previously decided will serve the "ends of justice." While the
dissent today purports to provide some substance to the Sanders standard by requiring a "good justification" for
relitigation of a claim previously decided, its standard provides
no real guidance to federal courts confronted with successive
claims for habeas corpus relief. As to the need for a standard, see supra at 477 U. S.
445 . [ Footnote 19 ]
In Maine v. Moulton, 474 U. S. 159 (1986), we again reserved this question, declining to reach the
situation where the informant acts simply as a " listening
post'" without "participat[ing] in active conversation and
prompt[ing] particular replies." Id. at 474 U. S. 177 ,
n. 13. [ Footnote 20 ]
The defendant in Massiah made the incriminating
statements in a conversation with one of his confederates, who had
secretly agreed to permit Government agents to listen to the
conversation over a radio transmitter. The agents instructed the
confederate to "engage Massiah in conversation relating to the
alleged crimes." United States v. Massiah, 307 F.2d at 72
(Hays, J., dissenting in part).
[ Footnote 21 ]
The Court observed, however, that where the defendant makes
"[i]ncriminating statements pertaining to other crimes, as to which
the Sixth Amendment right has not yet attached," those statements
"are, of course, admissible at a trial of those offenses." 474 U.S.
at 474 U. S. 180 ,
n. 16.
[ Footnote 22 ]
Eyewitnesses had identified respondent as the man they saw
fleeing from the garage with an armful of money.
[ Footnote 23 ]
The majority did not respond to Judge Van Graafeiland's
criticism that the court could not
"dispense with the presumption that the State court's factual
findings are correct without an adequate explanation as to why the
findings are not fairly supported by the record."
742 F.2d at 749 (citations omitted).
[ Footnote 24 ]
Curiously, the Court of Appeals expressed concern that
respondent was placed in a cell that overlooked the scene of his
crimes. Id. at 745. For all the record shows, however,
that fact was sheer coincidence. Nor do we perceive any reason to
require police to isolate one charged with crime so that he cannot
view the scene, whatever it may be, from his cell window.
CHIEF JUSTICE BURGER, concurring.
I agree fully with the Court's opinion and judgment. This case
is clearly distinguishable from United States v. Henry, 447 U. S. 264 (1980). There is a vast difference between placing an "ear" in the
suspect's cell and placing a voice in the cell to encourage
conversation for the "ear" to record.
Furthermore, the abuse of the Great Writ needs to be curbed so
as to limit, if not put a stop to, the "sporting contest" theory of
criminal justice so widely practiced today.
JUSTICE BRENNAN, with whom JUSTICE MARSHALL joins,
dissenting.
Because I believe that the Court of Appeals correctly concluded
that the "ends of justice" would be served by plenary consideration
of respondent's second federal habeas petition, and that United
States v. Henry, 447 U. S. 264 (1980), directly controls the merits of this case, I dissent. I In Sanders v. United States, 373 U. S.
1 , 373 U. S. 15 (1963), we held that a federal court may refuse to entertain a
successive petition for habeas relief or its equivalent under 28
U.S.C. § 2255 where "the ends of justice would not be served by
reaching the merits of the subsequent application." The decision
whether to hear a successive petition, we stated, was committed "to
the sound discretion of the federal trial judges." Id. at 373 U. S. 18 . We
declined to define precisely "the Page 477 U. S. 462 ends of justice," observing that the phrase "cannot be too
finely particularized." Id. at 373 U. S. 17 .
Today four Members of the Court argue that we should reject Sanders' "sound discretion" standard, and contend that the
ends of justice are served by reconsideration of issues raised in
previous federal habeas petitions only where the prisoner can make
a colorable showing of factual innocence. [ Footnote 2/1 ] Ante at 477 U. S. 454 ,
and n. 17. In support of this standard for consideration of
successive petitions, the plurality advances a revisionist theory
of this Court's habeas corpus jurisprudence. The plurality implies
that federal habeas review is not available as a matter of right to
a prisoner who alleges in his first federal petition a properly
preserved claim that his conviction was obtained in violation of
constitutional commands. Rather, the plurality suggests that a
prisoner is entitled to habeas relief only if his interest in
freedom from unconstitutional incarceration outweighs the State's
interests in the administration of its criminal laws. Ante at 477 U. S.
452 -453, and nn. 14-16. The plurality further intimates
that federal review of state court convictions under 28 U.S.C. §
2254 is predicated solely on the need to prevent the incarceration
of an innocent person, stating that,
"[d]espite [the substantial] costs [federal habeas review
imposes upon the States], Congress has continued to afford federal
habeas relief in appropriate cases, 'recognizing the need in a free
society for an additional safeguard against compelling an innocent
[person] to suffer an unconstitutional loss of liberty.'" Ante at 477 U. S. 454 ,
n. 16 (quoting Stone v. Powell, 428 U.
S. 465 , 491 U. S.
491 -492, n. 31 (1976)). Having thus implied that factual
innocence is central to our habeas jurisprudence generally, the
plurality declares that it is fundamental to the proper
interpretation of "the ends of justice." Neither the plurality's
standard for Page 477 U. S. 463 consideration of successive petitions nor its theory of habeas
corpus is supported by statutory language, legislative history, or
our precedents. [ Footnote 2/2 ] Page 477 U. S. 464 At least since the middle of this century, when we decided Waley v. Johnston, 316 U. S. 101 (1942), and Brown v. Allen, 344 U.
S. 443 (1953), it has been clear that "habeas lies to
inquire into every constitutional defect in any criminal trial," Mackey v. United States, 401 U. S. 667 , 401 U. S.
685 -686 (1971) (opinion of Harlan, J.), that has not
been procedurally defaulted, with the narrow exception of Fourth
Amendment exclusionary rule claims. Stone v. Powell,
supra. As we stated just two Terms ago, there is
"no doubt that, in enacting § 2254, Congress sought to"
"interpose the federal courts between the States and the people,
as guardians of the people's federal rights -- to protect the
people from unconstitutional action." Reed v. Ross, 468 U. S. 1 , 468 U. S. 10 (1984) (quoting Mitchum v. Foster, 407 U.
S. 225 , 407 U. S. 242 (1972)).
Contrary to the plurality's assertions, the Court has never
delineated the general scope of the writ by weighing the competing
interests of the prisoner and the State. Our cases addressing the
propriety of federal collateral review of constitutional error made
at trial or on appeal have balanced these interests solely with
respect to claims that were procedurally defaulted in state court. See, e.g., Wainwright v. Sykes, 433 U. S.
72 (1977), Engle v. Isaac, 456 U.
S. 107 (1982); Murray v. Carrier, post p. 477 U. S. 478 .
Recognizing that
"the State's interest in the integrity of its rules and
proceedings and the finality of its judgments . . . would be
undermined if the federal courts were too free to ignore procedural
forfeitures in state court," Reed v. Ross, supra, at 468 U. S. 10 , we
held in Wainwright v. Sykes, supra, that a state prisoner
generally must show cause and actual prejudice in order to obtain
federal habeas corpus relief of a procedurally defaulted claim. See also Engle v. Isaac, supra. But even as we established
the cause-and-prejudice standard in Wainwright v. Sykes,
supra, we emphasized that the "rule" of Brown v. Allen,
supra, "that the federal habeas petitioner who claims he is detained
pursuant to a final judgment of a state court in violation of the
United States Constitution is entitled to have the Page 477 U. S. 465 federal habeas court make its own independent determination of
his federal claim . . . is in no way changed,"
by our adoption of special rules for procedurally defaulted
claims. Wainwright v. Sykes, supra, at 433 U. S. 87 .
[ Footnote 2/3 ]
Furthermore, Stone v. Powell, supra, on which the
plurality heavily relies, did not establish a new regime for
federal habeas corpus under which the prisoner's interests are
weighed against the State's interests, and under which he usually
forfeits habeas review unless he can make out a colorable showing
of factual innocence or unless the constitutional right he seeks to
protect generally furthers the accuracy of factfinding at trial.
Indeed, in Stone v. Powell, the Court expressly stated
that its "decision . . . [was] not concerned with the
scope of the habeas corpus statute as authority for litigating
constitutional claims generally." Id. at 428 U. S. 495 ,
n. 37 (emphasis in original). Rather, the Court simply
"reaffirm[ed] that the exclusionary rule is a judicially created
remedy, rather than a personal constitutional right, . . . and . .
. emphasiz[ed] the minimal utility of the [exclusionary] rule"
in the context of federal collateral proceedings. Ibid. Subsequent cases have uniformly construed Stone v. Powell as creating a special rule only for Fourth Amendment exclusionary
rule claims, and have repeatedly refused to extend its limitations
on federal habeas review to any other context. Kimmelman v.
Morrison, ante p. 477 U. S. 365 (declining to extend Stone v. Powell to Sixth Amendment
right to effective assistance of counsel claims where the principal
allegation and manifestation of inadequate representation is
counsel's Page 477 U. S. 466 failure to litigate adequately a Fourth Amendment claim); Rose v. Mitchell, 443 U. S. 545 (1979) (declining to extend Stone v. Powell to claims of
racial discrimination in the selection of grand jury foremen); Jackson v. Virginia, 443 U. S. 307 (1979) (declining to extend Stone v. Powell to claims by
state prisoners that the evidence in support of their convictions
was not sufficient to permit a rational trier of fact to find guilt
beyond a reasonable doubt, as required under In re
Winship, 397 U. S. 358 (1970)).
Despite the plurality's intimations, we simply have never held
that federal habeas review of properly presented, nondefaulted
constitutional claims is limited either to constitutional
protections that advance the accuracy of the factfinding process at
trial or is available solely to prisoners who can make out a
colorable showing of factual innocence. On the contrary, we have
stated expressly that, on habeas review,
"what we have to deal with is not the petitioners' innocence or
guilt, but solely the question whether their constitutional rights
have been preserved." Moore v. Dempsey, 261 U. S. 86 , 261 U. S. 87 -88
(1923) (Holmes, J.). Congress has vested habeas jurisdiction in the
federal courts over all cases in which the petitioner claims he has
been detained "in violation of the Constitution or laws . . . of
the United States," 28 U.S.C. § 2241(c)(3), and, "[t]he
constitutional rights of criminal defendants are granted to the
innocent and the guilty alike." Kimmelman v. Morrison,
ante at 477 U. S. 380 .
Thus:
"Even if punishment of the 'guilty' were society's highest value
. . . in a constitution that [some] Members of this Court would
prefer, that is not the ordering of priorities under the
Constitution forged by the Framers. . . . Particular constitutional
rights that do not affect the fairness of factfinding procedures
cannot for that reason be denied at the trial itself. What possible
justification then can there be for denying vindication of such
rights on federal habeas when state courts do deny those rights Page 477 U. S. 467 at trial?" Stone v. Powell, 428 U.S. at 428 U. S.
523 -525 (BRENNAN, J., dissenting).
The habeas statute itself certainly does not provide any
justification, either for limiting the scope of habeas review
generally or for narrowly defining the ends of justice to make
habeas relief available on a successive petition only to prisoners
who can make a colorable showing of factual innocence.
With respect to the general scope of federal habeas review, §
2241, which grants federal courts the statutory authority to issue
writs of habeas corpus, makes no mention of guilt and innocence or
of the need to balance the interests of the State and the prisoner.
In pertinent part, it states simply that
"[t]he writ of habeas corpus shall not extend to a prisoner
unless . . . [h]e is in custody in violation of the Constitution or
laws or treaties of the United States."
28 U.S.C. § 2241(c)(3). Nor does anything in the legislative
history of the habeas statute support the view that Congress
intended to limit habeas review in the manner proposed by the
Court. For more than 30 years, our construction of the habeas
statute to permit federal collateral review of virtually all
nondefaulted constitutional claims -- with the narrow exception,
over dissent, of Fourth Amendment claims -- without reference to
actual guilt or innocence or to the competing interests of the
State and the prisoner, has been unmistakably clear. See Brown
v. Allen, 344 U. S. 443 (1953). Several times during this period, Congress has had the
Court's interpretation expressly brought to its attention through
bills proposing drastic revision of federal habeas jurisdiction. See L. Yackle, Postconviction Remedies § 19, pp. 91-92
(1981) (describing relevant bills introduced in past several
Congresses). Each of those times, Congress steadfastly refused to
make any significant changes in this Court's construction of that
jurisdiction. Id. § 19, at 92 ("[S]ince 1948, the only
amendments to the [habeas] statutes that the Congress has approved
have . . . simply tracked contemporaneous Supreme Court decisions")
(footnote omitted). The fact that Page 477 U. S. 468 Congress has been made aware of our longstanding construction,
and has chosen to leave it undisturbed, "lends powerful support to
[its] continued viability." Square D Co. v. Niagara Frontier
Tariff Bureau, Inc., 476 U. S. 409 , 476 U. S. 419 (1986).
With regard to the specific question whether factual innocence
is a precondition for review of a successive habeas petition,
neither § 2244(b) -- which governs applications for writs of habeas
corpus to state courts that are filed subsequent to the disposition
of a prior federal habeas petition, its legislative history, nor
the Rules Governing Section 2254 Cases in the United States
District Courts (hereafter Rules Governing Section 2254), support
the plurality's position. Section 2244(b), as amended in 1966,
states in relevant part that a subsequent petition
" need not be entertained . . . unless the application
alleges and is predicated on a factual or other ground not
adjudicated on the hearing of the earlier application for the writ,
and unless the court . . . is satisfied that the applicant has not
on the earlier application deliberately withheld the newly asserted
ground or otherwise abused the writ."
(Emphasis added.) By its very terms, then, § 2244(b) merely
informs district courts that they need not consider successive
petitions; that is, the statute gives district courts the discretion not to hear such petitions. Similarly, Rule
9(b) of the Rules Governing Section 2254, which were adopted in
1976, states that a
"second or successive petition may be dismissed if the
judge finds that it fails to allege new or different grounds for
relief and the prior determination was on the merits or, if new and
different grounds are alleged, the judge finds that the failure of
the petitioner to assert those grounds in a prior petition
constituted an abuse of the writ."
(Emphasis added.)
Congress clearly intended that courts continue to determine
which successive petitions they may choose not to hear by reference
to the Sanders ends-of-justice standard. First, nothing in
the House or Senate Reports accompanying the bill that amended §
2244 in 1966 suggests that Congress Page 477 U. S. 469 wished to abandon the Sanders standard. See H.R.Rep. No. 1892, 89th Cong., 2d Sess. (1966); S.Rep. No. 1797,
89th Cong., 2d Sess. (1966). Second, the legislative history of the
Rules Governing Section 2254 demonstrates that, in adopting Rule
9(b), Congress expressly endorsed the existing case law governing
subsequent petitions, and cited Sanders. [ Footnote 2/4 ] H.R.Rep. No. 94-1471, pp. 5-6 (1976).
Third, the Advisory Committee's Notes relating to Rule 9(b) state
that Sanders provides the relevant standards for
subsequent petitions, and indicate that the district courts have
the discretion to refuse to entertain vexatious and meritless
subsequent petitions:
"In Sanders v. United States, 373 U. S. 1 (1963), the court, in dealing with the problem of successive
applications, stated:"
" Controlling weight may be given to denial of a prior
application for federal habeas corpus or § 2255 relief only if (1)
the same ground presented in the subsequent application was
determined adversely to the applicant on the prior application, (2)
the prior determination was on the merits, and (3) the ends of
justice would not be served by reaching the merits of the
subsequent application."
"[Emphasis added]."
" * * * *" " Sanders, [28] U.S.C. § 2244, and [Rule 9(b)] make it
clear that the court has the discretion to entertain a successive
application."
" * * * *" "Subdivision (b) is consistent with the important and well
established purpose of habeas corpus. It does not Page 477 U. S. 470 eliminate a remedy to which the petitioner is rightfully
entitled. However, in Sanders, the court pointed out:"
" Nothing in the traditions of habeas corpus requires the
federal courts to tolerate needless piecemeal litigation, or to
entertain collateral proceedings whose only purpose is to vex,
harass, or delay."
"373 U.S. at 373 U. S. 18 ."
". . . In rare instances, the court may feel a need to entertain
a petition alleging grounds that have already been decided on the
merits. Sanders, 373 U.S. at 373 U. S.
1 , 373 U. S. 16 . However, abusive
use of the writ should be discouraged, and instances of abuse are
frequent enough to require a means of dealing with them. For
example, a successive application, already decided on the merits,
may be submitted in the hope of getting before a different judge in
multijudge courts. . . . This subdivision is aimed at screening out
the abusive petitions . . . so that the more meritorious petitions
can get quicker and fuller consideration."
28 U.S.C., p. 358.
The Advisory Committee gave no indication that the problem Rule
9(b), or § 2244(b), seeks to correct is that of a guilty prisoner
seeking repeated federal review of the same constitutional claim.
Rather, it is apparent that the Rule attempts to remedy only the
problem posed by vexatious and meritless subsequent petitions. The
Committee explicitly contemplated, though, that nonabusive,
"meritorious [subsequent] petitions" would receive "ful[l]
consideration." Ibid. When we review habeas cases, our task is "to give fair effect to
the habeas corpus jurisdiction enacted by Congress." Brown v.
Allen, 344 U.S. at 344 U. S. 500 (opinion of Frankfurter, J.). With respect to successive habeas
petitions, giving "fair effect" to the intent of Congress is to
construe "the ends of justice" as Sanders did -- to mean
that it is within the sound discretion of the court to refuse
to hear abusive, meritless petitions and to hear petitions in which the prisoner advances a potentially meritorious
claim and provides a good justification Page 477 U. S. 471 for returning to court a second time with the same claim.
[ Footnote 2/5 ]
In the instant case, respondent alleged a potentially
meritorious Sixth Amendment claim. He also advanced a complete
justification for returning to federal court a second time with
this claim. Between his first and second federal habeas petitions,
this Court decided United States v. Henry, 447 U.
S. 264 (1980), a case in which the facts were
substantially similar to the facts of respondent's case [ Footnote 2/6 ] and in which we elaborated on
the Sixth Amendment's prohibition against government interference
with an accused's right to counsel, a prohibition that we had
previously recognized in Massiah v. United States, 377 U. S. 201 (1964), and Brewer v. Williams, 430 U.
S. 387 (1977). The intervention of Henry,
supra, clarified the appropriate analysis for Sixth Amendment
claims like respondent's; thus, the Court of Appeals did not abuse
its discretion by granting reconsideration of respondent's
constitutional claim under the dispositive legal standard.
[ Footnote 2/7 ] Page 477 U. S. 472 II The Court holds that the Court of Appeals erred with respect to
the merits of respondent's habeas petition. According to the Court,
the Court of Appeals failed to accord § 2254(d)'s presumption of
correctness to the state trial court's findings that respondent's
cellmate, Lee, "at no time asked any questions" of respondent
concerning the pending charges, and that Lee only listened to
respondent's "spontaneous" and "unsolicited" statements, App.
62-63. As a result, the Court concludes, the Court of Appeals
failed to recognize that this case presents the question, reserved
in Henry, supra, whether the Sixth Amendment forbids the
admission into evidence of an accused's statements to a jailhouse
informant who was "placed in close proximity, but [made] no effort
to stimulate conversations about the crime charged." Id. at 447 U. S. 271 ,
n. 9. I disagree with the Court's characterization of the Court of
Appeals' treatment of the state court's findings and, consequently,
I disagree with the Court that the instant case presents the
"listening post" question.
The state trial court simply found that Lee did not ask
respondent any direct questions about the crime for which
respondent was incarcerated. App. 62-63. The trial court considered
the significance of this fact only under state precedents, which
the court interpreted to require affirmative "interrogation" by the
informant as a prerequisite to a constitutional violation. Id. at 63. The court did not indicate whether it referred
to a Fifth Amendment or to a Sixth Amendment violation in
identifying "interrogation" as a precondition to a violation; it
merely stated that
"the utterances made by [respondent] to Lee were unsolicited,
and voluntarily Page 477 U. S. 473 made and did not violate the defendant's Constitutional
rights." Ibid. The Court of Appeals did not disregard the state court's finding
that Lee asked respondent no direct questions regarding the crime.
Rather, the Court of Appeals expressly accepted that finding, Wilson v. Henderson, 742 F.2d 741, 745 (CA2 1984) ("[e]ven
accepting that Lee did not ask Wilson any direct questions . . ."),
but concluded that, as a matter of law, the deliberate elicitation
standard of Henry, supra, and Massiah, supra, encompasses other, more subtle forms of stimulating incriminating
admissions than overt questioning. The court suggested that the
police deliberately placed respondent in a cell that overlooked the
scene of the crime, hoping that the view would trigger an
inculpatory comment to respondent's cellmate. [ Footnote 2/8 ] The court also observed that, while
Lee asked respondent no questions, Lee nonetheless stimulated
conversation concerning respondents' role in the Star Taxicab
Garage robbery and murder by remarking that respondent's
exculpatory story did not " sound too good,'" and that he had
better come up with a better one. 742 F.2d at 745. Thus, the Court
of Appeals concluded that respondent's case did not present the
situation reserved in Henry, where an accused makes an
incriminating remark within the hearing of a jailhouse informant,
who "makes no effort to stimulate conversations about the crime
charged." 447 U.S. at 447 U. S. 271 ,
n. 9. Instead, the court determined this case to be virtually
indistinguishable from Henry. The Sixth Amendment guarantees an accused, at least after the
initiation of formal charges, the right to rely on counsel as the
"medium" between himself and the State. Maine v. Moulton, 474 U. S. 159 , 474 U. S. 176 (1985). Accordingly, the Sixth Amendment "imposes on the State an
affirmative obligation to respect and preserve the accused's choice
to Page 477 U. S. 474 seek [the assistance of counsel]," id. at 474 U. S. 171 ,
and therefore
"[t]he determination whether particular action by state agents
violates the accused's right to . . . counsel must be made in light
of this obligation." Id. at 474 U. S. 176 .
To be sure, the Sixth Amendment is not violated whenever, "by luck
or happenstance," the State obtains incriminating statements from
the accused after the right to counsel has attached. It is
violated, however, when
"the State obtains incriminating statements by knowingly
circumventing the accused's right to have counsel present in a
confrontation between the accused and a state agent." Ibid. (footnote omitted). As we explained in Henry, where the accused has not waived his right to
counsel, the government knowingly circumvents the defendant's right
to counsel where it "deliberately elicit[s]" inculpatory
admissions, 447 U.S. at 447 U. S. 270 ,
that is,
"intentionally creat[es] a situation likely to induce [the
accused] to make incriminating statements without the assistance of
counsel." Id. at 447 U. S.
274 .
In Henry, we found that the Federal Government had
"deliberately elicited" incriminating statements from Henry based on the following circumstances. The jailhouse
informant, Nichols, had apparently followed instructions to obtain
information without directly questioning Henry, and without
initiating conversations concerning the charges pending against
Henry. We rejected the Government's argument that, because Henry
initiated the discussion of his crime, no Sixth Amendment violation
had occurred. We pointed out that, under Massiah v. United
States, 377 U. S. 201 (1964), it is irrelevant whether the informant asks pointed
questions about the crime or "merely engage[s] in general
conversation about it." 447 U.S. at 447 U. S.
271 -272, and n. 10. Nichols, we noted,
"was not a passive listener; . . . he had 'some conversations
with Mr. Henry' while he was in jail and Henry's incriminatory
statements were 'the product of this conversation.'" Id. at 447 U. S.
271 . Page 477 U. S. 475 In deciding that Nichols' role in these conversations amounted
to deliberate elicitation, we also found three other factors
important. First, Nichols was to be paid for any information he
produced, and thus had an incentive to extract inculpatory
admissions from Henry. Id. at 447 U. S. 270 .
Second, Henry was not aware that Nichols was acting as an
informant. Ibid. "Conversation stimulated in such
circumstances," we observed, "may elicit information that an
accused would not intentionally reveal to persons known to be
Government agents." Id. at 447 U. S. 273 .
Third, Henry was in custody at the time he spoke with Nichols. This
last fact is significant, we stated, because
"custody imposes pressures on the accused [and] confinement may
bring into play subtle influences that will make him particularly
susceptible to the ploys of undercover Government agents." Id. at 447 U. S. 274 .
We concluded that, by
"intentionally creating a situation likely to induce Henry to
make incriminating statements without the assistance of counsel,
the Government violated Henry's Sixth Amendment right to
counsel." Ibid. (footnote omitted).
In the instant case, as in Henry, the accused was
incarcerated, and therefore was "susceptible to the ploys of
undercover Government agents." Ibid. Like Nichols, Lee was
a secret informant, usually received consideration for the services
he rendered the police, and therefore had an incentive to produce
the information which he knew the police hoped to obtain. Just as
Nichols had done, Lee obeyed instructions not to question
respondent and to report to the police any statements made by the
respondent in Lee's presence about the crime in question. App. 62.
And, like Nichols, Lee encouraged respondent to talk about his
crime by conversing with him on the subject over the course of
several days and by telling respondent that his exculpatory story
would not convince anyone without more work. However, unlike the
situation in Henry, a disturbing visit from respondent's
brother, rather than a conversation with the informant, seems to
have been the immediate catalyst for respondent's Page 477 U. S. 476 confession to Lee. Ante at 477 U. S. 440 ; Wilson v. Henderson, 82 Civ. 4397 (SDNY, Mar. 30, 1983),
App. to Pet. for Cert. 25a-26a. While it might appear from this
sequence of events that Lee's comment regarding respondent's story
and his general willingness to converse with respondent about the
crime were not the immediate causes of respondent's admission, I
think that the deliberate elicitation standard requires
consideration of the entire course of government behavior.
The State intentionally created a situation in which it was
foreseeable that respondent would make incriminating statements
without the assistance of counsel, Henry, 447 U.S. at 447 U. S. 274 -- it assigned respondent to a cell overlooking the scene of the
crime and designated a secret informant to be respondent's
cellmate. The informant, while avoiding direct questions,
nonetheless developed a relationship of cellmate camaraderie with
respondent and encouraged him to talk about his crime. While the coup de grace was delivered by respondent's brother, the
groundwork for respondent's confession was laid by the State.
Clearly the State's actions had a sufficient nexus with
respondent's admission of guilt to constitute deliberate
elicitation within the meaning of Henry. I would affirm
the judgment of the Court of Appeals.
[ Footnote 2/1 ]
While a majority of the Court today rejects, either implicitly
or explicitly, this argument, I believe it appropriate to explain
why the plurality's view is incorrect.
[ Footnote 2/2 ]
The plurality asserts, ante at 477 U. S.
455 -456, n. 18, that it addresses only the standard
applicable to successive habeas petitions, and that I
mischaracterize its opinion by suggesting that the dictum,
contained in Part II-B of the plurality's opinion, regarding the
purpose and the scope of the Great Writ has any significance. While
the plurality correctly states that what would have been the
holding of Part III of its opinion, had that Part commanded a
Court, would have directly governed only successive petitions,
methinks my Brothers and Sister protest too much about their
general discussion of the writ. In order to mask the fact that it
fashions its factual innocence standard from whole cloth, the
plurality attempts to justify that standard by reference to the
plurality's view of "the historic purpose of habeas corpus." Ante at 477 U. S. 454 ; see also ante at 477 U. S.
448 -452. Consequently, in order to comment upon the
plurality's standard for successive petitions, I find it necessary
first to address the plurality's treatment of the general scope and
purposes of the Great Writ. Thus, the "first six pages of the
dissent" has as much "relevance" to this case as does Part II-B of
the plurality's opinion. Ante at 477 U. S.
455 -456, n. 18.
The plurality further chastises me for failing to propose a
precise definition of the "ends of justice" standard of Sanders
v. United States, 373 U. S. 1 , 373 U. S. 15 (1963), and for adhering to Sanders by leaving the
decision whether to hear successive petitions to the "sound
discretion of the federal trial judges." Id. at 373 U. S. 18 . The
plurality argues that Sanders left open
"the critical question of what considerations should inform a
court's decision that successive review of an issue previously
decided will serve the 'ends of justice.'" Ante at 477 U. S.
455 -456, n. 18. Sanders did leave that question
open, but in a different sense than the plurality suggests. In Sanders, we acknowledged that the meaning of the phrase
" the ends of justice' . . . cannot be too finely
particularized," 373 U.S. at 373 U. S. 17 ,
and, in recognition of this fact, we left it to the "sound
discretion" of federal trial judges to make case-by-case
determinations of what the ends of justice require. The plurality,
while purporting merely to elucidate Sanders' "sound
discretion" standard, would replace discretion with a single legal
standard -- actual innocence. And, while the plurality asserts that
there is a need for a more refined standard, it offers no evidence
that, over the 23 years since Sanders was decided, federal
trial courts have had difficulty applying the "sound discretion"
standard, or have so abused their discretion with respect to
successive petitions that revision of our longstanding
interpretation of § 2244(b) is warranted. [ Footnote 2/3 ]
In other words, we have recognized an exception to the exercise
of federal jurisdiction in the unusual cases where respect for the
procedures of state courts make this appropriate; such an exception
is similar to abstention rules. See, e.g., Younger v.
Harris 401 U. S. 37 (1971); Burford v. Sun Oil Co., 319 U.
S. 315 (1943). However, like other judicially created
exceptions to federal jurisdiction conferred by Congress, it is a
narrow exception to the "virtually unflagging obligation" to
exercise that jurisdiction. Colorado River Water Conservation
Dist. v. United States, 424 U. S. 800 , 817
(1976).
[ Footnote 2/4 ]
While the discussion in the House Report regarding Rule 9(b)
focuses on that portion of the Rule that governs abuse of the writ,
rather than petitions that repeatedly allege the same claims, it is
clear that the Committee intended Rule 9(b) to conform in its
entirety to existing case law, particularly to Sanders v.
United States. See H.R.Rep. No. 94-1471, pp. 5-6
(1976).
[ Footnote 2/5 ]
I agree with the plurality that actual innocence constitutes a
sufficient justification for returning to court a second time with
the same claim. I do not agree, though, that a prisoner's inability
to make a showing of actual innocence negates an otherwise good
justification, such as respondent's.
[ Footnote 2/6 ]
The facts of this case demonstrate the arbitrariness of the
Court's rule. The initial federal habeas petitions filed by
respondent and by Henry presented virtually identical claims.
Because our decision in United States v. Henry may have
altered the law of the Circuit in which respondent's prior petition
failed, it is only just that respondent's claim be reviewed under
the proper constitutional standards.
[ Footnote 2/7 ]
The plurality's factual-innocence standard also presents some
significant institutional problems. First, this standard requires
the federal courts to function in much the same capacity as the
state trier of fact -- the federal courts must make a rough
decision on the question of guilt or innocence. This requirement
diverts the federal courts from the central purpose of habeas
review -- the evaluation of claims that convictions were obtained
in violation of the Constitution. Second, it is unclear what
relevance the plurality's standard would have in a case in which a
prisoner alleges constitutional error in the sentencing phase of a
capital case. Guilt or innocence is irrelevant in that context;
rather, there is only a decision made by representatives of the
community whether the prisoner shall live or die. Presumably, then,
the plurality's test would not be applicable to such claims.
[ Footnote 2/8 ]
The Court of Appeals noted that "[a]s soon as Wilson arrived and
viewed the garage, he became upset and stated that someone's
messing with me.'" 742 F.2d at 745. JUSTICE STEVENS, dissenting.
When a district court is confronted with the question whether
the "ends of justice" would be served by entertaining a state
prisoner's petition for habeas corpus raising a claim that has been
rejected on a prior federal petition for the same relief, one of
the facts that may properly be considered is whether the petitioner
has advanced a "colorable claim of innocence." But I agree with
JUSTICE BRENNAN that this is not an essential element of every just
disposition of a successive petition. More specifically, I believe
that the District Court did not abuse its discretion in
entertaining the petition in this case, although I would also
conclude that this is one of those close cases in which the
District Court could have properly decided that a second review of
the same contention was Page 477 U. S. 477 not required, despite the intervening decision in United
States v. Henry, 447 U. S. 264 (1980).
On the merits, I agree with the analysis in Part II of JUSTICE
BRENNAN's dissent. Accordingly, I also would affirm the judgment of
the Court of Appeals. | The Supreme Court reversed a Court of Appeals decision that granted habeas corpus relief to respondent Wilson, who argued that his Sixth Amendment right to counsel was violated when his incriminating statements to a jailhouse informant were used against him in a New York court. The Court held that the Court of Appeals erred in applying the "deliberately elicited" test from Massiah v. United States to this case, as the informant had not stimulated conversations with Wilson or sought to elicit incriminating information. The Court also addressed the procedural question of successive habeas petitions, with Justice Powell concluding that "actual innocence" is not required for a court to consider a successive petition, but is a sufficient justification. The Court remanded the case for further proceedings. |
Criminal Trials & Prosecutions | Indiana v. Edwards | https://supreme.justia.com/cases/federal/us/554/164/ | OPINION OF THE COURT INDIANA V. EDWARDS 554 U. S. ____ (2008) SUPREME COURT OF THE UNITED STATES NO. 07-208 INDIANA, PETITIONER v. AHMAD EDWARDS
on writ of certiorari to the supreme court of
indiana
[June 19, 2008]
Justice Breyer delivered the
opinion of the Court.
This case focuses upon a criminal
defendant whom a state court found mentally competent to stand
trial if represented by counsel but not mentally competent to
conduct that trial himself. We must decide whether in these
circumstances the Constitution forbids a State from insisting that
the defendant proceed to trial with counsel, the State thereby
denying the defendant the right to represent himself. See U. S.
Const., Amdt. 6; Faretta v. California , 422 U. S. 806 (1975). We conclude that
the Constitution does not forbid a State so to insist.
I
In July 1999 Ahmad Edwards, the
respondent, tried to steal a pair of shoes from an Indiana
department store. After he was discovered, he drew a gun, fired at
a store security officer, and wounded a bystander. He was caught
and then charged with attempted murder, battery with a deadly
weapon, criminal recklessness, and theft. His mental condition
subsequently became the subject of three competency proceedings and
two self-representation requests, mostly before the same trial
judge: 1. First Competency
Hearing: August 2000 . Five months after Edwards’ arrest, his
court-appointed counsel asked for a psychiatric evaluation. After
hearing psychiatrist and neuropsychologist witnesses (in February
2000 and again in August 2000), the court found Edwards incompetent
to stand trial, App. 365a, and committed him to Logansport State
Hospital for evaluation and treatment, see id ., at
48a–53a. 2. Second Competency Hearing:
March 2002. Seven months after his commitment, doctors found
that Edwards’ condition had improved to the point where he could
stand trial. Id ., at 63a–64a. Several months later,
however, but still before trial, Edwards’ counsel asked for another
psychiatric evaluation. In March 2002, the judge held a competency
hearing, considered additional psychiatric evidence, and (in April)
found that Edwards, while “suffer[ing] from mental illness,” was
“competent to assist his attorneys in his defense and stand trial
for the charged crimes.” Id ., at 114a. 3. Third Competency Hearing:
April 2003. Seven months later but still before trial,
Edwards’ counsel sought yet another psychiatric evaluation of his
client. And, in April 2003, the court held yet another competency
hearing. Edwards’ counsel presented further psychiatric and
neuropsychological evidence showing that Edwards was suffering from
serious thinking difficulties and delusions. A testifying
psychiatrist reported that Edwards could understand the charges
against him, but he was “unable to cooperate with his attorney in
his defense because of his schizophrenic illness”; “[h]is delusions
and his marked difficulties in thinking make it impossible for him
to cooperate with his attorney.” Id ., at 164a. In November
2003, the court concluded that Edwards was not then competent to
stand trial and ordered his recommitment to the state hospital. Id ., at 206a–211a. 4. First Self-Representation
Request and First Trial: June 2005. About eight months after
his commitment, the hospital reported that Edwards’ condition had
again improved to the point that he had again become competent to
stand trial. Id ., at 228a–236a. And almost one year after
that Edwards’ trial began. Just before trial, Edwards asked to
represent himself. Id ., at 509a, 520a. He also asked for a
continuance, which, he said, he needed in order to proceed pro
se . Id ., at 519a–520a. The court refused the
continuance. Id ., at 520a. Edwards then proceeded to trial
represented by counsel. The jury convicted him of criminal
recklessness and theft but failed to reach a verdict on the charges
of attempted murder and battery. 5. Second Self-Representation
Request and Second Trial: December 2005 . The State decided to
retry Edwards on the attempted murder and battery charges. Just
before the retrial, Edwards again asked the court to permit him to
represent himself. Id ., at 279a–282a. Referring to the
lengthy record of psychiatric reports, the trial court noted that
Edwards still suffered from schizophrenia and concluded that
“[w]ith these findings, he’s competent to stand trial but I’m not
going to find he’s competent to defend himself.” Id ., at
527a. The court denied Edwards’ self-representation request.
Edwards was represented by appointed counsel at his retrial. The
jury convicted Edwards on both of the remaining counts.
Edwards subsequently appealed to Indiana’s
intermediate appellate court. He argued that the trial court’s
refusal to permit him to represent himself at his retrial deprived
him of his constitutional right of self-representation. U. S.
Const., Amdt. 6; Faretta , supra . The court agreed
and ordered a new trial. The matter then went to the Indiana
Supreme Court. That court found that “[t]he record in this case
presents a substantial basis to agree with the trial court,” 866
N. E. 2d 252, 260 (2007), but it nonetheless affirmed the
intermediate appellate court on the belief that this Court’s
precedents, namely, Faretta , 422 U. S. 806 , and Godinez v. Moran , 509
U. S. 389 (1993), required the State to allow Edwards to
represent himself. At Indiana’s request, we agreed to consider
whether the Constitution required the trial court to allow Edwards
to represent himself at trial.
II
Our examination of this Court’s
precedents convinces us that those precedents frame the question
presented, but they do not answer it. The two cases that set forth
the Constitution’s “mental competence” standard, Dusky v. United States , 362 U. S. 402 (1960) (per curiam) , and Drope v. Missouri , 420 U. S. 162 (1975), specify that the Constitution does not permit trial of an
individual who lacks “mental competency.” Dusky defines
the competency standard as including both (1) “whether” the
defendant has “a rational as well as factual understanding of the
proceedings against him” and (2) whether the defendant “has
sufficient present ability to consult with his lawyer with
a reasonable degree of rational understanding.” 362 U. S., at 402
(emphasis added; internal quotation marks omitted). Drope repeats that standard, stating that it “has long been accepted that
a person whose mental condition is such that he lacks the capacity
to understand the nature and object of the proceedings against him, to consult with counsel, and to assist in preparing his
defense may not be subjected to a trial.” 420 U. S., at 171
(emphasis added). Neither case considered the mental competency
issue presented here, namely, the relation of the mental competence
standard to the right of self-representation.
The Court’s foundational
“self-representation” case, Faretta , held that the Sixth
and Fourteenth Amendments include a “constitutional right to
proceed without counsel when” a criminal defendant
“voluntarily and intelligently elects to do so.” 422 U. S., at 807
(emphasis in original). The Court implied that right from: (1) a
“nearly universal conviction,” made manifest in state law, that
“forcing a lawyer upon an unwilling defendant is contrary to his
basic right to defend himself if he truly wants to do so,” id ., at 817–818; (2) Sixth Amendment language granting
rights to the “accused;” (3) Sixth Amendment structure indicating
that the rights it sets forth, related to the “fair administration
of American justice,” are “persona[l]” to the accused, id ., at 818–821; (4) the absence of historical examples of forced representation, id ., at 821–832; and (5)
“ ‘respect for the individual,’ ” id ., at 834
(quoting Illinois v. Allen , 397 U. S. 337 , 350–351
(1970) (Brennan, J., concurring) (a knowing and intelligent waiver
of counsel “must be honored out of ‘that respect for the individual
which is the lifeblood of the law’ ”)). Faretta does not answer the question
before us both because it did not consider the problem of mental
competency (cf. 422 U. S., at 835 (Faretta was “literate,
competent, and understanding”)), and because Faretta itself and later cases have made clear that the right of
self-representation is not absolute. See Martinez v. Court of Appeal of Cal., Fourth Appellate Dist. , 528 U. S. 152 , 163
(2000) (no right of self-representation on direct appeal in a
criminal case); McKaskle v. Wiggins , 465 U. S. 168 , 178–179
(1984) (appointment of standby counsel over self-represented
defendant’s objection is permissible); Faretta , 422 U. S.,
at 835, n. 46 (no right “to abuse the dignity of the courtroom”); ibid . (no right to avoid compliance with “relevant rules
of procedural and substantive law”); id., at 834, n. 46
(no right to “engag[e] in serious and obstructionist misconduct,”
referring to Illinois v. Allen , supra ).
The question here concerns a mental-illness-related limitation on
the scope of the self-representation right.
The sole case in which this Court considered
mental competence and self-representation together, Godinez,
supra, presents a question closer to that at issue here. The
case focused upon a borderline-competent criminal defendant who had
asked a state trial court to permit him to represent himself and to
change his pleas from not guilty to guilty. The state trial court
had found that the defendant met Dusky’ s mental competence
standard, that he “knowingly and intelligently” waived his right to
assistance of counsel, and that he “freely and voluntarily” chose
to plead guilty. 509 U. S., at 393 (internal quotation marks
omitted). And the state trial court had consequently granted the
defendant’s self-representation and change-of-plea requests. See id ., at 392–393. A federal appeals court, however, had
vacated the defendant’s guilty pleas on the ground that the
Constitution required the trial court to ask a further question,
namely, whether the defendant was competent to waive his
constitutional right to counsel. See id ., at 393–394.
Competence to make that latter decision, the appeals court said,
required the defendant to satisfy a higher mental competency
standard than the standard set forth in Dusky . See 509 U.
S., at 393–394. Dusky ’s more general standard sought only
to determine whether a defendant represented by counsel was
competent to stand trial, not whether he was competent to waive his
right to counsel. 509 U. S., at 394–395.
This Court, reversing the Court of Appeals,
“reject[ed] the notion that competence to plead guilty or to waive
the right to counsel must be measured by a standard that is higher
than (or even different from) the Dusky standard.” Id ., at 398. The decision to plead guilty, we said, “is no
more complicated than the sum total of decisions that a
[represented] defendant may be called upon to make during the
course of a trial.” Ibid . Hence “there is no reason to
believe that the decision to waive counsel requires an appreciably
higher level of mental functioning than the decision to waive other
constitutional rights.” Id ., at 399. And even assuming
that self-representation might pose special trial-related
difficulties, “the competence that is required of a defendant
seeking to waive his right to counsel is the competence to waive the right, not the competence to represent himself.” Ibid . (emphasis in original). For this reason, we
concluded, “the defendant’s ‘technical legal knowledge’ is ‘not
relevant’ to the determination.” Id ., at 400 (quoting Faretta , supra , at 836).
We concede that Godinez bears certain
similarities with the present case. Both involve mental competence
and self-representation. Both involve a defendant who wants to
represent himself. Both involve a mental condition that falls in a
gray area between Dusky’ s minimal constitutional
requirement that measures a defendant’s ability to stand trial and
a somewhat higher standard that measures mental fitness for another
legal purpose.
We nonetheless conclude that Godinez does not answer the question before us now. In part that is because
the Court of Appeals higher standard at issue in Godinez differs in a critical way from the higher standard at issue here.
In Godinez, the higher standard sought to measure the
defendant’s ability to proceed on his own to enter a guilty plea;
here the higher standard seeks to measure the defendant’s ability
to conduct trial proceedings. To put the matter more specifically,
the Godinez defendant sought only to change his pleas to
guilty, he did not seek to conduct trial proceedings, and his
ability to conduct a defense at trial was expressly not at issue.
Thus we emphasized in Godinez that we needed to consider
only the defendant’s “competence to waive the right .” 509
U. S., at 399 (emphasis in original). And we further emphasized
that we need not consider the defendant’s “technical legal
knowledge” about how to proceed at trial. Id ., at 400
(internal quotation marks omitted). We found our holding consistent
with this Court’s earlier statement in Massey v. Moore , 348
U. S. 105 , 108 (1954), that “[o]ne might not be insane in the
sense of being incapable of standing trial and yet lack the
capacity to stand trial without benefit of counsel.” See Godinez , supra , at 399–400, n. 10 (quoting Massey and noting that it dealt with “a question that is
quite different from the question presented” in Godinez ).
In this case, the very matters that we did not consider in Godinez are directly before us.
For another thing, Godinez involved a
State that sought to permit a gray-area defendant to
represent himself. Godinez ’s constitutional holding is
that a State may do so. But that holding simply does not tell a
State whether it may deny a gray-area defendant the right
to represent himself—the matter at issue here. One might argue that Godinez ’s grant (to a State) of permission to allow a
gray-area defendant self-representation must implicitly include
permission to deny self-representation. Cf. 509 U. S., at 402
(“States are free to adopt competency standards that are more
elaborate than the Dusky formulation”). Yet one could more
forcefully argue that Godinez simply did not consider
whether the Constitution requires self-representation by
gray-area defendants even in circumstances where the State seeks to
disallow it (the question here). The upshot is that, in our view,
the question before us is an open one.
III
We now turn to the question
presented. We assume that a criminal defendant has sufficient
mental competence to stand trial ( i.e ., the defendant
meets Dusky’ s standard) and that the defendant insists on
representing himself during that trial. We ask whether the
Constitution permits a State to limit that defendant’s
self-representation right by insisting upon representation by
counsel at trial—on the ground that the defendant lacks the mental
capacity to conduct his trial defense unless represented.
Several considerations taken
together lead us to conclude that the answer to this question is
yes. First, the Court’s precedent, while not answering the
question, points slightly in the direction of our affirmative
answer. Godinez, as we have just said, simply leaves the
question open. But the Court’s “mental competency” cases set forth
a standard that focuses directly upon a defendant’s “present
ability to consult with his lawyer,” Dusky , 362 U. S., at
402 (internal quotation marks omitted); a “capacity … to consult
with counsel,” and an ability “to assist [counsel] in preparing his
defense,” Drope , 420 U. S., at 171. See ibid .
(“It has long been accepted that a person whose mental condition is
such that he lacks the capacity to understand the nature and object
of the proceedings against him, to consult with counsel, and to assist in preparing his defense may not be subjected to a
trial” (emphasis added)). These standards assume representation by
counsel and emphasize the importance of counsel. They thus suggest
(though do not hold) that an instance in which a defendant who
would choose to forgo counsel at trial presents a very different
set of circumstances, which in our view, calls for a different
standard.
At the same time Faretta , the
foundational self-representation case, rested its conclusion in
part upon pre-existing state law set forth in cases all of which
are consistent with, and at least two of which expressly adopt, a
competency limitation on the self-representation right. See 422 U.
S., at 813, and n. 9 (citing 16 state-court decisions and two
secondary sources). See, e.g ., Cappetta v. State , 204 So. 2d 913, 917–918 (Fla. App. 1967),
rev’d on other grounds, 216 So. 2d 749 (Fla. 1968), cited in Faretta , supra , at 813, n. 9 (assuring a
“mentally competent” defendant the right “to conduct his own
defense” provided that “no unusual circumstances exist”
such as, e.g ., “mental derangement” that “would …
depriv[e]” the defendant “of a fair trial if allowed to conduct his
own defense,” 204 So. 2d, at 917–918); id. , at 918
(noting that “whether unusual circumstances are evident is a matter
resting in the sound discretion granted to the trial judge”); Allen v. Commonwealth , 324 Mass. 558, 562–563, 87
N. E. 2d 192, 195 (1949) (noting “the assignment of counsel”
was “necessary” where there was some “special circumstance” such as
when the criminal defendant was “mentally defective”).
Second, the nature of the problem before us
cautions against the use of a single mental competency standard for
deciding both (1) whether a defendant who is represented by counsel
can proceed to trial and (2) whether a defendant who goes to trial
must be permitted to represent himself. Mental illness itself is
not a unitary concept. It varies in degree. It can vary over time.
It interferes with an individual’s functioning at different times
in different ways. The history of this case (set forth in Part I, supra) illustrates the complexity of the problem. In
certain instances an individual may well be able to satisfy Dusky’ s mental competence standard, for he will be able to
work with counsel at trial, yet at the same time he may be unable
to carry out the basic tasks needed to present his own defense
without the help of counsel. See, e.g. , N. Poythress, R.
Bonnie, J. Monahan, R. Otto, & S. Hoge, Adjudicative
Competence: The MacArthur Studies 103 (2002) (“Within each domain
of adjudicative competence (competence to assist counsel;
decisional competence) the data indicate that understanding,
reasoning, and appreciation [of the charges against a defendant]
are separable and somewhat independent aspects of functional legal
ability”). See also McKaskle , 465 U. S., at 174
(describing trial tasks as including organization of defense,
making motions, arguing points of law, participating in voir
dire , questioning witnesses, and addressing the court and
jury).
The American Psychiatric Association (APA)
tells us (without dispute) in its amicus brief filed in
support of neither party that “[d]isorganized thinking, deficits in
sustaining attention and concentration, impaired expressive
abilities, anxiety, and other common symptoms of severe mental
illnesses can impair the defendant’s ability to play the
significantly expanded role required for self-representation even
if he can play the lesser role of represented defendant.” Brief for
APA et al. as Amici Curiae 26. Motions and other
documents that the defendant prepared in this case (one of which we
include in the Appendix, infra ) suggest to a layperson the
common sense of this general conclusion.
Third, in our view, a right of
self-representation at trial will not “affirm the dignity” of a
defendant who lacks the mental capacity to conduct his defense
without the assistance of counsel. McKaskle , supra , at 176–177 (“Dignity” and “autonomy” of individual
underlie self-representation right) . To the contrary,
given that defendant’s uncertain mental state, the spectacle that
could well result from his self-representation at trial is at least
as likely to prove humiliating as ennobling. Moreover, insofar as a
defendant’s lack of capacity threatens an improper conviction or
sentence, self-representation in that exceptional context undercuts
the most basic of the Constitution’s criminal law objectives,
providing a fair trial. As Justice Brennan put it, “[t]he
Constitution would protect none of us if it prevented the courts
from acting to preserve the very processes that the Constitution
itself prescribes.” Allen , 397 U. S., at 350 (concurring
opinion). See Martinez , 528 U. S., at 162 (“Even at the
trial level … the government’s interest in ensuring the integrity
and efficiency of the trial at times outweighs the defendant’s
interest in acting as his own lawyer”). See also Sell v. United States , 539 U. S. 166 , 180
(2003) (“[T]he Government has a concomitant, constitutionally
essential interest in assuring that the defendant’s trial is a fair
one”).
Further, proceedings must not only be fair,
they must “appear fair to all who observe them.” Wheat v. United States , 486 U. S. 153 , 160
(1988). An amicus brief reports one psychiatrist’s
reaction to having observed a patient (a patient who had satisfied Dusky ) try to conduct his own defense: “[H]ow in the world
can our legal system allow an insane man to defend himself?” Brief
for Ohio et al. as Amici Curiae 24 (internal
quotation marks omitted). See Massey , 348 U. S., at 108
(“No trial can be fair that leaves the defense to a man who is
insane, unaided by counsel, and who by reason of his mental
condition stands helpless and alone before the court”). The
application of Dusky’ s basic mental competence standard
can help in part to avoid this result. But given the different
capacities needed to proceed to trial without counsel, there is
little reason to believe that Dusky alone is sufficient.
At the same time, the trial judge, particularly one such as the
trial judge in this case, who presided over one of Edwards’
competency hearings and his two trials, will often prove best able
to make more fine-tuned mental capacity decisions, tailored to the
individualized circumstances of a particular defendant.
We consequently conclude that the Constitution
permits judges to take realistic account of the particular
defendant’s mental capacities by asking whether a defendant who
seeks to conduct his own defense at trial is mentally competent to
do so. That is to say, the Constitution permits States to insist
upon representation by counsel for those competent enough to stand
trial under Dusky but who still suffer from severe mental
illness to the point where they are not competent to conduct trial
proceedings by themselves.
IV
Indiana has also asked us to
adopt, as a measure of a defendant’s ability to conduct a trial, a
more specific standard that would “deny a criminal defendant the
right to represent himself at trial where the defendant cannot
communicate coherently with the court or a jury.” Brief for
Petitioner 20 (emphasis deleted). We are sufficiently uncertain,
however, as to how that particular standard would work in practice
to refrain from endorsing it as a federal constitutional standard
here. We need not now, and we do not, adopt it.
Indiana has also asked us to
overrule Faretta . We decline to do so. We recognize that
judges have sometimes expressed concern that Faretta, contrary to its intent, has led to trials that are unfair. See Martinez , supra , at 164 (Breyer, J., concurring)
(noting practical concerns of trial judges). But recent empirical
research suggests that such instances are not common. See, e.g ., Hashimoto, Defending the Right of
Self-Representation: An Empirical Look at the Pro Se Felony
Defendant, 85 N. C. L. Rev. 423, 427, 447, 428 (2007)
(noting that of the small number of defendants who chose to proceed pro se —“roughly 0.3% to 0.5%” of the total, state felony
defendants in particular “appear to have achieved higher felony
acquittal rates than their represented counterparts in that they
were less likely to have been convicted of felonies”). At the same
time, instances in which the trial’s fairness is in doubt may well
be concentrated in the 20 percent or so of self-representation
cases where the mental competence of the defendant is also at
issue. See id ., at 428 (about 20 percent of federal pro se felony defendants ordered to undergo competency
evaluations). If so, today’s opinion, assuring trial judges the
authority to deal appropriately with cases in the latter category,
may well alleviate those fair trial concerns.
For these reasons, the judgment of the Supreme
Court of Indiana is vacated, and the case is remanded for further
proceedings not inconsistent with this opinion.
So ordered.
APPENDIX
Excerpt from respondent’s filing
entitled “ ‘Defendant’s Version of the Instant
Offense,’ ” which he had attached to his presentence
investigation report:
“ ‘The appointed motion of permissive
intervention filed therein the court superior on, 6–26–01 caused a
stay of action and apon it’s expiration or thereafter three years
the plan to establish a youth program to and for the coordination
of aspects of law enforcement to prevent and reduce crime amoung
young people in Indiana became a diplomatic act as under the Safe
Streets Act of 1967, “A omnibuc considerate agent: I membered
clients within the public and others that at/production of the
courts actions showcased causes. The costs of the stay (Trial Rule
60) has a derivative property that is: my knowledged events as not
unexpended to contract the membered clients is the commission of
finding a facilitie for this plan or project to become organization
of administrative recommendations conditioned by governors.’ ”
866 N. E. 2d, at 258, n. 4 (alterations omitted). SCALIA, J., DISSENTING INDIANA V. EDWARDS 554 U. S. ____ (2008) SUPREME COURT OF THE UNITED STATES NO. 07-208 INDIANA, PETITIONER v. AHMAD EDWARDS
on writ of certiorari to the supreme court of
indiana
[June 19, 2008]
Justice Scalia, with whom Justice
Thomas joins, dissenting.
The Constitution guarantees a
defendant who knowingly and voluntarily waives the right to counsel
the right to proceed pro se at his trial. Faretta v. California , 422 U. S. 806 (1975). A
mentally ill defendant who knowingly and voluntarily elects to
proceed pro se instead of through counsel receives a fair
trial that comports with the Fourteenth Amendment. Godinez v. Moran, 509 U. S. 389 (1993). The Court today
concludes that a State may nonetheless strip a mentally ill
defendant of the right to represent himself when that would be
fairer. In my view the Constitution does not permit a State to
substitute its own perception of fairness for the defendant’s right
to make his own case before the jury—a specific right long
understood as essential to a fair trial.
I
Ahmad Edwards suffers from
schizophrenia, an illness that has manifested itself in different
ways over time, depending on how and whether Edwards was treated as
well as on other factors that appear harder to identify. In the
years between 2000 and 2003—years in which Edwards was apparently
not treated with the antipsychotic medications and other drugs that
are commonly prescribed for his illness—Edwards was repeatedly
declared incompetent to stand trial. Even during this period,
however, his mental state seems to have fluctuated. For instance,
one psychiatrist in March 2001 described Edwards in a competency
report as “free of psychosis, depression, mania, and confusion,”
“alert, oriented, [and] appropriate,” apparently “able to think
clearly” and apparently “psychiatrically normal.” App. 61a.
Edwards seems to have been
treated with antipsychotic medication for the first time in 2004.
He was found competent to stand trial the same year. The
psychiatrist making the recommendation described Edwards’ thought
processes as “coherent” and wrote that he “communicate[d] very
well,” that his speech was “easy to understand,” that he displayed
“good communications skills, cooperative attitude, average
intelligence, and good cognitive functioning,” that he could
“appraise the roles of the participants in the courtroom
proceedings,” and that he had the capacity to challenge prosecution
witnesses realistically and to testify relevantly. Id. , at
232a–235a (report of Dr. Robert Sena).
Over the course of what became two separate
criminal trials, Edwards sought to act as his own lawyer. He filed
a number of incoherent written pleadings with the judge on which
the Court places emphasis, but he also filed several intelligible
pleadings, such as a motion to dismiss counsel, a motion to dismiss
charges under the Indiana speedy trial provision, and a motion
seeking a trial transcript.
Edwards made arguments in the courtroom that
were more coherent than his written pleadings. In seeking to
represent himself at his first trial, Edwards complained in detail
that the attorney representing him had not spent adequate time
preparing and was not sharing legal materials for use in his
defense. The trial judge concluded that Edwards had knowingly and
voluntarily waived his right to counsel and proceeded to quiz
Edwards about matters of state law. Edwards correctly answered
questions about the meaning of voir dire and how it
operated, and described the basic framework for admitting videotape
evidence to trial, though he was unable to answer other questions,
including questions about the topics covered by state evidentiary
rules that the judge identified only by number. He persisted in his
request to represent himself, but the judge denied the request
because Edwards acknowledged he would need a continuance.
Represented by counsel, he was convicted of criminal recklessness
and theft, but the jury deadlocked on charges of attempted murder
and battery.
At his second trial, Edwards again asked the
judge to be allowed to proceed pro se . He explained that
he and his attorney disagreed about which defense to present to the
attempted murder charge. Edwards’ counsel favored lack of intent to
kill; Edwards, self-defense. As the defendant put it: “My objection
is me and my attorney actually had discussed a defense, I think
prosecution had mentioned that, and we are in disagreement with it.
He has a defense and I have a defense that I would like to
represent or present to the Judge.” Id., at 523a.
The court again rejected Edwards’ request to
proceed pro se , and this time it did not have the
justification that Edwards had sought a continuance. The court did
not dispute that Edwards knowingly and intelligently waived his
right to counsel, but stated it was “going to carve out a third
exception” to the right of self-representation, and—without
explaining precisely what abilities Edwards lacked—stated Edwards
was “competent to stand trial but I’m not going to find he’s
competent to defend himself.” Id., at 527a. Edwards
sought—by a request through counsel and by raising an objection in
open court—to address the judge on the matter, but the judge
refused, stating that the issue had already been decided. Edwards’
court-appointed attorney pursued the defense the attorney judged
best—lack of intent, not self-defense—and Edwards was convicted of
both attempted murder and battery. The Supreme Court of Indiana
held that he was entitled to a new trial because he had been denied
the right to represent himself. The State of Indiana sought
certiorari, which we granted. 552 U. S. ___ (2007).
II
A
The Constitution guarantees to
every criminal defendant the “right to proceed without counsel when he voluntarily and intelligently elects to do so.” Faretta , 422 U. S., at 807. The right reflects “a nearly
universal conviction, on the part of our people as well as our
courts, that forcing a lawyer upon an unwilling defendant is
contrary to his basic right to defend himself if he truly wants to
do so.” Id. , at 817. Faretta ’s discussion of the
history of the right, id. , at 821–833, includes the
observation that “[i]n the long history of British criminal
jurisprudence, there was only one tribunal that ever adopted a
practice of forcing counsel upon an unwilling defendant in a
criminal proceeding. The tribunal was the Star Chamber,” id. , at 821. Faretta described the right to
proceed pro se as a premise of the Sixth Amendment, which
confers the tools for a defense on the “accused,” and describes the
role of the attorney as one of “assistance.” The right of
self-representation could also be seen as a part of the traditional
meaning of the Due Process Clause. See Martinez v. Court of Appeal of Cal., Fourth Appellate Dist. , 528 U. S. 152 , 165
(2000) (Scalia, J., concurring in judgment). Whichever provision
provides its source, it means that a State simply may not force a
lawyer upon a criminal defendant who wishes to conduct his own
defense. Faretta , 422 U. S., at 807.
Exercising the right of
self-representation requires waiving the right to counsel. A
defendant may represent himself only when he “ ‘knowingly and
intelligently’ ” waives the lawyer’s assistance that is
guaranteed by the Sixth Amendment. Id., at 835. He must
“be made aware of the dangers and disadvantages of
self-representation,” and the record must “establish that ‘he knows
what he is doing and his choice is made with eyes open.’ ” Ibid. (quoting Adams v. United States ex
rel. McCann , 317 U. S. 269 , 279
(1942)). This limitation may be relevant to many
mentally ill defendants, but there is no dispute that Edwards was
not one of them. Edwards was warned extensively of the risks of
proceeding pro se . The trial judge found that Edwards had
“knowingly and voluntarily” waived his right to counsel at his
first trial, App. 512a, and at his second trial the judge denied
him the right to represent himself only by “carv[ing] out” a new
“exception” to the right beyond the standard of knowing and
voluntary waiver, id., at 527a. When a defendant appreciates the
risks of forgoing counsel and chooses to do so voluntarily, the
Constitution protects his ability to present his own defense even
when that harms his case. In fact waiving counsel “usually” does
so. McKaskle v. Wiggins , 465 U. S. 168 , 177,
n. 8 (1984); see also Faretta , 422 U. S., at 834. We
have nonetheless said that the defendant’s “choice must be honored
out of ‘that respect for the individual which is the lifeblood of
the law.’ ” Ibid. What the Constitution requires is
not that a State’s case be subject to the most rigorous adversarial
testing possible—after all, it permits a defendant to eliminate all adversarial testing by pleading guilty. What the
Constitution requires is that a defendant be given the right to
challenge the State’s case against him using the arguments he sees fit. In Godinez, 509 U. S. 389 , we held that the Due
Process Clause posed no barrier to permitting a defendant who
suffered from mental illness both to waive his right to counsel and
to plead guilty, so long as he was competent to stand trial and
knowingly and voluntarily waived trial and the counsel right. Id. , at 391, 400. It was “never the rule at common law”
that a defendant could be competent to stand trial and yet
incompetent to either exercise or give up some of the rights
provided for his defense. Id. , at 404 (Kennedy, J.,
concurring in part and concurring in judgment). We rejected the
invitation to craft a higher competency standard for waiving
counsel than for standing trial. That proposal, we said, was built
on the “flawed premise” that a defendant’s “competence to represent
himself” was the relevant measure: “[T]he competence that is
required of a defendant seeking to waive his right to counsel is
the competence to waive the right , not the competence to
represent himself.” Id. , at 399. We grounded this on Faretta ’s candid acknowledgment that the Sixth Amendment
protected the defendant’s right to conduct a defense to his
disadvantage. 509 U. S. at 399–400. B The Court is correct
that this case presents a variation on Godinez: It
presents the question not whether another constitutional
requirement (in Godinez , the proposed higher degree of
competence required for a waiver) limits a defendant’s
constitutional right to elect self-representation, but whether a
State’s view of fairness (or of other values) permits it to strip
the defendant of this right. But that makes the question before us
an easier one. While one constitutional requirement must yield to
another in case of conflict, nothing permits a State, because of its view of what is fair, to deny a constitutional
protection. Although “the purpose of the rights set forth in [the
Sixth] Amendment is to ensure a fair trial,” it “does not follow
that the rights can be disregarded so long as the trial is, on the
whole, fair.” United States v. Gonzalez-Lopez, 548 U. S. 140 ,
145 (2006). Thus, although the Confrontation Clause aims to produce
fairness by ensuring the reliability of testimony, States may not
provide for unconfronted testimony to be used at trial so long as
it is reliable. Crawford v. Washington , 541 U. S. 36 , 61 (2004).
We have rejected an approach to individual liberties that
“ ‘abstracts from the right to its purposes, and then
eliminates the right.’ ” Gonzalez-Lopez , supra , at 145 (quoting Maryland v. Craig , 497
U. S. 836 , 862 (1990) (Scalia, J., dissenting)). Until today, the
right of self-representation has been accorded the same respect as
other constitutional guarantees. The only circumstance in which we
have permitted the State to deprive a defendant of this trial right
is the one under which we have allowed the State to deny other such rights: when it is necessary to enable the
trial to proceed in an orderly fashion. That overriding necessity,
we have said, justifies forfeiture of even the Sixth Amendment
right to be present at trial—if, after being threatened with
removal, a defendant “insists on conducting himself in a manner so
disorderly, disruptive, and disrespectful of the court that his
trial cannot be carried on with him in the courtroom.” Illinois v. Allen, 397 U. S. 337 , 343
(1970). A pro se defendant may not “abuse the dignity of
the courtroom,” nor may he fail to “comply with relevant rules of
procedural and substantive law,” and a court may “terminate” the
self-representation of a defendant who “deliberately engages in
serious and obstructionist misconduct.” Faretta, supra, at
834–835, n. 46. This ground for terminating
self-representation is unavailable here, however, because Edwards
was not even allowed to begin to represent himself, and because he
was respectful and compliant and did not provide a basis to
conclude a trial could not have gone forward had he been allowed to
press his own claims. Beyond this circumstance, we have
never constrained the ability of a defendant to retain “actual
control over the case he chooses to present to the jury”—what we
have termed “the core of the Faretta right.” Wiggins,
supra , at 178. Thus, while Faretta recognized that
the right of self-representation does not bar the court from
appointing standby counsel, we explained in Wiggins that
“[t]he pro se defendant must be allowed to control the
organization and content of his own defense, to make motions, to
argue points of law, to participate in voir dire, to
question witnesses, and to address the court and the jury at
appropriate points in the trial.” 465 U. S., at 174. Furthermore,
because “multiple voices ‘for the defense’ ” could “confuse
the message the defendant wishes to convey,” id. , at 177,
a standby attorney’s participation would be barred when it would
“destroy the jury’s perception that the defendant is representing
himself,” id. , at 178. As I have explained, I would not
adopt an approach to the right of self-representation that we have
squarely rejected for other rights—allowing courts to disregard the
right when doing so serves the purposes for which the right was
intended. But if I were to adopt such an approach, I would remain
in dissent, because I believe the Court’s assessment of the
purposes of the right of self-representation is inaccurate to boot.
While there is little doubt that preserving individual
“ ‘dignity’ ” (to which the Court refers), ante, at 11, is paramount among those purposes, there is equally little
doubt that the loss of “dignity” the right is designed to prevent
is not the defendant’s making a fool of himself by
presenting an amateurish or even incoherent defense. Rather, the
dignity at issue is the supreme human dignity of being master of
one’s fate rather than a ward of the State—the dignity of
individual choice. Faretta explained that the Sixth
Amendment’s counsel clause should not be invoked to impair
“ ‘the exercise of [the defendant’s] free choice’ ” to
dispense with the right, 422 U. S., at 815 (quoting Adams ,
317 U. S., at 280); for “whatever else may be said of those who
wrote the Bill of Rights, surely there can be no doubt that they
understood the inestimable worth of free choice,” 422 U. S., at
833–834. Nine years later, when we wrote in Wiggins that
the self-representation right served the “dignity and autonomy of
the accused,” 465 U. S., at 177, we explained in no uncertain terms
that this meant according every defendant the right to his say in
court. In particular, we said that individual dignity and autonomy
barred standby counsel from participating in a manner that would to
“destroy the jury’s perception that the defendant is representing
himself,” and meant that “the pro se defendant is entitled
to preserve actual control over the case he chooses to present to
the jury.” Id. , at 178. In sum, if the Court is to honor
the particular conception of “dignity” that underlies the
self-representation right, it should respect the autonomy of the
individual by honoring his choices knowingly and voluntarily
made. A further purpose that the Court
finds is advanced by denial of the right of self-representation is
the purpose of assuring that trials “appear fair to all who observe
them.” Ante , at 11. To my knowledge we have never denied a
defendant a right simply on the ground that it would make his trial
appear less “fair” to outside observers, and I would not inaugurate
that principle here. But were I to do so, I would not apply it to
deny a defendant the right to represent himself when he knowingly
and voluntarily waives counsel. When Edwards stood to say that “I
have a defense that I would like to represent or present to the
Judge,” App. 523a, it seems to me the epitome of both actual and
apparent unfairness for the judge to say, I have heard “your desire
to proceed by yourself and I’ve denied your request, so your
attorney will speak for you from now on,” id. , at
530a. III It may be that the
Court permits a State to deprive mentally ill defendants of a
historic component of a fair trial because it is suspicious of the
constitutional footing of the right of self-representation itself.
The right is not explicitly set forth in the text of the Sixth
Amendment, and some Members of this Court have expressed skepticism
about Faretta’ s holding. See Martinez, supra , at
156–158 (questioning relevance of historical evidence underlying Faretta’ s holding); 528 U. S., at 164 (Breyer, J.,
concurring) (noting “judges closer to the firing line have
sometimes expressed dismay about the practical consequences” of the
right of self-representation). While the Sixth
Amendment makes no mention of the right to forgo counsel, it
provides the defendant, and not his lawyer, the right to call
witnesses in his defense and to confront witnesses against him, and
counsel is permitted to assist in “ his defence” (emphasis
added). Our trial system, however, allows the attorney representing
a defendant “full authority to manage the conduct of the trial”—an
authority without which “[t]he adversary process could not function
effectively.” Taylor v. Illinois , 484 U. S. 400 , 418
(1988); see also Florida v. Nixon, 543 U. S. 175 , 187
(2004). We have held that “the client must accept the consequences
of the lawyer’s decision to forgo cross-examination, to decide not
to put certain witnesses on the stand, or to decide not to disclose
the identity of certain witnesses in advance of trial.” Taylor , supra , at 418. Thus, in order for the
defendant’s right to call his own witnesses, to cross-examine
witnesses, and to put on a defense to be anything more than “a
tenuous and unacceptable legal fiction,” a defendant must have
consented to the representation of counsel. Faretta,
supra, at 821. Otherwise, “the defense presented is not the
defense guaranteed him by the Constitution, for in a very real
sense, it is not his defense.” Ibid. The facts of this case illustrate
this point with the utmost clarity. Edwards wished to take a
self-defense case to the jury. His counsel preferred a defense that
focused on lack of intent. Having been denied the right to conduct
his own defense, Edwards was convicted without having had the
opportunity to present to the jury the grounds he believed
supported his innocence. I do not doubt that he likely would have
been convicted anyway. But to hold that a defendant may be deprived
of the right to make legal arguments for acquittal simply because a
state-selected agent has made different arguments on his behalf is,
as Justice Frankfurter wrote in Adams, supra , at 280, to
“imprison a man in his privileges and call it the Constitution.” In
singling out mentally ill defendants for this treatment, the
Court’s opinion does not even have the questionable virtue of being
politically correct. At a time when all society is trying to
mainstream the mentally impaired, the Court permits them to be
deprived of a basic constitutional right—for their own
good. Today’s holding is extraordinarily
vague. The Court does not accept Indiana’s position that
self-representation can be denied “ ‘where the defendant
cannot communicate coherently with the court or a jury,’ ” ante , at 12. It does not even hold that Edwards was
properly denied his right to represent himself. It holds only that
lack of mental competence can under some circumstances form a basis
for denying the right to proceed pro se , ante, at
1. We will presumably give some meaning to this holding in the
future, but the indeterminacy makes a bad holding worse. Once the
right of self-representation for the mentally ill is a sometime
thing, trial judges will have every incentive to make their lives
easier—to avoid the painful necessity of deciphering occasional
pleadings of the sort contained in the Appendix to today’s
opinion—by appointing knowledgeable and literate
counsel. Because I think a defendant who is
competent to stand trial, and who is capable of knowing and
voluntary waiver of assistance of counsel, has a constitutional
right to conduct his own defense, I respectfully
dissent. | In *Indiana v. Edwards*, the Supreme Court ruled that a defendant who is mentally competent to stand trial with legal representation may still be denied the right to represent themselves due to mental incompetence. The Court concluded that the Constitution does not prohibit a state from insisting that a defendant with mental health issues proceed to trial with legal counsel, even if they wish to represent themselves. This ruling considered the defendant's right to self-representation and the state's interest in ensuring a fair trial and protecting the integrity of judicial proceedings. |